Over at economist’s view, economics professor Mark Thoma has asked readers to identify the biggest disinformation circulating right now, and how best to debunk it.

Not a bad question to ask, but there’s so much disinformation circulating right now that selecting one particular item misses the really big piece of disinformation that allows all the other disinformation to exist:  The Republican Party is a serious party.  The current version of the GOP is not only NOT serious, it’s darn close to being stark raving mad.  Consider just a few pieces of serious disinformation Republicans constantly cite.

• Tax cuts always pay for themselves.  Clinton left Bush with a budget surplus and eight years later, after giving tax cuts primarily directed to millionaires, the national debt went from $5.6 trillion to more than $10 trillion by the time Obama was sworn in office.   Totally not serious.
• The financial industry doesn’t need regulating and financial  markets self correct anyway.  Exhibit No. 1 here is the Great Recession.  Some self correction that one.  In addition to putting 11 million people  on the unemployment line government revenues plunged while expenses on unemployment insurance and other safety net spending soared, increasing annual deficits by $1.5 trillion so that three years after the collapse, the debt stands at more than $14 trillion.   Don’t regulate finance?  Not serious.
• Firing people creates jobs.  Huh?  Republicans believe if a lot of people are fired, preferably public school teachers, then they will go into the private marketplace and drive down wages there, which will somehow create jobs.  I’m not making this up.   It’s right in the Republican Budget created by Rep. Paul Ryan.  You know, the budget the House has already passed.  Completely not serious.
• Reject any raise in the national debt ceiling.  Default instead.  This is more than not serious, this is stark raving mad.
• Ending Medicare and shifting health costs more on to family budgets, without recommending any way to curtail health care increases, is not serious.    Ryan’s Medicare ‘fix’ provides the elderly with vouchers that are guaranteed not to keep pace with health care costs.  He figures old people will shop so well costs won’t increase.  If you believe in that concept, you are not serious.
• Obama doesn’t have any plan to slow the rise in health care costs.  Yes he does.  Health care reform passed last year over unanimous Republican opposition and, according to the non partisan Congressional Budget Office, if left alone the legislation will save as much as $200 billion the next ten  years, and much more than that beyond the next decade.   It’s 2000 pages long, which is too long, but calling this legislation ‘no plan’ is simply not serious.
• We must cut taxes more, particularly for the wealthy and the corporations they own, and keep billion dollar subsidies for immensely profitable oil companies.  And in order to still be able to balance the budget we must decimate Medicare, Social Security, Medicaid and just about all other government programs that don’t directly help the rich.  In other words, let the public at large pay for the tax cuts enjoyed primarily by the rich.  This advice falls into the stark raving made bin.
• We must keep $8 billion in subsidies to corn growers so we can use corn to make ethanol, a gasoline additive.   This means we now tie the price of food directly to the price of petroleum.  The only thing serious about this subsidy is that it’s seriously stupid.
• Facing rising short term deficits caused by tax cuts and not paying attention to what our financial industry was doing, Republicans want to ‘double down’ and cut taxes more while continuing to not regulate the financial industry.  Stark raving mad.  They don’t deserve our attention, much less our vote.

I call it the ‘double down’ strategy.  During the Bush presidency we cut tax rates for the wealthy and for investors and what regulations we had were not enforced, particularly for financial institutions.  And look what we got:  The most severe economic downturn since the Great Depression and the first decade  since the Depression where the average working class family income was lower at the end than at the beginning.

Anyway, Washington Post columnist Ezra Klein spells out why Republicans may be insisting on a ‘double down’ strategy and why we should stop listening to them. 

Academic books pack about 600 words to a page. Normal books clock in around 400. Large-print books — you know, the ones for kids or the visually impaired — fit about 250. The House GOP’s jobs plan, however, gets about 200 words to a page. The typeface is fit for giants, and the document’s 10 pages are mostly taken up by pictures. It looks like the staffer in charge forgot the assignment was due on Thursday rather than Friday, and so cranked the font up to 24 and began dumping clip art to pad out the plan.

