The President's Speech: "Getting It" is Not Enough

Sep 8, 2011Mark Schmitt

Voters want to know their president cares about people like them, but they also want to know he's going to get something meaningful done.

Voters want to know their president cares about people like them, but they also want to know he's going to get something meaningful done.

The smartest Democratic political operative I've ever known once told me that the only thing that matters in a poll is how a politician scores on the question "cares about people like me." By that standard, Barack Obama has been doing just fine: In the recent Pew poll, 60 percent said he "cares about people like me," a rating higher than George W. Bush achieved at the peak of his popularity.

In tonight's speech, we're told, Obama has to show that he cares about the crisis of joblessness, that he gets it. "Getting it," or empathy for the plight of economically struggling Americans, has been at the core of American politics for the last several decades. Empathy was the central drama of the 1990s, and the main genius of Bill Clinton. From George H.W. Bush accidentally reading his subtextual notes -- "Message: I care" -- in the 1992 primaries to the debate later that year when he looked at his watch while Clinton walked down into the audience to listen directly to a questioner who was having trouble articulating her distress, "getting it" was all that mattered. "I feel your pain" -- Clinton's answer to a heckling AIDS activist -- became the shorthand summary of his political method.

Clintonian governance wasn't just words -- it was also a policy agenda of empathetic gestures. Welfare reform to show the middle class that he understood their anger about poor people, modest demonstration projects on ideas like school uniforms to show that he understood parents' anxiety about school discipline, tax credits for college tuition to show that he (or Democrats) understood families' worries about rising college costs. None of them were big enough to solve the problems, but that wasn't the point. The point was to identify the party with those concerns.

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The problem with a politics of empathetic gestures is that it spreads all over the place. There's a gesture for everything, a small tax credit for every good behavior. All Democratic politicians of the modern era play the politics of the empathetic gesture, even those who claim to reject it, and Obama was a master of it, offering a half dozen tax credits during the 2008 campaign for things like "responsible fatherhood." In recent months, he's gestured toward deficit reduction while also gesturing in the direction of investment and protecting vital social programs. But the result is a governing agenda that does a little bit of everything and not enough of anything, and one whose priorities are invisible to most citizens.

Many critics of the president are also locked into the politics of empathy. They favor more populist language, such as an attack on Wall Street bonuses, or a more pugnacious posture toward congressional Republicans, as if seeing those things would convince Americans that the president is on their side.

But Americans already know the president's on their side. It doesn't matter. When a president has a 44 percent approval rating, and a 41 percent reelect rating (in the recent Pew poll), but a 60 percent rating on "cares about people like me," it's a sign that the conventional Democratic approach to politics is exhausted. Empathy isn't enough. Now all that matters is action. I hope the president tonight, rather than gesturing in all directions, will pick one big direction -- not necessarily one program, but one big vision, and stick with it. If Republicans block it, they block it, but at least it's clear what they're blocking. Bring it back, and bring it back again. Take incremental successes and come back for more. Drop all the rest for now -- deficit reduction in particular (though there will be a time for that) -- and construct everything around a single, clear vision of a recovering economy, one whose benefits are broadly shared and that creates opportunity for everyone. Anything that doesn't tie into that vision goes to the back burner.

I'm not naïve; it's not likely that even a clear and convincing policy initiative can pass Congress. But if it doesn't, at least we'll all understand what the choices were, and who's actually responsible for the ongoing debacle of the American economy.

Mark Schmitt is a Senior Fellow and Director of the Fellows Program at the Roosevelt Institute.

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The CFPB Stands Up to Banks' Overblown Financial Firepower

Sep 7, 2011Bryce Covert

Republicans claim that allowing Richard Cordray to head the CFPB imbues him with too much power, ignoring the immense influence on the other side of the equation.

This week's credit check: The 10 Republicans blocking Richard Cordray's nomination have received over $31 million in campaign cash from the financial sector. The median American family saw yearly earnings fall $5,261 over the past decade.

Republicans claim that allowing Richard Cordray to head the CFPB imbues him with too much power, ignoring the immense influence on the other side of the equation.

This week's credit check: The 10 Republicans blocking Richard Cordray's nomination have received over $31 million in campaign cash from the financial sector. The median American family saw yearly earnings fall $5,261 over the past decade.

The least remarkable part of yesterday's Senate Banking Committee hearing on Richard Cordray, President Obama's nominee to head the new Consumer Financial Protection Bureau (CFPB), was Cordray's testimony itself. In fact, Republicans made it clear that his credentials are not what's up for debate. Sen. Bob Corker (R-TN) called a recent meeting with him "pleasant" and Sen. Richard Shelby (R-AL) said he has a "good background." Rather, they want to debate whether his post should exist at all. Their reasoning? That having one person in charge of this new watchdog will imbue Cordray with far too much power. As Shelby put it, "No one person should have so much unfettered power over the American people."

But what of the power of the opposition, the banks themselves, who stand to have new oversight and regulation from someone on the side of the average consumer? If we're going to talk about power imbalances, we might want to look at what the financial sector can marshal against the American people. Elizabeth Warren herself, the originator of the idea for the CFPB, estimates that it will police a $3 trillion consumer financial services industry. And Wall Street, along with its other corporate counterparts, is doing pretty well compared to the rest of us. Corporate profits have taken in 88 percent of the raise in national income since the recovery began, while household incomes only took in 1 percent.

It's not just profits banks wield in this fight, however. That money can easily turn into lobbying and campaign contributions. As Ari Berman reported in June, "According to the Center for Responsive Politics, 156 groups -- the vast majority representing corporate interests -- lobbied the government about the CFPB in the second half of 2010 and the first quarter of 2011. The list ranged from JPMorgan Chase to McDonald's." The Chamber of Commerce even has an entire division devoted to fighting Dodd-Frank, and it spent $17 million on federal lobbying in the first quarter of this year with a dozen lobbyists focused on just the CFPB.

