The Sifted Bookshelf: Seven Deadly Innocent Frauds

In one memorable scene from The Matrix, a boy apparently bends a spoon with his mind, and then gives Neo advice on how it’s done: by realizing that there is no spoon.

At first “there is no spoon” sounds like mystic mumbo-jumbo, but eventually you come to understand that it is literally true: The world the boy and Neo share is a computer simulation, and the apparent spoon is just a pattern of data. If you believe it is a solid object, you expect it to obey physical laws and not bend. But if it is a pattern of data, why couldn’t it be a different pattern of data — a bent spoon — instead?

As you watched that scene, you may not have realized you were learning about economics, but you were. If you need that idea spelled out more clearly (as I did) you should read a down-to-earth little book that is available for free on the internet: The Seven Deadly Innocent Frauds of Economic Policy by Warren Mosler. (Don’t let the blank first page confuse you. Keep scrolling.)

The deadly frauds, which very serious pundits and politicans tell you every day (innocently, because they don’t know any better) are:

  1. The government must raise funds through taxation or borrowing in order to spend. In other words, government spending is limited by its ability to tax or borrow.
  2. With government deficits, we are leaving our debt burden to our children.
  3. Government budget deficits take away savings.
  4. Social Security is broken.
  5. The trade deficit is an unsustainable imbalance that takes away jobs and output.
  6. We need savings to provide the funds for investment.
  7. It’s a bad thing that higher deficits today mean higher taxes tomorrow.

Now, chances are all seven of those seem like common sense to you, just as the spoon looked very solidly spoonlike to Neo. What people have trouble grasping, Mosler explains, is what dollars are: Dollars are numbers on a spreadsheet at the Federal Reserve. Dollars are a pattern of data, and (like Neo’s spoon) could just as easily be a different pattern of data.

When, for example, the government pays my Dad’s monthly Social Security benefit, the Fed just increases the balance in the account of Dad’s bank. No object of any real-world value moves or changes.

Where else do we see this happen? Your team kicks a field goal and on the scoreboard, the score changes from, say, 7 points to 10 points. Does anyone wonder where the stadium got those three points? … Do you think all bowling alleys and football stadiums should have a “reserve of points” in a “lock box” to make sure you can get the points you have scored? …

Just keep this in mind as a starting point: The federal government doesn’t ever “have” or “not have” any dollars. It’s just like the stadium, which doesn’t “have” or “not have” a hoard of points to give out. When it comes to the dollar, our government, working through its Federal agencies, the Federal Reserve Bank and the U.S. Treasury Department, is the score keeper.

Not bankrupt. So Mosler immediately discards any notion that the U. S. government might “go broke”. Paying interest or redeeming a bond means changing the numbers in the spreadsheet, not coming up with real assets that are conserved by physical laws.

Ditto for parts of the government going bankrupt. If the Social Security Trust Fund “runs out”, that just means that the corresponding entry in the spreadsheet is zero and about to go negative, not that some real cupboard is now bare.

Taxes and inflation. The purpose of taxing is not to acquire assets that the government needs to fund its programs (because the government never has or doesn’t have any dollars). It is to take dollars out of circulation so that they don’t cause inflation.

Inflation happens when the real economy isn’t able to produce enough goods to satisfy all the people who have money to spend. So consumers bid up the price of scarce goods and businesses bid up the wages of scarce workers.

Seen any scarcities of goods or workers lately? There are occasional bottlenecks (like gasoline), but in general the economy has plenty of room to produce more goods to cover more dollars. There is no good reason not to create those dollars so that more people can work and spend.

What about saddling future generations with government debt? Again, the problem is our mis-framing of what money and debt means: Everything produced in the future will be consumed in the future, not sent back in time to pay for our spending today.

Some day it will be our children changing numbers on what will be their spreadsheet, just as seamlessly as we did, and our parents did, though hopefully with a better understanding!

There are many more quotable passages, but I’ll limit myself to this one, where Mosler answers the people who think that we need to change Social Security because the worker-to-retiree ratio is shrinking.

Let’s look at it this way: 50 years from now when there is one person left working and 300 million retired people (I exaggerate to make the point), that guy is going to be pretty busy since he’ll have to grow all the food, build and maintain all the buildings, do the laundry, take care of all medical needs, produce the TV shows, etc. etc. etc. What we need to do is make sure that those 300 million retired people have the funds to pay him??? I don’t think so! This problem obviously isn’t about money.

