Author Archives: Joe Firestone

Prosecutorial Discretion: Plenty for Me; But None for Thee

Republican “strategists,” Party functionaries, and Congresspeople, are saying, with considerable emotion and rage, that the President’s Executive Order allowing undocumented immigrants goes beyond presidential authority under the Constitution in the areas of law enforcement and prosecutorial discretion, claiming that he must enforce the law without bias, in a manner consistent with his oath to uphold the Constitution. They’ve made similar claims in relation to his decision to delay for one year the requirement that employers with over 50 employees provide health care coverage or pay penalties, and have now gone to court to get relief from this “horrible” action relieving the financial burden on one of the Republicans supposed favorite constituencies, non-small businesses.

On the other hand, the President’s unwillingness to investigate, prosecute and seek convictions against: Continue reading

Why Democrats Lost: It’s Not All About Millennials

By Joe Firestone

Carl Gibson, a writer blogging at Reader Supported News, provides an “Open Letter to the Democrats” giving his view of why they lost the Congressional Elections of 2014. He endorses the President’s view that people didn’t show up to vote because their choice of politicians didn’t motivate them. And to this view he adds that the Democrats did not get his generation’s support because they didn’t “. . . get populist.” And he goes on to say:

2014’s low voter turnout was historic. Voter turnout actually hasn’t been this low since the 1940s. As Mother Jones pointed out, voter turnout for people under 30 was dismal. In this election, people like me only made up 12 percent of those who voted, while people aged 60 and older made up almost 40 percent of total voters. In 2012, when President Obama was re-elected and Congressional Democrats made gains in the House and Senate, millennials made up almost one-fifth of all voters, and voters 60 and older made up just 25 percent of the electorate, bringing us a little closer to a tie. It isn’t hard to see the difference – this year, Republicans steamrolled you, Democrats, because most of us stayed home and let our Fox-watching uncles and grandparents decide on who was going to represent everyone else.

So how do older people pick who runs Congress? Like every other voting bloc, they pick the ones who run on issues most important to them. And as Vox reported, data consistently shows that younger people want their tax dollars spent on education and job creation. Older voters want their money spent on Social Security and war. The Republicans who swept the U.S. Senate ran largely on fear campaigns over ISIS, promising to be more hawkish than their opponents in an eagerness to pour money and troops into Iraq and Syria to snuff out America’s newest boogeyman.

Contrast the unified Republican message with the profound silence from you Democrats on addressing the trillion-dollar student debt crisis, rampant inequality and underemployment, and your collective fear of openly embracing economic populism, and you cook up what we saw on Tuesday night. Older people showed up, highly motivated to elect war hawks. Younger people mostly stayed home, disillusioned with the only alternative on the ballot who didn’t even talk about the issues affecting our lives every day.

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Elizabeth Warren: Better, But Not there Yet

In her recent post-election piece “It’s Time to Work on America’s Agenda” Elizabeth Warren points out that the changes in Washington and in various States aren’t changing the fact that

The stock market and gross domestic product keep going up, while families are getting squeezed hard by an economy that isn’t working for them.

Or to put it another way, it’s not enough to have aggregate indicators going up. We also have to have shared gains and inequality going down, and given our current state of affairs, going down rapidly. She then says:

The solution to this isn’t a basket of quickly passed laws designed to prove Congress can do something — anything. The solution isn’t for the president to cut deals — any deals — just to show he can do business. The solution requires an honest recognition of the kind of changes needed if families are going to get a shot at building a secure future.

That’s what happened in 2009 – 2010. Democrats structured legislation in a vain search for bipartisanship, and in doing so produced:

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Piketty’s Neoliberal Capital

Let’s get this out of the way. I agree with Piketty’s overall conclusion in Capital about inequality, that: the distribution of wealth in many industrial nations is highly unequal, wealth concentration has been increasing; and there is a high likelihood that the extent of wealth inequality will continue to grow unless appropriate fiscal policy is used to reverse current trends. However, I don’t agree with:

— the framework he uses to define and specify “capital”;

— the way he looks at Government finance and net worth; and

— the fiscal policy proposals he offers to reduce Inequality and put a stop to current trends of growth in the capital to income ratio.

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Cantor Repeats the Same Old Nonsense: Shows He Hasn’t Learned A Thing From Defeat

Eric Cantor weighed in today at Quora on the balanced budget Amendment. This is what he said:

Once created, government programs build constituencies of special interests determined to keep the money flowing, whether or not the particular program is effective. There have been many times when the House has placed wasteful and duplicative programs on the chopping block, only to see pressure from the spending lobby win the day in the Senate.

Near-term spending cuts are necessary to alter the course, but they will not be enough without long-term changes. Likewise, promises of cuts 10 years from now mean little without a way to enforce them. The only way to truly guarantee delivery from future elected officials is for the Constitution to demand it.

