The Huffington Post has the article from Elizabeth Warren – The First Week in January.  It ends with the following call to action:

On the first day of the new session in January, the senators will have a unique opportunity to change the filibuster rule with a majority vote, rather than the normal two-thirds vote. The change can be modest: If someone objects to a bill or a nomination in the United States Senate, they should have to stand on the floor of the chamber and defend their opposition.

I’m joining Senator Jeff Merkley and six other newly elected senators to pledge to lead this reform on Day One, and I hope you’ll be right there with us. Our campaign didn’t end on Election Day — and I’m counting on you to keep on working each and every day to bring real change for working families. This is the first step.

What can we do to support this effort by Elizabeth Warren?  Perhaps we can start by making this post of hers go viral.  We have to use the power we have which derives from our numbers.  Make sure all the other Senators know how much the public supports this effort.

Truth Out has an op-ed Embrace the Fiscal Cliff  by Simon Johnson, Moyers & Company. The original source of this op-ed is on Bill Moyers’ web site.

In the post-election commentary, you will hear numerous voices – definitely on the right but also on the left – arguing that we could not possibly increase taxes this year or next, as this will push our economy back into recession. Do not believe them – this is just the latest disinformation put out by people who agree with Grover Norquist that the real goal of politics should always and everywhere be to reduce taxes and shrink the size of government. It is exactly such policies that have brought us to our current economic predicament.
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But once he has vetoed Bush cuts, President Obama can immediately propose a new set of tax cuts – the Obama tax cuts – to Congress. These would cut taxes for lower income Americans, for example by lowering payroll taxes (which should also encourage job creation). Would the House Republicans really vote against a tax cut for 100 million Americans?

These new tax cuts should be linked to the state of the economy – for example, they could phase out automatically as employment rises relative to population. This would both help the economy in the short-run and put our budget onto a much more sound footing for the coming decades.

This last paragraph is an excellent example of making policy that adjusts to the economic cycles.  Rather than enshrining permanent economic shifts in government policy into law to solve temporary problems, we enact temporary solutions for temporary problems.

By enacting hard to get rid of tax cuts when they were not needed, George Bush and the Congress at the time created a structural deficit in the budget.  In other words a deficit that will still be there even when the economy was at full employment.  In fact the economy was at full employment when they foolishly enacted permanent tax cuts when temporary tax cuts were not even needed.

There are people who do not seem able to or willing to understand the difference between what George Bush did and what President Obama ought to be doing now.  In a cyclical situation, timing is everything for the right policy.  On the other hand timing is nothing for a policy that is permanently wrong.

I have been getting some denial when I make the reference implied in this cartoon.

I am glad to see that political cartoonist Tom Toles sees the same obvious parallel that I see.

The Real News Network has the interview Is the “Fiscal Cliff” a Fiction?

I have selected some pieces from the transcript:

But I think the important thing is for people everywhere—for Americans, for other people, but particularly people in the United States—to realize that this deficit is not a problem. Once you realize it’s not a problem, then it becomes easier to argue against cuts in it, whether Obama’s for them or anyone else is for them. I mean, there are a lot of people out there on the left or whose hearts are in the right place who really do think it’s a problem if the government is spending a lot more money than it’s taking in. That’s a problem, that we have a debt that’s equal to annual GNP. But it’s not a problem, and people ought to realize it’s not a problem
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The first thing to realize is almost 40 percent of the U.S. Debt is owned by the U.S. Government itself or by state governments. Another 20 percent or so is held by various private pension funds.

So think about that for a moment. The biggest single holder of U.S. debt is the Social Security system. The interest rate goes up. What happens to [incompr.] The Social Security system has more money and is more solvent. I’m not for interest rates going up, but what I’m saying is it’s not—paying this interest does not mean money down a rat hole. It’s not just throwing money away. People hold those assets. And many of the people who hold them are people like you and me—I mean, particularly me, because I’m retired. So those interest payments in part are what fund people’s pensions. And that should be kept in mind when you’re thinking about whether or not the debt is a problem.

