bipartisanship

The Importance of Being Alan: A Response to Alan Simpson's Conservative Defenders

Daniel Marans — Fri, 27 May 2011 16:03:03 -0400

Try as they might, conservatives cannot rescue Fiscal Commission Co-Chair Alan Simpson from self-marginalization. But while Simpson’s revealing gaffes remain a welcome political gift for opponents of Social Security and Medicare cuts, his staying power in elite policymaking circles only attests to the sad and distorted state of our nation’s fiscal debate—and the powerlessness of mainstream America within that discussion. That Simpson was probably the most prominent Republican President Obama could find to chair the Commission, is just the latest sign of how Democrats have had to define “moderate” down to slightly-left-of-nutjob.

Charles Blahous, a conservative Social Security expert, and public trustee of the Social Security trust funds, tries to undo the damage done to the Fiscal Commission’s credibility by Ryan Grim’s conversation with Fiscal Commission Co-Chair Alan Simpson. While some of the points he makes are valid, all fail to restore confidence in Simpson as a prominent voice on Social Security policy, or the fairness of the process by which the Fiscal Commission developed its recommendations.

Here’s the rundown. Grim found Simpson cursing out AARP, calling Social Security a “Ponzi scheme,” and claiming that life expectancy was 63 when Social Security was created at an event hosted by the Investment Company Institute, a financial industry trade group.

Grim caught up with Simpson and challenged him on the life expectancy statistics. It turns out, Grim noted, that according to the Social Security Trustees, life expectancy if you reached age 65 was 79.7 years for women and 77.7 years from men. Overall life expectancy was lower because of high infant and childhood mortality rates that medical advances have since been largely eliminated. Contrary to Simpson’s implied argument that Social Security was intended to cover very few people, the life expectancy statistics at age 65 confirmed that it served a very real segment of the population.

Simpson responded with confident disbelief, saying, “Just because a guy gets to be 65, he’s gonna live to be 77? Hell, that’s my genre. That’s not true.”

Chuck Blahous defends Simpson, claiming that Simpson was clearly confusing life expectancy at any age with life expectancy at age 65. In any event, Blahous argues, Simpson’s point stands that overall increases in life expectancy have made Social Security’s finances unsustainable. Simpson’s statement does not discredit the Bowles-Simpson [Fiscal Commission] recommendations, because the “Commission” used SSA’s estimates of both kinds of life expectancy, regardless of what Simpson said. Finally, the ongoing 1983 increase in the normal retirement age from 65 to 67, Blahous says, does not account for the full increases in life expectancy.

But Blahous’s argument doesn’t hold water. In the first place, He gives Simpson far too much of the benefit of the doubt. What Simpson intended is not 100 percent clear; what he said is. And even then, what he intended is probably 99.9 percent clear. Simpson was evidently not familiar with the distinction between life expectancy at birth and life expectancy at age 65, and displayed a stubborn aversion to confirming the facts when he was presented with an account that did not square with his own.

It is really the latter aspect of the interaction, in which Simpson showed a total lack of intellectual curiosity, or openness to the possibility that he might not be familiar with the statistics being presented to him. If it were an aberration for Simpson that would be one thing, but unfortunately, Simpson has a long record of hostility to facts and people that challenge his glib pronouncements on Social Security. As head of the Fiscal Commission, he repeatedly derided critics who presented him with inconvenient information about the program’s finances (see Lawson, Alex), and was dismissive of Americans who rely on Social Security (see Carson, Ashley, and “cow with 310 million tits”).

More recently, Zach Carter heard Simpson parroting the oft-repeated myth that because Social Security had 16.5 workers for every 1 retiree in 1950, and only 3 workers for every retiree today, it is now de-facto unsustainable. In fact, the program had a 16-to-1 worker-retiree ratio in 1950 because of the addition of millions of farm, domestic and self-employed workers that year, who had not yet begun receiving benefits. Ten years later it was 5-to-1, and by 1975 it was at the 3-to-1 ratio it has now. More importantly, since 1961, as the number of workers supporting beneficiaries got smaller, Social Security’s tax rates and base have both more than doubled, going from 3% to 6.2% (on the employee side), and $30,000 to $106,800 (both current dollars), respectively.

As for Blahous’s argument that increases in the retirement age have failed to accommodate the financial impact of growth in life expectancy, he is comparing apples and oranges. As he concedes, growth in life expectancy is not the largest contributor to Social Security’s projected long-term shortfall (the decline fertility and increase in income not covered by the cap are the biggest causes). What Blahous doesn’t mention is that life expectancy’s financial impact is so insignificant that it could be entirely balanced by miniscule revenue increases. As Monique Morrissey of EPI explains, in her excellent paper, Beyond Normal: Raising the Retirement Age is the Wrong Approach for Social Security, longevity gains could be offset by a 0.01% increase in the payroll tax, phased in over 60 years from 2025 to 2084.

I disagree with Blahous that the Commission’s proposal must be considered independently of Alan Simpson. The Commission has been irrevocably discredited by Simpson’s record of ignorant and insensitive remarks. Blahous is correct that the Commission staff, who no doubt did the bricks-and-mortar work of running the numbers for the recommendations, know the correct numbers on life expectancy. But the Commission’s—or, more accurately, Erskine Bowles and Alan Simpson’s—proposal, has earned gravitas in the media and in Congress (where a group of Senators is using its proposal as the basis for a bipartisan deficit deal), at least in part by virtue of the distinction enjoyed by the two men who headed it. As evidenced by the location of his very encounter with Grim, Simpson continues to be an active spokesman for a center-right brand of deficit reduction, and use his perch to mischaracterize Social Security and other programs.

