http://www.nytimes.com/2011/08/12/opinion/the-hijacked-crisis.html?_r=1 <http://www.nytimes.com/2011/08/12/opinion/the-hijacked-crisis.html?_r=1&nl= todaysheadlines&emc=tha212> &nl=todaysheadlines&emc=tha212
The Hijacked Crisis By Paul Krugman NY Times Op-Ed: August 12, 2011 Has market turmoil left you feeling afraid? Well, it should. Clearly, the economic crisis that began in 2008 is by no means over. But there's another emotion you should feel: anger. For what we're seeing now is what happens when influential people exploit a crisis rather than try to solve it. For more than a year and a half - ever since President Obama chose to make deficits, not jobs, the central focus of the 2010 State of the Union address - we've had a public conversation that has been dominated by budget concerns, while almost ignoring unemployment. The supposedly urgent need to reduce deficits has so dominated the discourse that on Monday, in the midst of a market panic, Mr. Obama devoted most of his remarks to the deficit rather than to the clear and present danger of renewed recession. What made this so bizarre was the fact that markets were signaling, as clearly as anyone could ask, that unemployment rather than deficits is our biggest problem. Bear in mind that deficit hawks have been warning for years that interest rates on U.S. government debt would soar any day now; the threat from the bond market was supposed to be the reason that we must slash the deficit now now now. But that threat keeps not materializing. And, this week, on the heels of a downgrade that was supposed to scare bond investors, those interest rates actually plunged to record lows. What the market was saying - almost shouting - was, "We're not worried about the deficit! We're worried about the weak economy!" For a weak economy means both low interest rates and a lack of business opportunities, which, in turn, means that government bonds become an attractive investment even at very low yields. If the downgrade of U.S. debt had any effect at all, it was to reinforce fears of austerity policies that will make the economy even weaker. So how did Washington discourse come to be dominated by the wrong issue? Hard-line Republicans have, of course, played a role. Although they don't seem to truly care about deficits - try suggesting any rise in taxes on the rich - they have found harping on deficits a useful way to attack government programs. But our discourse wouldn't have gone so far off-track if other influential people hadn't been eager to change the subject away from jobs, even in the face of 9 percent unemployment, and to hijack the crisis on behalf of their pre-existing agendas. Check out the opinion page of any major newspaper, or listen to any news-discussion program, and you're likely to encounter some self-proclaimed centrist declaring that there are no short-run fixes for our economic difficulties, that the responsible thing is to focus on long-run solutions and, in particular, on "entitlement reform" - that is, cuts in Social Security and Medicare. And when you do encounter such a person, you should be aware that people like that are a major reason we're in so much trouble. For the fact is that right now the economy desperately needs a short-run fix. When you're bleeding profusely from an open wound, you want a doctor who binds that wound up, not a doctor who lectures you on the importance of maintaining a healthy lifestyle as you get older. When millions of willing and able workers are unemployed, and economic potential is going to waste to the tune of almost $1 trillion a year, you want policy makers who work on a fast recovery, not people who lecture you on the need for long-run fiscal sustainability. Unfortunately, giving lectures on long-run fiscal sustainability is a fashionable Washington pastime; it's what people who want to sound serious do to demonstrate their seriousness. So when the crisis struck and led to big budget deficits - because that's what happens when the economy shrinks and revenue plunges - many members of our policy elite were all too eager to seize on those deficits as an excuse to change the subject from jobs to their favorite hobbyhorse. And the economy continued to bleed. What would a real response to our problems involve? First of all, it would involve more, not less, government spending for the time being - with mass unemployment and incredibly low borrowing costs, we should be rebuilding our schools, our roads, our water systems and more. It would involve aggressive moves to reduce household debt via mortgage forgiveness and refinancing. And it would involve an all-out effort by the Federal Reserve to get the economy moving, with the deliberate goal of generating higher inflation to help alleviate debt problems. The usual suspects will, of