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Individual Republican Senators are also getting lavish gifts from the financial sector while opposing its newest regulator. The 10 Republican members of the Senate Banking Committee, who signed a letter to Obama in May demanding debilitating changes to the CFPB before any candidate can be confirmed, have received over $31 million in campaign cash from the financial sector during their time in Congress. Meanwhile, Sen. Shelby himself has taken $6.2 million from the financial sector, including about $1 million from commercial banks. His top career donors include JP Morgan ($140,771), Citigroup ($109,199), and Goldman Sachs ($67.600).

Compare all that financial firepower to what's going on for everyday Americans. A new report from the Pew Charitable Trusts shows that nearly one in three Americans who grew up middle-class has fallen out of that group. It's not hard to see why so many people are moving down the ladder when wages have been heading in the same direction. While the financial sector is bringing in $3 trillion, the median American family saw yearly earnings fall $5,261 over the past decade, from $52,388 in 2000 to $47,127 in 2010.

Things are even worse for low-income families. Over the past 10 years, the percentage of children living in poverty has soared, increasing by 18 percent, or 2.4 million more, from 2000-2009. These children and their families are set to fall on even harder times, as states slash vital services to balance their budgets. They face the loss of unemployment benefits, income tax credits, and cash assistance, among other safety net supports.

Those who find themselves in such financial hardship have one place to turn when they can't make ends meet: debt. Credit card companies already employ a variety of tactics to entice middle-class families into debt and keep them there. But those tactics will be under strict scrutiny if the CFPB has its full powers. Low-income families often find themselves prey to unregulated non-banks like payday lenders and check cashers, but those will also come under the supervision of the Bureau.

The CFPB isn't taking on dictatorial powers. It's standing up to the formidable forces preying upon struggling American consumers.

Bryce Covert is Assistant Editor at New Deal 2.0.

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Mike Konczal Parses Perry's Fed Remarks on MSNBC's 'The Last Word'

Aug 17, 2011

Roosevelt Institute Fellow Mike Konczal joined Chris Hayes last night on MSNBC's "The Last Word" to analyze Rick Perry's take on quantitative easing, aka 'printing money.' Why is Perry set against QE3? Is this the only tool left in the kit to fight economic disaster?

And what do the Bee Gees have to do with all this? Find out:

Visit msnbc.com for breaking news, world news, and news about the economy

Roosevelt Institute Fellow Mike Konczal joined Chris Hayes last night on MSNBC's "The Last Word" to analyze Rick Perry's take on quantitative easing, aka 'printing money.' Why is Perry set against QE3? Is this the only tool left in the kit to fight economic disaster?

And what do the Bee Gees have to do with all this? Find out:

Visit msnbc.com for breaking news, world news, and news about the economy

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S&P Downgrade Brought on by Republican Obstructionism

Aug 8, 2011Jeff Madrick

There are lessons to be learned from S&P's report, but none of them are financial.

There are lessons to be learned from S&P's report, but none of them are financial.

Does anyone really think that Standard & Poor's downgrade of U.S. debt would have occurred unless there had been the Congressional stand-off on raising the debt ceiling? For all of S&P's handwringing about the nation's debt problems, Congressional recalcitrance was the driving issue. So when the press says neither the Democrats nor the Republicans can escape blame, it is in truth nonsense. The showdown caused the downgrade, not the nation's financial liabilities, and Republicans deliberately caused it in pursuit of their own political and ideological goals.

Of all the silly comments about the Standard & Poor's downgrade of U.S. debt, those of Senator Lindsey Graham might take the cake. He said any CEO would have to quit if his or her company's debt was downgraded. But Graham does not realize that private corporations are essentially dictatorships, only occasionally beholden to shareholders. President Obama has to deal with the deliberately obstructionist Congress led by Graham's party. Republicans could have lifted the debt ceiling and still fought for their case. Instead, they played chicken with U.S. credit in the name of ideology -- or, more likely, to target the President.

S&P adds to the confusion by making believe there are serious budget issues here as well. It admits the political showdown was a cause for concern. Then it goes on to talk about America's need to get its finances together. Let's be very clear: There would be no downgrade now if it were solely based on budget issues. It is all about politics.

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And about S&P's clairvoyance on budget matters, the record is mostly a bad joke. Few will remember that the credit ratings agencies gave Penn Central a high rating in 1970 just before it went bankrupt. Similarly, it gave New York City high ratings just before the city's brush with bankruptcy in the mid-1970s, about which we are reminded by Governor Carey's death. (He was the man who managed the city's rescue along with a then rather young Felix Rohatyn, the investment banker.) The credit ratings agencies gave Enron a high rating before it became the biggest bankruptcy of all time. And of course it doled out triple-A ratings to tranches of collateralized debt obligations, and even synthetic CDOs, which were blatantly undeserved. A mistake? The ratings agencies made a lot of money with those kinds of mistakes, as the Financial Crisis Inquiry Commission made clear in its recent report. These CDOs were composed of subprime mortgage bonds. Defaults of 8 or 9 percent, not just the 25 percent or so we wound up with, caused those triple-A tranches to plummet in value. How could they not know that? Conflicts of interest were rife, of course.

Now Fannie Mae and Freddie Mac are being downgraded because of S&P's decision. Some municipalities will be as well. So there is one other lesson to be learned here. If S&P really has that much influence, financial markets are hardly efficient at all. There is no new financial news here, no new turns in the budget fight, and no new political news. Markets should have built these concerns into prices already. An S&P announcement changes almost no real world conditions, only perceptions.