To that end, the House has scheduled a vote on a balanced budget amendment that would require supermajorities in both chambers to run a deficit, raise the debt ceiling, raise taxes and spend more than 18% of the GDP. With the balanced budget movement gaining momentum, members of the spending lobby want to argue that Congress and the President already have the ability to control spending. Ability and discipline are not the same. If Washington actually had the discipline to live within its means over the long-term, every American citizen would not owe $46,000 toward the national debt.

In my view, the importance of these upcoming votes cannot be overstated. The adoption of a Balanced Budget Amendment would make reckless borrowing a thing of the past, and will ensure that our children enjoy futures full of opportunity.

Democrats and Republicans should join together to do the right thing, pass this amendment, and make a real difference for the future of our country.

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Beware of Policies and Legislation Based on the Generational Accounting Scam

The Peter G. Peterson Foundation (PGPF) and its allied army of associated deficit hawks want the Congressional Budget Office (CBO), the General Accountability Office (GAO), and the Office of Management and Budget (OMB) to do fiscal gap accounting and generational accounting on an annual basis and, upon request by Congress, to use these accounting methods to evaluate major proposed changes in fiscal legislation. Generational Accounting is an invalid long-range projection method that doesn’t take into account inflation, the projected value of the Government’s capability to issue fiat currency and reserves in the amounts needed to fulfill Congressional appropriations, and re-pay its debts, the projected non-Government assets corresponding to government liabilities, the likely economic impacts of Government spending, surpluses, and deficits, the impact of accumulating errors on projections, and the biases inherent in pessimistic AND contradictory assumptions. It is a green eye shade method that ignores both economic and political reality.

If you want America to end deficit terrorism and austerity, and to have the fiscal policy space it needs to begin to restore the American Dream, then you need to defeat proposed policies or legislation which puts building blocks in place to bias fiscal policy towards austerity and the economic decline it will surely produce for ourselves, our children, and for their children. Proposed policies and legislation of this kind must be defeated for the following seven reasons. Continue reading

Paul Krugman Still Believes That “the debt” Can Be a Problem for the U.S.

The deficit is now down to under 3% of GDP, and in contemplating that fact, Paul Krugman asks why the deficit hawks aren’t celebrating the precipitous fall from nearly 10% of GDP a few years ago. He then explains that:

Far from celebrating the deficit’s decline, the usual suspects — fiscal-scold think tanks, inside-the-Beltway pundits — seem annoyed by the news. It’s a “false victory,” they declare. “Trillion dollar deficits are coming back,” they warn. And they’re furious with President Obama for saying that it’s time to get past “mindless austerity” and “manufactured crises.” He’s declaring mission accomplished, they say, when he should be making another push for entitlement reform.

All of which demonstrates a truth that has been apparent for a while, if you have been paying close attention: Deficit scolds actually love big budget deficits, and hate it when those deficits get smaller. Why? Because fears of a fiscal crisis — fears that they feed assiduously — are their best hope of getting what they really want: big cuts in social programs.

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Yes We Can Pay for Increasing Social Security Benefits

Some time ago, in the pages of USA Today, Duncan Black, better known to some as Atrios voiced the immediate need for increased Social Security benefits of 20% or more even if it means raising taxes on high incomes, or removing the payroll tax cap on salaries.

Black is right about the need for increased benefits; but legislating that increase doesn’t require increasing taxes. In fact, Congress should both increase benefits and remove the payroll tax entirely.

But how is that possible without greatly increasing “the national debt”? The answer to that one is easy. Don’t tax or borrow to pay for it. Just mint a single one oz. platinum coin at the beginning of each fiscal year with a face value large enough to cover expected the cost of SS payments. Doing it that way will both take care of retirement needs and also provide a huge shot in the arm for employment, since the increase in Social Security benefit payments and the ending of the payroll tax won’t be offset by tax increases elsewhere that will depress aggregate demand. Continue reading

Equality, MMT, Real Fiscal Responsibility, and Re-inventing Democracy

Inequality and MMT

For some time now, MMT has been receiving criticism from self-identified progressives charging that MMT economists and advocates aren’t concerned about one of the most pressing problems in modern democracies and especially in the US, namely, increasing and often extreme inequality. MMT supporters have responded by citing much previous work on inequality, a lot of it done at the Levy Institute, by pointing out their great concern over the problem, and their work in advocating for a Federal Job Guarantee that would do more than perhaps any other single piece of legislation to ameliorate both poverty and inequality.

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The Re-invent Democracy Platform and MMT

The MMT Uptake Problem

Proponents of the Modern Monetary Theory (MMT) approach to macroeconomics have had many successes since the approach was first synthesized in coherent form by Warren Mosler. There have been successful predictions of economic conditions: much work showing that the historical record accords with the MMT point of view, rather than the views of other approaches and paradigms, and also many instances where representatives of other approaches to economics have suddenly begun to use economic views first put forward by MMT economists.

So, it’s surely true that MMT has been making progress in its quest to become the dominant economic paradigm guiding macroeconomic and fiscal policy in nations. But for some of us writing about issues relating to MMT progress seems painfully slow. A big part of the reason for slow progress is the difficulty of getting MMT views into the mass media consistently, which is seen as a necessary step in getting them popular currency.

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