How Shadowy Right-Wing Front Groups Engineered Our National Embrace of Debt Reduction Over Job Creation July 29, 2011Posted by rogerhollander in Economic Crisis, Right Wing.
Tags: big lie, debt ceiling, debt crisis, debt reduction, Economic Crisis, economic recovery, government spending, lee fang, right wing, roger hollander, spending reduction
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Roger’s note: repeat after me, “political democracy without economic democracy is not democratic.” Economic democracy is synonymous with (gasp!) Socialism. Under capitalist economic relations, money always trumps the interest of living breathing human beings. Right wing money is taking things to the extreme, but it is corporate money — left, right or center — that controls education, information, news and therefore public opinion. Has been that way since day one. What we are seeing today is the slow and steady collapse of world capitalism. You can’t get blood from a stone.
(Photo: Vanessa Arn / Flickr)
For the entire year, as a sluggish economy sputters by and states continue to struggle with falling revenue, the conversation in Congress has centered solely on spending reduction. Earlier this year, we witnessed looming government-showdown duels between competing spending reduction plans. Now with the debt ceiling debate, the only two options are a choice between a package of painful cuts and a package of deeply draconian cuts. There has been no lively discussion of new policy ideas for job creation, foreclosure mitigation, or how to spur demand, the key driver of economic recovery.
Earlier this week, Politico published a piece outlining the vast disparity in the ad war over the debt ceiling. Republican-aligned groups have run over $21.2 million in attack ads highlighting Democrats as irresponsible drivers of the national debt, and elevating the debt ceiling as a top priority. Meanwhile, groups on the left have spent about $30,000 on ads calling out Republicans on the debt, with one hitting lawmakers for “recklessly risking default.” Some Democratic leaning groups have even run ads casting Democrats as better at cutting than Republicans.
Since the end of the Bush presidency, shadowy right-wing groups, many of them formed for this very purpose, have primed the public with a sophisticated public relations campaign to shift the national discourse to a focus on debt reduction. Many of these groups do not appear partisan, and have figured out ways around registering their activity with the Federal Elections Commission (so the true extent to their ad-buying is rarely recorded):
– Founded in 2010 by former Bush admin flak Gretchen Hamel, the group Public Notice has quietly pumped millions into advertising about debt reduction: Public Notice sponsored at least $3 million on a debt ad called “Shovel” that falsely claims the spending doesn’t create jobs, an undisclosed amount for online ads promoting a highly produced web series on the evils of government spending, a debt pledge that features pop singer Justin Bieber, and what is believed to be another multimillion dollar ad buy recently for a commercial, appearing like a PSA, that warns that government spending is akin to cocaine addiction. To warp elite opinion, the group sponsored billboard ads at Reagan National Airport and on buses and bus shelters near Capitol Hill. Although Hamel does not reveal her donors, she is connected closely with the Koch network of billionaire and investors. Last year at a right-wing donor conference attended by top hedge fund manager Steve Schwarzman and Charles Koch, Hamel gave a presentation on “Framing the Debate on Spending.”
– Retired investor Pete Peterson has dedicated $1 billion of his personal wealth to reducing government spending; much of that money has gone to a multifaceted marketing campaign: The Peterson Institute has spent $1 million underwriting a movie about the debt, at least $1,010,232 developing a children’s debt sports game that also directs users to a Econ4U, a front group created by infamous lobbyist Rick Berman, millions more for a TV ad campaign called “Hugh Jidette,” an MTV-U cable television series that misleadingly conflates personal debt with the national debt, a newspaper partnered with the Washington Post, and even a program at Columbia University to develop a national debt-related K-12 curriculum.
– Corporate astroturf lobbyist Rick Berman has spent large amounts orchestrating a scare-mongering campaign over the national debt. Along with his connections to the Peterson network mentioned above, Berman has set up a campaign called “Defeat the Debt” to push the public into believing the national debt is the country’s top priority. He has run ads on television, purchased billboards throughout the Washington D.C. metro area, and aggressively marketed his campaign to Capitol Hill staffers. Last year, Berman purchased an ad during the Super Bowl — spending approximately $3 million — that showed schoolchildren pledging allegiance “to America’s debt, and to the Chinese government that lends us money.”