My guess is the fallout from S&P's move will not be bad. Some fairly amateurish calculations -- note its enormous arithmetic mistake of $2 trillion -- by S&P shouldn't be affecting markets. What is affecting markets is that the underlying American economy is weak, and that in turn affects the rest of the world. This morning as I write, interest rates are not rising sharply as you'd expect from a downgrade --in fact, some Treasury rates are plunging -- but stocks are falling sharply as you'd expect from a weak economy. We should also keep in mind that a weak U.S. economy is also affecting the outlook for Europe. Any news of economic weakness in the U.S. can affect these markets, because it will mean less demand for goods and a lower dollar. It is not only European financial uncertainty that is affecting U.S. markets.

But the U.S. debt downgrade is driven by politics, not economics. And here the Republicans bear all the blame.

Roosevelt Institute Senior Fellow Jeff Madrick is the author of Age of Greed.

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Who Makes Capitalism Work? Adam Smith Would Disagree with Today's Conservatives

Aug 8, 2011John Paul Rollert

adam-smithThe hero for fiscal conservatives warned that it's those at the bottom of the economic pyramid who are the real engines for growth.

adam-smithThe hero for fiscal conservatives warned that it's those at the bottom of the economic pyramid who are the real engines for growth.

To hear the Republicans tell it, even more than paying down the national debt, the key to solving our current economic woes is to make way for the "job creators," a motley crew of Americans who appear to share no more in common than their membership in the top tax bracket.

The reasoning is relatively straightforward and was summed up recently by Texas Governor Rick Perry: "America is not going to move forward until we remove restrictions of over-taxation, over-regulation and over-litigation on the job creators and free them so the jobs can be created." This is a familiar refrain, one that makes progressives shake their heads at a seeming indifference to hard choices and economic history. Still, by now it should be clear that the refrain is far more than convenient rhetoric. It is founded on a bedrock belief about the free market, one that answers What makes capitalism work? by addressing a different question: Who? For that is what is at stake in the term "job creators," a vision of capitalism's essential players, one very different from the original account provided by Adam Smith. His account of who makes capitalism work is at odds with the one we are used to. The essential players are found at the base, not the apex, of the economic pyramid.

Near the beginning of The Wealth of Nations, Smith calls our attention to what, for him, is one of the fundamental qualities of human experience: helplessness. "[M]an has almost constant need for the help of his brethren," he says, for unlike animals, we cannot tend to even our most basic needs on our own. How exactly do we gain the help of others? The answer, says Smith, lies somewhere between the fawning cocker spaniel and the commands of an all-powerful king.

Let's hold the king aside for a moment. When a cocker spaniel wants to be fed, Smith says, "it has no other means of persuasion but to gain the favour of those whose service it requires." It wags its tails, licks its master's hand, and appeals to him with puppy dog eyes. The cocker spaniel will occasionally succeed, and so too will the fawning beggar, but such an approach is obviously not an optimal way to get what you want. Indeed, most times people will simply pass by you, leaving you hat in hand.

Thankfully, says Smith, human beings have a natural propensity to negotiate or, as he describes it, to truck, barter, and exchange. "Give me that which I want, and you shall have this which you want" is not only the manner in which we acquire most things in this world, but it is the building block for an economically advanced society. Thus, Smith declares in his most famous passage:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.

People who read this passage and nothing else of Smith tend to regard it as an affirmation of the virtue and efficacy of selfishness over and against the relative impotence of altruism. But that isn't its significance for Smith. Yes, our personal interests act as a sharper spur to action than the interests of others, but the same may be said for the cocker spaniel. The difference is not that we have selfish interests, but that only by understanding the interests of others are we able to fulfill our own.

Indeed, the passage attests to the human capacity for empathy, the focus of Smith's other great work, The Theory of Moral Sentiments. It is because of our natural tendency to stand in the shoes of others and see the world through their eyes that we can appeal to their interests. The commercial effect of this practice is that we individually learn how to make the kinds of exchanges that, in the aggregate, lead to the wealth of a nation.

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This brings us back to the all-powerful king. Fundamentally, he is no different from the rest of us. Regardless of the scepter and pomp, set him down on a deserted island and he would be just as helpless. Still, when he is seated on the throne he can remedy his helplessness by ordering others to attend to his needs. He can also force them to attend to the needs of one another. In this respect, he provides an alternative way of thinking about how we might distribute the resources of society apart from relying on the dull instinct of altruism or the even the organizational force of self-interest guided by empathy.

And yet, says Smith, if we consider those cases where, because of assumed wisdom and/or threatened force, a single person directs considerable resources, we will soon see that this third way fails to match the decentralized power of truck, barter, and exchange. Reflecting on the creature comforts that even the meanest person enjoys in a developed society, Smith says, if we

consider what a variety of labour is employed about each of them, we shall be sensible that without the assistance and co-operation of many thousands, the very meanest person in a civilized country could not be provided, even according to, what we very falsely imagine, the easy and simple manner in which he is commonly accommodated. Compared, indeed, with the more extravagant luxury of the great, his accommodation must no doubt appear extremely simple and easy; and yet it may be true, perhaps, that the accommodation of an European prince does not always so much exceed that of an industrious and frugal peasant, as the accommodation of the latter exceeds that of many an African king, the absolute master of the lives and liberties of ten thousand naked savages.

If the contrast Smith makes is not necessarily marked by cultural sensitivity, it underscores his broader point about who makes capitalism work. Not the all-powerful king, however wise and mighty, but "the assistance and co-operation of many thousands." The butcher, the baker, and the brewer, the countless men and women who support and extend the division the labor -- these are the people who ensure the increasing efficiency, growing complexity, and continued development of society. They are the base of the economic pyramid, and their actions ensure the bounty of the Invisible Hand.

