The catfood chronicles

Yves Smith:

There is no more pretense possible. As we’ve warned for some time, Obama is eager to put a notch on his belt by being the President that rolled back the New Deal programs that helped create broad-based middle-class prosperity and dignity. He’s cast himself as an adult inflicting discipline on profligate Americans. But in reality, the profligacy was most concentrated among elite financiers who used leverage on leverage vehicles to stoke liquidity that led to worldwide underpricing of risk. They paid themselves record bonuses in the years immediately preceding the crisis, and then in a grotesque display of ingratitude, did so again in 2009, able to do so only thanks to massive taxpayer support, alphabet-soup special borrowing programs, and the tax on savers known as ZIRP. And the direct result of their looting exercise that produced the crisis was the explosion in government deficits, due to a collapse in tax revenues and a rise in payments under countercyclical programs such as unemployment insurance and food stamps.


I agreed with Duncan two years ago:

The point of “grand bargains” between the parties isn’t to get something done, the point is to get something done in a way which leaves no one for voters to blame. It’s accountability free legislating. Villagers love this, because they hate this whole voting thing and just want Bob Kerrey and Alan Greenspan to rule by fiat in order to make the poor and middle class suffer as much as possible without any resistance, but it means the rest of us are out of luck.

What do we do now?


Ok, so what do we do now?

First, we cannot simply sit back and expect the GOP to do our dirty work for us. After all, the way things are going, the Prsident or could start offering up new tax cuts for all we know. He’s either a terrible negotiator or he really, really wants these cuts. Either way, counting on him holding the line is probably not a good idea.

So, we have to buck up the Democrats. I know, I know. But they still have to face voters while the president has run his last election. They should be made very, very aware of what they are contemplating: attacks from both the left and the right in the next election. Any incumbent Democrat who could face a primary challenge will be facing withering criticism for voting to cut SS, veterans benefits and medicare. And if they are lucky to fight them off and win they will be attacked by the Republicans challenger on exactly the same issues. These are very, very popular programs which, by the way, don’t actually need to be cut. Anyone who votes for this will hear about it. If you have a Democratic congressional rep, give them a call and let them know that you will hold it against them. (Also too, if you have a Republican representative. They have to face voters too and it can’t hurt to remind them of that. And after all, they are just looking for reasons to oppose this …)

And call your Senators starting today. The pattern so far has been that Speaker Boehner will only suspend the Hastert Rule (allowing legislation to the floor without a Republican majority) if it is already passed with a bipartisan Senate vote. Best to try to stop it here first.

Meanwhile prepare for a barrage of savvy, world weary commentary from your fellow liberals telling you that this is no big thing and that Democrats will not suffer even a tiny bit if they vote for a common sense proposal like this one. You will be shushed and told to calm down and take a chill pill. In other words, you will be gaslighted by fellow liberals who are embarrassed that you aren’t being coolly accepting of something that is completely unacceptable. This is how this works. Tell them to STFU and move out of the way.

And recall this:

Responding to a flood of angry phone calls and letters from their elderly constituents, a growing number of Congressmen and Senators are seeking to repeal or revise the “Medicare Catastrophic Coverage Act of 1988” enacted in June of that year. The amount and the tenacity of elderly opposition to the law, particularly to the new taxes that will fund it, took many Congressmen by surprise. It also has provoked an open and widespread grass-roots rebellion within the nation’s largest senior citizen lobby, the American Association of Retired Persons (AARP), whose national office pushed hard for the original legislation. Already, some 30 bills have been introduced to repeal the catastrophic act in whole or in part or to change the way it is financed. More bills are expected.

The cool kids should think twice before predicting a complacent acceptance of this proposal because sometimes the people do stand up and object. Especially when it comes to these programs. They don’t call it the third rail for nothing.

Yeah, that worked

Uh huh:

As if on cue, from the Speaker: “If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes.”

Textbook. It’s what you invite when you pre-emptively move to the middle.


Nick Ruiz is running against anti-Social Security fanatic John Mica in the Orlando area. A professor and activist, Nick is pretty passionate on this subject:

“There is a sinister trick to rob citizens of retirement security, which is being promulgated as sound policy in this discussion. Let’s reveal it. Congress and the President have continued to stifle wages and reduce job opportunities for citizens, and now suggest that upon retirement or disablement, people should receive less. Why? By all measures, the economy needs more jobs, and citizens need higher wages, with more robust retirement and disablement assistance. So, reducing any of these things will make people suffer.

“But the Congress is not suffering. Nor is the President. Nor is the Fortune 500 that bankroll fake populist political campaigns and wealth-biased policy think tanks. Thus, it’s plain to see. This President and Congress, enabled by the wealthy and their enterprises– aim to make Americans suffer. There are many selfish reasons why they would do this, that are probably beyond the scope of a conversation about cutting benefits with the chained CPI trick– but it starts with the basic premise that the world economy will not grow for the foreseeable future. With smaller net margins expected, the capital stream is being tightened to preserve their wealth and nothing else.

“The important thing to recognize is that these hateful agendas that will further decimate average living standards will not stop– unless progressives stop them.”

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