Mosler’s book falls into three parts: the explanation of the seven frauds (56 easy-to-read pages), the story of his career as a banker and fund manager (entertaining if you like business stories, but not necessary to get the point), and his prescription for the economy (which I’ll cover next week).

Another common-sense story that explains money-supply issues is Paul Krugman’s 1998 article about a baby-sitting co-op whose “money” consisted of coupons the participating parents traded when they baby-sat for each other.

Now what happened in the Sweeneys’ co-op was that, for complicated reasons involving the collection and use of dues (paid in scrip), the number of coupons in circulation became quite low. As a result, most couples were anxious to add to their reserves by baby-sitting, reluctant to run them down by going out. But one couple’s decision to go out was another’s chance to baby-sit; so it became difficult to earn coupons. Knowing this, couples became even more reluctant to use their reserves except on special occasions, reducing baby-sitting opportunities still further.

In short, the co-op had fallen into a recession.

They got out of the recession by printing and distributing more coupons, which worked because their “economy” was willing and able to produce more nights-out and more hours of babysitting.

A related discussion this week has concerned a novel solution to the debt-ceiling “crisis”. The Pragmatic Capitalism blog claims that the Treasury, which unlike the Fed is completely under the President’s control, has unlimited authority to produce palladium coins. Treasury could strike a small coin, stamp $1 trillion on it, and use it to redeem $1 T worth of bonds, thereby creating $1 T of space under the debt ceiling.

Independent of whether this is good economic policy, it completely avoids the current hostage situation. Even skeptics like Matt Yglesias are coming to believe that this would work.

July 18, 2011 – 11:29 am Categories: The Sifted Bookshelf | Comments (25)

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Meet ALEC

The Republican landslide of 2010 swept into office governors like Scott Walker of Wisconsin, Rick Scott of Florida, Rick Snyder of Michigan, Tom Corbett of Pennsylvania, and John Kasich of Ohio. All replaced Democrats except for Scott, who replaced moderate Republican Charlie Crist.

All five of these governors ran fairly vague campaigns about cutting waste and shrinking government, but after the election each hit the ground running with a detailed and radically conservative agenda — coincidentally, the same agenda.

Some of that agenda was predictable from campaign rhetoric: budget cuts in education and medical care, tax cuts for corporations, and loosening regulations that protect consumers and workers from corporations. Voters may not have guessed the specific cuts from the ads they saw, but anybody who has been paying attention knows that when Republicans say “waste” they mean schools and medical care. And when they say “growth” or “jobs” they mean give-aways to corporations.

Strangely, though, much of the one-size-fits-every-state agenda wasn’t even hinted in the campaigns: breaking the state employee unions, for example. It is predictable that governors who want to cut education will drive a hard bargain with teachers. But in November nobody was talking about taking away collective bargaining rights or de-certifying unions. And then suddenly in February they all were.

Just as suddenly, the new governors were talking about making it harder to vote. And harder to sue. And easier to carry concealed weapons. Similar plans to start or expand private-school voucher programs appeared.

Hardly anybody ran on those issues. But on Day 1, Republicans were ready to move on them.

Even the predictable parts of the unified agenda were being pursued in suspiciously similar ways. All over the country, conservative governors decided to go big, hit hard, and push their opposition to the wall. At one point Illinois was hosting refugee legislators from both Wisconsin and Indiana.

This level of similarity would make sense if there had been some public Contract With America II that they had all signed. But there wasn’t.

Clearly, governors (or leaders of Republican legislatures in states with Democratic governors) were not calling in their local advisors and having independent conversations that all happened to reach the same conclusions.

The hidden common thread was the American Legislative Executive Council (ALEC). ALEC is an organization where corporate representatives and conservative politicians meet together in secret to draft legislation that the politicians can then take back to their home states. American Radioworks claimed in 2002 that about 1/3 of state legislators are ALEC members.

ALEC has existed since conservative activist Paul Weyrich founded it in 1979, and it has been written about for years. The American Radioworks piece described how the private prison industry works through ALEC to build their market by increasing prison sentences.

But [Corrections Corporation of America] does more than chat up lawmakers at ALEC meetings. On top of its membership dues and contributions to help pay the bills for ALEC meetings, the prison company pays two thousand dollars a year for a seat on ALEC’s Criminal Justice Task Force. That panel writes the group’s “model” bills on crime and punishment. Until recently, a CCA official even co-chaired the task force.