– A network of other right-wing groups have used a series of public relations gimmicks — like barnstorming bus tours filled with highly paid GOP operatives posing as Tea Party activists — to orchestrate an astroturf effort to build support for cutting spending over creating jobs. Groups like Americans for Prosperity and Americans for Tax Reform sponsored a group called Spending Revolt that toured the country organizing debt-related rallies with Republican candidates last year. The group, which has organized events with the Ohio Coal Association, gained countless local press hits appearing as a genuine citizens groups, despite the fact its sponsors are corporate lobbyists. This year, Americans for Prosperity has continued a separate effort to organize debt-themed rallies. American Majority, a group founded after Obama’s election by two GOP operatives, has quietly provided training efforts across the country to mobilize around the issue of the national debt.
This is only a snapshot of the debt-related public relations campaign; millions more have been spent by the U.S. Chamber of Commerce, FreedomWorks, Club for Growth, and other big business advocacy groups.
The incredible resources the right has amassed for its debt campaign are unmatched by progressives. Moreover, at a time when solving the unemployment crisis should be our national priority, only the very wealthy and privileged have the money to direct national ad campaigns of any real impact. In an era of unlimited corporate money in politics, the unemployed and the Middle Class have a quickly disappearing voice in public life.
Tags: budget crisis, david morris, debt ceiling, debt limit, defense spending, Economic Crisis, federal deficit, government, government spending, government waste, military, military budget, military spending, Pentagon, pentagon budget, roger hollander, tea party budget, war costs, war spending
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Republicans ignore incompetence, bloat and corruption at the Pentagon
In all the talk about the federal deficit, why is the single largest culprit left out of the conversation? Why is the one part of government that best epitomizes everything conservatives say they hate about government—- waste, incompetence, and corruption—all but exempt from conservative criticism?
Of course, I’m talking about the Pentagon. Any serious battle plan to reduce the deficit must take on the Pentagon. In 2011 military spending accounted for more than 58 percent of all federal discretionary spending and even more if the interest on the federal debt that is related to military spending were added. In the last ten years we have spent more than $7.6 trillion on military and homeland security according to the National Priorities Project.
In the last decade military spending has soared from $300 billion to $700 billion.
When debt ceilings and deficits seem to be the only two items on Washington’s agenda, it is both revealing and tragic that both parties give a free pass to military spending. Representative Paul Ryan’s much discussed Tea Party budget accepted Obama’s proposal for a pathetic $78 billion reduction in military spending over 5 years, a recommendation that would only modestly slow the rate of growth of military spending.
Indeed, the Republican government battering ram appears to have stopped at the Pentagon door. This was evident early on. As soon as they took over the House of Representatives, Republicans changed the rules so that military spending does not have to be offset by reduced spending somewhere else, unlike any other kind of government spending. It is the only activity of government they believe does not have to be paid for. Which brings to mind a bit of wisdom from one of their heroes, Adam Smith. “Were the expense of war to be defrayed always by revenue raised within the year … wars would in general be more speedily concluded, and less wantonly undertaken.”
The Tea Party revolution has only strengthened the Republican Party’s resolve that the Pentagon’s budget is untouchable. An analysis by the Heritage Foundation of Republican votes on defense spending found that Tea Party freshmen were even more likely than their Republican elders to vote against cutting any part of the military budget.
What makes the hypocrisy even more revealing is that the Pentagon turns out to be the poster child for government waste and incompetence.
In 2009 the Government Accountability Office (GAO) found “staggering” cost overruns of almost $300 billion in nearly 70 percent of the Pentagon’s 96 major weapons. What’s more, the programs were running, on average, 21 months behind schedule. And when they were completed, they provided less than they promised.
The Defense Logistics Agency had no use for parts worth more than half of the $13.7 billion in equipment stacked up in DOD warehouses in 2006 to 2008.
And these are only the tips of the military’s misspending iceberg. We really don’t know how much the Pentagon wastes because, believe it or not, there hasn’t been a complete audit of the Pentagon in more than 15 years.
