The above video of the interview with Bob Pollin explains that “There are many ways states can deal with crisis without cuts to services.” The paper from the Political Economy Research Institute at The University of Massachusetts, Amherst Fighting Austerity and Reclaiming a Future for State and Local Governments is the supporting research for the claims of Bob Pollin.

I have had special sympathy for the constraints on state and local governments in handling their budget crises because they were constitutionally forced to balance their budgets on an annual basis. I thought that there was not much they could do to rescue themselves, but depended on federal help that was being blocked by Republicans in the Federal government.

I was ready to argue with the interviewee who just did not comprehend that reality, Instead what I found was a person who fully understood the constraints and had come up with methods I had not considered to fight against those constraints.

After having listened to this interview, I now have much less sympathy for what the state governments are doing and what they are failing to do.

Robert Reich connects the dots on the economy, in less than 2 minutes and 15 seconds. Who knew he could draw!?!

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Here is the money quote from the article Medicare Saves Money by Paul Krugman:

Indeed, as the economist (and former Reagan adviser) Bruce Bartlett points out, high U.S. private spending on health care, compared with spending in other advanced countries, just about wipes out any benefit we might receive from our relatively low tax burden. So where’s the gain from pushing seniors out of an admittedly expensive system, Medicare, into even more expensive private health insurance?

I think the same reasoning in our country is applying here as the reasoning that most people go through to minimize the taxes they pay on investments.  I have heard it said that if you put money away in tax deferred accounts, you will end up paying more in taxes than if you paid the taxes right away.  I did a few hypothetical calculations and found out that this claim is true.  However, the reason you pay more taxes is that you make more money.  If you calculate how much money you have after paying your taxes, you will find you have more by investing in tax deferred accounts like IRAs and 401k’s than if you invested without the benefit of tax deferral.

People get stuck on the idea of minimizing their taxes, when they ought to be concentrating on maximizing the money they get to keep after paying taxes.  Doing one of these things is not the equivalent of doing the other. (For the mathematically inclined who want to know why the difference, the simple answer is that compound interest is not mathematically linear. In fact, it is geometrically nonlinear.)

Now for Krugman’s strong finish:

The point, however, is that privatizing health insurance for seniors, which is what Mr. Lieberman is in effect proposing — and which is the essence of the G.O.P. plan — hurts rather than helps the cause of cost control. If we really want to hold down costs, we should be seeking to offer Medicare-type programs to as many Americans as possible.

JB made a comment on the article Wrestle Mania Over Debt Ceiling.  The comment was:

Republicrats have dropped the ball on both sides.  There really is very little difference between Bush & Obama.  Both have abhorrently squandered money thru expensiver power grabbing programs.  Both have intruded in our personal lives whether thru the Patriot Act, or the bureaucracies such as the FBI given more power to search without cause, or thru Obama’s executive order to assassinate U.S. citizens suspected of terrorism without a trial by jury.  Both are war mongers.  Bush went on his war parade bombing Iraq and Afghanistan, Obama has expanded it by adding Pakistan, Yemen, and Libya to the list.  I don’t care how much they hate us over there, they simply aren’t a major threat until they start making inter-continental ballistic AK-47 bullets that can travel from a cave in Pakistan over the ocean to the U.S.  We need someone that’ll drop these power grabbing executive orders, and IMMEDIATELY begin withdrawing troops down from the mess in the middle east, or the gig is up with a major economic collapse.

My response to the comment was:

I agree with the many similarities you point out.  However stating the similarities does not prove that there is little difference unless you can also prove that there really are no differences.

Would Bush have pushed through health care reform legislation?  Would he have pushed through financial reform legislation?  Would he have pushed through the Lilly Ledbetter fair pay act?  Would he have appointed good Supreme Court Justices? Would he have pushed through an economic stimulus program?

Yes, there are many unfortunate similarities between Bush and Obama.  There are also many important differences.

While it is important to recognize the differences between Bush and Obama, it would be like hiding our heads in the sand to ignore the similarities.  Given both the differences and similarities, it may be hard to figure out exactly what to do in the lead-up to the 2012 Presidential election.

From Robert Reich’s blog as published on Truth-out we have the article The White House Needs a Real Jobs Plan.  The article starts with the following remarks:

Today the President met with business leaders on his “jobs and competitiveness council,” who suggested more public-private partnerships to train workers, less government red-tape in obtaining permits, and more jobs in travel and tourism, among other things. The President then toured a manufacturing plant in North Carolina, and made an eloquent speech about the need for more jobs.