… Among ALEC’s model bills: mandatory minimum sentences; Three Strikes laws, giving repeat offenders 25 years to life in prison; and “truth-in-sentencing,” which requires inmates to serve most or all of their time without a chance for parole. ALEC didn’t invent any of these ideas but has played a pivotal role in making them law in the states, says [Edwin] Bender of the National Institute on Money in State Politics.

The piece ended with a quote from William Dickey, the former head of Wisconsin’s prison system:

I’ve always understood political people as having differences of opinion — tough on crime, soft on crime. But I’ve usually thought that whatever views were being held in that debate, they were sincerely arrived at. And to discover that there’s a group pushing criminal justice policy not because it’s in the public interest, but because it’s a way to make money, is disappointing to me.

But that’s just one industry. Recently we got our first look at the full scope of ALEC’s activities when the Center for Media and Democracy got its hands on 800 pieces of model legislation ALEC has written. You can find them on the web site ALEC Exposed.

The major pieces of the Walker/Scott/Snyder/Corbett/Kasich agenda are all there. (For example, the model “Public Employee Freedom Act” contains the union-busting provisions, and the “Voter ID Act” the vote-suppression provisions — including the ones that make no sense, like saying that an expired driver’s license does not establish your identity.)

There is, I rush to point out, nothing illegal about this. Any one can write model legislation and try to get a legislator to propose it. Liberal groups do it too. What is sinister, though, is the secrecy. Corporations have managed to remove their fingerprints from the laws they have written.

Whether an environmental group is pushing higher pollution standards or an polluting industry seeks lower ones, the public has a right to know where its laws are coming from, and what interests are being served.

You get an idea of the founding philosophy of ALEC from this 1980 clip of founder Paul Weyrich: “I don’t want everybody to vote. … Our leverage in the elections quite candidly goes up as the voting populace goes down.”

July 18, 2011 – 11:28 am Categories: Articles | Comments (15)

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Short Notes

3D printers are seriously cool, science-fictiony things. But they also will be very disruptive. What happens to manufacturing and shipping jobs — or to capitalist economics in general — when you can turn out a crescent wrench like this?

One attempt to answer this question is Peter Frase’s vision of Anti-Star Trek. In other words, what happens if you have Star Trek‘s replicators and limitless clean energy, but you’re not willing to embrace the Federation’s socialist economy? Frase pictures a future capitalism based not on production, but on collecting rents on intellectual property. It’s not pretty.

Another attempt to answer similar questions is Martin Ford’s The Lights in the Tunnel, which I discussed in May.

I’m ready to stop writing about Sarah Palin, but this is too good: A worshipful documentary about her, The Undefeated, opened Friday at 10 theaters in conservative hotspots. Atlantic’s associate editor Conor Friedersdorf went to the midnight premier in Orange County CA, where he imagined he would get fascinating quotes from the rabid Palinistas.

There weren’t any. Two women came in because Harry Potter was sold out. They soon left. A couple came to make out in the back row. They soon left too. Friedersdorf wound up interviewing the manager. “In hindsight,” he asked, “do you wish you’d had one more screen showing Harry Potter?”

Paul Krugman to his fellow pundits: If you’re just now noticing that the Republican Party has gone crazy, you’re part of the problem.

Bill Mahr says a lot the same thing to all the middle-class people who vote Republican, but he’s much funnier:

President Obama pointing out the obvious — that if the debt ceiling isn’t raised he can’t guarantee that seniors will get their full Social Security checks — is “fear mongering” according to Fox News. (Try making the trade-offs yourself. You don’t have to cut Social Security, but you have to cut something important.)

In this remarkable clip, Fox’s Eric Bolling not only claims “President Bush never fear-mongered like this,” but when another panelist brings up terrorism Bolling says: “America was certainly safe between 2000 and 2008. I don’t remember any terrorist attacks on American soil during that period of time.”

So, Eric, does 9-11 ring any bells?
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Dim bulbs. Tea partiers in the House are intent on repealing the law that raises light bulb efficiency standards. If the incandescent was good enough for Reagan, it’s good enough for us.

If only we could reduce all our issues to music videos like The Fracking Song.