Which is odd, because there’s nothing in this plan that hasn’t been in a thousand other plans. When I asked David Autor, an economist at MIT and a specialist on labor markets, to take a look at the substance, he pronounced it a classic case of “what Larry Summers would call ‘now-more-than-everism.’”

“Here’s how it works,” Autor wrote in am e-mail. “1. You have a set of policies that you favor at all times and under all circumstances, e.g., cut taxes, remove regulations, drill-baby-drill, etc. 2. You see a problem that needs fixing (e.g., the economy stinks). 3. You say, ‘We need to enact my favored policies now more than ever.’ I believe that every item in the GOP list that you sent derives from this three step procedure.

“That’s not to say that there are no reasonable ideas on this list. But there is certainly no original thinking here directed at addressing the employment problem. Or, put it differently, is there any set of economic circumstances under which the GOP would not actually want to enact every item on this agenda? If the answer is no, then this is clearly now-more-than-everism.”

If you just read Autor’s answer and then guessed at what’s included in the plan, you’d probably get it about right. The GOP wants a separate congressional vote on every significant regulation. They want to cut taxes for corporations and small-businesses headed by individuals. They want a tax break for profits that corporations earn overseas. They want to pass pending trade agreements, increase domestic production of oil and enact spending cuts. The only two proposals that you couldn’t have guessed sight unseen are patent reform and visas for the highly skilled.

But even if you think every item on that agenda is a grand idea, this isn’t exactly fast-acting medicine. “At best, an agenda like this is meant to improve long-term growth by a couple of tenths of a percentage point,” says Larry Mishel, president of the Economic Policy Institute. “It takes a really long time to move the dial. It’s not a response to a cyclical downturn.”

That’s okay, because the document doesn’t believe in cyclical downturns. It only believes in deviations from the Republican agenda. The first page sets out the GOP’s narrative of the country’s current unemployment crisis. See if you recognize what’s missing here: “For the past four years, Democrats in Washington have enacted policies that undermine these basic concepts which have historically placed America at the forefront of the global marketplace. As a result, most Americans know someone who has recently lost a job, and small businesses and entrepreneurs lack the confidence needed to invest in our economy. Not since the Great Depression has our nation’s unemployment rate been this high this long.”

Four years ago, of course, George W. Bush was president. And he was, as you might remember, a Republican, not a Democrat. As for Wall Street, well, Wall Street who?

But it’s not just that you could read this jobs plan without knowing the financial crisis ever happened. You could read it without knowing the past decade ever happened. As Mishel says, “if lower taxes and less regulation was such good policy, then George W. Bush’s economy would have been a lot better. But under Bush, Republicans cut taxes on business and on investors and high-income people and they didn’t add many regulations and that business cycle was the first one in the post-war period where the income for a typical working class family was lower at the end than at the beginning.”

That, however, is the agenda the House GOP thinks we need. And now more than ever.

Beezer here.  Having a serious discussion about getting our economy back on track means honestly looking at what didn’t work before.   The Republicans simply cannot do that–even after confronted by the dismal failure of their policy prescriptions when they were implemented.

My daughter Sarah graduates today from New England Law in Boston.  Graduation ceremonies are at the Wang Center.

She ranks in the top 10 of her class and was awarded a fellowship by the school for next year allowing her to be the lawyer of record for a non profit environmental organization.   In effect it’s a fourth year of law school where she will sharpen her knowledge and skills in defense of our environment.

Times may be tough right now, but our younger generation offers great hope for the future in the person of Sarah Herbert and many like her.  Congratulations to Sarah and her fellow graduates.

Mark Haines died unexpectedly Tuesday at the age of 65.  The cause of death has not been revealed but the suddenness of his death favors a heart attack.  Haines was an iconic, original mainstay of the financial cable news network CNBC, which I watch every business day.

A big, gruff former Rhode Island print journalist and a lawyer, Haines had no patience with anyone who ‘spun’ answers to his all too direct questions.   CEOs of the world’s largest corporations feared him.