So what happened to Smith's account? Consider Andrew Carnegie's perspective on who makes capitalism work in his essay "The Gospel of Wealth." Writing a century after Smith's death, the steel magnate describes the decisive moment when human beings began to favor a model of free competition that saw the separation of "the drones from the bees," a process that allowed for the "accumulation of wealth by those who have the ability and energy that produce it." Carnegie says of such people (who happen to look a lot like him) that they are so essential to society's development that those who object to the inequalities of a free market system might as well "urge the destruction of the highest existing type of man." In the same spirit, roughly 75 years later, Ayn Rand, in her aptly titled "What Is Capitalism?," focuses on the "the innovators" who promote a society's development. They are an "exceptional minority," she says, "who lift the whole of a free society to the level of their own achievements." What does everyone else contribute? On Rand's account -- nothing. "The man at the top of the intellectual pyramid contributes the most to all those below him," she says, "but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contribute nothing to those above him, but receives the bonus of all their brains."

This is a striking alternative to Smith's vision. Instead of "the assistance and co-operation of many thousands," it is an elite caste that provides the vision, brains, and organizational savvy that ensure a thriving economy. They are the Visible Hand of capitalism, and for Carnegie, Rand, and others like them, if you want to know who makes capitalism work, simply stand at the base of the economic pyramid and look up. You'll find the 'job creators' at the very top.

Smith would be highly skeptical of such claims. In the final edition of the Theory of Moral Sentiments, written over a decade after The Wealth of Nations, he added a chapter in which he describes the "disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition." This disposition, Smith says, colors the way we view the world, leading us to conflate wealth and greatness with virtue and poverty and weakness with vice.

It also leads to confusion in thought. Who makes capitalism work? is a very different question from For whom has capitalism worked best? We should guard against presuming the answers are necessarily one and the same.

John Paul Rollert is a doctoral student at the Committee on Social Thought at the University of Chicago.  His essay, "Does the Top Really Supportthe Bottom? - Adam Smith and the Problem of the Commercial Pyramid," was recently published by The Business and Society Review.

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How to Take Our Country Back from the Money Men Who Fund the Tea Party

Aug 2, 2011June Carbone

line-of-american-peopleIf there is a silver lining to the debt limit crisis -- and it's a big if -- it would be that the extremism of Republican agenda has finely become visible to a larger number of Americans. It is time to recognize what it means to face a determined ideological bloc.

line-of-american-peopleIf there is a silver lining to the debt limit crisis -- and it's a big if -- it would be that the extremism of Republican agenda has finely become visible to a larger number of Americans. It is time to recognize what it means to face a determined ideological bloc. And what it means to fight back.

While New York Times columnist Thomas Friedman recently described the Tea Party as an American Hezbollah, Islamic terrorists would not have much clout without their funders in Saudi Arabia and Iran. So, too, the Republican right would be impotent without its behind-the-scenes creators. A small number of incredibly wealthy businessmen -- the principle beneficiaries of the Bush tax cuts -- have created an ideological machine determined to destroy government. Taking our country back, restoring pragmatism over ideology, and making government function requires making the deep pocket money men (and they are mostly men) visible and identifying their cause with the looting of the country.

The debt limit gridlock is simply the latest episode in a war on government that has been thirty years in the making. Many of us dismissed the genial, misguided Ronald Reagan as an aberration. We saw the Gingrich revolution as self-destructive and easily contained. We cheered in 2006 and 2008 as we reached that the conclusion that Bush, with his unnecessary wars and the financial crisis that was the predictable consequence of mindless deregulation, had discredited the Republican brand. Some of us voted for Obama over Hillary because we thought that with Bush and political maestro Karl Rove out of the way, Obama could transcend the partisanship of the Clinton years.

We were wrong. What we failed to recognize is the engine of Republican extremism is not Reagan or the second Bush or Gingrich. Nor is it some authentic voice of the Christian right or the disillusioned working class on the American "street." The engine of conservative ascendance is the ideologically driven money men who have built a single-minded political machine in the United States. In Winner Take All Politics, political scientists Paul Pierson and Jacob Hacker date the conservative rise to 1978, two years before Reagan. They identify conservative success with the ascendance of the Chamber of Commerce, which became a vehicle for right-wing business interests. They report that since the consolidation and channeling of conservative funding, Republicans have won an astounding 85% of closely fought contests.
Roosevelt Institute Senior Fellow and New Deal 2.0 pundit Thomas Ferguson, a political scientist at U Mass, Boston, documents the effective sale of Congress to special interests. The Congressmen who raked consumer advocate and should-be populist hero Elizabeth Warren over the coals were the paid shills of the big banks she was willing to confront. Membership on financial services committees is now the product of the right campaign contributions. While public outrage may have led to the passage of the Dodd-Frank financial reform bill, it did nothing to contain the alliance of lobbyists and business friendly Republicans (along with more than a few Democrats) working overtime to water it down and block its implementation.

In the meantime, the Republicans have launched a campaign to rig the political system. Their campaign against unions is a campaign against the last remaining source of institutional support for Democrats. At the same time, they are engaged in a wholesale initiative to make it harder to vote. Who is most likely to be affected by these measures? The answer is clear: the poor, the young, the less educated, recent immigrants, in short, those mostly likely to be Democrats and most likely to be the victims of tea party budget cuts.

The Supreme Court is no different. The rule of law is all but dead in America. The same group that funded the Tea Party and the congressional financial services committees has stacked the Court and blocked Obama appointments everywhere else. While commentators focus on issues such as abortion or campaign finance, the Supreme Court reaches its ideological height in its consistently pro-business decisions. Three of the Justices (Scalia, Thomas and Alito) are the most extreme justices since the twenties. Chief Justice Roberts and Justice Kennedy are only slightly behind. Together, the five have produced a series of nakedly partisan 5-4 votes.

