To live with Kurosawa's Ikiru

By Frank Moraes

Ed. note: Frank writes about film quite a bit at his blog, Frankly Curious, but we don't usually feature his film writing here, preferring to stick with his more political posts. But I couldn't resist this one, an excellent examination of Akira Kurosawa's Ikiru (which is actually quite political, as is Frank's post).

Ahead even of Ozu and Kieslowski, Kurosawa is my favorite director. He made what I think is the greatest movie ever made, Seven Samurai, and the list of his masterpieces is a long one: Ran, High and Low, Yojimbo, Rashomon, and Throne of Blood lead the pack after Seven Samurai, for me, but The Hidden Fortress (the basis for Star Wars), Sanjuro, Kagemusha, and Stray Dog, to name but four others, are also excellent. And then there are the many great "minor" films that deserve greater attention, including his early and post-war work.

Anyway, suffice it to say I absolutely love Kurosawa, and while I wouldn't put Ikiru among his very best, it's certainly a wonderful film, and the iconic scene of Watanabe (the great Takashi Shimura) on the swing ranks among the most powerful of Kurosawa's entire oeuvre. -- MJWS

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After many years, I watched Akira Kurosawa's Ikiru. It is the story of a man who learns that he is dying of stomach cancer and so decides to use his life to do something meaningful. You can well imagine what kind of sentimental claptrap this would be in the hands of Hollywood. Ikiru -- which means "to live" -- is not at all sentimental. In fact, the main character dies halfway through the film. But that doesn't mean it isn't inspiring. It shows how one man decided to change his life for the better without any of the cheap movie tricks that I so despise. (Think: Beaches.)

The film is a product of the post-war period in Japan and focuses on a bureaucrat, Kanji Watanabe, who follows the tradition of doing as little as possible. This is highlighted at the beginning of the film when Watanebe uses pages from a document titled, "A Proposal for Increasing Departmental Efficiency." This is followed by the narrator telling us, "The best way to protect your place in the world is to do nothing at all." This goes along with a quote provided in Stephen Prince's excellent commentary from Masao Miyamoto, "The three great principles of Japanese bureaucracy are: don't be late; don't take time off; and do no work." Watanabe wasn't always like this, but he certainly is at this mature point in his career.

At the same time, we are introduced to a group of local women who want the government to fix a problem. Where they live is an open sewer that is making their children sick. They want it to be remediated and turned into a park. So they go to the government and end up being sent from one agency to another. They stand as the opportunity that Watanabe needs to find redemption and his pathway "to live" -- even if it is for a short time.


(As a political matter, I have a problem with too much focus on governmental bureaucracy. Bureaucratic obstruction in the government was a big problem and still is in many places. But at least in this country, it has gotten much better. Now, the "run around" is much more common in dealing with corporations. A couple of years ago, Paul Krugman noted, "I've recently had fairly extensive dealings with both our health care system and with the New Jersey DMV. In one case, I encountered vast amounts of paperwork, mind-numbing bureaucracy, and extremely frustrating delays. In the other, my needs were met quickly and politely. So far, then, it's DMV 1, private health system (and I have very good insurance) 0." That's my experience.)

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Republicans have been very, very good to social conservatives

By Frank Moraes 

I have a bone to pick with Paul Krugman. His column today is quite good, "Republicans Against Reality." The first half of the article is about Republican dysfunction. He highlights last week's transportation bill fiasco. It's an old story. Talk to any conservative (and sadly many liberals as well) and they will tell you that there is loads of wasteful spending in the government. But when you ask them what ought to be cut, the first thing they say is: foreign aid. There are two problems with this. First, foreign aid really does help us out globally by pushing back against all the bad stuff we do. (And note: Israel gets by far the most foreign aid of any country.) Second, foreign aid only makes up about 1% of the federal budget.

So the problem the House Republicans are having is that they've gone along with Paul Ryan's new mythical budget. But when it comes to actual policies, the House members don't like it because it requires cutting programs that their constituencies like and depend upon. So vauge notions of cutting "waste": gooood! Concrete ideas of cutting actual programs: baaad!

The second half of Krugman's article is about how the Republican leadership is reaping what it sowed. He writes:

For a long time the Republican establishment got its way by playing a con game with the party's base. Voters would be mobilized as soldiers in an ideological crusade, fired up by warnings that liberals were going to turn the country over to gay married terrorists, not to mention taking your hard-earned dollars and giving them to Those People. Then, once the election was over, the establishment would get on with its real priorities -- deregulation and lower taxes on the wealthy.

