Thursday, July 06, 2006

National Shitstorm

WaPo: " A Driven President Faces a World of Crises."

I am hard-pressed to think of any other moment in modern times where there have been so many challenges facing this country simultaneously," said Richard N. Haass, a former senior Bush administration official who heads the Council on Foreign Relations. "The danger is that Mr. Bush will hand over a White House to a successor that will face a far messier world, with far fewer resources left to cope with it."

And they're just talking about international issues here, not the national debt, social security, health care, global warming or energy dependence

2 comments:

Wilson Barber said...

Ms. Kamenetz, you make a reference in your book as being "aligned" to "mavericks" like "Peter G. Peterson" who spent his "career" in some sort of “quixotic quest” to get the Republicans to stop “cutting taxes” and the Democrats to “stop spending”.

This is a rather unfortunately narrow analysis that essentially touts the corporate media line. Firstly, Pete Peterson was an investment banker who was head of the Department of Commerce during the Nixon Administration and who class interest supports the impoverishment of working class citizens and especially young working class citizens. His attempts for the last quarter of a century have been to attack Social Security by pitting younger workers against older workers – divided and conquer.

The fact of the matter is that Social Security can be paid for by younger workers because of the rising productivity that has been accrued over the past quarter of a century, The problem is that tax policies has made the system more regressive and burdens have been shifted away from people of Peterson’s and onto working class citizens.

Also with regards to the Democrats “spending” you failed to mention that much of that “spending” is on the military. The Johnson Administration falsified the budget in 1969 to conceal how much discretionary spending is on war by “unifying” the budget by adding in the Social Security trust funds. These funds overstate how much the government actually spends in social programs while understating war spending. Much of the U.S. debt burden is on PAYING FORWAR. This burden has been shifted onto working class citizens by the regression of progressive taxes.

The inflation of the late 1970’s was due to the oil shocks because of the U.S support for repressive regimes in the Middle East such as Israel, Saudi Arabia, and the Shah of Iran. Support for Israel lead to the first oil shock in 1973 and support for the Shah lead to the second one in 1979. The Carter Administration, rather than adjust the tax brackets for raising inflation chose to allow Paul Volker to send the economy in a major recession by raising interest rates and thus causing the burdens of the oil shocks to be borne by the working class, Carter and even before him, Nixon, could have nationalized the oil industry but chose to put their interest ahead of the public’s interest.

In the 1980’s Reagan cut taxes for the rich and corporations instituted by the 1981 Kemp/Roth tax cut. Reagan also increased military spending and created huge deficits. This spending favors the rich and corporations over social spending of which Reagan cut. In 1986, the so-called “tax reform” bill supported by such “liberal” Democrats such as Bill Bradley made the system more regressive by eliminating many of the graduated upper tax brackets.

However in order to pay for this regressive policy, Alan Greenspan came up with the idea of making working class citizen pay for it by “inventing” a “crisis” in Social Security. This false crisis created the overpayment to the trust fund – the so-called “IOU” whereby the government takes in more in Social Security taxes than it requires and shift the money into the discretionary budget to pay for such things as tax cuts for the rich and corporation and weapons of mass destruction, This bait-and-shift was chronicled by David Stockman – Reagan’s former budget director.

I had great hopes for your book but unfortunately it appears that you have drunk the “Kool-Aid” of divide and conquer and offer no solutions to the real crisis of class warfare where the rich is winning and everyone else – old, young, middle income, working class, and poor are losing.

ProgressiveEconomist said...

Great post, WB! I agree with most everything you said,

the main exception being the part about support for Israel(?!*), which is pretty irrelevant to your solid main argument.

It seems to me that Kamenetz well may have been duped by Laurence Kotlikoff, whom she quotes frequently, into parroting ultra-right economic nonsense about "generational accounting".

Have you read "Social security: the phony crisis", by Dean Baker and Mark Weisbrot (partially online at http://www.amazon.com/exec/obidos/tg/detail/-/0226035441?v=glance)? Baker and Weisbrot were students of a prominent liberal economist at the University of Michigan in the 70s and 80s, Robert Eisner, and they do their mentor proud in their book on the academic frauds of Feldstein, Kotlikoff, Peterson, and company. The whole book is only 175 pages long, but I'd recommend in particular chapter 2, "Generating phony wars with generational accounting". That chapter DESTROYS the phony "Generational Accounting" argument that seems to be Kamenetz's main premise for her book.

See also my comment on another Kamenetz blog post, at http://anyakamenetz.blogspot.com/2006/05/retirement-benefits-monster.html.