The practical implications of Alan Simpson’s leadership are two-fold. First, his constant repetition of exaggerations and myths about Social Security has no doubt contributed to the constant drumbeat of fear that has characterized debate over the deficit in general, and Social Security in particular. When the President’s Republican appointee as chair of the Fiscal Commission can spew such misinformation about Social Security and is received as “brave” and “honest” on all of the major television networks, is it any wonder that the public believes Social Security is “broke,” “not gonna be there,” and responsible for our debt?

More importantly, Simpson represents just what it means to meet Republicans on their terms in the current political climate in Washington. When President Obama, a Democratic president, appointed Simpson to be the Republican face of a blue-ribbon Fiscal Commission, Simpson was hailed for his spunk and wit, and willingness to “tell it like it is.” Without a Republican figure like Simpson who was willing to agree to cutting tax loopholes, which angered Grover Norquist, it is likely that a bipartisan Commission would not have been able to exist. But beyond ticking Norquist off, and not embracing the Ryan budget wholesale, Simpson is not especially “moderate.” And neither was the Commission he headed, for that matter. The composition of the Commission’s proposal was two-thirds cuts and one-third revenue increases at a time when tax rates on the wealthiest Americans have reached their lowest levels since the 1950s. Is it really worth courting moderates like Alan Simpson who are liberal only when compared to Grover Norquist and Paul Ryan?

In denouncing Simpson, we must also reject the logic of bipartisan appeasement that empowered him. Rather than work with Republicans to reduce the deficit on their unfair and ultra-conservative terms, we should stand our ground, knowing that the public stands with us.

WWTOD: What Would Tip O'Neill Do?

Daniel Marans — Wed, 16 Feb 2011 16:48:50 -0500

What would legendary House Speaker Thomas “Tip” O’Neill (D-MA) do, if he were here right now? That seems like an important question to ask now that President Obama has invoked the 1983 Reagan-O’Neill deal on Social Security as a model of responsible, bipartisan “entitlement” reform. But in order to understand what O’Neill would do, we need to accurately recall exactly what he did and the circumstances in which he did it. A closer look at the history reveals that President Obama has a lot to learn if he is to live up to O’Neill’s legacy.

In calling up the ghosts of the Reagan-O’Neill deal in his press conference on the budget, the President’s message was two-fold: First, both sides will have to make concessions to “reform” entitlements, just as Tip O’Neill did with Reagan in 1983. Second, by engaging Republicans I, President Obama, am merely following in the footsteps of Tip O’Neill, a venerated Democratic luminary.

Let’s begin by assessing the claim implicit in the first part of the President’s message: That the imperatives and conditions for reforming Social Security are as strong now as they were in 1983.

An honest interpretation of the facts shows this to be a false analogy. Neither the imperatives, nor the conditions for Social Security reform in 2011 are what they were in 1983.

Here’s what I mean:
• Saving Social Security may have required compromise in 1983, but that is no longer true. Back in 1983, Social Security was facing an immediate financial shortfall in which it would be unable to pay full benefits in a matter of months. Democrats had no choice but to deal with the problem right away, so the impetus to compromise was much greater. In fact, the cuts and revenue increases implemented then—including a delayed COLA, retirement age increase, and taxation of benefits—are responsible for Social Security’s current surplus of $2.6 trillion.

• Bob Ball, the brains behind the ’83 compromise, argued that benefit cuts would be unnecessary and irresponsible in the next round of reform. “It’s the essence of responsibility to insist on no benefit cuts,” Ball wrote in a 2007 op-ed in the Washington Post. “What was right in 1983—a balanced package of benefit cuts and tax increases as part, roughly half, of the final agreement—would be wrong today.” Ball goes on to explain that present Social Security benefits are too modest, specifically because they are already being cut as the ’83 retirement age increase takes effect, and deductions for Medicare premiums continue to rise.

• Even the ’83 compromise was too weighted toward benefit cuts. In the Greenspan Commission’s final recommendations to Congress it offered a choice between raising the payroll tax rate and raising the retirement age as the final measure that would put Social Security in long-term actuarial balance. Congress opted to raise the retirement age, thereby shifting the make-up of the legislation to two-thirds benefit cuts and one-third revenue increases—hardly even-handed in its effects.

• The ’82 Greenspan Commission was a stronger and more balanced framework for dealing with Social Security than today’s Fiscal Commission.
o The Greenspan Commission enjoyed the confidence of both parties. This was in large part because it narrowly focused on the immediate problem of saving Social Security, it agreed on preserving the program’s fundamental structure, it included a diverse sampling of party representatives and stakeholders from the labor and business communities, and it was staffed exclusively by Social Security experts like Robert J. Myers, chief actuary of Social Security from 1947 to 1970, and Robert M. Ball (aka Bob), who served as Social Security Commissioner from 1962 to 1973 and is considered the figure most central to the development and protection of Social Security over the course of six decades.
o By contrast, President Obama’s Fiscal Commission enjoys no such confidence. The Commission’s broad mandate for deficit reduction undermined its ability to address the peculiarities of Social Security, a program that has not contributed one penny to the deficit. In addition, the Commission’s make-up was bipartisan only in the most cosmetic sense: its Democratic members were disproportionately fiscally hawkish, and many of its Republican members were avowed proponents of privatization. The Commission’s staff contained few if any experienced Social Security experts, and minorities and the labor movement were severely underrepresented among the Commission’s members.

As for the second claim, it can hardly be said that President Obama’s overtures to the GOP are consistent with O’Neill’s cautious brand of bipartisanship. Thus far, President Obama’s behavior has been more like that of Reagan, who got played, than O’Neill, who did the playing.

But it’s not too late for President Obama to change his approach. He can still throw the Bowles-Simpson recommendations in the garbage, speak passionately about Social Security and its recipients, and restart the debate with Republicans on his own terms. In short, the President can channel his inner Tip O’Neill.

