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Donald Trump Has Been Played Like a Violin

By David William Pear. Originally published at OpEdNews.com

The Central Intelligence Agency, the Democrats, neocons in the Republican Party and the Main Stream Media (MSM) have gotten under Donald Trump's thin skin. When attacked, Trump's instinct is to lash out at his attackers with counter attacks, without regard to his truthfulness or not. When Trump was a candidate for President that meant a war of words. As the President of the United States of America he has resorted to a dangerous and deadly shooting war of aggression.

Trumps critics are so numerous, unrelenting and persistent that like a cornered rat, Trump lost any sanity that he may have possessed and instead of lashing out at his tormentors, he lashed out at Syria's president Bashar al-Assad. Just like a drunk that comes home and beats his wife, terrorize his children, busts up the furniture and kicks the dog it accomplished nothing but chaos, but it feels so good to blow off some steam, even if it is at the wrong target.

Now Trump has a lot of damage to repair and it will take more than a night in the drunk tank to patch up the mess he has made. It is probably beyond redemption. Worse is that like an alcoholic there is no cure for someone drunk with power. Predictably Trump will continue with his unpredictable binges on which he prides himself. The world will now be walking on eggshells waiting for Trumps next irrational outburst.

Trump is not the only insane actor. The MSM has gone crazy with fake news, a phrase they will regret ever inventing. Not one MSM source paused in their war rant to even question the propaganda fed to it by the CIA (a shorthand abbreviation for the Deep State of 16 and counting intelligence agencies and police state goons). Readers are encouraged to correct the record if they know of even one MSM sources that had a serious debate of the few known facts of Assad's alleged chemical weapon attack on Syria's Idlib Province.

Today, April 10, 2017 the New York Times (NYT) is still busy pumping out propaganda: "The Grim Logic Behind Syria's Chemical Weapons Attack ", but instead of a logical discussion the NYT calls on clairvoyants to read Assad's mind. To paraphrase the conclusion, Assad is just plan evil, he loves to kill his own people, especially children and babies.

The NYT goes on that Assad wants to thumb his nose and show "the world the West's impotence and weakness", especially at this time of Assad's victory. The NYT concludes that Assad was taking a victory lap in preparation for retaking Idlib back from the West after losing it in 2015 to "a mix of Qaeda-linked and other rebels, some supported by the United States and its allies". Note that after all these years of the MSM pretending that the US was supporting "well-vetted moderates" and pooh-poohing as fake news that the US was supporting al-Qaeda, the NYT admits that the US has been behind "Qaeda-linked and other rebels" the whole time.

So according to the MSM, Assad just threw away a diplomatic solution being hammered out in Brussel (Supporting the future of Syria and the region) that would end the so-called civil war, leaving him in power and giving him billions of dollars in aid to rebuild Syria. As I write now, Lt. Colonel Ralf Peters, a military hack for Fox News, is screaming that Assad would rather "continue the war against his own people and that Trump did exactly the right thing". The MSM would have us believe that Assad just could not resist his thirst for the blood of "his own people" over several billions of dollars in foreign aid.

The MSM just cannot stop spinning its web of lies and cheerleading the USA into more illegal wars of aggression, war crimes and crimes against humanity. The American people could use some clairvoyants of their own to tell us what is on the mind of the MSM in their perpetual warmongering propaganda.

The MSM's groupthink is mind numbing. Do they have any sense of responsibility and the consequences of their propaganda? War propaganda like a rung bell cannot be unrung. It has a lasting effect that will pave the way for more enemies, more war and more death.

The Democratic Party apparatchiks keep egging Trump on, purely for their own political ambitions. Instead of legitimately attacking Trump on his policies and lack thereof, they have found that further demonizing the nuclear armed Russian Federation and its president Vladimir Putin has legs. Russia has been universally declared an enemy nation by the Democrats, and anybody, i.e. Trump and his associates, that has ties, however slight, to Russia, or even conversations, must be an unpatriotic stooge, accomplice and spy.

Trump has been accused by the Democrats and their faithful media of having a "man crush" on Putin and being Putin's puppet. One of Trump's few positive populist campaign agendas was to improve relations and work with Russia to solve common problems. Peaceful relations with Russia struck a chord not only with Trump fans but also many anti-war liberals and progressives.

The Democratic diehard Clinton backers turned peace with Russia on its head and made it treason. A ray of light from the years of dark propaganda against Russia has been extinguished. The dark shadow of a war with Russia now looms over the world. The neocons in both the Democratic Party and Republican Party are loving it. War profiteers continue to party just as Trump was about to take away their punchbowl. The endless flow of unaccounted for money continues to pour out of the Pentagon into the pockets of profiteers.

Donald Trump has taken the fight to some big enemies: the MSM, CIA, neocons, liberal interventionists, the military industrial complex, and he even stuck his finger in Israel's eye until he thought better and backed off. That list of enemies and some others such as the banks, oil companies, monopolies, and oligarchs make up a large part of the Deep State.

Trump may be the first president in a long time that was not a full-fledged member of the Deep State. Trump is learning the hard way what Senate Minority Leader Chuck Schumer (D-NY) warned him, or was it a threat: "Let me tell you: You take on the intelligence community -- they have six ways from Sunday at getting back at you."

Unless Trump is a complete dummy he knows that he was had by the Deep State with the false flag of "Assad has used weapons of mass destruction, again!" But he is loving all the attention, admiration and faux respect. He does not know that the Deep State is laughing at him, not with him. Trump was played like a violin as he sinks deeper into the swamp he said he would drain.

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David William Pear is an unpaid Senior Editor for OpEdNews (OEN). All of his articles and comments are his own, and are not the responsibility of, or reflect the editorial opinion of OEN.
David is a progressive columnist writing on economic, political and social issues. He is a regular columnist and commenter on OEN. His articles have been published by The Real News Network, Truth Out, Consortium News, Russia Insider, Pravda and many other progressive publications.
David has a Bachelor of Science degree in economics from the University of Maryland and attended classes at George Washington University to receive his Certified Financial Planner certification. He also attended courses at the Wharton School of the University of Pennsylvania for his certification as a Certified Investment Management Analyst (CIMA).
He is active in social issues relating to peace, race relations, homelessness and equal justice. David is a member of Veterans for Peace, St Pete for Peace, CodePink and International Solidarity Movement.
In February of 2015 he was part of a people-to-people delegation to Cuba with CodePink. In November of 2015 he was a delegate with CodePink to Palestine to show solidarity with Palestinians. In 2016 David spent 10 weeks in Palestine with the Palestinian lead non-violent resistance group International Solidarity Movement (ISM). David frequently makes extended trips to Russia as a private citizen.
After retiring from finance in 2009, David earned a certification as an Emergency Medical Technician. He has volunteered for public health service, humanitarian assistance, disaster relief, emergency medicine and needs of the homeless.
His hobbies include boating, fishing and motorcycle touring. He is also a licensed skydiver (USPA-inactive).