So how are we (everyone to the left of Paul Ryan) to respond? In the New York Times this weekend, pollster Stanley Greenberg depressingly observed that the public gets it -- and the public response has been neutralized by the right wing ideological campaign. The public gets that Wall Street runs the country. The public gets that no one represents their interests. The public gets that both Bush and Obama serve corporate interests first. And the public responds -- incredibly to some of us -- by believing that government is the problem. As Tom Frank explained in 'The Wrecking Crew', the point of this ideological campaign is to prove to the public that government can't work and there is no better way than to make sure it doesn't. So how to respond?

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Greenberg argued that Democrats should adopt sensible policies to limit campaign contributions, tax lobbyist expenses, simplify the tax code, add fees to financial transactions and limit CEO compensation and executive bonuses. I wish! To accomplish these objectives, Greenberg needs a party that is not beholden to the same interests. To get there requires taking a few pages from the Republican playbook. Republican success has come from playing on the fears of the American public, making "liberal" a naughty word, and discrediting government especially when it works. According to independent observers, Obama's stimulus package saved jobs and probably prevented a worldwide depression; yet, most Americans think it was a failure. How do we combat propaganda? The answer requires seeing what we are up against and responding in turn.

First, we need to put a face on the enemies of the Republic. The true powers behind the throne are the money men. The Koch Brothers, leading right wing funders, are finally becoming visible. They own the largest privately held energy company in the country, with over $100 billion in revenues. It is one the country's ten top contributors to air pollution and a "kingpin of climate science denial."  The Koch Brothers fund a largely invisible network of think tanks, political front groups and advocacy organizations that have opposed Obama Administration initiatives from health care to the stimulus package. Charles Lewis, of the non-partisan Center for Public Integrity, reported that the "sheer dimension" of what the Koch Brothers spend sets them apart. "They have a pattern of lawbreaking, political manipulation, and obfuscation. . . .They are the Standard Oil of our times." Where do all those tax cuts go? We should emphasize just how much the tax cuts increase the Koch Brothers' ability to game the political system to insure their unaccountability.

Right up there with the Koch Brothers is Rupert Murdoch. He has finally registered in public consciousness as a result of the scandals in Britain. His minions illegally tapped the phones of the royal family, the opposition Labor Party, missing children and 9/11 victims, all while he supped with the Conservative Prime Minister. What he has done in the U.S. is comparable. He single-handedly funded the creation of Fox News, the primary source of information for 64% of the tea party and the single entity outside of the Bush Administration itself most responsible for the war in Iraq. He subverted the Wall Street Journal from a reputable, conservative, financial publication to an ideological force. Murdoch undermines reputable journalism everywhere he goes and insulates his media empire from effective oversight (or enforcement of the criminal law). His creations are much more effective than Pravda (the Soviet newspaper and propaganda arm) ever was. We must start by making these men and similar funders the face of conservative extremists. Conservative Republican and former Louisiana Governor Buddy Romer is running for the Republican Presidential nomination by disavowing large contributions. He is close to invisible in the polls. We should make visible the obvious -- every other Republican candidate is a stalking horse for the financial sector.

Second, we need to discredit the extremists as extremists. The Ku Klux Klan and the John Birch society are appropriately viewed as wingnuts. The Tea Party should be seen in the same league. Imagine if Democrats threatened the country's credit rating to pursue an unachievable ideological agenda. They would be called traitors; Vice President Joe Biden finally called them "terrorists" but only behind closed doors. The Tea Party has held the country hostage to a manufactured crisis designed to prove their ideological purity. At best, they are partisans who put their ideological commitments ahead of the country's. More systematically, they serve the interests of those who would destroy government effectiveness. John McCain, now that he has been safely reelected for what is likely to be his last term, has been one of the more effective voices against them. They deserve to be discredited permanently.

Third, the only way to discredit them is to link the money men to the extremist policies. Progressives are proud of their video showing the Republican attack on Medicare as the equivalent of pushing Grandma off the cliff. Their far more effective refrain is the one that links sacrificing Grandma to tax cuts for the wealthy. The refrain could be done through fill in the blanks. The Republicans want to sacrifice Medicare to protect tax cuts for the wealthy. The Republicans want to fire teachers to promote tax cuts for the wealthy. The Republicans want to slash Social Security to promote tax cuts for the wealthy. The Republican held the debt limit increase hostage to their efforts to protect tax cuts for the wealthy. The Republicans, whatever they do, are beholden to the money men the country should love to hate.

Fourth, the Democrats need to claim credit for government's genuine accomplishments. The public believes that Social Security and Medicare are successes. Somehow, it thinks that the extension of Medicare to more people is socialism. Obama failed to put an effective government (and Democratic) label on the programs that in fact produced the most results -- the jobs created by the stimulus for government infrastructure, the federal funds that staved off the need for state layoffs, etc. In Kansas, Republican Governor Brownback and Republican Senator Pat Roberts are claiming credit for a new federally funded Bio-Defense Facility even as they bash federal spending. Either the federal government should be getting credit for the facility or it should be on the chopping block.

Fifth, the Democrats need an overriding agenda. An easy one is the need to rebuild community and equality. Impressive empirical studies suggest that inequality necessarily undermines community health. It results in writing off large numbers as chronically unemployed, mentally ill, likely to abuse drugs or alcohol and effectively unmarriageable. It also makes it easy for those with six figure bonuses to escape accountability. The right wing extremism machine is possible only because the Koch Brothers can amass fortunes worth over $35 billion between them.

I am not optimistic. Naomi Cahn and I wrote a book on the family called 'Red Families v. Blue Families'. We expected it to appeal to family law scholars and women's groups. Instead, we received immediate attention from conservative family institutes. We were eventually invited to speak by same-sex marriage advocacy organizations. We never heard much from the feminist left. At first we were mystified. Then we realized that while there is a well funded network of right wing think tanks, the organized left -- and much of the center -- has starved on the vine for lack of funds. Same-sex marriage passed in New York State because Republican funders, who identify with their gay sons and lesbian daughters, supported the cause. Efforts that require limiting the influence of the billionaires we have empowered and insulated from accountability face an uphill struggle.