If O’Neill were here today, here’s what he’d do.
• Make the GOP go first. President Reagan made the colossal blunder of being the first to propose changes to Social Security. Reagan’s Budget Director David Stockman recommended $2.5 billion in Social Security cuts as part of the omnibus budget in 1981. The most egregious cut was a provision that would reduce benefits at age 62 from 80 percent of full benefits at age 65, to just 55 percent. Democrats wasted no time attacking it and from then on, they more or less controlled the debate.

• Separate Social Security from the rest of the budget. O’Neill knew that unlike the rest of the budget, the American people feel a deep sense of personal ownership for Social Security, because they earn their benefits with lifelong contributions from their wages. The key weakness in Stockman’s initial Social Security proposal was that it lumped Social Security in with the regular budget, literally using funds designated to Social Security for other purposes. Exploiting this flaw, O’Neill immediately focused the debate on how cuts would betray the program’s promise to the American people. He called a press conference right away, telling reporters, “For the first time since 1935 people would suffer because they trusted in the Social Security system. I’m not talking about politics. I’m talking about decency.” Obama can still do this in the context of a larger deficit reduction deal if he insists that each component be dealt with individually.

• Make Social Security a moral issue. O’Neill called Social Security a matter of “decency,” and regularly denounced Republican attempts to harm the program as “rotten” and “despicable.” President Obama’s language on Social Security has been tepid up to this point, focusing generically on “strengthening” the program for future generations. Obama should at least speak passionately against those who would cut Social Security it after the devastation the recent financial crisis wrought on Americans’ retirement savings.

• Negotiate from a position of strength. Because O’Neill led a massive public relations campaign against Reagan for sticking it to seniors, he was able to bring Reagan to his knees before talks even started. As a result, O’Neill got to call the shots. Reagan abandoned Stockman’s proposal, and instead created the Greenspan Commission, over which the Democrats would have much greater sway. Even at the end, when the bipartisan legislation was signed, O’Neill turned down Reagan’s overtures for a joint press conference and did one on his own, so as to deny Reagan the credit of seeming bipartisan. Obama, by contrast, has already submitted to GOP pressure by creating the lopsided, deficit-focused Fiscal Commission, and expressing his willingness to put “everything” on the table.

• Start by demanding more than what you’d ultimately settle for. O’Neill and his surrogates on the Greenspan Commission began by adamantly opposing cuts, and repeating their opposition publicly as often as possible. In reality, they were willing to make small sacrifices, but they knew the final concessions would be greater if they agreed to cuts right away. Obama has considered offering cuts just as a way of getting Republicans to come to the table. Now he says he won’t “slash” Social Security benefits for future retirees. He needs to decide what he wants his end point to be. O’Neill might tell him that if the President does not want any cuts, he should start by demanding that Republicans increase benefits.

Mr. President, Americans Agree On Social Security. So Talk To Us, Not Washington.

Richard Eskow — Thu, 13 Jan 2011 03:53:11 -0500

Mr. President, you moved a nation today with your words in Tucson. "Rather than pointing fingers or assigning blame," you said, "let us use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together."

You also said this: "It's important for us to pause for a moment and make sure that we are talking with each other in a way that heals, not a way that wounds."

Two weeks from now the State of the Union address will be an opportunity to bring Americans together - Americans who have been bitterly divided by party loyalty and ideology, but who stand united in their support for the social programs that have improved our lives for the past seventy-five years. On that night, will they know that somebody has heard them? Will they feel that someone is talking to them? Will they feel they have a voice inside the Capitol rotunda, in a city where they sometimes seem to have been forgotten?

There's a popular idea in Washington that I've - perhaps too harshly - called "the Third Way Fallacy." It essentially says we can end the harsh and divisive nature of today's politics by having Washington party leaders work out their differences in private. Some of us think that's the wrong way to go about the people's business - that a truly "bipartisan" approach must respect the opinions of each party's members, not just those of its leaders.

But whatever my past criticisms of Third Way, the organization had a terrific suggestion today for increasing civility in politics. In an open letter to Speaker Boehner, they suggested that the Congressional seating chart be changed for this year's State of the Union address so that members aren't separated by party.

"We do not see any purpose behind putting Democrats on one side of the floor and Republicans on the other," Third Way's letter said. "The spectacle of one side of the room leaping to its feet while the other sits glumly on its hands is just that--a spectacle. Perhaps having both parties sit together, intermingled, would help control the choreography of partisanship that accompanies the President's remarks."

This idea is smart, moving, and even beautiful. The State of the Union has turned into an annual circus, as you know far better than I. Americans want more statesmanship in Washington, and this would be a symbolic way of letting them know they've been heard. The Speaker would bring honor to himself and his institution if he took this suggestion. It would, in Third Way's words, "demonstrate what is true but not always apparent--that we are one nation, not two, and that Members are unified by their service to our country."

Mr. Boehner is famous for crying in public, but if he follows this suggestion maybe we'll cry instead. It might be good for the country if more of us shared the burden of tears.

But the business at hand won't just be symbolic. As you know, Mr. President, leaders of both political parties have been talking about Social Security cuts. Your own Deficit Commission came up with some very Draconian (and unpopular) ideas, and members of your Administration haven't committed to defending retirement benefits. There are even rumors that people in your Administration have floated trial balloons about cutting a deal with Republicans to raise the retirement age and make other cuts.

Inside the Beltway there's some "bipartisan" approval for those ideas. But outside Washington the real bipartisan consensus is even stronger: Large majorities of Americans - Democrats, Republicans, and independents alike - agree that Social Security must be defended, not cut.

Mr. President, I hope you'll have the chance to see the poll numbers on Social Security. We know you've said you won't govern by following polls, and we respect that. But it's moving and inspiring to see the way Americans of all political parties have joined together in their defense of Social Security. They speak with one voice about how to handle it: Raise the payroll tax cap and protect its current benefits. They're equally united in their defense of Medicare in similarly large numbers. These are the people's programs, and people of all political persuasions want them protected.