David is a Vietnam veteran having served as a member of the 5th Special Forces Group as a combat advisor to the Army of the Republic of (South) Viet Nam.
David resides with his wife and three cats in Clearwater Beach, Florida.

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When Was America Great?

By Andrew Levine. This article was first published on Counterpunch.

Photo by Nicolas Raymond | CC BY 2.0

Photo by Nicolas Raymond | CC BY 2.0

Donald Trump ran for President on the slogan “Make America Great Again,” implying that America had been great once, but no longer is.

True to form, Hillary Clinton’s rejoinder was clueless.  America is great now, she would insist every chance she got — indispensably great, “exceptional” even.

Could there be a more empty-headed exchange of views!

After all, Trump was neither asserting nor implying anything; he was pitching a line to a demographic that he, advertising himself, wanted to target.  Therefore, no rebuttal was called for; least of all, one as inane as Clinton’s.

But, of course, she was pitching a line too.

A cottage industry has lately sprung up analyzing the pathologies of Donald Trump’s personality.  His public persona is inscrutable, however; it defies analysis for the simple reason that there is no there there.

Trump is a con man for whom reasons and evidence matter only insofar as they serve his purposes.   He is whatever he needs to be at the moment.

Meanwhile, Clinton took her lead from the Ronald Reagan, “morning in America” playbook.  The Gipper sold his snake oil by projecting a shallow, but infectious, optimism.  However, for that to work, a sunny disposition is required.  Hillary isn’t a good enough actor to pull it off.

All she could do was scare a lot of voters – a majority of them, it turned out — with the specter of the orange haired monster.  As for promoting herself, she was hopeless.

Moreover, her take on the morning in America meme only fed the hostility of her detractors.   How could it not?  In their minds, she represented the “elites” behind the losses they felt.

They were right about that.

Meanwhile, Trump knew exactly how to play his marks by making them think that he could restore a past that they look back upon with nostalgia.

In reality, though, Trump cannot do anything of the sort, and wouldn’t if he could.

This is why, before long, “Make America Great Again” will stick in the craw of Trump voters in much the way that Obama’s “hope and change thingee,” as Sarah Palin called it, still plagues disillusioned Obamaphiles.

Obama was vague about what he wanted people to hope for, and what changes he saw coming.  Trump is vague as well.

But it is obvious enough what he wants people to hear when he speaks of making America great — again.

Since Trump’s target audience was comprised mainly of people who are at least middle aged, it would be fair to say that his goal was to get them to think of post-War America as their personal Paradise lost.

This is nonsense, of course; but, by now, the span of time between the late forties and early sixties is remote enough to be looked back upon in ways that Trump could and did successfully exploit.

***

The man is anything but subtle.

He wanted his marks to yearn for a Golden Age in which hard working white men could make a decent living doing honest, productive labor in jobs that were not about to go away; and in which everybody else knew his or her place: blacks in the back of the bus, women standing by their men, gays in the closet, Hispanics in Mexico or Central America.

The pundits tell us that “Make America Great Again” is a dog whistle slogan – meaning that its meaning is audible to Trump’s target audience and no one else.   Like so much else that liberal pundits tell us, this is nonsense.  What Trump wanted people to hear was audible to everybody.

It is a noxious message, and a false one: even white men didn’t have it so good back in the day.

Nevertheless, as with much else that Trump says, there is something to it – just not what he intended.

For one thing, the political scene really was better in the Truman, Eisenhower and Kennedy years.  Republicans were pernicious, of course, but no worse than Democrats are today.  And the New Deal spirit still survived in sectors of the Democratic Party.

Democrats now, especially since Election Day, are many times worse than they used to be.  Cold War Democrats had at least some measure of common sense and proportionality; Democrats today, for no plausible reason whatsoever, are hell-bent on taking the world to the brink of destruction, or beyond.

Hillary lost, but, within the ranks of the party she led, her Russophobic, neoconservative warmongering has taken on a life of its own.   Can any sane person not be nostalgic for a time when Democrats were better than that?

It is all well and good to question the “legitimacy” of Trump’s presidency.   There are so many questions that could be raised about that: voter suppression topping the list.

But Democrats cannot find it in themselves to do anything more edifying than blame those damn Ruskies.

This is not only preposterous; it is criminally reckless because all it does is prepare the public for war.

On this, “progressive” Democrats are as bad as the others; as bad even as Republicans like that perennial miscreant John McCain and his sidekick, Lindsey Graham.

Shame especially on “civil rights icon” and Clinton stooge John Lewis.  The guardians of the status quo now find it useful to place him on a pedestal, just as they find it useful to de-radicalize and then venerate Martin Luther King.

In exchange for the honor, he does them yeoman service – as when he conflated still unanswered questions about Russian hackers with the legitimacy of Donald Trump’s election.

Civil rights icon indeed; the man belongs in a museum.  Along with most of the rest of the Congressional Black Caucus, and nearly the entire membership of the incongruously named Progressive Caucus, he should just get out of the way.

Cold War Democrats were anything but “great,” but at least they didn’t make starting World War III their life’s work.

Trump obviously has no interest in transforming the Democratic Party for the better, and neither did voters who thought that a Trump presidency would make America great again.

Nevertheless, along with all the really bad stuff that Trump, and many of his fans, actually did have in mind, the nostalgia for the fifties and early sixties that he churned up does suggest a thought that is well worth taking on board — that neither Republicans nor Democrats need be quite as awful as they actually are.

Ironically too, Trump’s implicit appeal to post-War American values and norms helps sustain (small-r) republican ways of thinking about politics that are generally progressive and diametrically opposed to all things Trumpian.

From the sixteenth century on, there have been political thinkers in Western countries for whom ancient Sparta and the Roman republic served as political models.  What they esteemed was their egalitarianism (applicable, however, only to free male citizens) and their ideal of civic virtue, according to which the public good takes precedence over individuals’ private interests.

In the ideal world envisioned by republicans, small, mainly rural, largely self-sufficient households prosper together – with no one rich, no one poor, and everyone happy.

America’s founders were influenced by republican thought – Thomas Jefferson, most famously – and, early on, strains of republican thinking found a welcome home in the collective consciousness of the American people.

The fortunes of republican thinking have waxed and waned in the years that ensued, as has the appeal of republican values – in part because republicanism’s fortunes and capitalism’s are thoroughly intertwined.

(Small-r) republican societies may not be full-fledged capitalist societies, according to one or another account of what capitalism involves, but they are relevantly like mature capitalist societies in supposing private ownership of major means of production and market relations.  They therefore give rise to concentrations of wealth that undo the conditions for their possibility.

In this sense, their vision of ideal political-economic arrangements is utopian, unrealizable in real world conditions.  Full-fledged capitalism, on the other hand, is astonishingly resilient; and, as everyone nowadays understands, it is capable of sustaining enormous levels of inequality.

In the years that people in Trump’s target audience look back upon yearningly, the inegalitarian tendencies inherent in the logic of capitalist development were effectively held in bounds by circumstances that cannot now be reproduced, and by the sustained efforts of a political class for whom memories of the Great Depression of the 1930s remained vivid.  Those days are long gone.