June Carbone is the Edward A. Smith/Missouri Chair of Law, the Constitution and Society at the University of Missouri-Kansas City. She is the co-author, with Naomi Cahn, of Red Families v. Blue Families.

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Why Debt Ceilings and Balanced-Budget Requirements Violate the Original Intent of the Constitution

Aug 1, 2011William Hogeland

american_colonial_flagSo-called "constitutional conservatives" ignore the realpolitik of our nation's origins.

american_colonial_flagSo-called "constitutional conservatives" ignore the realpolitik of our nation's origins.

In a critical and entertaining portrait of the anti-tax activist Grover Norquist, the New York Times columnist Frank Bruni presented Norquist as an absolutist obsessed with forcing modern political life to conform to ideas that Norquist associates with the American founders' first principles.

Of course, Norquist is by no means alone in taking that position. That the Constitution came into existence to keep taxes low, the federal government small, and national debt at zero is an article of faith among many who, like Michele Bachmann, have taken to calling themselves "constitutional conservatives." And faith is required to believe it, as the Norquist interview shows. To make his supposedly constitutional argument, Norquist cites the first amendment on freedom of religion and the second on the right to keep and bear arms, and then goes on to cite absolutely nothing, in either the articles or the amendments, that so much as hints at a constitutional requirement to balance the federal budget, avoid debt, tax no more than people like Norquist deem appropriate, and keep government small.

He can't cite anything to that effect because while balancing budgets, restraining borrowing, and keeping taxes low and government small might be good goals, depending on what you mean by them, it is impossible to locate in the founding national law any requirement to accomplish them. Indeed, the reality of founding history leads to the reverse conclusion.

The Constitution came about precisely to enable a newly large government -- a national one -- to tax all Americans for the specific purpose of funding a large public debt. Neither Alexander Hamilton nor his mentor the financier Robert Morris made any bones about that purpose; James Madison was among their closest allies; and Edmund Randolph of Virginia opened the Constitutional Convention by charging the delegates to redress the country's failure to fund -- not pay off, fund -- the public debt, by creating a national government.

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Beginning during the War of Independence, and continuing throughout the 1780s, American nationalists committed themselves to a small class of upscale high financiers (largely identical with the American nationalists), who had bought bonds from the confederation Congress in hopes of earning regular, tax-free, 6% interest payments -- not in the Congress's crashing paper currency but in hard, cold metal or its equivalent, stable bills of exchange. Morris, Hamilton, Madison, and others believed that swelling the debt to immense proportions would make a coherent nation out of thirteen squabbling states and make that nation a player on the world economic stage. Their plan to do so depended partly on making military-officer pay a pension, thus turning the entire officer class into public bondholders -- and giving Congress new power to tax all Americans to support that debt.

Hamilton is often reflexively presented as finding inventive ways to pay down the national debt. His real accomplishments were of course "funding and assumption" -- absorbing the states' war debts in the federal one and funding that huge obligation via nationally collected and nationally enforced taxes.

Hence the all-important provisions of the Constitution giving Congress very broad powers to tax and acquire debt. To 18th-century American nationalists across the political spectrum -- to our founders and framers, that is, from Hamilton to Madison, from Morris to Randolph, from the financiers to the planters -- national taxing and borrowing were ineluctably connected to the very purpose of national government.

Nobody has to like it. But the original intent of the Constitution involved sustaining and managing public debt via taxation.

Both the articles and the amendments do, of course, limit government and restrict its power. But no ratified amendment has ever qualified Congress's power of the purse, which in the minds of the framers explicitly involved the power to take on debt and fund it. In their tweets and blogs, "constitutional conservatives" have been promoting a balanced-budget amendment with reference to the tired notion that since households and small businesses must balance their budgets (as if!), government must too. They link that economically useless prescription to the widespread fantasy that our Constitution was written, amended, and ratified for just such a purpose. The framers saw it just the other way.

But really everybody, not just "constitutional conservatives," buys into the fantasy now. History is rarely helpful politically. It's hard to imagine liberals bringing to debt-ceiling and balanced-budget debates the painful realpolitik of our national origins, which show the Constitution existing, originally, to finance the investing class and yoke that class's interest (in every sense) to national power. Thus the Times gives the Bruni piece a headline referring to Norquist's "dangerous purity" -- as if the danger in Norquist's approach lies in a too-rigid insistence on basic principle. There's nothing purist about Norquist. Whether his ideas may be proven right or proven wrong, they are anything but originalist. Like those of Bachmann and the rest of the anti-tax right, Norquist's principles are novel, innovative, and weirdly postmodern, extra-constitutional at best.

Stark realism about the actual founding purposes of the Constitution will always have limited use in political debate. But it would be nice, at least -- though unlikely -- if we would argue these issues on their merits, and leave the Constitution alone.

William Hogeland is the author of the narrative histories Declaration and The Whiskey Rebellion and a collection of essays, Inventing American History. He has spoken on unexpected connections between history and politics at the National Archives, the Kansas City Public Library, and various corporate and organization events. He blogs at http://www.williamhogeland.com.

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The God of Tea Party Freshmen Serves the Rich, Not the Poor

Aug 1, 2011Lynn Parramore

How a prince of Hell took a job on Capitol Hill.

Every once in a while, you come across a news story that's more than a story. It's a revelation.

How a prince of Hell took a job on Capitol Hill.

Every once in a while, you come across a news story that's more than a story. It's a revelation.