BTW, the latest research on fracking indicates that water wells near fracked gas wells do get contaminated with methane, but not with the trade-secret fracking chemicals themselves. The problem might be as simple as bad piping. Because fracking wells are so deep, there’s a lot more pipe for gas to leak from.

Conservatives are still trying to pin the housing bubble on government rather than Wall Street, and they’re still wrong.

The Rupert Murdoch scandal is exactly the kind of thing I need Stephen Colbert to explain to me:

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July 18, 2011 – 11:10 am Categories: Short Notes | Comments (1)

This Week’s Challenge

The Wisconsin recall elections are coming down to the wire, and previously unheard-of amounts of money are being spent. So far, the Republican incumbents are out-raising their challengers, with who-knows-how-much last-minute corporate money waiting in the wings.

You can contribute to the challengers through Act Blue.

July 18, 2011 – 11:03 am Categories: This Week's Challenge | Comments (3)

Trimming the Fat

Welcome to Austerity in America. We can afford tax breaks for millionaires, but can’t afford five-day school weeks.

— Steve Benen, The Washington Monthly

In this week’s Sift:

Is Obama on Our Side? What if President Obama isn’t being out-negotiated by Republicans? What if he’s getting what he wants?

The Hard Line. The Republican inclination not to compromise goes all the way down to the grass roots, where three kinds of fundamentalism are replacing the 20th-century conservative’s respect for the status quo.

What “Spending” Really Means. Cutting government spending sounds good until you have to get specific. Do we want safe food and fire engines that work?

Short Notes. Fiore’s biting animations. We had a revenue crash, not a spending orgy. New light bulbs and solar panels. The debt ceiling is constitutional. And Ohio says that poll workers don’t have to be helpful.

This Week’s Challenge. As I redesign the Weekly Sift blog, now is a good time to make your suggestions.

July 11, 2011 – 1:40 pm Categories: Weekly summaries | Post a comment

Is Obama on our side?

When Barack Obama’s 2008 landslide carried such unlikely states as North Carolina and Indiana, and swept in large majorities in Congress, many progressives imagined a transformational presidency like FDR’s. Katrina Vanden Heuval wrote:

[F]uture historians may well view Barack Obama’s victory as the end of the age of Reagan and the beginning of something substantially new.

So far, it hasn’t worked out that way.

Not that President Obama hasn’t had accomplishments. The Bush economic crisis did not become a second Great Depression, as it threatened to do. With all its compromises, the Affordable Care Act is still a historic step in the right direction. Obama’s two appointments have slowed down the rightward drift of the Supreme Court. In thousands of ways that don’t make headlines, regulatory agencies have gone back to protecting the American people. On gay rights, President Obama has not led, but at least he has not stood in the way. The Iraq War has continued to wind down, our relations with other nations in general are less belligerent, and we finally nailed Osama Bin Laden.

That’s not nothing. But by now the list of liberal disappointments has gotten long.

What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe.

  • No public option. Given the public option’s popularity, a great speech might have made a difference to wavering Democrats in the Senate, but Obama didn’t give one.
  • Ratifying Bush’s power grabs. On Inauguration Day, the new president had a chance to define the Bush administration as an aberration and turn the corner. Obama could even have enforced the law and prosecuted Bush officials for ordering torture. Instead, he let his initial effort to close Guantanamo fail, and has continued to practice and has systematically defended in court many of the Bush administration abuses of power.
  • Afghanistan. To be fair, Candidate Obama portrayed Afghanistan as the good war that got ignored because we fought the bad war in Iraq. So Afghan escalation shouldn’t have been a surprise. But we still have no coherent goal or exit strategy.
  • Libya. Again: goal? exit strategy? By ignoring the War Powers Act — in defiance of the advice of his own top lawyers — he’s expanded executive power beyond even Bush.
  • Global warming. In a recent article in Rolling Stone, Al Gore credits Obama for at least starting to take action, but then says:

President Obama has thus far failed to use the bully pulpit to make the case for bold action on climate change. After successfully passing his green stimulus package, he did nothing to defend it when Congress decimated its funding. After the House passed cap and trade, he did little to make passage in the Senate a priority. Senate advocates — including one Republican — felt abandoned when the president made concessions to oil and coal companies without asking for anything in return. He has also called for a massive expansion of oil drilling in the United States, apparently in an effort to defuse criticism from those who argue speciously that “drill, baby, drill” is the answer to our growing dependence on foreign oil.