Moreover, for nearly the entire post-War period, rampant, corporate and state sponsored consumerism has been militating against republican notions of civic virtue.

Even so, vestigial republican attitudes survive in the deepest recesses of the American psyche.   In recent years, there has even been a revival of republican political philosophy in respectable academic precincts.

Therefore, one plausible understanding of “Make America Great Again” would be to see it as a call for America to recover its republican roots – by building a politics around the notions of freedom, equality, and virtue associated with the republican tradition.

Needless to say, this is not what Trump was promising.   He stands for everything republicanism rejects.

Trump voters are obviously capable of believing almost anything, but it would strain even their credulity to see Trump’s “Make America Great Again” slogan as a call for equality, virtue, and the simplicity of manners and morals inherent in the republican ideal.

Perhaps this is why, to hear Trump and his defenders tell it, what has been lost that is worth restoring is not exactly the ways that American society accorded a semblance of homage to what republicans care about but something more pedestrian associated with it: the economic security that existed when manufacturing jobs abounded. That is what he claims he can restore.

But, of course, he cannot – not with what he is peddling.  He can only do what mountebanks generally do: sell crap to the gullible and the desperate, counting on the power of suggestion to keep them on board long enough for him not to be run out of town.

This is all he can do for much the same reason that social democrats, these days, cannot hold back the neoliberal tide: because capitalism cannot be transformed or even tamed by government fiat alone.

Marxists were spot on right when they maintained that far-reaching changes of the kind that are desperately needed nowadays can only come about through class struggle.  This is why, in the absence of a collective agent, able and determined to transform the underlying structure of capitalism itself, the broad contours of the status quo are regretfully secure.

Because neoliberal economic realities, and neoliberal state policies, have effectively reduced the labor movement to a shadow of its former self, leaving no functional equivalent in its place, this is indeed the situation we now find ourselves in.

Therefore, even if Trump wasn’t just blowing air – even if he really did want to restore manufacturing jobs — he would be unable to do anything of the kind.

Being both an opportunist and a showman, he will likely collude with a few of his fellow capitalists for a while — making them offers, at the taxpayer’s expense, that they cannot refuse.  But without a counter-systemic social movement leading the way, he cannot defy the inherent logic of the system.   No one can.

At this point in its development, that system has two major requirements, both of which militate against restoring anything like the conditions that, decades ago, created a large and secure middle class.  It requires consumers able and willing to spend enough to keep aggregate demand at acceptable levels; and it requires a domestic work force that that is insecure and poorly paid, and therefore quiescent.   These exigencies are at odds; precarious work situations and depressed wages depress consumption.

Neoliberals square the circle by transferring manufacturing jobs to low wage countries and then flooding the domestic market with goods that are so cheap that most Americans can still afford them.

Obviously, this “solution” doesn’t address any of the fundamental contradictions of neoliberal capitalism.  If anything, it exacerbates them.

Trump owes his election, in part, to the discontents it generates.  If those discontents continue, or intensify, he will have hell to pay.

Barring a radical change of course, the day of reckoning is sure to come; the only question is when.

If, in a vain effort to keep his supporters on board for as long as he can, Trump ratchets up more of the same – and what else could he do with the cabinet of dunces he has appointed, and without being a traitor to his class and to his own venality? – it could well come on his watch.

This will be wondrous to behold.

Had the Democratic Party not rigged the nomination process against Bernie Sanders, he would probably now be President, and he would find his efforts to restore the gains of the New Deal – Great Society era, and then to move beyond them, thwarted not just by the obstacles that (big-R) Republicans and rightwing Democrats (is there any other kind?) would put in his way, but by the same fatal contradiction.

The problem with Sanders’ “political revolution” was not just that it wasn’t radical enough or that it was too empire friendly; it was that, after the neoliberal assault on what little (small-d) democracy we had, there can be no fundamental changes at the political level without taking on capitalism itself.

But since Sanders was denied the nomination, that is a problem for another day.  Trump is the problem now.

Surely, at some level, many, maybe most, Trump voters have known all along that there is nothing he could do that would restore the economic security they crave.  They voted for him anyway, however.  That is how desperate they were.

And so, he won; and, as surely as the sun will rise tomorrow, the shit will hit the fan.

Notwithstanding the willful blindness that is so rampant in liberal quarters, the problem now, had Hillary not flubbed so badly, would be to keep her and her fellow Russophobic neocons and “humanitarian” imperialists from vaporizing the world.

But because he is such a loose cannon, and in so far over his head, what lies ahead with Trump seems even scarier than that – even on matters of war and peace.  If he does derail the War Party, then more power to him.  But he is no more to be trusted to use the American juggernaut, nukes and all, wisely than any normally immature adolescent boy chosen at random.

Expect turbulence ahead!  The time when it is still possible to postpone the inevitable choice between socialism – not the social democratic – Sanders version, but the real deal — or barbarism is fading fast.  Thank Trump for that.

ANDREW LEVINE is a Senior Scholar at the Institute for Policy Studies, the author most recently of THE AMERICAN IDEOLOGY (Routledge) and POLITICAL KEY WORDS (Blackwell) as well as of many other books and articles in political philosophy. His most recent book is In Bad Faith: What’s Wrong With the Opium of the People. He was a Professor (philosophy) at the University of Wisconsin-Madison and a Research Professor (philosophy) at the University of Maryland-College Park.  He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

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More on the Economic Hardship of Young Adults

By Yves Smith. This article was first published on Naked Capitalism.

In the US, the cost of the aftermath of the crisis has fallen heavily on young people, mainly due to bad policy responses to the crisis that we’ve described at length as it was happening: the failure to restructure bad loans (particularly mortgages) and impose costs on banks and investors, not just homeowners; the refusal to engage in enough fiscal spending, not just during the crisis but in deficit fights during the Obama Administration. That isn’t to say that other groups haven’t suffered too. Remember that older, less educated whites have suffered a decline in lifespans, which is unheard in anything other than post-USSR economic collapse. And even though some people in their 50s and 60s are sitting pretty, virtually all the ones I know outside McKinsey and top Wall Street circles are looking at working till they drop.

But young people have suffered in a very large way and don’t have any reason to expect much improvement. And the impact on them of diminished earnings early in their career is more serious than taking a hit for a similarly long period later in one’s working life. Various studies have found that lower earnings at the start of one’s career lead to diminished lifetime earnings.

Reader UserFriendly flagged two disheartening sightings on how young adults are suffering. As we’ll see, the report from Fortune is directionally correct in showing how much lower typical incomes are for young people now versus in the 1980s. However, they over-egged the pudding by taking a period of time that ended with pre-recession peak incomes that it took the better part of a decade to reach again.

I also do not like the Boomer versus Millennial framing in that it implies Boomers were responsible for Reagan-era policies. Deregulation and the Fed crushing labor started in the Carter era, although Reagan cemented neoliberalism as the dominant ideology. The so-called “Greatest Generation” backed Reagan. The propensity to vote for Reagan correlated extremely highly with incomes. Needless to say, the oldest Boomer voters in 1980 would have been 25, which is too young to be very well off, save perhaps by inheritance. Boomers did not vote in Reagan; when you look at the breakdown by age cohort, it was not until you got to 30 year old and over groups that you saw Reagan getting the majority vote (interestingly, young people then also voted more heavily for Anderson than their elders).