Fluff.

Doesn’t the White House get it? The President has to have a bold jobs plan, with specifics. Why not exempt the first $20,000 of income from payroll taxes for the next year? Why not a new WPA for the long-term unemployed, and a Civilian Conservation Corps for the legions of young jobless Americans? Why not allow people to declare bankruptcy on their primary residences, and thereby reorganize their mortgage debt?

Or a hundred other ways to boost demand.

Fluff won’t get us anywhere. In fact, it creates a policy vacuum that will be filled by Republicans intent on convincing Americans that cutting federal spending and reducing taxes on the rich will create jobs.

Most Americans are smart enough to see through this. But if the Republican snake oil is the only remedy being offered, some people will buy it. And if the President and Democrats on Capitol Hill continue to obsess about reaching an agreement to raise the debt limit, they risk making the snake oil seem like a legitimate cure.

As indicated by the above excerpts from the article, it’s not like there aren’t many voices and many proposals for an alternative to what the Republicans are proposing.  For the President to add his voice to the promotion of the alternatives, he first has to know about the alternatives, and then he has to remember that a politician’s primary job is to educate the public on policy matters.

As I have tried to make it clear to Democratic politicians before, you cannot beat something with nothing.  Rather than merely explain what is wrong with the Republican plan, the Democrats have to come up with an obviously better plan.  If they have an obviously better plan, they don’t even have to talk about the Republican’s plan.  Staying positive was a lesson that Obama taught us all in his campaign for the Presidency.

As for the President and Democrats on Capitol Hill continuing to obsess about reaching an agreement to raise the debt limit, the President should instead think of coming out with a statement harking back to my satirical post Obama Vows To Veto Tax Cut For The Wealthy. I leave it as an exercise for the reader to come up with the appropriate statement of conscience.

The following snippet comes from an interview I first heard on a local public radio station:

TRANSCRIPT:

AMY GOODMAN: And finally, I want to go to a very different issue in the last 30 seconds: the government adding formaldehyde to a list of known carcinogens despite years of lobbying from the chemical industry. This report coming out now, just months after the Occupational Safety and Health Administration warned that a hair-care product, Brazilian Blowout Acai Professional Smoothing Solution, contained unacceptable levels of formaldehyde. The government also saying Friday, styrene, which is used in boats, bathtubs and in disposable foam plastic cups and plates, may cause cancer. One of the chief lobbyists against formaldehyde being put on this list were the Koch brothers. Could I get a quick reply from you?

RALPH NADER: The carcinogen aspects, long known, finally recognized by the Food and Drug Administration, opposed by these right-wing lobbyists, the Koch brothers, who, you know, $37 billion worth of money, they’re going to put a lot of it in the campaign. So this will put more spotlight on the Koch brothers, and deservedly so.

The transcript (and a video clip) come from the article Ralph Nader: Koch Brothers Led Fight to Defend Formaldehyde Despite Carcinogenic Evidence on Truth-out.org.

Some people have told me that I should not look a gift horse in the mouth when I see David H. Koch having a cancer research center at MIT named after him because of the money he gave.  Is their a case of irony deprivation running riot through our nation?  Does supporting cancer prevention research balance the selling and promotion of  cancer causing agents to the public?  Would we be better off had the Koch brothers paid their taxes instead of evading them, made less money promoting and selling cancer products, and allowing the NIH to fund the cancer research instead of the Koch brothers funding the research?

If a firefighter commits arson and then heroically helps put out the fire, should we celebrate the heroism even if we know about the arson?  Might we want to disparage the arsonist firefighter in order to concentrate our celebrating on the firefighters who do not also set fires?

As a student at MIT, I did hear the argument from other students that law enforcement should go easy on MIT grads because of all they will contribute to society.  I don’t buy it. Fortunately, I never heard that argument from any of the faculty (who were already making their contributions to society).  Maybe the faculty should have actively argued against that idea rather than merely refraining from promoting it.

In the article Gridlocking the Lives of the Jobless by E.J. Dionne, Jr., he states the following:

For the moment, Republicans have no interest in moving the nation’s debate toward investments in job creation because they gain twice over from keeping Washington mired in discussions on the deficit. It’s a brute fact that Republicans benefit if the economy stays sluggish. And despite their role in ballooning the deficit during the Bush years, they will always outbid Democrats on spending cuts.