  • Taxes. When Republicans wouldn’t extend the Bush tax cuts just for the middle class, Obama had a perfect place to make a popular stand. Imagine: “I wanted to keep your taxes low, but the Republicans blocked me to protect the millionaires.” Instead he agreed to extend all the Bush cuts — and didn’t even get a debt-ceiling increase written into the deal.

And now, he seems ready to make significant concessions on Social Security and Medicare in those debt-ceiling negotiations he might have avoided. Like the public option only moreso, Social Security and Medicare are popular. There’s a significant rabble waiting to be roused, if a silver-tongued president were so inclined. So far, nothing.

Explanations. In the beginning, progressives explained these disappointments with some combination of 1) He’s doing the best he can given political reality and the power of the special interests and 2) He’s a bad negotiator who compromises when he doesn’t have to. Lately, though, a third explanation is getting louder and louder: 3) Maybe he’s not really on our side.

Bringing up Explanation 3 — even to deny it — is the surest way to start a blood feud on a liberal web site like Daily Kos. Emotions run high. Some liberals feel strongly that Obama has betrayed them, while others are just as strongly attached to him.

The problem is: All three explanations work, and each explains things the others can’t. For example, I think Obama was genuinely surprised by the popular resistance Republicans raised to closing Guantanamo. (Scary, scary terrorists were going to be housed in flimsy jails down the street from you.) Otherwise, why make a grand promise only to back off of it? And I believe he did (foolishly) expect Republicans to negotiate in good faith on vital issues like the debt ceiling.

True intentions. In spite of all the socialist and Marxist and big spender rhetoric from the Right, what if Obama has always been a centrist? Left and Right alike imagined that the centrist positions he campaigned on were masking a deeper progressive agenda, but what if they weren’t?

From the beginning, the role Obama has written for himself has been to let liberals and conservatives fight it out in Congress, and then to come in at the end with a compromise. (The problem has been that liberals are largely shut out of the corporate media — when was the last time you saw Dennis Kucinich on TV? — so the public debate has been between the most moderate Democrats and the most conservative Republicans, with Obama coming in at the end to make a center-right compromise rather than a left-right compromise.)

I think the way he has handled entitlement reform tells us a lot. The Simpson-Bowles Commission Obama appointed to study long-term deficit issues was stacked from the beginning. (Digby kept calling it “the Catfood Commission”.) When the commission was appointed, Unsilent Generation posted:

Despite protestations to the contrary, the commission exists primarily to make cuts to Social Security and Medicare. The commission’s slant is evident from the choice of its two co-chairs: former Wyoming Republican senator Alan Simpson, a long-time foe of entitlements, and Erskine Bowles, the middle-right former Clinton chief of staff.

It should have surprised no one when Simpson called Social Security “a milk cow with 310 million tits“. And it should have surprised no one that the Commission recommended Social Security and Medicare cuts.

Presidents do this kind of spadework to cover unpopular actions they want to take later. It’s where you can see presidential intention in its purest form. Obama has believed all along that Social Security and Medicare need to be cut. So while he’s not likely to get on board with the Ryan privatization plan, he’s also not likely to make a bold stand against cuts that he’s been maneuvering towards from the beginning.

Framing is another place you can see presidential intention at work. The other side can force you to accept deals you don’t like, but they can’t make you repeat their deceptive rhetoric. Recently, though, Obama has said things like:

Government has to start living within its means, just like families do.  We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs

Paul Krugman comments:

That’s three of the right’s favorite economic fallacies in just two sentences. No, the government shouldn’t budget the way families do; on the contrary, trying to balance the budget in times of economic distress is a recipe for deepening the slump. Spending cuts right now wouldn’t “put the economy on sounder footing.” They would reduce growth and raise unemployment. And last but not least, businesses aren’t holding back because they lack confidence in government policies; they’re holding back because they don’t have enough customers — a problem that would be made worse, not better, by short-term spending cuts.

My conclusion. Consider the possibility that Obama is a Clintonian centrist whose liberal actions have been forced on him by events. I don’t think he’s a bad guy or a traitor to the cause. I just don’t think he’s ever been a progressive.