Nevertheless, young adults had a good run in Reagan years before the nasty hangover of the 1990-1991 recession kicked in. From Fortune, summarizing a report by a group called the Young Invincibles, using Fed data:

The report found that millennials—15 to 34-year-olds in 2013—were worth roughly half as much as the boomer generation and are earning about 20% less in comparison to young adults in 1989. While millennials earned $40,581 on average in 2013, members of the boomer generation earned $50,910 annually in 1989.

Meanwhile, young adults with debt and a degree in 2013 earned roughly the same as those who had no degree at all in 1989: $50,000.

The lower number on the paycheck has also materialized in the form of a lower net worth. While Millennials are worth about $10,900, the Boomers were worth $25,035 at the same age.The lower number on the paycheck has also materialized in the form of a lower net worth. While Millennials are worth about $10,900, the Boomers were worth $25,035 at the same age.

While this does not break down income by age group, this chart illustrates how using 1989 as the basis for comparison over-eggs the pudding, since it was the peak year in a strong recovery after a severe recession (the Fred chart is interactive, so if you visit the site, you can see the values for each year. Unfortunately, the series does not go back before 1984):

Needless to say, one of the factors driving the lackluster post 2007 results is the lousy quality of jobs. 94% of the new jobs created in the Obama era were part-time or temporary.

The lack of a steady job makes it hard to save for a down payment and hard to have enough in the way of steady earnings to qualify for a mortgage. And in our society, where the property rights of tenants are generally poor (unlike some other societies) and landlords can and do raise rents aggressively, owning real estate historically was the way that the middle class accumulated wealth for retirement. The 30 year mortgage matched the typical productive earning years of the (male) head of the household. When he retired, he would own his house rent free and face much lower costs, or could move into a smaller home and free up equity. Housing was a tax-advantaged forced savings vehicle; the traditional model provided a wealth buffer for retirees even when real estate appreciated only at its long-term historical level of a mere 0.5% real price growth per year.

The resolution of the crisis again turned the old model on its ear. Housing before the crisis was at strained valuations in relationship to average incomes and rentals. Yet the priority after the crisis was to restore home prices to their former levels. Now in fact, outcomes have varied considerably, with the top 10% communities that have done well in the “recovery” seeing turbo charged home price gains (which in New York, San Francisco, and increasingly other major cities have been amplified by Russian and Chinese flight capital).

These high average prices have had a secondary effect: the McMansionization of what used to be starter homes. I see this in Birmingham, Alabama where my mother lives in an affluent suburb with the best school district in the state. Most of the houses near her are 1950s ranch or split-level homes, and when sold, they are either razed or have big additions made to them. Down the hill, a somewhat busy street was clearly one of the first to be developed, and when my parents moved there in the 1970s, it was full of nicely maintained classic 1940s starter homes on small plots. There are still a very few left, but when they are sold, they are replaced with new structures with at least double the old square footage of living space that max out the available land.

As a Washington Post story indicates, it isn’t just the terrible state of the incomes and balance sheets of the young that are keeping them from owning homes; it’s also that modest homes are going the way of the dinosaur. Key points from the article:

Here’s a look at some of the ways that home buying is becoming more difficult for young buyers:

1. More deals are falling through. The share of home sales that fail is on the rise, with more issues arising for people buying starter homes, according to a report released this week by Trulia…The fail rate was higher for starter homes, with 7 percent of deals falling through at the end of 2016…

New home buyers are more likely to face issues with their loans because they haven’t gone through the process and usually don’t have as much equity as older borrowers, [Felipe] Chacón [of Trulia]says. They are also more likely to be buying homes with loans secured by the Federal Housing Administration, which require smaller down payments but have more restrictions, he says.

2. They don’t have many options. One of the main challenges affecting all kinds of home buyers is that there is a shortage of homes on the market. Still, those shortages are growing most for low- and midpriced homes in many markets, according to Trulia. Inventory for starter homes fell by nearly 11 percent nationally at the end of last year when compared to the end of 2015, the company found. That compares to a drop of 6.5 percent for premium homes, or the priciest homes in the market…

3. More people are being priced out of the market. Mortgage rates have increased since the election, putting a squeeze on young home buyers. Rates for 30-year fixed-rate mortgages rose to 4.2 percent last week from about 3.4 percent at the beginning of October. Those higher mortgage rates pushed down the median mortgage that millennials can afford by 9 percent, according to a report released Thursday by Fitch Ratings.

It also doesn’t help that the list prices for starter homes are rising, according to Trulia, requiring bigger down payments. For aspiring buyers, that can mean having to move to a less-expensive area, or putting off the purchase until they have more cash in the bank.

As UserFriendly said by e-mail:

I know exactly who’s fault it is, that is half the problem. It’s like I live in a bubble because next to no one understands anything about economics and so many people only understand politics to the extent that the GOP is more racist and therefore always bad. It’s maddening. It’s especially maddening for people my age, who graduated in 2008. I’d say it’s a reasonable argument that between Clinton and Obama I am about $200k worse off than I would be. So are most of my peers. Which makes my blood boil when I see them cheer him.

I litteraly have no life to look forward to. Out of the 14 years of my adult life I don’t think there has been a single one where my debt load has decreased. Which is completely unsustainable but thanks to uncle joe there is nothing I can do about it.

The young are between student debt, background checks that result in anyone with even a minor incarceration record putting themselves at a big career disadvantage, and the surveillance state so hemmed in as to make it very unlikely that they will revolt. But the Soviet Union didn’t fail due to an internal uprising but due to its inefficiency, the erosion of its legitimacy and the withdrawal of support of its citizens. The US has massive, unsustainable military, higher education, and health expenses and no plan to reduce their growth, much less to shrink them. I’m not sure how this ends, but on current trajectories, it will end badly.

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Democrats need to stop throwing everything they can at Trump

By Norman Solomon. This article was first published on The Hill.

Democrats need to stop throwing everything they can at Trump
© Getty Images

Thirty-five Democrats in the House have sent a letter to Attorney General Loretta Lynch urging her to appoint an independent Special Counsel because Donald Trump “has repeatedly engaged in actions constituting unauthorized foreign policy in violation of the Logan Act.”

Dating back to 1799, the law has resulted in a grand total of one indictment (during Thomas Jefferson’s presidency) and no conviction. But the Logan Act remains a convenient statute to brandish against disruptors of foreign-policy orthodoxies.

The Jan. 12 letter — relying on an arcane and wobbly relic of a law — is an example of opportunism that isn’t even opportune. Worse, it’s an effort to spur Justice Department action that would establish a dangerous precedent.

 

When the letter charges that “in several cases Mr. Trump’s actions directly contravene and undermine official positions of the United States government,” the complaint rings hollow. In our lifetimes, countless private citizens — and quite a few members of Congress — have sought to contravene and undermine official U.S. positions. Often that has been for the better.