Haines  manned the CNBC desk during 9/11.  His steady, insightful performance during those terrible hours elevated his stature as a broadcaster to the level of Walter Cronkite and Edward R. Murrow.

Haines’ gruff exterior masked a quite different man, off camera.   Viewers always saw the top half of Haines, suit and tie.  Yet he often wore sweats and boat shoes beneath the suit and tie.  He adored his family and the New York Mets.  Colleagues knew this Mark Haines and they loved him.

The millions of investors who religiously monitor CNBC’s coverage of all things financial, like myself, have lost a dear friend and public servant.

So we’re all having a big fight over the cost of Medicare.  Some believe it will break our bank if we don’t do something drastic, like throw Grandma under the bus holding a cheap voucher.

Over at the Center For Economic and Policy Research, co-founder Dean Baker makes mincemeat of what the fear mongers claim is the truth.

Thursday, 26 May 2011 05:04

The Wall Street Journal tells us that: “Republicans argue that Mr. Obama and the Democrats have no plan to rescue Medicare, despite estimates that it will be unable to pay out full benefits beginning in 2024.” It then gives us the Democrats’ response, making it a he said/she said. It would have been helpful to inform readers about the projected gap in Medicare funding so that readers know what it would mean to “rescue” Medicare from a shortfall that it is first expected to face 13 years in the future. The Medicare Trustees put the projected shortfall at 0.79 percent of payroll, which is approximately 0.27 percent of GDP over the program’s 75-year planning horizon. By comparison, the increase in annual spending on the military between 2000 and 2011 was more than 1.6 percentage points of GDP. This increase in spending did not cause serious harm to the economy, therefore increased spending of one-fifth this size will presumably not be a major problem.

 

Beezer here.  So the shortfall is less than one fifth of the annual increases in defense spending we’ve incurred since 2000.  Doesn’t sound like a big problem looked at from that perspective.  A corollary question is what should our spending priorities be anyway, when so many of our population (about 30%) are entering retirement age. 

The Ryan medical voucher proposal not only shifts costs from the government to families it increases the overall cost of health care.  This comes from the Congressional Budget Office and is cited by Peter Orszag, former White House budget director under Obama and now Vice President of Global Banking at Citigroup, in an article published by Bloomburg.

Many Republican policy makers appear conflicted about the budget plan put forward by the House Budget Committee chairman, Representative Paul Ryan of Wisconsin. They are torn because they like its substance, but believe it is bad politics, especially among elderly voters. In truth, the substance is not particularly appealing either…..

While more consumer cost-sharing would help reduce unnecessary care, the plan would not live up to its billing in cutting health costs for America. According to the nonpartisan Congressional Budget Office, it would do the opposite. That’s right: The CBO found that the Ryan Medicare proposal would substantially increase total health-care spending….

The CBO’s analysis of the Ryan plan confirms that federal expenditures would be reduced, by a lot. By 2030, payments for a typical beneficiary would be more than 20 percent lower than current projections, according to the report, and the beneficiary’s personal costs would increase.

So far, nothing unexpected. On the critical metric of whether the Ryan plan would reduce total health-care costs, though, the CBO conclusion is shocking: The plan would not only fail to decrease health-care costs per beneficiary, it would increase them –- by an astonishingly large amount that grows over time. By 2030, health spending on the typical beneficiary would be more than 40 percent higher under the Ryan plan than under existing Medicare, according to the CBO report.

Health-care costs would not be reduced on the backs of seniors; they would be raised on the backs of seniors.

Beezer here.  The political destruction is not reversible either.  House Republicans are already on record as voting for the Ryan Medicare plan, and a Senate vote is scheduled as well.  It wasn’t going to pass the Senate anyway because of the Democrat majority there, but it will be interesting to see how Senate Republicans will vote.  Massachusetts Senator Scott Brown has already said he won’t vote for Ryan’s plan.  My bet is that a large number of Republican Senators will disavow supporting Ryan.  Those who do vote for the plan will have a scarlet letter on their foreheads and will likely lose their seats.