The whole interview puts together in one place a lot of the economic principles I have been talking about in various articles on this blog.

Based on the comments on The Real News Network web site, there seem to be two camps. The camp to which I belong, is the one that says “finally an interview that puts many of the economic issues together in one place.” The other camp seems to be, “this guys an idiot and can’t possible know what he is talking about.”

For the second camp, I hark back to Mark Twain’s famous quote, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Of course the other side would just repeat that quote to me.

The Mother Jones article What’s Going on With the Fiscal Cliff? goes with the sub-head:

Why we’re not really going to fall off a cliff on January 1 and everything else you need to know about the upcoming budget talks.

That is why I think my headline is more appropriate.  Kevin Drum goes on to explain:

So when you add it all up, what’s the price tag for this stuff?

That’s where things get a little tricky. The whole fiscal-cliff metaphor is specifically designed to sound super scary, but it’s really kind of misleading. Here are two different ways of looking at it:

• The fiscal-cliff way: On January 1, about $400 billion in tax increases and $200 billion in spending cuts will take effect. That’s $600 billion, or 4 percent of GDP, and that would be a huge drag on the economy.
• The fiscal-staircase way: On January 1, total spending cuts and tax increases of about $1.6 billion will take effect. On January 2, another $1.6 billion. On January 3, another $1.6 billion. Etc.

You see? We’re not really going to fall off a cliff on January 1. The cumulative effect of all this stuff will be pretty small for the first few weeks. It’s only if it drags on forever that we really feel the hit.

The article goes into a lot more detail in a fairly humorous way.

The Politico article really titled Obama, left leaders discuss fiscal cliff campaign shows that perhaps, just perhaps Obama has finally figured out what it takes to be President.

Obama raised the possibility of a barnstorming tour to promote his position, while others in the room pledged to keep organizational pressure on Republicans to back Obama’s agenda.

Raised the possibility?  Maybe he isn;t as serious as I thought.    Maybe he will get some backbone if we  pressure him.

The invited union leaders said they will mobilize their members to push Obama’s agenda.

“We’re very, very committed to making sure that the middle class and workers don’t end up paying the tab for a party that we didn’t get to go to and the president is committed to that as well,” said Richard Trumka, president of the AFL-CIO.

That commitment, of course, is not unconditional. It comes with the expectation that Obama not cave on allowing cuts to entitlement programs like Medicare, Medicaid and Social Security and that he stick to his guns on refusing to allow an extension of the Bush tax cuts on annual income greater than $250,000.

Max Richtman, the president and CEO of the National Committee to Preserve Social Security & Medicare, said he was “reassured” by Obama that any deal will maintain current spending levels for key entitlement programs.

And Trumka said Obama made it clear that he will have the wealthy, not the middle class, pay down the nation’s debt.

“The president, like we are, is committed to preserving tax breaks for the middle class and making sure that rich people pay their fair share,” Trumka said.

This won’t happen unless we keep blogging, emailing, commenting, letter to the editor writing, contacting our Congress critters, and whatever else you can think of.

The actual Daily Ticker segment is headlined Fixing the Fiscal Cliff: Is Hiking Taxes on the Rich the Answer?

In this dialog, Henry Blodget is too right wing for me. He seems to be the more in agreement with Obama’s position than is Adam Task.

In his meetings this week, the president hopes to persuade Republicans in Congress to accept higher taxes on wealthy American while he works to persuade Democrats to agree to spending cuts in entitlement spending.

I’d like to see a lengthy trial of tax hikes for the wealthy being used to fund fiscal stimulus until the economy recovers. During this waiting period, there can be efforts made at finding ways to lower the costs of programs whose benefits people are contractually entitled to. There is absolutely no need to cut benefits.

The full scale Obamacare program before it got watered down by Congress would go a long way to solving the Medicare and general societal medical cost problem. There is some hope that in the ensuing years, enough voters and politicians would come to wake up to this fact and start reinstating some of the items that got lost the first time around.