The members of Congress who signed the letter should know that. Many are ostensibly aligned with the kind of dissent that has been — and will be — essential to pull this country away from disastrous wars overseas. More than half of the letter’s signers — 19 of the 35 — are in the Congressional Progressive Caucus.

It should be obvious that the Logan Act is antithetical to free speech and other vital liberties. The law provides for up to three years in prison for “any citizen of the United States” who — without authorization from the U.S. government — “directly or indirectly commences or carries on any correspondence or intercourse with any foreign government,” with intent to influence that government “in relation to disputes or controversies with the United States.”

Steve Vladeck, a professor of law at the University of Texas, points out that the First and Fifth Amendments “do not look too kindly on either content-based restrictions on speech (which the Logan Act clearly is), or criminal laws that do not clearly articulate the line between lawful and unlawful conduct (which the Logan Act may well not do).”

In recent decades, the specter of the Logan Act has been used to threaten legislators who went outside an administration’s policy boundaries. In 1975, Sens. George McGovern and John Sparkman faced accusations that they’d violated the Act by going to Havana and talking with Cuban officials. In 1984, President Ronald Reagan said that Jesse Jackson’s efforts in Cuba and Nicaragua may have violated the Logan Act.

Later in the 1980s, Reagan’s National Security Council considered invoking the Logan Act to stop House Speaker Jim Wright’s involvement in negotiations between the Sandinista government and the Contra forces that the CIA made possible in Nicaragua. Twenty years later, in 2007, another House speaker — Nancy Pelosi — faced accusations that she’d run afoul of the Logan Act by going to Damascus and negotiating with Syria’s President Bashar al-Assad.

Now, it’s sad to see dozens of Democrats trying to throw the Logan Act at Trump when there are so many crucial matters to address — healthcare, civil rights, environmental protection, social programs and much more. While a multitude of legitimate and profound issues are at hand — with an urgent need to concentrate on blocking the GOP’s legislative agenda — the letter clamoring for a Logan Act investigation of Trump is an instance of counterproductive partisan zeal run amuck.

The idea that a U.S. citizen — whether Donald Trump, Jesse Jackson or anyone else — does not have a right to dialogue with officials of foreign governments is pernicious and undemocratic. We should assert that right, no matter who is in the Oval Office.

While some members of Congress are indignant that Trump’s actions “directly contravene and undermine official positions of the United States government,” the history of U.S. foreign policy warns against automatic deference to official U.S. positions. Citizens have often been wise when they sought to contravene and undermine the U.S. government’s positions.

Today, entrenched forces in Washington remain committed to foreign policies more in line with what Martin Luther King Jr. called “the madness of militarism” than the statecraft of real diplomacy. Citizens should push back against officials at either end of Pennsylvania Avenue who cite the Logan Act as an argument for conformity or use it as a tool for intimidation.

Norman Solomon is co-founder of the online activist group RootsAction.org, which has 750,000 members. He is executive director of the Institute for Public Accuracy.

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The New Democrats’ Addiction to Austerity Will Not Die

By William K. Black, January 16, 2017     Bloomington, MN

I know the Republicans are complete hypocrites about federal deficits and debt.  I know their dishonesty and faux deficit and debt hysteria, when a Democrat is president, harms the Nation and the world through the infliction of self-destructive austerity.  Austerity’s primary victims are the working class and government social programs for the poor and working class.  That means that the Democrats should never mimic the Republicans’ dishonesty, hysteria, and willingness to inflict austerity on the people of America and the world.

Cui Bono?

Unfortunately, the New Democrats embraced the economic malpractice of austerity with the passion of a convert.  Michael Meeropol, an economist whose work I respect greatly, has rightly chastised me for failing to explain that fiscal austerity produces enormous winners, not just losers, and that this fact helps explain why the economic malpractice of austerity is so common.  Austerity is a policy that aids the wealthy and harms the non-wealthy.  One of the greatest triumphs of the wealthy is to get vast numbers of the non-wealthy to fail to understand this point.   The New Democrats’ passionate support for austerity reflects the interests of its primary donors – Wall Street elites.

Austerity produces higher unemployment rates.  It can cause deflation.  It leads to cuts in public employment and funding for social programs.  High unemployment allows CEOs to force lower wages and creates a political climate in which CEOs are able to get legislation and rule changes embracing “labor flexibility.”  That phrase is a euphemism for making it easier for firms to fire workers without.  CEOs use high unemployment to induce an international race to the bottom on worker protections and wages under the pretext that doing so is essential for U.S. firms to maintain “global competitiveness.”

Deflation is a superb situation for (net) creditors.  They get repaid in a currency that is gaining value.  Deflation reduces interest rates, so the market value of existing long-term fixed rate debt instruments (bonds) can increase substantially.

Federal fiscal austerity could be implemented through tax increases, including tax increases on the wealthy and corporations.  But this would harm rather than aid the wealthy so it increasingly rare to see it done because it would harm legislators’ wealthy patrons (donors).

President Obama Embraced the New Democrats’ Desire to Inflict Austerity

President Obama famously told Congressional New Democrats that they represented his views.  Obama reluctantly agreed to a stimulus program that was considerably less than half of what economists knew was needed.  Even that inadequate stimulus spurred our (inadequate) recovery from the Great Recession and, unlike the eurozone’s austerity policies that through many nations into Great Depression levels of unemployment, the U.S. growth rate soon surged and unemployment rates fell.

Obama’s reaction to the meaningful success of (inadequate) stimulus was to abandon it and join the Republicans’ condemnation of stimulus.  In his January 27, 2010 State of the Union address he complained that when he took office he inherited “a government deeply in debt.”  The implication, which is false, is that the U.S. would be better off if there were no federal debt or at least dramatically less federal debt.  The U.S. would be worse off in either circumstance, for the alternatives – not winning World War II or having longer, deeper recessions – were very bad and the U.S. national debt causes no serious problems for our people or the people of the world.

Obama knew that was true.  In the same address he explained.

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed.  (Applause.)  Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers.  Tens of thousands are cops, firefighters, correctional officers, first responders.  (Applause.)  And we're on track to add another one and a half million jobs to this total by the end of the year.

The plan that has made all of this possible, from the tax cuts to the jobs, is the Recovery Act.  (Applause.)  That's right -– the Recovery Act, also known as the stimulus bill.  (Applause.)  Economists on the left and the right say this bill has helped save jobs and avert disaster.

Obama then admitted that recent U.S. expansions had been based on bubbles and scams.

We can't afford another so-called economic "expansion" like the one from the last decade –- what some call the "lost decade" -– where jobs grew more slowly than during any prior expansion; where the income of the average American household declined while the cost of health care and tuition reached record highs; where prosperity was built on a housing bubble and financial speculation.