Deep down, I think Obama wants to be the president who steers the center course — fixing the long-term growth in entitlement spending without gutting the safety net. The ACA is part of that vision, because health-care inflation is the main long-term fiscal threat, and the private sector is never going to stop it. The near-depression forced a half-hearted stimulus on him, but expanding government services is not his fundamental inclination.

He never said it was.

Conservative columnist Ross Douhat on the deficit negotiations: “The not-so-secret secret is that the White House has given ground on purpose.”

Rick Perlstein was all over this more than a year ago.

July 11, 2011 – 1:31 pm Categories: Articles | Comments (2)

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The Hard Line

Two articles this week explained why Republicans are (depending on your point of view) either (1) able to hold together on hardline positions, or (2) unable to compromise. Turns out, it’s not just the party leadership or elected officials that are different, it’s the rank-and-file:

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NYT blogger Nate Silver looks more deeply at the polling data and concludes that while polarization is hitting both parties, it has a more profound effect on the Republicans. Republican is becoming identical with conservative, while the Democrats remain a coalition of diverse philosophies. So Democrats worry about alienating their moderates, while Republicans focus on energizing their base.

In The three fundamentalisms of the American right, Salon’s Michael Lind notes a long-term philosophical shift in conservatism. William F. Buckley modeled the mid-20th-century conservative movement after 18th-century philosopher Edmund Burke, who argued that people underestimate the values embedded in traditional practices, so change should be measured and thoughtful rather than sweeping and giddy.

But increasingly, 21st-century conservatism is built around fundamentalist reaction rather than thoughtful prudence. Christian fundamentalism (the Bible), constitutional fundamentalism (the Constitution and carefully selected quotes from the Founders), and market fundamentalism (Atlas Shrugged) each have a holy scripture that teaches unquestionable Truth. And that creates a problem for democracy.

Back when conservatism was orthodox and traditional, rather than fundamentalist and counter-revolutionary, conservatives could engage in friendly debates with liberals, and minds on both sides could now and then be changed. But if your sect alone understands the True Religion and the True Constitution and the Laws of the Market, then there is no point in debate. All those who disagree with you are heretics, to be defeated, whether or not they are converted.

A Burke-Buckley conservative respects the status quo, but to a fundamentalist the status quo already represents a fall from a lost Golden Age — often an imaginary one.

It’s tempting to respond to all three types of right-wing fundamentalist with scorn, especially when they make up facts about their respective Golden Ages. But in the long run scorn may be counterproductive. Fundamentalism is a reaction to a loss of identity and community. (No one who feels at home here and now pledges loyalty to a lost era or an ancient text.) Ultimately, fundamentalists need to be healed, not beaten down further. The candidate-Obama message of Hope and Yes We Can seems exactly right to me, if we can see it through.

This move conflicts with my healing strategy, but I’ll be interested to see if it works tactically: The American Values Network points out that two of the right-wing fundamentalisms contradict each other. Jesus and Ayn Rand are not at all on the same page.

Less-extreme Republicans have finally started protesting against the hard line: David Brooks, David Frum, Kathleen Parker, Robert Samuelson.

July 11, 2011 – 1:28 pm Categories: Articles | Comments (2)

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What “spending” really means

Cutting government spending always sounds good until you start looking at specifics. In Wilmington, NC, “cutting spending” specifically means not replacing an ancient fire engine that tends to die when the firefighters need water pressure. In California, Arizona, and Nevada it means a shorter school year. And in parts of Idaho and New Mexico it means a four-day school week — not for any academic reason, but because (as Rachel Maddow summed up) “In America now, we can’t afford to keep all our schools open five days a week.”

This clip from Rachel’s show on Wednesday is worth watching in its entirety, because it pulls together so much.

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For example: Alto, Texas has scrapped its police force — not just furloughed a few officers, but padlocked the door and sent the whole force home for a minimum of six months. Not because they’re not needed — even when it had police, Alto’s crime rate was higher than the Texas average — but because Alto is out of money.

On the federal level, the House has eliminated funding to test American vegetables for the E-coli strain that killed 50 people in Europe. Georgia Republican Rep. Jack Kingston isn’t worried: “The food supply in America is very safe because the private sector self-polices.” But whether we’re talking food or crime, self-policing only works up to a point. Somehow, even before the testing cutbacks, 3000 Americans died each year from tainted food.

State after state is laying off teachers — not because they’ve found some better way to educate children, but because they can’t afford to pay them. We’re slashing transportation funding too, because high-speed trains belong in China, not America.

