In the real world and the reality based community, there is talk about austerity from people who understand the nuances of it and macroeconomic accounting identities. They point out the undeniable fact that there is austerity in the UK, the Eurozone, and yes, the United States. This interactive chart will show this, though I can't embed it here. So instead, I will add a small snapshot of some of the data.
Net spending in the United States has steadily declined since it rose from 2008 to 2009 when the inadequate stimulus(only $500 billion of direct spending at about 1.5 percent of GDP) was passed. Stimulus packages don't exist in a vacuum, and you have to count all government spending, which basically shows how exactly the numbers, including the stimulus as this does, didn't close the output gap. And since the numbers didn't, that is actually austerity. After all, spending went up in the UK and Eurozone from 2008 to 2009 as well, and since then, their spending has declined. Even though it is on a higher level, it is being cut at an even more alarming rate with its fate set to go below our miserable level by 2017.
I have pointed this out before. Sometimes I get frustrated, and point this out harshly, because some pride themselves on denying this established data to support whatever a politician in their party says or does. I don't know why. Denying reality is not going to give resources to people who need them. There is a reason my last diary has been cited by the reality based Post Keynesian MMT community, in which I am truly grateful for and humbled by; it is the truth.
The real economy of jobs and wages continues to go nowhere thanks to the lack of deficit spending and an illogical debate in DC about how much austerity we need to appease the invisible bond vigilantes and confidence fairies. It is neoliberal deficit terrorist economic insanity based on lies. And on that note, it is my pleasure to republish a piece by someone in the reality based economic community whom I can now proudly say is a friend of mine, Post Keynesian MMT economist John T. Harvey. He, once again, brings clarity to these matters in a way that only he can.
Regardless of the left's opinion of Fox News, the Obama administration has gone way over the constitutional line and this is adds to the serious threat to freedom of the press. The idea that the government. on its unconstrained wild hunt for whistle blowers, can issue secret subpoenas for telephone records just got worse this morning. The case is being made against Fox News reporter James Rosen for his reporting on the possibility that North Korea would respond to additional UN sanctions with more nuclear tests back in 2009. The Department of Justice is prosecuting State Department adviser and arms expert Stephen Jin-Woo Kim for "leaking" the information to James Rosen of Fox News. To makes the case against Rosen this is what the DOJ did:
They used security badge access records to track the reporter's comings and goings from the State Department, according to a newly obtained court affidavit. They traced the timing of his calls with a State Department security adviser suspected of sharing the classified report. They obtained a search warrant for the reporter's personal e-mails. [..]
Court documents in the Kim case reveal how deeply investigators explored the private communications of a working journalist - and raise the question of how often journalists have been investigated as closely as Rosen was in 2010. The case also raises new concerns among critics of government secrecy about the possible stifling effect of these investigations on a critical element of press freedom: the exchange of information between reporters and their sources.
This is not directed at the reality based VOTS community.
And by "we" I don't mean me or I, because I make a good effort to at least try. I'm talking about blogs like Daily Kos. I had always assumed, because of the many insightful writers on the site and on the front page that was the case. However, we are starting to see some of what we see with corporate control of all airwaves in how site moderation is run.
For instance, whether on Fox News, CNN, or MSNBC there is always a fake debate when it comes to climate change which is undeniably happening since we have hit 400 ppm of CO2 in our atmosphere for the first time in 3 million years. When this spectacle that pretends to be a live debate on TV happens, there are always two guys picked by the network to come on TV to debate the issue; one a NASA scientist like say James Hansen and one fringe dwelling Koch funded climate changed denier to debate as if there is something to debate as if both sides have an equal argument to make. WRONG. The science is in.
I always thought we in the progressive blogosphere prided ourselves on not accepting that dynamic, but now I am starting to wonder. On the issues I go to great lengths to cover when it comes to the economy, there are certain undeniable facts that have to be acknowledged whether you are a Post Keynesian MMT proponent like me or not. I mean, if we are any different than debates on red state or the corporate owned media, that is. I have to wonder about that now, because it now appears from what went on in my last diary in the comment section that a moderator here stepped in and made an effort to portray the troll like behavior and continual denial of established facts in every diary of mine as "just an honest disagreement."