The politics of how Obama phrased this point are clear – he only wanted to talk about the last decade during which President Bush held power.  But Obama’s logic actually covered the last two decades and included both of President Clinton’s terms in which the supposed economic expansion “was built on a housing [and high tech] bubble and financial speculation.”  “Speculation” is Obama’s euphemism for elite financial fraud such as the Enron-era frauds (which grew large under Clinton but collapsed under Bush) and the three great epidemics of mortgage fraud by elite bankers that hyper-inflated the bubble and drove the financial crisis and the Great Recession.  Obama’s address repeated two of the New Democrats’ most destructive financial memes.

We need to make sure consumers and middle-class families have the information they need to make financial decisions.  (Applause.)  We can't allow financial institutions, including those that take your deposits, to take risks that threaten the whole economy.

No, financial education of the 320 million of Americans up to the level of the Wall Street predators that prey on them is a preposterous answer that echoes the dishonesty of Milton Friedman’s “Freedom to Choose” nostrums.  We can never provide a Wall Street level of financial expertise to 320 million Americans, indeed, we cannot do so for one million Americans.  “Financial education” is the excuse New Democrats give for not regulating and prosecuting the Wall Street elites who run the frauds that devastate the global economy.  It puts the blame on the consumer and the small investor – if only you had educated yourself properly your pension fund would not have been defrauded by the cartel that rigged LIBOR.  Education has never worked and will never work against elite financial fraud – or VW or Takata’s frauds in the automobile industry.  Education about fish will not protect you from being defrauded by the common practice of selling filets of cheap fish that purport to be filets of expensive fish.

The crisis had nothing to do with “financial institutions” deciding “to take risks that threaten the whole economy.”  Humans take risks, not “institutions.”  Humans are, overwhelmingly risk averse.  The critical person who makes decisions about what financial institutions will do is the CEO.  CEOs frequently prefer what George Akerlof and Paul Romer aptly described in their 1993 article “Looting: The Economic Underworld of Bankruptcy for Profit” as a “sure thing” rather than a “risk.”  Fraud, particularly accounting frauds that loot the bank they control, is a “sure thing.”  The behavior of bank CEOs who caused the massive losses that drove the crisis is not consistent with them being honest, rational gamblers.  It is consistent with the “recipe” for accounting control fraud.  Indeed, the bank CEOs used the same recipe in largely the same manner that their savings and loan predecessors had made infamous in the 1980s.  Akerlof and Romer said the fraud option would become highly preferable when the risk of prosecution appeared low.  Under Obama, the risk of elite bankers being prosecuted for leading the three epidemics of mortgage fraud that drove the crisis became nil.

The supposed economic successes of the Clinton years (and austerity) have been exposed as fictional.  The Clinton expansion was driven by the two largest bubbles in world history and the four greatest epidemics of elite financial fraud in history.  The first of these epidemics was the Enron-era frauds.  The other three epidemics of mortgage fraud began under Clinton, but blew up on Bush’s watch.  Bush’s “wrecking crew” was even worse than Clinton’s assault on effective regulation, so you should not feel sympathy for Bush.  The lost two decades have extended during Obama two terms of office.  Significant wage gains only began in the U.S. in 2016.  In particular, blacks and Latinos have suffered catastrophic wealth losses due to the fraud-driven financial crisis and the predatory for-profit schools.  Black and Latino households’ wealth losses have not been regained under the Obama recovery.  The top one-ten- thousandth of one-percent have been the massive winners in income and wealth under Obama.

Obama next flaunted his New Democrat colors, saying we needed to create trade deals to increase the number of U.S. jobs.  He portrayed the deals as unambiguously good for workers and jobs – with no losers.  He proposed nothing to help the millions of U.S. workers that could lose their existing jobs under the trade deals.

The 2010 presidential address was already a nightmare at that point, but it was at this juncture that Obama decided to channel his inner New Democrat dogmas and become a champion for the glories of austerity.  He went on at length, so I will reproduce the relevant passages to provide the context.  His signature metaphor and simile were not simply economically illiterate; they were knowingly false and exceptionally harmful to the American people, particularly the working class.  That means they Obama’s austerity plans were also a betrayal of the working class by the New Democrats, who had radically changed a party that once defined itself as the champion of the working class.  The consequences for the Democratic Party would soon prove horrific.  I’ll comment after each paragraph of Obama’s address on the joys of austerity.

Now, even as health care reform would reduce our deficit, it's not enough to dig us out of a massive fiscal hole in which we find ourselves.  It's a challenge that makes all others that much harder to solve, and one that's been subject to a lot of political posturing.  So let me start the discussion of government spending by setting the record straight.

Obama had just asked everyone for ideas about how to contain health costs, claiming he knew of no better way to do so.  Obama, of course, in his deal with the health insurers, had agreed not to adopt the most effective means of cost containment.  Here, he was disingenuous.

At the beginning of the last decade, the year 2000, America had a budget surplus of over $200 billion.  (Applause.)  By the time I took office, we had a one-year deficit of over $1 trillion and projected deficits of $8 trillion over the next decade.  Most of this was the result of not paying for two wars, two tax cuts, and an expensive prescription drug program.  On top of that, the effects of the recession put a $3 trillion hole in our budget.  All this was before I walked in the door.  (Laughter and applause.)

Yes, good point – recessions produce large federal budget deficits.  Now explain that this is good – it is an “automatic stabilizer” that occurs without any need for new legislation or rules, so it acts far more quickly and reduces the length and severity of recessions.  Obama, of course, takes the opposite tack – a tack he knows to be a lie – and presents the growth in the deficit as a bad thing.  Note that he ignores the fact that President Bush inherited a recession that officially began in March 2001 at the start of his term so important parts of Bush’s earlier deficits were also the product of automatic stabilizers acting desirably.

But we should start with the budget surplus in 2000.  Obama portrays this as unambiguously wonderful, but he presents no basis for his implicit claim.  Every time the U.S. has run a substantial budget surplus it has been followed by a depression or the Great Recession.  That does not prove the surpluses caused the depressions and the Great Recession, but it certainly puts the burden on anyone trying to tout the desirability of running a budget surplus in the United States, particularly given the balance of trade.  Obama presents it as if it were axiomatic that any deficit under Bush was harmful, but presents no evidence that it was.

Now -- just stating the facts.  Now, if we had taken office in ordinary times, I would have liked nothing more than to start bringing down the deficit.  But we took office amid a crisis.  And our efforts to prevent a second depression have added another $1 trillion to our national debt.  That, too, is a fact.

No, it is not a “fact” that “our efforts to prevent a second depression have added another $1 trillion to our national debt.”  It is a falsehood.  Had Obama immediately inflicted austerity rather than his modest and deeply inadequate stimulus our recovery would have been vastly worse.  The eurozone’s recovery was crippled by austerity.  If our recovery had been far worse, then the national debt would have risen by even larger amounts.  Why would Obama have “liked nothing more than to start bringing down the deficit” had he “taken office in normal times”?  We all know that is true because he is a self-proclaimed believer in the New Democrats’ failed dogmas, but what is his rationale?  The phrase “like nothing better” is meant to indicate that deficit reduction would be one of his highest priorities and that he would do so with great enthusiasm.  Why?  Would the U.S. have been better off in 2010 with austerity?  It would have been worse off.  As Obama moved toward austerity he slowed the economic recovery.  Had the Tea Party coalition not blocked his “Grand Bargain” with the GOP leadership the even greater austerity would have choked off the recovery and made Obama a one-term president.