In 1994, the Government Management Reform Act required the Inspector General of each federal agency to audit and publish the financial statements of their agency. The Department of Defense was the only agency that has been unable to comply. In fiscal 1998 the Department of Defense used $1.7 trillion of undocumentable adjustments to balance the books. In 2002 the situation was even worse. CBS News reported that Secretary of Defense Donald Rumsfeld admitted, “we cannot track $2.3 trillion in transactions.”
Imagine that a school district were to reveal that it didn’t know where it spent its money. Now imagine the Republican response. Perhaps, “Off with their desktops!”
How did Congress’ respond to DOD’s delinquency? It gave it absolution and allowed it to opt out of its legal requirement. But as a sop to outraged public opinion Congress required DOD to set a date when it would have its book sufficiently in order to be audited. Which the Pentagon dutiful did, and missed every one of the target dates. The latest is 2017 and DOD has already announced it will be unable to meet that deadline.
Adding insult to injury, last September, the GAO found that the new computer systems intended to improve the Pentagon’s financial oversight are themselves nearly 100 percent or $7 billion over budget and as much as 12 years behind schedule!
The Pentagon is not just incompetent. It is corrupt. In November 2009 the Pentagon’s Defense Contract Audit Agency (DCAA), the federal watchdog responsible for auditing oversight of military contractors, raised the question of criminal wrongdoing when it found that the audits that did occur were riddled with serious breaches of auditor independence. One Pentagon auditor admitted he did not perform detailed tests because, “The contractor would not appreciate it.”
Why would the Pentagon allow its contractors to get away with fraud? To answer that question we need to understand the incestuous relationship between the Pentagon and its contractors that has been going on for years, and is getting worse. From 2004 to 2008, 80 percent of retiring three and four star officers went to work as consultants or defense industry executives. Thirty-four out of 39 three- and four-star generals and admirals who retired in 2007 are now working in defense industry roles — nearly 90 percent.
retired general working for defense
Generals are recruited for private sector jobs well before they retire. Once employed by the military contractor the general maintains a Pentagon advisory role.
“In almost any other realm it would seem a clear conflict of interest. But this is the Pentagon where…such apparent conflicts are a routine fact of life”, an in-depth investigation by the Boston Globe concluded.
U.S. military spending now exceeds the spending of all other countries combined. Knowledge military experts argue that we can cut at least $1 trillion from the Pentagon budget without changing its currently expressed mission. But a growing number believe that the mission itself is suspect. Economic competitors like India and China certainly approve of our willingness to undermine our economic competitiveness by diverting trillions of dollars into war and weapons production. Some argue that all this spending has made us more secure but all the evidence points in the opposite direction. Certainly our $2 trillion and counting military adventures in the Middle East and Afghanistan and Pakistan have won us few friends and multiplied our enemies.
Defense experts Gordon Adams and Matthew Leatherman, writing in the Washington Post offer another argument against unrestrained military spending.
“Countries feel threatened when rivals ramp up their defenses; this was true in the Cold War, and now it may happen with China. It’s how arms races are born. We spend more, inspiring competitors to do the same — thus inflating defense budgets without making anyone safer. For example, Gates observed in May that no other country has a single ship comparable to our 11 aircraft carriers. Based on the perceived threat that this fleet poses, the Chinese are pursuing an anti-ship ballistic missile program. U.S. military officials have decried this “carrier-killer’‘ effort, and in response we are diversifying our capabilities to strike China, including a new long-range bomber program, and modernizing our carrier fleet at a cost of about $10 billion per ship.”
For tens of millions of Americans real security comes not from fighting wars on foreign soil but from not having to worry losing their house or their job or their medical care. As Joshua Holland, columnist for Alternet points out 46 states faced combined budget shortfalls this year of $130 billion, leading them to fire tens of thousands of workers and cut off assistance to millions of families. Just the supplemental requests for fighting in Iraq and Afghanistan this year were $170 billion.