We know that Americans don't like party squabbling. But that doesn't mean they want the two parties to collaborate on policies that rank-and-file members of both parties have rejected. Voters mean exactly what they've told those pollsters for years: They want Washington politicians to work for them, not each other. They'll be watching on January 25 to see their leaders speak to them, or to each other.

When asked how we should cut the deficit, Americans would rather raise taxes on the wealthy than cut Social Security by more than two to one. These Americans - Democrats, Republicans, and independents - make up the New Silent Majority, and they speak with a single voice. To paraphrase Third Way, when they talk about Social Security they demonstrate what is true but not always apparent - that we are one nation, not two.

This bipartisan consensus has the unwavering support of non-partisan experts, too - experts like Harry C. Ballantyne, who was appointed Chief Actuary for the Social Security Administration under Ronald Reagan. Mr. Ballantyne and two respected economists wrote a paper that explains how the bipartisan preference for Social Security - keep benefits and raise the payroll tax cap - addresses that program's very modest long-term shortfall.

There will be many people in the room with you who want to make these cuts anyway, Mr. President. Despite the great benefits that have flowed to the wealthiest among us, they'll want to protect the wealthy from paying the same payroll tax rate as police officers or nurses. These differences of opinion are unavoidable in a democracy. But you'll have an opportunity to show the nation how its leaders can differ with courtesy and grace - and in this case, with a bipartisan majority at your back. You'll be able explain that you're not defending Social Security because you speak for Democrats, but because you speak for all Americans.

While you're at it, you can also defend the principles of trust and honesty. Too many politicians and pundits have said that the government's bonds, which cover the money it has borrowed from Social Security's Trust Fund, is just an "IOU." That's not true. And you can remind them that even if it were true, we're an honorable people who make good on our IOUs.

There isn't a single argument being thrown around today about Social Security that hasn't been around for 75 years: "Ponzi scheme," too many old people and too few workers -- you name it, we've heard it before. That's why President Eisenhower's bipartisan panel refuted them all back in the 1950s. Ike's experts defended our shared hopes and dreams back then, and now it's our generation's turn.

You also said that in a time of tragedy "we reflect on the past. Did we spend enough time with an aging parent ... Did we express our gratitude for all the sacrifices they made for us?" What better way of expressing gratitude to all of our aging parents than by ensuring their financial security? That's an ideal way to "expand our moral imaginations, listen to each other more carefully, sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together."

Our moral imaginations shouldn't be limited to slanted ideas cooked up in think tanks and parroted by pundits and consultants.

Sometimes listening to one another, really listening, means we have to silence the clamor of Beltway chatter.

Our instincts for empathy can be sharpened by the image of an elderly woman in a small urban apartment, struggling to get by on $800 per month. They should direct our thoughts to the 68-year-old janitor whose back aches after half a century spent pushing a broom. They should call us to remember the waitress whose feet can no longer support her for eight hours, and whose bent fingers can no longer scribble on her order pad.

We've been bound by shared dreams since the country was founded. Social Security and Medicare turned some of those dreams into reality. Let's not turn them back into dreams.

Mr. President, this year's State of the Union will help to shape your legacy. That legacy can be one of real bipartisanship. You can bring us together as a people by expressing our shared commitment to Social Security. That's a commitment that binds Republicans, Democrats, Independents, and even Tea Party followers together in a common bond.

Reach out for that bond. Express it. Build on it to create a new American consensus - a consensus for fairness, a consensus for security, a consensus for growth and jobs. Americans are united on the issue of Social Security, and the state of that union is sound.

At least in one small way, we're already bound together in our hopes and dreams. In a wounded moment, that bond can help us heal.

________________________________________________

This post was produced as part of the Strengthen Social Security campaign.

Obama's Top Priority Must Be Jobs, Not Republican Appeasement

Zach Carter — Wed, 03 Nov 2010 12:08:31 -0400

Economic policy has faced grave challenges over the past two years, hamstrung by obstructionist Republicans in the U.S. Senate and Wall Street-friendly advisers in the Obama administration. With the Republican Party now in control of the House, it seems certain that any major action to create jobs will face tremendous obstacles. This is a global calamity. But the political lesson of the past two years should be clear: all the good PR in the world can't whitewash a terrible economy. For the next two years, President Obama and his Congressional allies must do everything they can to actually improve the job market. Without a better economy for ordinary Americans, Democrats are doomed in 2012.

Ezra Klein presents what he thinks is a rosy view of how policy could proceed after last night. To me, it looks like exactly the sort of empty political gesture that Democrats should be fighting. Ezra envisions Obama and new House Speaker John Boehner, R-Ohio, reaching a grand bargain on economic policy: the payroll tax is lifted for a year, $50 billion in infrastructure spending is approved, the unspent 2009 stimulus money is abandoned, and $400 billion in spending cuts over 10 years are approved.

Ezra calls this the next chapter in an imaginary "universe where the government works." It's more like the next chapter in an imaginary world where the government works, and every policymaker is completely insane. Sure, the deal would convince voters that Democrats and Republicans can pass legislation (if it passed). But the result would be a neutral to negative impact on the job market. Continuing today's avoidable economic suffering is bad enough in its own right, but it's also a political disaster for Democrats.

If Obama heads into 2012 with double-digit unemployment, he will lose. End of story. Voters have a terrible view of Republicans, and they just sent over 60 new Republicans to Washington because Obama didn't bring down the unemployment rate. Those results prove that Democrats' backs are already up against the wall on 2012. Fixing the economy takes time, and we need strong, serious action as soon as possible, or we are headed for political calamity.