I'm absolutely convinced that was the right thing to do.  But families across the country are tightening their belts and making tough decisions.  The federal government should do the same.  (Applause.)  So tonight, I'm proposing specific steps to pay for the trillion dollars that it took to rescue the economy last year.

This is the metaphor from Hell.  It is a favorite metaphor of Jack Lew, who Obama would soon name his budget director and eventually his Treasury Secretary.  In January 2010, when Obama made this address, Lew and Treasury Secretary Geithner were Rubinites who were extreme deficit hawks even from the perspective of the New Democrats.  Geithner denounced stimulus as providing only a harmful “sugar” rush.  The “tightening their belts” metaphor violates the most fundamental macroeconomic truth in dealing with a severe recession or depression.  Lew is a lawyer.  Geithner has boasted that he took only one class in economics – and couldn’t understand it.  Rubin was not an economist.  Their austerity dogmas were the product of ignorance of economics, but what Rubin, Obama, Geithner, and Lew have in common is a devotion to the interests of Wall Street CEOs.

In a serious contraction, particularly one following a credit-driven bubble, consumers are worried about losing their jobs.  They begin to repay their debts and reducing consumption.  This is perfectly rational from their perspective.  CEOs react to the fall in consumer demand in an equally rational manner – they reduce output and spending on investments.  Banks are likely to constrain credit and try to build capital.  This too is rational.  The result is that there is inadequate demand and unemployment and business failures rise.  At the very time that demand is most inadequate and the need for spending on consumption and investment would be most helpful to the economic recovery, consumers and CEOs are likely to do the opposite.  Economists call this “the paradox of thrift.”

There is one entity that is an ideal position to do the opposite – to increase demand in response to a recession or depression.  This entity is not credit-constrained by bankers.  The entity is a government with a sovereign currency that borrows only in that currency and allows that currency to freely float.  The U.S. is such a nation.  It is critical that our federal government provide fiscal stimulus, in addition to the automatic stabilizers, to counter the recession or depression.

Obama’s metaphor is exactly the opposite of economic literacy.  If “families across the country are tightening their belts” then it is particularly essential that the federal government do the opposite – not “the same” – to counter the effects of the sharp fall in effective demand.

No, the federal government need not and should not “pay for the trillion dollars” you spent on stimulus (and, the federal government did not spend a $1 trillion on stimulus).  If you “pay for” the stimulus by austerity you will harm the recovery and the people of America and likely increase the ultimate debt.  Economic growth is the key to deficits and debt of a sovereign nation.

Starting in 2011, we are prepared to freeze government spending for three years.  (Applause.)  Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected.  But all other discretionary government programs will.  Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don't.  And if I have to enforce this discipline by veto, I will.  (Applause.)

Count the number of times New Democratic dogmas drew applause.  First, particularly given Obama’s increasing embrace of austerity, but also given the terrible scale of the Great Recession, 2011 was far too soon to even be thinking of inflicting austerity on the Nation.  The results were sure to slow the recovery and harm Americans.  That is what happened.

Second, this is the paragraph that presents Obama’s simile from hell about austerity.  “Like any cash-strapped family, we will work within a budget to invest in what we need and sacrifice what we don’t.”  The simile is a variant on the economic illiteracy of Obama’s metaphor from hell.  Yes, families are “cash-strapped” when a credit expansion leads to a Great Recession.  Families’ incomes and wealth drop as the stock market tanks and their homes lose market value.  Families react to seeing neighbors losing their jobs and their homes by decreasing consumption.  Families see credit being constrained by banks’ tighter credit policies.  Families see interest rates fall sharply on their savings accounts, further reducing their income.  It is precisely because families are “cash-strapped” and fearful of further losses that they reduce their consumption – exacerbating the already inadequate demand and deepening the Great Recession.

The United States government is not – and cannot be except through self-inflicted insanity such as austerity and debt limits – “cash-strapped.”  The U.S. creates cash.  The U.S. can be resource constrained, but not cash or credit constrained.  The U.S., with debt levels that Obama is about to describe in his address in histrionic terms, was able to borrow essentially unlimited amounts of money at interest rates near zero.  (More to the point, the U.S. does not have to borrow its sovereign currency because it makes its sovereign currency.)  These facts explain why Obama’s logic is reversed – it is essential that the U.S. not act as if it were “cash-strapped” in response to a Great Recession.

Third, Obama adds to his inanity by promising to be more of an austerity hawk than Republican legislators and “veto” any bill that would address a growing problem, such as the Zika virus becoming epidemic through increased government spending.  This is mind-numbingly stupid as a policy, and the rationale Obama offers for the stupidity rests solely on an economically illiterate simile.

We will continue to go through the budget, line by line, page by page, to eliminate programs that we can't afford and don't work.  We've already identified $20 billion in savings for next year.  To help working families, we'll extend our middle-class tax cuts.  But at a time of record deficits, we will not continue tax cuts for oil companies, for investment fund managers, and for those making over $250,000 a year.  We just can't afford it.  (Applause.)

Getting rid of programs that do not work and cannot be fixed is a good thing.  But we can “afford” anything that does not produce a serious constraint on real resources needed elsewhere in more critical applications.

Now, even after paying for what we spent on my watch, we'll still face the massive deficit we had when I took office.  More importantly, the cost of Medicare, Medicaid, and Social Security will continue to skyrocket.  That's why I've called for a bipartisan fiscal commission, modeled on a proposal by Republican Judd Gregg and Democrat Kent Conrad.  (Applause.)  This can't be one of those Washington gimmicks that lets us pretend we solved a problem.  The commission will have to provide a specific set of solutions by a certain deadline.

What is the point of Obama calling the federal budget deficit “massive”?  Yes, it is a huge number.  The Great Recession officially began in the fourth quarter of 2007.  The automatic stabilizers began to kick in almost immediately and greatly reduced the length and severity of the Great Recession.  Indeed, it officially ended in the second quarter of 2009 shortly after Obama took office – and well before his stimulus program could take effect.  The dates on which recessions begin and end is a technical matter that is inherently decided after the fact.  It does not mean that the economy was doing well before the official onset of the recession or after the official end of the recession.  Indeed, it is typical that the economy was doing very badly before and after the official start and end dates of the recession.

The point is that a huge portion of the Bush deficit that Obama inherited was the product of the automatic stabilizers working well to limit the depth and length of the Great Recession.  That was a good thing.

Obama’s “fiscal commission” was an obscenity.  It was a creature of Pete Peterson, the Wall Street billionaire whose greatest dream is privatizing Social Security.  Obama stacked it with pro-austerity officials.  Despite this fact, the commission failed to reach the super-majority required under its own governing documents to make recommendations.  The co-chairs, two infamous deficit fanatics, ignored the commission’s own governing documents to present their recommendations.  In this article I do not address the supposed crises in the safety net.  Again, the short answer is that the meaningful constraint is real resources, and the safety net does pose any serious risk of causing a constraint in real resources.