But don’t tax the rich. We are eliminating all this stuff rather than raise taxes on anybody, even the wealthiest Americans. Republicans claim they are taking this stand because, as John Boehner says, “The American people don’t want us to raise taxes.”

Except that they do. Politifact did the research:

we found a number of polls that indicate people do want the government to raise taxes. That was most clearly the case when it comes to raising taxes on the wealthy and on corporations.

Like these polls. Rachel quotes a poll saying that 81% of Americans would accept higher taxes on millionaires to cut the deficit. 68% could support eliminating the Bush tax cuts for people earning more than $250,000 a year.

The American people also want to protect Social Security, Medicare, and even Medicaid. By a 60-32 margin, they said that maintaining Social Security and Medicare benefits was more important than cutting the deficit. By 61-31 they said that Medicare recipients already pay enough of their medical costs. 58% think “Low income people should not have their Medicaid benefits taken away.”

And don’t tax corporations. A significant majority of Americans (56% on Question 36) say that corporations are not paying their fair share of taxes. And the most stunning poll result is this (Question 40): 61% say that corporations use tax breaks to pay higher dividends and bonuses; only 4% say they use the money to create jobs.

That jaundiced public perception is accurate. Rachel lists a number of large American corporations (Johnson & Johnson, General Electric, etc.) who pay significantly less than the official 35% corporate tax rate (GE: 7.4%) and have been cutting jobs rather than creating them. Moreover, American corporate taxes are low, not high: Compared to 25 other developed countries, only in Iceland are corporate taxes a smaller percentage of GDP than in the US.

Rich people, poor country. Let me sum up: House Majority Leader Eric Cantor says “the people that put us here” want to change “the way the system works so that we’re no longer spending money that we don’t have.” The question that goes unasked is: Why don’t we have that money?

Is the United States a poor country now? Can we simply not afford to have police and full-time schools and safe food? Can we not afford to take care of Americans who are sick or old? To fix our potholes and keep our bridges from falling down?

Other countries manage to pay for such things. They aren’t richer than the United States. The difference is that in America, billionaires and corporations have become so powerful that they can dictate to the government how much tax they are willing to pay. And those dictates are put forward by the corporate media as “the will of the people”, even if (when you ask them) the people say the exact opposite. So if the billionaires and corporations are only willing to pay for four days of school a week, that’s what we’ll get.

At least as long as Eric Cantor believes that billionaires and corporate CEOs are the people that put him where he is.

July 11, 2011 – 1:25 pm Categories: Articles | Comments (2)

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Short Notes

Mark Fiore’s animations are very sharp satires. Check out “Trickle Down Tales”. And Tom Tomorrow is pretty good today too.

Democrats on the Senate Appropriations Committee have put together a chart explaining what happened to the surplus in Clinton’s final budget. It’s mildly deceptive (everything except defense is adjusted for inflation and population growth), but ignoring the too-high defense number, it makes a great point: We had a revenue crash and the population got older, but there was no discretionary-spending orgy.

Last week I mentioned the possibility of Obama invoking the 14th amendment to ignore the debt ceiling. Lawrence Tribe has convinced me that’s not a legitimate option.

Slate’s tech reviewer loves the new LED light bulb. It lasts 20 years, uses about 1/5 the power, and emits the spectrum we expect from incandescents. The problem: They cost $20 each. Long-term it’s a good deal, but people aren’t used to thinking about light bulbs as investments.

What if your windows could be solar panels?

If Republican election-reform laws aren’t about suppressing legitimate votes, then why does the new Ohio law say that poll workers don’t have to direct confused voters to their correct polling places?

July 11, 2011 – 1:09 pm Categories: Short Notes | Comments (1)

This Week’s Challenge

I’m working on a redesign of the Weekly Sift blog, which I’ll roll out on weeklysift.com either next Monday or the one after. (Currently, weeklysift.com is a bit of a mess, like any unfinished construction project.) If you have any suggestions for improving the blog, now is a good time to make them. Like: What do you think of this week’s embedded chart and video? I’m thinking of doing a lot more of that.

BTW, what do you think of this as a logo? If you’ve been getting the Sift via email, what do you think of the new MailChimp mailings? Have you noticed?

July 11, 2011 – 1:02 pm Categories: This Week's Challenge | Comments (1)