Why won't Ezra's policy package work? It has two useful elements—a tax cut to hire more workers, and $50 billion in infrastructure spending. Both of these would help some—if the tax cut was really wildly effective, they might combine to take the unemployment rate down by half a percentage point. But these useful policies would be offset by other spending cuts. And unless we're only cutting $600 hammers in the Pentagon budget, those spending cuts are going to kill jobs. To get $400 billion in cuts, we'd have to find 667 million of those hammers.

Lifting the payroll tax really might help create jobs. We don't know how many, but it surely wouldn't be as effective as simply hiring people outright, and that's what government spending—"stimulus" or otherwise—does. In other words, Ezra has outlined a proposal to kill jobs in order to maybe create some.

Showing that they can work with Republicans won't save Democrats in 2012. Only real economic results will. Aggressive PR about how you really actually did fix things won't convince people who are out of a job or in foreclosure. They know the economy still sucks, and even worse, they know you're not telling the truth.

So Obama also has to get his messaging in order. It may very well prove to be the case that Republicans block all but the most modest of steps to create jobs. Obama can't pretend that these steps are enough, and he cannot hesitate to attack Republicans, holding out hope that maybe, someday they will magically come to their senses and start approving policies that promote growth. He can't keep repeating the Republican talking points Rahm Emmanuel fed him over the past two years—the government can create jobs. Right now, it's the only entity that can.

Getting past "partisanship" doesn't mean cutting whatever crappy deal you can with your political adversaries. It means eschewing political grandstanding for good policy. Without good policy, bipartisanship is a pyrrhic victory.

So Obama has to fight hard for policies that actually bring the unemployment rate down, and he must be willing to defend his policy proposals from Republican attacks, making a clear moral case for why spending to support jobs is a good idea. Republicans know that they can win the White House in 2012 by simply blocking Obama and letting the economy fall apart. They'll do it. They already have. Obama has to hold Republicans rhetorically accountable so they fear the electoral consequences of obstruction enough to vote in favor of policies that actually work.

If Republicans refuse to cooperate, Democrats must at least demonstrate to voters that they are working for voters, not for bigwig bankers. The stimulus package approved in 2009 was too small for a variety of reasons, but one of them was due to the fact that Larry Summers and Timothy Geithner expected the financial system to help revive the economy. It didn't, because the system is dominated by too-big-to-fail behemoths with massive losses embedded in their balance sheets.

It's been very fashionable in D.C. to say that the bank bailouts "worked," even though they were unpopular. But they didn't work—banks aren't lending. And they didn't work because banks are still saddled with hundreds of billions of dollars worth of lousy assets. Regulators are allowing banks to account for those assets at inflated values, which protects the banks from losses. So banks trade securities instead of lending, and slowly recognize losses as they rake in gambling profits. This is why the foreclosure fraud scandal has sent bank stock prices on a downward trend—investors know that enough documentation will spark a new wave of losses, causing big trouble for Wall Street.

So we still need to fix the financial system. Banks must be forced to recognize their losses. Where those losses render a bank insolvent, the bank has to be restructured—shareholders wiped out, creditors taking a hit, and taxpayers putting up money only where doing so prevents a cascade of defaults. This will be painful, but no more painful than watching a recovery without credit.

And if Obama can't get these policies, he needs to at least fight for them. Prosecute the deep fraud in the financial system that is being uncovered every day. Explain to voters that Republicans are blocking job-creation.

These policies will be extremely difficult to secure in the face of anything close to the Republican obstruction we've seen over the past two years. But Democrats simply have no other choice. Without major action on the economy very soon, the White House is already gone.

Bipartisan Blight III: Evan Bayh Bye

Robert Borosage — Wed, 17 Feb 2010 16:59:26 -0500

Evan Bayh abruptly announced he was quitting the Senate days before the filing deadline for his Senate seat, without notice to his constituents, to his colleagues, to his party's leaders or to the White House. He deprived the Democratic voters in Indiana who had voted him into office of the opportunity of choosing their own nominee. Nice work.

So naturally, the pundits are celebrating Bayh as a "good and thoughtful" person, a moderate appalled at the partisanship that has gridlocked the Senate. Perhaps, muses the Washington Post's Ruth Marcus, his departure will be the "wake-up call" the Senate needs to work together once more.

Who could argue with Bayh's complaint? The Senate is dysfunctional. Bitter partisanship divides Washington. Politicians spend their lives raising money, as Bayh with some $13 million in his campaign account can attest.

But absent from this celebration of a departing hero is even a fleeting glance at substance. What has Evan Bayh been championing with his bipartisan common sense? Has he had any success?

The harsh reality is that Bayh has been wrong about virtually everything. And the country suffers not because partisanship blocked action, but because the establishment consensus got too much of his agenda enacted.

Bayh supported the catastrophic invasion of Iraq. He joined the bipartisan celebration of banking deregulation. He favors more military spending. He favored tax breaks for the wealthiest Americans in an age of Gilded-Age inequality. He was an advocate of corporate free trade policies that encouraged multinationals to ship jobs to a mercantilist China willing to subsidize them. He's a champion of bipartisanship -- bipartisan folly.

Even in his departing, he got it wrong. Bayh announced on CBS's Early Show that he was looking for a job in the private sector because "If I could create one job in the private sector by helping to grow a business, that would be one more than Congress has created in the last six months." This echoes the Republican assault on the recovery plan as summarized by newly elected Sen. Scott Brown of Massachusetts, that the stimulus plan "didn't create one new job."