Now, yesterday, the Senate blocked a bill that would have created this commission.  So I'll issue an executive order that will allow us to go forward, because I refuse to pass this problem on to another generation of Americans.  (Applause.)  And when the vote comes tomorrow, the Senate should restore the pay-as-you-go law that was a big reason for why we had record surpluses in the 1990s.  (Applause.)

In the last sentence Obama shows he is among the most extreme of the New Democrats in his embrace of austerity.  First, the “record surpluses in the 1990s were built on the non-foundation of the two largest bubbles in history – the dot.com and housing bubbles.  Second, the record surpluses set the stage for the Great Recession.  As I noted, prior federal budget surpluses were followed closely by depressions.  Third, “pay-as-you-go” is an example of mindless austerity.

Now, I know that some in my own party will argue that we can't address the deficit or freeze government spending when so many are still hurting.  And I agree -- which is why this freeze won't take effect until next year -- (laughter) -- when the economy is stronger.  That's how budgeting works.  (Laughter and applause.)  But understand –- understand if we don't take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery -– all of which would have an even worse effect on our job growth and family incomes.

Ah, a completely unfunny attempt at a joke.  I’d like to start austerity now, but the legislative process takes time so I won’t be able to inflict austerity on the American people until next year.  It’s a dumb, not funny line for multiple reasons.  Tens of millions of Americans were guaranteed to be “still hurting” in 2011, when Obama threatened to begin inflicting austerity.  Austerity in 2011 was guaranteed to be a self-inflicted wound.  The Democratic Party should be a party in which every congressional member (not “some”) reject inflicting austerity when tens of millions of Americans are in agony as a result of the Great Recession and unemployment rates and rates of leaving the work force are high.

The last sentence of the paragraph is even worse for every argument it makes is a lie.  Stimulus was a huge gain to our “economy.”  Stimulus did not “increase the cost of borrowing.”  Austerity did “jeopardize our recovery” – reducing job growth and family income.

From some on the right, I expect we'll hear a different argument -– that if we just make fewer investments in our people, extend tax cuts including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away.  The problem is that's what we did for eight years.  (Applause.)  That's what helped us into this crisis.  It's what helped lead to these deficits.  We can't do it again.

Obama proposed to “make fewer investments in our people” – that is precisely what austerity did.  It is not true that Bush’s elimination of “more regulations … helped us into this crisis.”  It was Clinton that eliminated key financial regulations.  More importantly, it was the combination of Clinton and Bush that desupervised finance – desupervision proved to be far more destructive than Clinton’s deregulation.  Bush’s earlier deficits had nothing to do causing the crisis.  His deficits once the economy slowed and then went into the Great Recession were the product of the automatic stabilizers and they “helped us” out not “into this crisis.”

Rather than fight the same tired battles that have dominated Washington for decades, it's time to try something new.  Let's invest in our people without leaving them a mountain of debt.  Let's meet our responsibility to the citizens who sent us here.  Let's try common sense.  (Laughter.)  A novel concept.

“Common sense” is not common.  People extrapolate to the federal government what they know best – the nature of the household and its budget constraints.  They desperately need the President of the United States, the Treasury Secretary (Geithner), and the soon-to-be-appointed head of the Office of Management and Budget (Jack Lew) explain why the federal government is not remotely similar to a household when it comes to constraints and why that means the federal government has the unique ability and moral duty to use fiscal stimulus and serve as the employer-of-last-resort to reduce the severity and length of recessions and provide full employment to all those willing and able to work.

The NYT Resurrects Its Love for Austerity

On January 9, 2017, the NYT’s op ed guy who spent his summer attacking Bernie Sanders and praising Hillary Clinton turned his sights on Donald Trump and congressional Republicans in a piece entitled “The Betrayal of Fiscal Conservatism.”  That is his euphemism for austerity.  He began his ode to austerity with this assertion.

The label of “fiscal conservative” used to mean something.

It referred to people — mostly Republicans — whose top priority was the health of the federal government’s balance sheet. They favored a small deficit, or no deficit at all.

He is writing in 2017, when even the IMF admits that stimulus was a success and austerity a failure.  We can observe the difference in growth between the eurozone, which mandates austerity, and the U.S. where even a grossly inadequate stimulus program produced far superior growth.  But none of this penetrates this writer who so loves the New Democrats’ ever present desire to inflict self-destructive austerity on Americans, particularly the working class.  What could go wrong?

A federal budget is not “health[y]” when it is in surplus and sick when it is in deficit.  A federal budget deficit due to the automatic stabilizers’ powerful response to the Great Recession is a sign of health.  An even larger (short-run) budget deficit through a stimulus program is an even greater sign of economic health that should be celebrated.  People who seek to inflict austerity on the people in such circumstances are not “fiscal conservative[s].”  They may be well meaning, but ignorant of economics.  However, as I explained in response to Dr. Meeropol’s chastisement of my failure to note who wins under austerity, they may want to enrich their wealthy donors and themselves.

Why would a NYT op ed celebrate Republicans “whose top priority” was austerity?  The “top priority” of members of Congress should be the welfare of Americans, particularly the non-wealthy.  Austerity is not a logical goal of a nation with a sovereign currency, much less its “top priority.”

The NYT op ed ends with this obscenity.

The original meaning of “fiscal conservative” may be gone. In fact, Democrats have had a better claim on the label in recent years than Republicans. But it’s important to remember that the concept is as legitimate as ever. The United States does indeed face a long-term budget deficit that eventually will require a solution, and cuts to government spending almost certainly need to be part of that solution.

So the next time that you hear a politician describe himself or herself as a “fiscal conservative,” I recommend deep skepticism. But I also hope that Washington one day has more real fiscal conservatives than it does today.

Yes, New Democrats are far more consistent proponents of inflicting austerity on Americans, particularly the working class, than are Republicans – and that is a travesty.  The NYT op ed was written after Trump’s election driven by the wholesale rejection of the New Democrats’ agenda by the white working class.  The New Democrats have learned nothing from that defeat.  They continue to push the message of Wall Street and the wealth – the infliction of self-destructive austerity – as their defining mantra.  They continue down the disastrous path that Tom Frank has been warning them about for over a decade.  (Yes, I know that Trump will continue to betray the white working class.)  We desperately need a “Washington” and a political party in which no official buys the Wall Street dogmas favoring austerity.  Austerity is to economics as bleeding a patient is to medicine.  Among the last things that “Washington” needs is to have “more” Wall Street sycophants pushing austerity “than it does today.”

And no, “cuts to government spending” are not “almost certainly” essential in the “long-term.”  Growth is what is essential, and austerity is the great enemy of American growth.  Clinton’s “growth” was not the product of austerity and it was not real.  It was the product of the two largest bubbles in history.  The U.S. had far higher deficits relative to GDP in and after World War II.  Does anyone think austerity was the proper answer to Hitler, the attack on Pearl Harbor, or the Great Depression?

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