On Sunday morning, that's what greeted readers of the Washington Post searching for insight into the Great Debt Showdown. The first two thirds of a piece by David A. Farenthold and Dan Balz is a familiar recitation of the tribulations of Speaker John Boehner as he struggled with defiant new members of the House Republican conference. Nothing earth-shattering there. But then, out jumps a nugget of naked truth that simply takes your breath away. It concerns the god served by Tea Party-backed GOP members who have held the country hostage in a sham debt-ceiling crisis. Keep in mind that the passage below is not a parody:

Not even gentle persuasion could overcome higher powers Thursday. As Boehner was in his meetings, three freshman Republicans from South Carolina were in the House chapel nearby, in quiet discussion and in prayer. Reps. Mick Mulvaney, Tim Scott and Jeff Duncan wanted a stronger provision to guarantee a balanced-budget amendment and knew they would be lobbied furiously in the hours to come.

At one point, Duncan said, Mulvaney picked up a Bible and read a verse from Proverbs 22: "The rich ruleth over the poor, and the borrower is servant to the lender."

"It's telling me to really be bold, to really fight for structural changes," Duncan said.

"Mulvaney snapped the Bible closed. And I said, ‘Guys, that's all I need to see,' " Duncan said. "Tim said, ‘Yep.' And we stood up and walked out."

These gentlemen would like for us to construe their prayerful moment as spiritual concern for suffering Americans. That's a tough sell, because the god worshiped by these devout South Carolina congressmen is not Yahweh. It is not the deity served by Jesus, he of throw-the-money-lenders-out-of-the-temple fame.

The god of the Tea Party freshmen is certainly ancient and powerful. He was last employed as one of the chief princes of Hell. And his name is Mammon. On leave from his post in Hell, Mammon is doing a bit of temp work. The avatar of wealth and greed has rolled up his sleeves and taken up residence in the People's House, where he currently advises GOP freshmen on policies contrived to do his bidding.

Now, if Congressman Mulvaney had not shut his Bible so quickly, he might have come across another interesting passage, this one from the Gospel of Matthew.

No one can serve two masters, for either he will hate the one and love the other; or else he will be devoted to one and despise the other. You can not serve both God and Mammon.

—Matthew 6:19-21,24

But there was really no need for the freshmen to read this passage. Mulvaney, Scott and Duncan know  who they are really serving. They must understand that the budget cuts they have fought for tooth and nail will take money from the most vulnerable members of our society and fill the coffers of the rich -- though you wouldn't necessarily think they'd invoke the Christian Bible in support of their trickle-up economics.

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But Mammon's power has been known to be irresistible. Those who fall under his spell frequently turn their backs on justice and become the fawning lapdogs of the rich (peruse the Koch-Mulvaney connections here).

Today we learn that the deal currently in the works to avert an historic U.S. default would require Americans rendered jobless by the financial crash caused by Wall Street to suffer even as bankers take in record-breaking profits. Medicare would be placed on the chopping block. Tax loopholes for the wealthy would remain open. The economy would be further weakened. Pain would be inflicted on just about everybody but the privileged and the powerful.

The God of Greed can look upon his work with satisfaction. His troops are delivering. The angels have fled. He knows his kingdom is coming. And Mulvaney, Scott, and Duncan have secured their place in it.

Lynn Parramore is the editor of New Deal 2.0, Media Fellow and Deputy Director of Communications at the Roosevelt Institute, co-founder of Recessionwire, and the author of Reading the Sphinx.

**Follow Lynn Parramore on Twitter at http://www.twitter.com/lynnparramore

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Polarized Politics: How Extremists Have Taken America Hostage

Jul 28, 2011June Carbone

flag-150Could the GOP motto be: "Abandon Moderation All Ye Who Enter Here"?

flag-150Could the GOP motto be: "Abandon Moderation All Ye Who Enter Here"?

In the most recent polls, an overwhelming 68% of the American public want a compromise on the debt ceiling. Break down those numbers by party, however, and a different picture emerges. 81% of Democrats want a compromise compared to only 53% of Republicans. Even more strikingly, 53% of the Tea Party oppose a settlement compared to 42% who favor it.  The Tea Party, in opposition to the majority of the country, the majority of the Republican electorate and the weight of professional opinion, takes the my-way-or-the-high-way approach. What is going on?

The short answer is that the Republican leadership, in general, and the Tea Party, in particular, is designed to be a party of extremists. That is, the modern Republican party is built on its appeal to those most likely to see the world in black and white. Giving power to the true believers of any stripe is dangerous, and the debt limit makes visible a decades long process that increases the risk that the country will become ungovernable.

The debt ceiling is a perfect issue to illustrate the intransigence of the new group because the underlying issue is meaningless. The ceiling is an artificial restriction that essentially says that after Congress has passed a budget and the U.S. has borrowed money in accordance with that budget, it cannot make payments on the debts it has already incurred unless Congress increases the debt limit. Ordinarily, Congress raises the debt limit without much fuss. It has done so over 70 times since the limit was enacted in 1917 and, indeed, 17 times during the Reagan Administration alone.

While increasing the debt limit is therefore meaningless, the failure to raise the debt ceiling is not. The refusal to make monthly payments on debts already incurred marks one as a credit risk. Ask anyone who misses an occasional monthly payment on their credit cards. Interest rates go up, even if the debtor has lots of money in the bank. At the national level, the mere threat of default -- the signaling that the U.S. is not a reliable borrower -- could play havoc with national and international markets.

So why risk it? Because it is what true believers do. The conventional wisdom is that we are living through a period of greater political polarization. It is true that Congressional districts have become more polarized, with more safe Republican and safe Democratic districts. It is also true that the views of members of Congress no longer overlap much, with virtually all Republicans to the right of virtually all Democrats on substantive positions.  People with different views, however, are capable of compromise. The substantive differences between Democrats and Republicans do not explain why they can't reach an agreement especially on an issue like the debt limit where there are many intermediate solutions. Abortion, after all, can be cast as murder; the only issue for the debt limit is the price that can be extracted for the vote.