Republican spinmeister Frank Luntz would be proud. These are great sound bites. They play to people's anger about jobs, the economy, Wall Street, the bailout, the deficits. But they are both untrue and silly. There is no serious economist, right left or center, who does not accept that the recovery plan generated or saved nearly two million jobs —and forestalled what would have been a far worse downturn, if not a depression. As David Leonhardt summarized in the New York Times Wednesday:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody's Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

The reality, as Martin Wolf of the conservative Financial Times once more details, the recovery act was too small, not too large— and too laden with ineffective top-end tax cuts, rather than public services jobs and infrastructure spending that would put people to work. This, of course, was a reflection of Evan Bayh's bipartisan labors, as he joined with a couple Republicans and the sainted Democrat Ben Nelson to cut the size of the recovery bill that passed the House, adding top-end tax cuts and cutting spending on school repairs and the like, making it far less effective than it might have been.

Since then Bayh has been echoing the growing establishment clamor about deficits and debt. He has championed the notion of a bipartisan commission to report to a lame-duck Congress to vote up or down on a package that would surely include cuts in Social Security and Medicare and tax increases. This is a classic example of Naomi Klein's Shock Doctrine, of conservatives using a crisis to enact measures that would otherwise be politically unacceptable—and that force working families to pay for the failures of the elite.

It's worth repeating, as Martin Wolf summarizes: In the short term, we need more, not less of a boost to the economy; deficits should be higher not lower, as government spending steps in while consumers recover from the loss of over $10 trillion in assets.

Once the economy starts moving, growing employment produces rising tax revenues, and lower spending on supports like unemployment and food subsidies will erase much of that short-term borrowing. In the long term, our unsustainable deficit projections are driven almost entirely by our broken health care system. If the U.S. had the German health care system, or spent the same percentage of gross domestic product as they do on health, we'd have better health, and a surplus as far as the eye can see.

Bayh's complaint about Washington gets some things right. Washington would be a better place were there more civility. The Senate would be functional if it would adopt majority rule. It would be far better if legislators would work together than try to do each other in. Money politics corrupts the Congress. But with all that, we should not forget about policy. The substance of Evan Bayh's bipartisan policies that were enacted helped get us into the mess we are in, and are making it harder to get out of it.

Obama To Progressives: Stop Working to Elect Democrats

Jonathan Walker — Sat, 27 Jun 2009 16:15:45 -0400

While President Obama has yet to tell his progressive grassroots supporters directly, his words and actions make it clear that he wants progressives to stop working to elect Democrats. The problem is that Obama has a strange, overwhelming bipartisanship fetish. Apparently, getting good legislation passed, truly fixing our health care system, and providing Americans with the best possible care at the lowest possible price is all less important than the approval of a handful Republican senators.

Obama has said so himself multiple times: “The president has told visitors that he would rather have 70 votes in the Senate for a bill that gives him 85 percent of what he wants than a 100 percent satisfactory bill that passes 52 to 48.” In other words, Obama is happy to make our health care system 25% worse solely for the approval of Republican Senators Grassley, Hatch, and Snowe.

The progressive grassroots community worked hard over the past four years to give the Democrats their largest majority in the Senate in decades. Once Al Franken is seated, the Democrats will have a filibuster-proof 60 seats. Despite massive wins (and dismal poll numbers for Republicans), Obama is obsessed with watering down important legislation to win a few votes from any Republican senators.

Since Obama values “bipartisanship” more than getting the best possible legislation passed, progressives are hurting their cause by working to elect Democrats. Every Democratic Senator elected makes the Senate Republican Caucus smaller and more conservative. That means legislation needs to be pushed even farther to the right to gain the support from an ever-shrinking pool of GOP Senators.

As long as Obama values the votes of a few Republican senators more highly than fulfilling campaign promises, grassroots activists should be working to elect moderate Republican senators instead. Obama's action makes it clear that the progressives should support Republican Mark Kirk for Senate in Illinois and Republican Mike Castle for Senate in Delaware.

If every bill is only going to be as liberal as the most moderate Republican senator, working to elect Democrats is counterproductive. Obama should be focused on fixing the country, not undermining the Democratic party by forfeiting to a few Republicans the incredible power of shaping legislation just to gain the label “bipartisan”.

http://jwalkerreport.blogspot.com/2009/06/obama-to-progressives-stop-wor...

Forked Tongues

Digby — Wed, 12 Nov 2008 03:57:23 -0500

I have been struggling since the election to write the big piece about "what it all means" but others here and elsewhere have said it all so eloquently that I've been stymied. It goes without saying that Barack Obama's win is a great victory for racial progress, and there is no doubt that the country has finally awakened from its post 9-11 trance. But what does it all mean for progressivism? I honestly don't know yet. The contours of this victory are still amorphous to me. I'm watching it unfold with excited interest and hope.

It's much more obvious to me what has changed for the right considering their epic fall from grace--- absolutely nothing. This is because in their minds they didn't actually lose --- liberalism did. Back in 2005 I wrote:

Movement conservatives are getting ready to write the history of this era as liberalism once again failing the people. Typically, the conservatives were screwed, as they always are. They must regroup and fight for conservatism, real conservatism, once again. Viva la revolucion!

There is no such thing as a bad conservative. "Conservative" is a magic word that applies to those who are in other conservatives' good graces. Until they aren't. At which point they are liberals.

Get used to the hearing about how the Republicans failed because they weren't true conservatives. Conservatism can never fail. It can only be failed by weak-minded souls who refuse to properly follow its tenets.

They have certainly lived up to my expectations. Here's Rush:

The way to the light is plainly visible. But everybody wants to be considered the smartest people in the room, so they come up with all these new things like "the era of Reagan is over...[T]here's a blueprint for winning it, 1980, there's a blueprint. McCain is not the blueprint for how Republicans win landslides. Going after moderates, independents, and all these yokels is not the blueprint. The blueprint's there, 1994, taking back the House, the blueprint's there. Why are these people ignoring it?