It was inferred that I was "out of line" for accurately describing a commentator while using a term that accurately describes his brand of troll like behavior. That's not out of line. When people act like trolls in every diary of mine I can only ignore it for so long before calling it out directly. We can't just ignore this kind of behavior forever in this community. I mean, not if we still consider ourselves part the reality based community. Do we?
I have referenced this before, but there hasn't really been enough of a movement on the this issue, and it's an important one. It's specifically important right now when Washington DC is completely stuck on stupid in a self created crisis. This crisis started in 2010 when the debt ceiling was not secured in the Bush tax cut deal with Republicans by President Obama and Senate Majority Leader Harry Reid. Many of us predicted it would lead to the debt ceiling debacle in 2011 which in turn led to the fiscal cliff negotiations and the sequester that is now a reality.
However, it could end anytime with House Democratic Representative John Conyer's bill to just repeal the sequester; that is, if he got proper support. I think that needs to be a goal along with forever protecting Social Security from neoliberal economics and the politicians that support it. After all, this sequester was a conscious bipartisan decision on their part to put Social Security in danger now that a 130 billion net cut within the chained(superlative) CPI is now on the White House's website in its proposal to stand in place of the sequester.
What we are hearing to justify it are not only exaggerations and lies about Social Security being unsustainable, those lies are based on inaccurate accounting standards that have pervaded our entire government; the CBO, and yes, even the Social Security Trustees Board itself at times over the years. Let's face it; the Social Security Trustees Board has a broad history of being overly pessimistic.
It's an important one because it destroys the argument you hear from some Obama supporters hoping to deflect the inhumane treatment of whistle blower Bradley Manning. They say that since African Americans in our prison system suffer torture and injustice in our prison industrial complex, then that means what is happening to Bradley Manning is not really an issue. Of course what they don't mention is that yes, African Americans have been and are indeed suffering atrocities in our prison industrial complex, yet they don't want to talk about President Obama continuing this trend and even making it worse even hiring a for profit private prison lobbyists in his Justice Department where some of the worst offenses happen making him involved in the state issue and federal issue.
You can see the failed deflections in the comments of that diary and how the truth about this really hit a nerve with some people, whether they claim to be a fake Marxist in a past life making their support of the PIC and neoliberalism OK now under Obama or not. The facts show that they don't really care about these issues when hoping to shield Obama from them in the case of Bradley Manning.
Part of the reason the Occupy movement exists and are out in the streets is because of the massive failures of this Democratic administration and a Democratic Congress. This can't be denied. However, because it can't be denied there are certain implications going around in their defense by those who are in denial about this. They imply that what’s going on with Bradley Manning’s confinement and his sham of a trial doesn't truly matter.
They imply Occupy protesters getting beaten, sprayed, and handcuffed until they get nerve damage doesn't matter because of the fact that African Americans and Latinos have been feeling the brunt of police brutality and a corrupt racist justice system for years. It is very true that African Americans and Latinos have felt the brunt of a corrupt racist justice system for years.
However, these injustices still matter regardless, because as MLK said, "A threat to justice anywhere is a threat to justice everywhere" and that still holds true today. The issues the Occupy movement are fighting for affect all races, especially on income inequality and economic justice. That is an acknowledged fact that can't be denied.
Recently at a city council meeting in my home of Jersey City, a 46-year-old formerly incarcerated man told the council, as reported in the Jersey City Independent: "I've served 16 years in prison. I came home three years ago and tried everything possible you can do. I got my high school diploma and a driver's license...The job system failed me."
When I went to Occupy Wall Street, my friend carried a sign that read: "Troy Davis would still be alive if he had been rich and white." We had attended a protest earlier that month, when Davis was still alive, where signs and demonstrators proclaimed, "We are Troy Davis."
This piece is my most viral piece to date and appeared on Daily Kos on December 15, 2011. It's an ironic diary coming from myself given all the economic pieces I write but I do have range on other issues, too. It's about the NDAA and is still relevant because the US can still indefinitely detain American citizens, and the White House has never been able to properly define the terms "associated forces" among others things with regard to Al Qaeda. Section 1021 can still be used to indefinitely detain American citizens.