What is perhaps most astonishing of all is that cutting the military budget is wildly popular. Even back in 1995, when military spending was only a fraction of its present size, a poll by the Program on International Policy Attitudes reported that 42 percent of the US public feeling that defense spending is too high and a majority of Americans were convinced that defense spending “has weakened the US economy and given some allies an economic edge.”
This March Reuters released a new poll that found the majority of Americans support reducing defense spending.
The next time you hear Republicans insist they want to ferret out government waste and reduce spending and stamp out incompetence ask them why the one part of government that exemplifies everything they say is wrong with government is the one part of government they embrace most heartily.
Restraint for Everything but Sports February 23, 2010Posted by rogerhollander in Canada, Economic Crisis, Sports.
Tags: Canada, canada budget, Canada Conservatives, canada liberals, Economic Crisis, government spending, harper government, linda mcquaig, olympics, pan am games, roger hollander, sports, Stephen Harper
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No cost has been spared in mounting a giant spectacle of spandex-clad athletes performing dazzling feats in massive public venues.
Certainly, nobody seems to be letting the $6 billion price tag for Vancouver’s Olympic extravaganza get in the way.
Don’t get me wrong. I’m not against sports. I appreciate the nuances of a fine skeleton performance as much as the next person.
My point is simply to question why goals other than mounting gala sports events are routinely dismissed on the grounds that we can’t afford them.
Of course, sports extravaganzas often have side benefits. We’re told that with the 2015 Pan Am Games coming here, Toronto may finally get its public transit system upgraded.
How’s that? Are the Pan Am countries – an assortment of mostly poverty-stricken Latin American nations – going to chip in to improve Toronto’s subway system?
No. We’re going to pay. So why don’t we just decide to do it without the Games, given the need and the looming climate change disaster?
The conventional explanation is that the public won’t pay otherwise. But is the public the real obstacle here?
We’ve been exhorted to believe in the magic of sports, in the transformative power of the Olympic torch – that no dream is too big to dream, that guts and willpower will bring us glory.
But next week, when Ottawa brings down its budget, all that big-thinking and sky-high believing is to be shelved. We’ll be advised to think small, think restraint, focus on the impossibility of things. Deficits will own the podium.
That’s not because the public only cares about sports. It’s because the corporate world only supports public investments when it comes to sports and war, from which it makes money. But it wants to hold the line on public investment in health care, education, child care, social supports, etc.
So it’s tried to convince us these things aren’t affordable, or that we don’t want to pay for them – as we did in the past.
From the end of World War II, federal spending was almost always above 15 per cent of GDP, until the massive Liberal spending cuts of the mid-1990s brought it way down to about 12 per cent, notes economist Armine Yalnizyan.
Those cuts – made to reduce deficits caused by recession and overly tight monetary policy – became permanent, even after balanced budgets were quickly restored in the late 1990s.
Despite a decade of huge federal surpluses since then, the Liberals and the Conservatives failed to restore spending levels that prevailed during the prosperous early postwar decades, cutting taxes in response to corporate pressure instead.
The Harper government has made clear that once the stimulus package expires, federal spending will return to the historically low levels of the past decade.
But this is disastrous policy. Given the severity of the ongoing recession, what is needed now is massive public investment to put the country back to work and rebuild our crumbling social and physical infrastructure.
For millions of young people, holding a job is a dream just as surely as competing before the hometown crowd.
But we’re supposed to believe that, beyond sports, we can’t afford to meet our needs, no matter how pressing.
Perhaps we could finally get some serious action on climate change if it were a curling bonspiel – rather than simply a crisis that threatens life as we know it on this planet.
© Copyright Toronto Star 1996-2010
Visualizing the Stimulus February 11, 2009Posted by rogerhollander in Economic Crisis.
Tags: bailout, economic history, government spending, Iraq war, korean war, louisiana purchase, marshall plan, moon landing, nasa, New Deal, roger hollander, s&l crisis, Stimulus, stimulus package, Vietnam War, Wall Street, wall street bonuses, wealth redistribution, world war II
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January 30, 2009 — whatthecrap?