And if anyone wonders how they plan to go forward, here's Michael Reagan:

It's official: America has its first truly Socialist president... and it's the Republican Party's fault...the so-called "leaders" of our party, who promised us that if we'd just vote for who they put up for election, we'd finally get what we wanted: smaller government, lower taxes, dramatically lower spending, pro-life laws, pro-marriage constitutional amendments, pro-American economics... well, YOU AND I put them in power, and they gave us nothing but BIG GOVERNMENT, BIG DEFICITS, and LIBERAL COMPROMISES.

[We must] EXPOSE LIBERAL CORRUPTION-- With the Democrats back in power in both Congress and the White House, you KNOW that they'll be falling right back into their habits of taking lobbyists' money under the table, trading votes for campaign contributions, spying on and sabotaging Republican legislative plans, covering up their leaders' sexual "flings," and spending taxpayer money on personal expenses like never before. But this time, YOU AND I will be there every step of the way, making sure that no stone is left unturned, every dark corner is filled with light, and every illegal act is paid for with censure, impeachment, recalls, investigations, and jail time for every criminal we expose in Washington, D.C.

Lest anyone believes this thinking is confined to the fever swamps, here's a member of the Senate talking about how he plans to approach this new era:

Jon Kyl, the second-ranking Republican in the U.S. Senate, warned president-elect Barack Obama that he would filibuster U.S. Supreme Court appointments if those nominees were too liberal.

Kyl, Arizona's junior senator, expects Obama to appoint judges in the mold of U.S Supreme Court Justices Ruth Bader Ginsburg, David Souter and Stephen Breyer. Those justices take a liberal view on cases related to social, law and order and business issues, Kyl said.

"He believes in justices that have empathy," said Kyl, speaking at a Federalist Society meeting in Phoenix. The attorneys group promotes conservative legal principles.

Kyl said if Obama goes with empathetic judges who do not base their decisions on the rule of law and legal precedents but instead the factors in each case, he would try to block those picks via filibuster.

Naturally, Kyl was one of those threatening to invoke the so-called nuclear option to end the filibuster when such things were suggested by the Democrats.

I hear a lot of people saying they think the backlash politics of Nixonland may finally be in retreat with the election of an African American president. Let's hope that's true. But it pays to remember that ruthless attack politics have been practiced by somebody in America since the very beginning. And we have an entire generation of conservatives trained in its dark arts. I suspect they'll find a way to use them.

But in the early going, it's clear to many of us that the bigger threat to the progressive agenda lies with the political establishment's frenzied attempt to narrow the mandate to a cramped, incremental centrism. They insist that the country is center-right even in the face of a broad progressive victory and demand that the the new administration must bend over backwards to accomodate conservatives or risk being seen as liberal, which is assumed to be the political kiss of death. They say this in spite of the fact that the Republican Party is less popular than e coli.

Like David Sirota here and others elsewhere, I have been tracking this "center-right" meme that has been building since the election. (In fact, I've been tracking this theme as it's built since the 2006 election.) Here's a fairly mundane, but thoroughly common, case in point. Steve McMahon, Democratic strategist, said on Chris Matthews yesterday that "the middle decided this election and the swing voters are waiting for Obama to address their economic concerns."

That's simply not true. The turnout was only slightly higher overall than last time because Republicans stayed home. But there was hugely increased turnout among Democrats and first time voters who registered as Democrats. Unless McMahon is saying that African Americans, young people and liberals are swing voters, he's just full of it. This was not a swing election. This was an enthusiastic endorsement of the Democratic Party by a majority of voters.

I can see why politicians say they represent the middle; it's a perfectly understandable bit of political rhetoric. But it's kind of a shame that every time I see an allegedly progressive spokesperson on television these days he or she is spinning like a whirling dervish derisively insisting that the left had nothing to do with this election. It's just sad. I guess we've got a way to go before Democrats will proudly own their victories or even give rhetorical lip service to the idea that Americans are progressives and believe in liberal ideas.

Matthews, of all people, actually batted this stuff back pretty vociferously, (which is also sad. If Chris Matthews is now the voice of the liberalism on television, we've got some big public relations problems.) The Republican strategist on Matthews' show, Todd Harris, agreed with him that Obama needed to deliver on his big promises, but offered this warning:

But big doesn't need to be conflated with liberal. He can be big and govern from the center. I think it's important that people not lose sight of what this election was and what it wasn't. What it was, was a historic victory for Barack Obama, what it wasn't was a wholesale realignment of American politics to the left.

Matthews interrupted:

You speak with a forked tongue, Todd. Let me tell you something, when Ronald Reagan won with 51%, when your guy George Bush won with less votes than Al Gore --- you talk about mandates --- he came in there and did exactly what he wanted to do. He came in there and gave tax cuts to the rich across the board. He took us to war in Iraq, the way he wanted to do it. The idea that you should pussyfoot if you're a Democrat, but if you're a Republican you go in there whole hog --- you have a totally ---two standards here. Republicans should take advantage of every victory and call it a mandate, Democrats should go in there and be very cautious --- "gee whiz, I'm sorry for being here, I hope we don't offend the conservatives" ----

Steve McMahon, would you jump in here please?

McMahon: First and foremost, Barack Obama believes there is a 700 billion dollar bailout that Obama believes was too tilted to Wall Street and the financial interests. The first thing he needs to do is get control of that so that some of that money can be redirected to some of the things you talked about. But he also promised health care reform and he promised to insure every American. He made big promises and these are very difficult to do. But there's not going to be enough money to do everything that he wants to do right away. So he's going to have to pick some priorities and I think what's important for Barack Obama is that the priorities he picks are mainstream values and mainstream priorities for the swing voters who got him ten or twelve states that John Kerry wasn't able to win.

Those are the people who delivered this presidency to him, not the left, and he needs to address their economic concerns with big ideas and bold programs but with programs that the country can afford.