As for Social Security, I have been promoting Franco Modigliani’s plan for putting Social Security on a firm financial footing with no decrease in benefits and no deficits in the plan. I know that I have been pushing for this since before 2005. See my old politics page section on Social Security.

Senator Ted Kennedy was supposed to get Franco Modigliani a hearing of his plan before Congress, but they both died before it could happen.

As long as the politicians are ignoring the two obvious fixes to our biggest potential budget-busters, then I am ignoring what the politicians suggest as alternatives.

The major cause of our economic stagnation is that the wealthy have no good place to invest their money in a down economy.  Therefore they suck the liquidity right out of the economy to “invest” it in cash or economically useless financial derivatives.

The only solution must include getting this money out of their hands and back into the economy.

Your task, Mr. Phelps, if you choose to accept it, is to find a way to accomplish the only thing that will get the economy moving again.

This blog post will not self destruct, so if you fail to take on this mission, it will be plain for everyone to see.

The Nation Of Change has the article How to Build a Grassroots Power Base.

For people fed up with bait-and-switch pitches from Democrats who talk progressive to get elected but then govern otherwise, the Occupy movement has been a compelling and energizing counterforce. Its often-implicit message: protesting is hip and astute, while electioneering is uncool and clueless. Yet protesters’ demands, routinely focused on government action and inaction, underscore how much state power really matters.

To escape this self-defeating trap, progressives must build a grassroots power base that can do more than illuminate the nonstop horror shows of the status quo. To posit a choice between developing strong social movements and strong electoral capacity is akin to choosing between arms and legs. [ssg: emphasis added] If we want to move the country in a progressive direction, the politics of denunciation must work in sync with the politics of organizing—which must include solid electoral work.
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Politicians like to envision social movements as tributaries flowing into their election campaigns. But a healthy ecology of progressive politics would mean the flow goes mostly in the other direction. Election campaigns should be subsets of social movements, not the other way around. Vital initiatives to break the cycles of capitulation and lack of accountability will come from the grassroots.

The article goes on to discuss several campaigns and lessons learned from them.

I just returned from a luncheon in Brimfield arranged by campaign activists MariaT and DickH where we struggled with ideas for how we are going to keep the activism alive in this part of Massachusetts.  I hope we can learn from other people’s experiences and come up with something that makes a difference.

The Nation of Change has published Robert Reich’s article The Next Game of Economic Chicken: Not on the Deficit But Over Taxing the Rich.

Some Democrats (and some White House strategists) figure they’ll have most bargaining leverage in next year’s deal if they do nothing now – allowing tax rates to rise automatically on everyone after the first of the year. Then they plan to offer Republicans a deal that reduces taxes on people earning less than $250,000 – which would be retroactive to January 1st.

Republicans would have to choose between a tax cut on the middle class or no tax cut at all. Democrats believe Republicans would have to take the deal. Even Grover Norquist would be hard-pressed to come up with an argument against it.
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So who blinks first? Democrats who don’t mind going over the cliff because they’ll get a better final deal – and the deal will be retroactive to January 1st so it’s not really a cliff at all but more like a little hill?

Keep that last part of the quote in mind always.  The fiscal cliff is only a cliff if the scheduled changes go into effect and the Congress never does anything in the ensuing decade to fix the problem.

This idea of the fiscal cliff fits right in as part of Naomi Klein’s thesis in The Shock Doctrine.

Based on breakthrough historical research and four years of on-the-ground reporting in disaster zones, The Shock Doctrine vividly shows how disaster capitalism – the rapid-fire corporate reengineering of societies still reeling from shock – did not begin with September 11, 2001.

The wealthy, the Republicans, and the media owned by the wealthy want to scare you so badly that you will put pressure on Congress to “do something, do anything, don’t just stand there, do something!”  What you should be saying to President Obama and the Democrats is, “Stand your ground.  Don’t cave to the scare tactics.  You have all the high cards, use them.  Call their bluff. Use the shock doctrine on them for a change.”

If you read the quotes I have chosen from Robert Reich’s article you can infer that I have left out the other side of the game of chicken.  Very clever of you.  Now go read the article to find out what the other side is.