Understanding the stalemate therefore requires understanding the modern Republican party and how it has been assembled. The result is not a parallel construction of liberals versus conservatives. It is rather the construction of one party (and only one) designed not to compromise.

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First, with respect to substance, the Republican party has become dramatically more conservative while the Democratic party has not become similarly more liberal (See Hacker and Pierson, Off-Center). Republicans have been able to do so and still win elections principally by adopting policies that increase turnout and those policies tend to be the ones that fire up the base and attract deep pocket funders. The principal difference between the outcome of the 2008 and the 2010 elections, for example, was the identity of those who showed up at the polls.

Second, the appeal to the base involves an appeal to those least likely to compromise -- and Republican partisans are more inflexible than Democratic partisans. An intriguing study attempted to determine whether political orientations were inherited by examining the difference between identical and fraternal twins. It described conservatives (irrespective of their positions on individual issues) as those "yearning for in-group unity and strong leadership." They desire clear, unbending moral and behavioral codes, a fondness for systematization, a willingness to tolerate inequality and an inherently pessimistic view of human nature. In contrast, those with a more liberal political orientation tend to be more tolerant of out-groups, and to take a more context-dependent rather than rule-based approach to proper behavior. They also demonstrate more empathy, optimism and "suspicion of hierarchy, certainty, and strong leadership."  The polar opposites in this typology are the true believers v. the flip-floppers. While the jury is out on how conclusively the twin studies establish a genetic component, other studies tend to find that such preferences are hard to change and influence perceptions of facts as well as policies. 64% of Tea Parties, for example, incorrectly believe that President Obama raised taxes in comparison with 34% of the country overall.

Third, Republicans have adopted an intentional rhetorical strategy that tends to appeal to those who prefer fixed, unbending values. According to linguist George Lakoff, for example, conservatives celebrate the "strict father," who enforces relatively fixed and hierarchical values, while liberals prefer the "nurturing mother" who makes context-based decisions designed to promote individual well-being.

Fourth, with the multiplication of cable TV channels and internet sites and the decline of the mainstream media, we increasingly listen only to those with whom we already agree. 63% of Tea Parties, for example, say that they get the majority of their political and current events news on television from the Fox News Channel, compared to 23 percent of Americans overall.

Finally, these effects are greatest for those with the most influence. Polarization on issues -- and values preferences -- are dramatically greater for political activists and the more educated generally than for the rank and file. Tom Ferguson explains that the big increase in political contributions has come from conservative big money donors who both respond to and shape the "no compromise" rhetoric (*For more on how money drives polarization, see Lynn Parramore's ND20 interview with Ferguson).

A half century ago, neither political party disproportionately consisted of those who favored a my-way-or-the-high-way approach. Unbending ideologues did not make it into leadership positions. Today, it may be the only way to get elected - for one of the parties. That party has framed the debt limit as a matter of principle and used it to fire up the base. For a group inclined to see the world in terms of absolutes, compromise can accordingly only be seen as betrayal.

June Carbone is the Edward A. Smith/Missouri Chair of Law, the Constitution and Society at the University of Missouri-Kansas City.


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The Rise of the Radical Center: The Crisis of the Old Order

Jul 26, 2011Bo Cutter

Big changes are coming for Americans fed up with the crisis in governance.

Big changes are coming for Americans fed up with the crisis in governance.

Last week one of my oldest friends -- named Les Francis -- and I hosted a small dinner in Washington D.C. we called "the annual meeting of the Radical Center." Policy preferences differed. Party allegiances differed. Explanations for why we are where we are differed, but among this group -- everyone of whom had long histories of deep involvement in government and politics -- there was no disagreement on a central point: in the deficit/debt ceiling debacle unfolding before us we are seeing a crisis of governance.

This debacle is confirming -- and solidifying -- a view that has slowly been building among ordinary Americans for a long time: the Republican and Democratic parties are essentially bankrupt in a central sense of the term. They are not capable, separately or together, of governing America. The effects of this realization and conclusion will not be felt immediately -- next month -- but the avalanche has begun to move down the hill and it is going to pick up speed.

The evidence is increasingly hard to deny. Republicans have a 55% unfavorable rating by voters -- only exceeded by a 57% score in 1998 during their stupid effort to impeach President Clinton. Democrats have an unfavorable rating of 49%, their highest ever. A resounding 12% of voters express confidence in the Congress. And 62% of Americans think the country is on the wrong track. My bet is that these numbers will become worse not better between now and the 2012 election.

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But so what? Don't the two parties constitute a duopoly, so there is no real way for dissent to be registered except by not voting? Well, that may be changing.

To get a sense of this, I recommend two recent articles to you: first, Tom Friedman's column of July 23, "Make Way for the Radical Center"; and John Avlon's July 22 Daily Beast column, "The Web's Stealth Presidential Race." Both columns discuss the emergence of a new group -- Americans Elect -- which intends to do two simple things: (1) Provide ballot access to an independent bipartisan presidential ticket, which will be chosen through (2) a web based convention to be held in June 2012. I've been part of this effort for a couple of years, but that is not why I mention it here. Rather, I mention this new group to emphasize the following points: we are in the midst of a governing crisis; we are also in the midst of fundamental change in the "old order"; Americans are losing confidence rapidly in existing political arrangements; and technology now provides a way of leap-frogging the two party duopoly and going directly to the voters with a different message.

Both the necessary and the sufficient circumstances for the effective emergence of the radical center are now fulfilled. And the odds are mounting that within the next 2 presidential elections we will see political changes of the kind this country sees about twice a century.

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic Presidents.

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