You may recognize my illustration about the NDAA as well which is also still relevant.
Processing the President's Disdain for Due Process
That’s right. You know what’s going on.
This administration never threatened to veto the NDAA because of civil liberties concerns. This administration is using the same fear mongering that the Bush administration has used concerning Al Qaeda to codify the unchecked executive power it has claimed erroneously for itself in the exact same way.
Yes, unlike what was sold to us about Dodd Frank, there are in effect already backdoor bailouts before our very eyes if we care to look. This one involves the most important regulator of our entire financial system, the New York Fed, intervening to let Bank of America off the hook for its residential mortgage backed securities fraud.
After all, it was at the SOTU merely just a year ago that President Obama assured us that something was going to be done about the Wall St. perpetrators of our mortgage and foreclosure crisis. This was a crisis in which they defrauded consumers with sub-prime NINJA loans pumping up the housing bubble and then dumping the private debt overhang onto the economy destroying over 10 trillion in housing wealth. This left consumers with massive loads of private debt and everyone else jobless like this recovery.
This White House's DOJ has made a complete mockery of the concept of Justice in and of itself. That illusion of Justice is perpetuated to this day and normal people are devastated because of it. Let President Obama know you are not amused. I have.
This is an older essay of mine from Daily Kos posted on Thursday February 02, 2012.
It was referenced by Yves Smith which I am proud of. It's worth posting now because it's been a year later and in Yves Smith's words, Quelle Surprise! The Mortgage/Financial Fraud task force put together by the foreclosure fraud sham of a "settlement" has done nothing.
President Obama got NY AG Eric Schneiderman, DE AG Beau Biden and the other Justice Democrats to sell out and give up on real justice. It is a sham that continues to this day. Let President Obama know you are not amused.
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Sometimes, once in a blue moon, there comes a time when important events unfold that I then must trust my own judgment. And in doing so, I also sometimes have to part ways with people I admire. It doesn't feel good to do so, but I think NY AG Eric Schneiderman is possibly making a mistake, and I very much agree with David Dayen’s take on these events.
Taibbi has kind of bought the argument that the robo-signing was a smaller part of a bigger fraud in the securitization markets, which is true. That doesn’t mean that a settlement that allows you to go after that poisoned tree by only giving up the fruit is in any way equitable. That’s the point of California Rep. George Miller, a key ally to Nancy Pelosi:
Democratic Congressman George Miller of the East San Francisco Bay area says he’s “proud” of Harris for leaving negotiations that aren’t in the state’s best interest. And he says any agreement has to be transparent.
“Whatever settlement they have has to go out to the public for a week, for a period of time, where it can be commented on,” Miller said, “because this represents the largest decisions about people’s homes, their equity, their assets and their worth.”
As you might have heard the economy is contracting while unemployment remains high inching higher especially in real terms again while Washington is too stupid or corrupt across the board to notice. I can't say I didn't see this coming even as just an above average layman. All this focus on austerity is detrimental. After all, spending is actually income and so are deficits which are the life blood of the private sector in the economy when it comes to those sectoral balances you hear me always harping about.
I have to thank NY brit expat for introducing me to John whom is not only a brilliant economist, but an all around cool guy who is very approachable and has an awesome taste in music. He stresses that the economics discipline hasn't made economics very understandable to the general public and he's right; however, you wouldn't know that by reading his many excellent pieces on why everything people think they know about debt and deficits is absolutely wrong. As John points out, it's not only wrong, it pervades this entire ignorant and corrupt political debate happening right now over this stupid sequester that was a creation of the White House and Congress.
As you will read down below, this horrible self induced debt ceiling pro austerity political show where never is heard an encouraging word like full employment, but instead for Peter Peterson's enjoyment, idiotic words praising deficit terrorism(budget balance and cutting our safety net) rules the day. It only amounts to economic decay and a likely recession on the way depending on how much deficit spending is cut in the coming days.
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