Progressive Opinion

prospect.org — The Boston Globe, Politico, and Huffington Post are all reporting that Senator-elect Elizabeth Warren has been granted her wish to get a seat on the Senate Banking Committee. This victory for progressives is huge. It means that Senate Majority Leader Harry Reid—who makes the committee selection, later ratified by the Democratic caucus—did not cave to pressure from either the financial lobby or from Senate Banking Committee Chairman, Tim Johnson of South Dakota, who is effectively part of that lobby. (South Dakota gutted its usury laws decades ago to make the state hospitable to the back office operations of the biggest banks.) It isn’t just that Warren is a resolute progressive. It’s that she knows so much about the financial industry, from her years as chair of the Congressional Oversight Panel for the TARP, and before that as one of the leading scholars of bankruptcy and consumer abuses. And it’s that she’s incorruptible, as well as very smart.

more »

guardian.co.uk — Many of the nation's most important news outlets openly embrace the agenda of the rich and powerful that colors its coverage of major economic issues. This is perhaps nowhere better demonstrated than during the current budget standoff between President Obama and Congress, which the media routinely describes as the "fiscal cliff". This terminology seriously misrepresents the nature of the budget dispute, as everyone in the debate has acknowledged. There is no "cliff" currently facing the budget or the economy. If no deal is reached this year, then on 1 January, daily tax withholdings will rise by an average of about $4 per person. No one can think that this modest increase in tax withholdings would plunge the economy into a recession, but the Wall Street types seeking to dismantle social security and Medicare have used their enormous wealth and allies in the media to generate this kind of fear-mongering across the country.

more »

alternet.org — New York magazine calls it a “Mass Movement for Millionaires.” The New York Times' Paul Krugman sums up the idea : “Hey, sacrifice is for the little people.” The Campaign to Fix the Debt is a huge, and growing, coalition of powerful CEOs, politicians and policy makers on a mission to lower taxes for the rich and cut Social Security, Medicare and Medicaid under the cover of concern about the national debt. The group was spawned in July 2012 by Erskine Bowles and Alan Simpson, architects of a misguided deficit reduction scheme in Washington back in 2010. By now, the "fixers" have collected a war chest of $43 million. Private equity billionaire Peter G. Peterson, longtime enemy of the social safety net, is a major supporter. These CEOs talk about shared sacrifice, but it seems that they don’t intend to share anything but your retirement money with their wealthy friends.

more »

motherjones.com — "Debtpocalypse" is merely the latest installment in a tragic, 40-year-old story of the dispossession of American working people. Think of it as the archeology of decline, or a tale of two worlds. As a long generation of austerity politics hollowed out the heartland, the quants and traders and financial wizards of Wall Street gobbled up ever more of the nation's resources. It was another Great Migration—instead of people, though, trillions of dollars were being sucked out of industrial America and turned into "financial instruments" and new, exotic forms of wealth. If blue-collar Americans were the particular victims here, then high finance is what consumed them. Now, it promises to consume the rest of us.

more »

cepr.net — Many economists have pointed out that the Campaign to Fix the Debt and the rest of the austerity crew seem badly confused about basic economics. The most obvious item that they seem to be missing is that large current deficits are the result of the downturn that was caused by the collapse of the housing bubble. We did not go on a sudden spending spree and tax cutting orgy in 2008. The deficits exploded because the downturn sent tax collections plummeting and increased spending on programs like unemployment insurance. Rather than posing a risk to the economy, the deficits are sustaining demand and growth, keeping unemployment lower than it would otherwise be. The markets understand this, which is why investors are willing to lend the United States trillions of dollars at interest rates that are just over 1.5 percent. But this is far from the only problem with the debt fixers' understanding of the economy.

more »

economix.blogs.nytimes.com — With regard to financial reform, the outcome of the November election seems straightforward. At the presidential level, the too-big-to-fail banks bet heavily on Mitt Romney and lost; President Obama received relatively few contributions from the financial sector, in contrast to 2008. In Senate races, Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio demonstrated that it was possible to win not just without Wall Street money but against Wall Street money. More broadly, this political shift coincides with and matches a significant change of views within the regulatory community. To pick these up, you need to listen carefully, but the signs are unmistakable.

more »

robertreich.org — I’m trying to remain optimistic that the President and congressional Democrats will hold their ground over the next month as we approach the so-called “fiscal cliff.” But leading those negotiations for the White House is outgoing Secretary of Treasury Tim Geithner, whom Monday’s Wall Street Journal described as a “pragmatic deal maker” because of “his long relationship with former Treasury Secretary Robert Rubin, for whom balancing the budget was a priority over other Democratic touchstones.” Geithner is indeed a protege of Bob Rubin, for whom he worked when Rubin was Treasury Secretary in the Clinton administration. Rubin then helped arranged for Geithner to become president of the New York Fed, and then pushed for him to become Obama’s Treasury Secretary. Both Rubin and Geithner are hardworking and decent. But both see the world through the eyes of Wall Street rather than Main Street.

more »

finance.yahoo.com — The talk in Washington these days might lead people to think that the main cause of the economic downturn is the Social Security and Medicare benefits being paid to retirees. After all, we have people from both parties giving us assurances that cuts to these programs are an essential part of any budget deal. This is the sort of topsy-turvy thinking that passes as conventional wisdom in Washington. In case it's necessary to remind people, our economy plunged due to the collapse of a Wall Street fueled housing bubble. The loss of demand from the collapse of the housing bubble both led to a jump in the unemployment rate from which we have still not fully recovered and also the large deficits of the last five years.

more »

salon.com — The need for a “grand bargain” involving taxes and entitlements — in the next few years, if not immediately — has moved to the center of discussion in Washington. But it’s the wrong grand bargain — and a very bad deal for Middle America. According to the conventional wisdom, any grand bargain should be modeled on plans like the Bowles-Simpson plan or the Rivlin-Domenici plan — financing lower tax rates on the rich by closing tax loopholes and cutting Social Security and Medicare. In the aftermath of an election in which the candidates of the rich were trounced at the polls, America’s plutocratic conservatives might be satisfied with merely maintaining existing low tax rates on the rich, while capping loopholes and cutting Social Security and Medicare. This entire approach should be rejected. It is based on two fallacies.

more »

huffingtonpost.com — More than 600 small business owners and executives wrote a letter to every member of Congress urging them to end the Bush-era tax cuts for the wealthy under any deal brokered to avert the so-called "fiscal cliff." "As businesses owners, none of us hire more employees simply because someone gives us a tax cut. We hire more employees when our customers demand more of what we have to sell," the letter reads. "When a teacher, firefighter, or construction worker building public infrastructure loses his or her job, many of us also lose a customer." The letter also emphasizes that the Bush tax cuts for the wealthy do not generally aid small businesses, and suggests that the money could be better spent on infrastructure projects, education, or other efforts to strengthen the economy.

more »