course, denounce such ideas as irresponsible. But you know what's really irresponsible? Hijacking the debate over a crisis to push for the same things you were advocating before the crisis, and letting the economy continue to bleed. * * * http://www.commondreams.org/view/2011/08/10-11 "Super Congress" Designed for One Purpose Thoughts About the Catfood II "Super Congress" Appointments by Jane Hamsher <http://www.commondreams.org/jane-hamsher> FireDogLake.com <http://fdlaction.firedoglake.com/2011/08/10/thoughts-about-the-catfood-ii-s uper-congress-appointments/> : August 10, 2011 1. There are no good choices for this commission. It is designed to protect members of Congress from the electoral repercussions of cutting Social Security and Medicare benefits, something that 82% of the country vehemently opposes. A full 60% of the country thinks the wars are responsible for the deficit, but the money for war will not be touched. The committee exists solely to impose the will of a small minority of oligarchic elites on the nation, and rob millions of Americans of the retirement insurance they have been faithfully and honorably been paying into their entire adult lives. The fact that the committee exists at all represents the breakdown of the social contract. 2. The US government is the <http://washingtontechnology.com/toplists/top-100-lists/2010.aspx> largest contractor in the world. Lockheed Martin: $16.7 billion in 2010. Boeing: $10.5 billion. Hewlett-Packard: $2.3 billion. IBM: $1.8 billion. These companies spend millions each year bribing elected officials for pennies on the dollar in exchange for these contracts. They do not want to be the one on the chopping block. Appointing the Chair of the DSCC to the committee - whose job is collecting campaign contributions on behalf of Senate Democrats - is like putting up a "for sale" sign. Democrats would be screaming bloody <http://www.nrsc.org/about-the-nrsc/nrsc-chairman/> murder if John Cornyn were appointed. Greenberg-Quinlan-Rossner polling finds that the only message polling well for Democrats right now is "reducing the influence of lobbyists and money in Congress." Way to go with the optics, Harry Reid. 3. Jon Kyl is the Senate Minority Whip. Kyl walked <http://www.outsidethebeltway.com/eric-cantor-jon-kyl-drop-out-of-biden-defi cit-talks/> out of the Biden talks with Eric Cantor in order to force Obama to take ownership of the deal. Toomey is a member of the Tea Party who authored <http://1stamendmentdomainrevenuerecoveryservices.us/first-amendment-watch/g op-senators-all-back-toomey-balanced-budget-bill> a balanced budget amendment and will vote for increased revenues when hell freezes over. Rob Portman is a former budget director under George Bush. Dave Camp and Jeb Hensarling are Catfood <http://fdlaction.firedoglake.com/2010/05/10/obama-packs-debt-committee-with -supportes-of-social-security-benefit-cuts-and-privatization/> Commission I retreads. Fred Upton's niece is a Sports <http://www.mymodernmet.com/profiles/blogs/kate-upton-in-sports> Illustrated swimsuit model. 4. The Democratic House appointees will be meaningless. With three Democratic "grand bargain" Senate appointees, there is already a strong majority in favor of cutting Social Security and Medicare benefits. 3. None of these 6 Senators is up for reelection soon, and the House members are in safe districts (notice no Paul Ryan). That exacerbates the anti-democratic nature of (1) above. The only thing these committee members are going to respond to is their fellow members of Congress who are up for reelection. They need to start telling them that they will be the ones will who bear the burden of whatever decision the committee makes, but they're all in the throes of an austerity fit. They need to hear from you. At FireDogLake, we're running a new round of online ads on Facebook and Google targeted to voters in 2012 swing states. Some of these ads are about opposing the coming benefit cuts from the Super Congress, and joining our pledge to oppose anyone who votes for them. Others are focused on individual members of Congress to pressure them not to vote for the Super Congress' final recommendations, and let them know members know what the consequence will be in 2012 if they do. Click <https://secure.firedoglake.com/page/contribute/supercongress-ads?source=JHP ost> here to see some of the ads and consider chipping in $15 or more to help us get them online, in front of as many voters as possible. C 2011 FireDogLake <http://www.commondreams.org/jane-hamsher> Jane Hamsher Jane Hamsher is the founder of firedoglake.com <http://firedoglake.blogspot.com/> . Her work has also appeared on The Daily Beat, Common Dreams, AlterNet, The Nation and The American Prospect. 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