Todd Harris: I think Steve is right about that and he ought to be looking for ways to work in a bipartisan way and the first thing that he can do is the enactment of his middle class tax cut. I don't think there will be a single Republican who will be opposed to that. I also think working toward energy independence is something the parties can agree on and on the foreign policy front, working to win the war in Afghanistan, something he talked about and Republicans ought to be able to get behind.

Matthews: Let's go through that. That sounds like a Republican platform...

Funny that.

When Obama says he's going to govern as a post partisan, I'm not sure even he knows exactly what that means just yet. But Democrats and pundits reflexively reassuring everyone who'll listen that the crazy progressives are completely irrelevant is not only a public slap in the face of millions of Democratic voters (many of whom are new and must be wondering who these hated Democrats are) is destructive. All I hear is small bore, boiler plate junk about middle class tax cuts and "stimulus" --- which doesn't mean anything to people. If they succeed in defining it as a crabbed, circumscribed agenda that must appeal to some mythological swing voter while simultaneously placating the walking ids that call themselves conservatives, they are going to shrink this mandate before the new administration has unpacked its laptops in the West Wing. I realize that they want to "manage expectations" but this excessive pearl clutching about bipartisanship is about as inspiring as dirt and could very well lead to a premature loss of confidence among the faithful and a loss of flexibility in the congress.

I obviously don't know what the new administration is going to do out of the gate. They're just figuring that out themselves. But I do know that the villagers are working overtime to make sure that whatever it is will be comfortably restricted to what they think is "center-right." And we know that the conservatives are going to continue their obstructionist tactics and character assassination because they still think that's a winning strategy. If real change is going to come, Obama (and we) are going to have to educate some of them, outwit all of them and ignore most of them, all at the same time.

Bipartisanship Misdirection

Digby — Fri, 01 Feb 2008 15:38:37 -0500

There has been a lot of discussion recently about the urgent need to stop the "partisan bickering" in Washington, with elder statesmen gathering in groups to demand bipartisan cabinets and pundits wringing their hankies about government not "getting anything done."

Glenn Greenwald wrote about the actual record of bipartisanship earlier this week and set forth a long list of recent legislative initiatives in which the Republicans voted as a bloc and Democrats crossed the aisle to pass legislation. It's quite impressive. He concludes:

On virtually every major controversial issue -- particularly, though not only, ones involving national security and terrorism -- the Republicans (including their vaunted mythical moderates and mavericks) vote in almost complete lockstep in favor of the President, the Democratic caucus splits, and the Republicans then get their way on every issue thanks to "bipartisan" support. That's what "bipartisanship" in Washington means...Other than formally disbanding as a party -- or granting a permanent proxy of their collective vote to Mitch McConnell -- how could Congressional Democrats possibly be more accommodating than they already are?

When the Republicans won in 2004, conservative movement leader Grover Norquist made a famous statement:

"Once the minority of House and Senate are comfortable in their minority status, they will have no problem socializing with the Republicans. Any farmer will tell you that certain animals run around and are unpleasant, but when they've been fixed, then they are happy and sedate. They are contented and cheerful. They don't go around peeing on the furniture and such."

I could be wrong, but I don't recall any outcry about a lack of comity or civility in Washington over comments like that. People chuckled knowingly and explained "elections have consequences." Only now that Republicans are in the minority and may suffer an epic loss at the polls next fall do we see nearly hysterical op-eds imploring politicians to compromise for the good of the nation.

For seven years, when Democrats were in the minority, there was nary a peep from the "punditocracy" about bipartisanship, despite strict party line votes specifically designed so that Democrats would not cross over (on the theory that the Republican base preferred legislation that featured no compromises with the enemy). Yet since the Democrats won the Congress in 2006, there has been a nonstop keening from the political establishment about how the Congress needs to stop the partisan bickering — even as it is still only the Republicans who vote as a bloc on bill after bill and filibuster at twice the rate of any congressional minority in U.S. history. These critics never name names. And lately, they've been demanding that a Democratic president must be willing to name Republicans to his or her cabinet, implying that Republicans are the ones who've been shut out of the process and must be included for the sake of bipartisan comity.

It's possible that the pundits and elder statesmen simply accept that Republicans can't be asked to compromise. After all, everyone knows that conservatism is defined by its philosophy of principles and integrity (except for all the corruption and hypocrisy, of course.). Therefore, in order that a Democratic majority "gets things done," progressives must be sensitive to that special need, even to the extent that they not complain about obstructionism or pass legislation that the president might veto. That causes unpleasant discord and dissension which can only be cured by Democrats agreeing to share power with the minority and compromise on their agenda.

This new obsession about bipartisanship, which blames both parties equally for the sins of one, comes at the moment of progressive ascension. That is not an accident. Conservatism is still considered the default philosophy of "real Americans" in the political establishment. The blame for any Republican electoral losses are placed at the feet of George W. Bush, not conservatism itself, and this hand wringing about the need for bipartisanship is a way for the protectors of the status quo to keep progressivism in check after a decade of failed conservative governance.

The fact is that conservatives understand how to advance their agenda, whether in the majority or in the minority, always blaming progressives or liberalism for what has gone wrong. The political and media establishments help them do it with "heads I win, tails you lose" calls for bipartisanship the minute the Republicans become a minority. That's why progressives need to make their arguments about conservatism explicitly so that they can begin to expose this game for what it is and make people understand that conservatism, not a lack of "comity" or "bipartisan cooperation" is at fault for the mess this country is in today. If they don't, if history is any guide, a new Democratic president will be under tremendous pressure to not only govern in bipartisan fashion but, perhaps more importantly, put the past behind him or her in order to "bind the nation's wounds" with a call for unity and cooperation which will naturally exclude "looking backward."

And in 20 years we will likely see some of Dick Cheney's young protégés come to power in a new conservative administration determined restore the glorious conservative order that was cut so tragically short. by George W. Bush's mismanagement of the conservative dream.