So how big is the resulting $1.2 trillion spending package? Big enough to dwarf any government program in history, even after adjusting for inflation. It’s bigger than the New Deal and the Iraq War combined. The interest alone will be costlier than going to the moon or the Louisiana Purchase. The $18 billion in bonuses paid legally by private Wall Street firms in 2008 – decried by the President as “shameful” – is vanishingly small in comparison (smaller even than the bill’s incremental food stamps expenditures).
The only relatively modest component of the spending bonanza is the money tagged for infrastructure and energy efficiency (the ostensibly stimulative part), which accounts for less than 14% of the total.
…The bailout has cost more than all of these big budget government expenditures – combined:
• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion
TOTAL: $3.92 trillion
The only single American event in history that even comes close to matching the cost of the credit crisis is World War II: Original Cost: $288 billion, Inflation Adjusted Cost: $3.6 trillion
The $4.6165 trillion dollars committed so far is about a trillion dollars ($979 billion dollars) greater than the entire cost of World War II borne by the United States: $3.6 trillion, adjusted for inflation (original cost was $288 billion).
Financial elite have no shame February 7, 2009Posted by rogerhollander in Canada, Economic Crisis.
Tags: $700 billion bailout, bailout, canada economic crisis, canada politics, deregulation, Economic Crisis, financial degregulation, financial elite, Goldman Sachs, government spending, harper government, Henry Paulson, linda mcquaig, predatory lending, reagan, roger hollander, Stephen Harper, stimulus package, subprime mortgages, unions, Wall Street
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Let’s imagine, for a moment, how different the public debate would be today if it had been unions that had caused the current economic turmoil.
In other words, try to imagine a scenario in which union leaders – not financial managers – were the ones whose reckless behaviour had driven a number of Wall Street firms into bankruptcy and in the process triggered a worldwide recession.
Needless to say, it’s hard to imagine a labour leader being appointed to oversee a bailout of unions the way former Goldman Sachs CEO Henry Paulson was put in charge of supervising the $700 billion bailout of his former Wall Street colleagues.
My point is simply to note how odd it is that the financial community has emerged so unscathed, despite its central role in the collapse that has brought havoc to the world economy.
Of course, not all members of the financial community were involved in Wall Street’s wildly irresponsible practices of bundling mortgages into securities and trading credit default swaps. But the financial community as a whole, on both sides of the border, certainly pushed hard to put in place an agenda of small government, in which financial markets largely regulated themselves and citizens (particularly high-income investors) would be spared the burden of paying much tax.
The agenda advanced much further in the U.S., but had an impact in Canada, particularly on the tax front.
One would think that those who pushed this agenda so enthusiastically would, at the very least, be a tad embarrassed today.
But so influential are those in the financial elite – and their hangers-on in think-tanks and economics departments – that they continue to appear on our TV screens, confidently providing us with economic advice, as if they’d played no role whatsoever in shaping our economic system for the past quarter century.
Of course, we’re told there’s been a major change in their thinking, in that many of them are now willing to accept large deficits in today’s federal budget, in the name of stimulating the economy.
While this does seem like a sharp departure from the deficit hysteria of the 1990s, a closer look reveals the change may not be that significant.
In fact, financial types have always accepted deficits – when they liked the cause. Hence their lack of protest over George W. Bush’s enormous deficits, which were caused by his large tax cuts for the rich and his extravagant foreign wars.
What they don’t like is governments going into deficit to help ordinary citizens – either by creating jobs or providing much unemployment relief.
So the Canadian financial community has been urging that the stimulus package consist mostly of income tax cuts – even though direct government spending would provide much more stimulus and do more to help the neediest.
If the Harper government follows the financial community’s advice, we will simply move further along with the small government revolution launched by Ronald Reagan in the early 1980s.
Of course, tax cuts are not the same as financial deregulation. But they are twin prongs of a bundled package aimed at reducing the power of government to operate in the public interest.
Surely it’s time to rethink this resistance to government acting as an agent of the common good.
And maybe it’s time for a little humility on the part of a financial elite that long has enjoyed such deference while turning out to be so spectacularly inept.
Linda McQuaig’s column appears every other week. firstname.lastname@example.org