So is there any way out for those looking to Washington? The recent disappointing jobs numbers have at least had the salutary effect of reminding Democrats that they cannot agree to anything that further slows the recovery. “The first principle has to be ‘do no harm,’” said Rep. Chris Van Hollen of Maryland, a key House Democratic negotiator in the deficit talks. “There is a danger of making things worse if you adopt very deep cuts in the short term.”

To this article I responded with the following comment:

Yesterday I received an email from Biden saying that he has a plan to take idle government real-estate and stop wasting money on it.  Does that mean that he is going to put this real-estate on the market where there is already a glut of real estate?

Today I hear that the Veep is aiming toward a bipartisan deal to cut $1 trillion in spending.

Meanwhile corporations are withholding $2 trillion of their cash from investing in new plants, equipment, and jobs.  Why? Because there is not enough demand (i.e. spending) in the economy to warrant further investment.

So now both Republicans and Democrats are going to solve the lack of spending in the economy by cutting spending.  I suppose they might also cut taxes to raise tax revenue.

We need a law to make English at least one of the languages spoken in this country.  I mean dictionary English, not political double speak.

For Obama to change the direction of the national conversation on the economy, he first has to know where the new direction is.

I just got an email from the Vice President with the title, “There’s a new sheriff in town”.  It starts off with:

Did you know that the government spends millions to maintain buildings that have sat vacant for years? Or that your tax dollars pay to needlessly ship copies of the Federal Register to thousands of government offices across the country even though the same information is available online?

Vilifying government is what Republicans do.  Do we really need the Obama administration to pile on?  And what is Biden proposing to do about these empty buildings, put them on the real estate market during a real estate bust?  That ought to bring real estate prices back up, note heavy sarcasm.

Here is the response I emailed back to the Vice President:

I didn’t vote for your team to out Republican the Republicans.

While cutting waste is very laudable, there are far bigger and more important issues that your team is ignoring.

The Republicans are proposing to solve the lack of product demand in the economy and the $2 trillion of corporate wealth that is sitting idle waiting for this demand to appear, by cutting taxes, regulation and spending. Cutting spending when corporations are sitting back, waiting to see more spending is so ridiculous the Republicans ought to be laughed off the stage of serious policy proposers.

This idea is so obviously counter-productive that your team should be shouting this from the rooftops. The mainstream media certainly doesn’t show enough knowledge of economics to do the job for you.

If your team won’t stand up for reason in economic policy, then I can see the inevitable consequences. The debate will be settled before you even raise your voices. All that will be left to argue is how much of the wrong policy to have.

I never expected that you would be able to push through all the correct legislation through Congress. I did expect your team to know what that policy is, to stand up for it, and to make sure these ideas were vigorously stated in the country’s marketplace of ideas.

Your team has been a close to utter failure in this regard.

Instead your team has come up with the silly phrase, “Winning the future.”

If you expect campaign donations from me, you are going to have to sharpen your game considerably starting this instant.

And let’s not start any more wars for oil such as the one you just started in Libya. Your so called humanitarian justification for trying to grab Libyan oil for US oil companies is so transparent, to be laughable. The dignity of the office is not upheld with laughable arguments.

In the accompanying post Spitzer Schools Coulter: “Your story would be nice if it were true, but it’s not.”

There is commentary on this video on LOL! Elliot Spitzer SCHOOLS Ann Coulter on what “Reality is”.

The Commentary: Boeing gets corporate welfare in S.C. by Issac Bailey in The Myrtle Beach Sun, adds a little perspective on the NLRB dispute with Boeing,

But there is an overlooked aspect of the dispute. According to an analysis by The (Charleston) Post & Courier, Boeing is being given a package of incentives worth more than $900 million – at least $150 million more than Boeing has said it would spend to build the plant – this while education and other important programs are being cut, undermining the state’s ability to compete over the long haul.

That essentially means South Carolina taxpayers are building the plant and giving Boeing maybe a couple hundred million dollars on top of it. Question for all those who claim to love the free market: If Boeing is such a great deal, why aren’t market forces enough to help the company make a profit without the public’s help? And if it isn’t such a great deal why should the public be on the hook if the rosy predictions about annual economic impact are never realized?

…

They also claimed that right-to-work states – states that actively crush union formation – are “outperforming forced-unionism states.”

This is what they didn’t mention: South Carolina, one of the country’s strongest right-to-work states, has among the nation’s lowest wages and highest unemployment rates, worst rates of health insurance and millions of workers who are afraid every day of losing their jobs if they decide to use their free speech rights in ways the boss might not like, with little recourse.