That is mostly true, but I take exception to the claim that the Republican Party has abandoned the social conservative base. Just in terms of policy, they got things like the Defense of Marriage Act and Terri Schiavo. But more important, they've gotten really conservative judges throughout the federal court system. I don't have any doubt that if Roe v. Wade came up for a vote in the Supreme Court that it would be overturned. So social conservatives have gotten what they want.

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Reinhart and Rogoff shown to be wrong -- again

By Frank Moraes 

There was a bit of economic news yesterday that was wonderfully fun and I dare say it would be a shame for you all to miss out on it just because you don't follow the economics blogs. What's more, in terms of truth, it really matters, even if, in terms of politics, it probably won't.

In 2010, Carmen Reinhart and Kenneth Rogoff, two economists at Harvard, published a hugely influential paper, "Growth in a Time of Debt" (pdf). In it, they purported to show that if the total government debt equaled more than 90% of the country's GDP, then there would be a big slowdown in economic growth. This paper was used more than any other to justify economic austerity all over the world, but especially in Europe and the United States. In fact, Paul Ryan, in his The Path to Prosperity (pdf) budget, claimed, "The study found conclusive empirical evidence that gross debt exceeding 90 percent of the economy has a significant negative effect on economic growth."

That sounds bad, right? In fact, if you look at the paper, it is even worse. Countries with a debt-to-GDP ratio of less than 30% see a growth of 4.1% whereas those with a ratio of more than 90% see a contraction of 0.1%. Of course, long ago, I had dismissed the paper for two reasons. (But the fact that I even knew about the paper should give you some idea of just how important it has been.) First, correlation is not cause. And in this case, the cause is probably the opposite of what Reinhart and Rogoff (R&R) suggest. When economies are bad, governments have to borrow money. The case is much stronger that bad economies lead to large debts rather than the other way around.

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Holding freedom hostage

By Mustang Bobby 

Paul Krugman writes that the Republicans have dusted off an old argument from years ago to block the agenda of President Obama and the Democrats. Instead of arguing the merits of, say, expanding Medicaid to people who need it, they now say that giving people a guarantee that they will have health insurance is an assault on freedom:

Conservatives love, for example, to quote from a stirring speech Reagan gave in 1961, in which he warned of a grim future unless patriots took a stand. (Liz Cheney used it in a Wall Street Journal op-ed article just a few days ago.) "If you and I don't do this," Reagan declared, "then you and I may well spend our sunset years telling our children and our children's children what it once was like in America when men were free." What you might not guess from the lofty language is that "this" — the heroic act Reagan was calling on his listeners to perform — was a concerted effort to block the enactment of Medicare.

These days, conservatives make very similar arguments against Obamacare. For example, Senator Ron Johnson of Wisconsin has called it the "greatest assault on freedom in our lifetime." And this kind of rhetoric matters, because when it comes to the main obstacle now remaining to more or less universal health coverage — the reluctance of Republican governors to allow the Medicaid expansion that is a key part of reform — it's pretty much all the right has.

They trot out this pony for lots of other things, too. Universal background checks and liability insurance for gun owners shreds the Second Amendment. Giving free or reduced lunches to impoverished children takes away the parents' rights to feed their children the way they see fit. Banning interracial marriage is an assault on the rights of states to protect their own traditions, and of course the one we've been hearing a lot of recently, permitting marriage equality is a blatant attempt to muzzle the freedom of the "religious" to bully and harass the LGBT community.

David Brooks' column last week where he said that granting gays more freedom actually meant less was a caricature of the argument, and this is how we know that they're getting down to the fumes. When they have to tell you that more is actually less and up is actually down; that more choice for more people is tyranny and that finding a way to stop a madman from sweeping a kindergarten with 154 bullets in less than five minutes is the last step before Stalinism, it makes you wonder at what point will it dawn on them how utterly contemptuous of freedom they really are.

(Cross-posted at Bark Bark Woof Woof.)

Conservatives never learn

By Frank Moraes

This morning, Paul Krugman wrote another article trying to understand why conservatives and moderates who are shown to be wrong time and again never reflect that maybe "all the people they know" just don't know very much. The specific target is John Hinderaker at Powerline Blog. Yesterday, he was channeling Chicken Little over an immanent economic crisis. Krugman disagrees of course, but also points back to 2005 when Hinderaker mocked Krugman for saying there was a housing bubble.

I went over and looked at that article, That Hissing Sound Is Krugman. In the article, he doesn't argue against Krugman. He just claims that Krugman is not making an argument—or at least that he doesn't understand it. This is odd, because the argument for the housing bubble was pretty simple: home prices have always risen at the rate of inflation; at that time, home prices were rising substantially faster than inflation. There was no underlying reason for prices to rise so fast other than that there was a bubble.


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Not so Breitbart strikes again

By tmcbpatriot 

Andrew Breitbart is still dead! That much is true. Not much else coming out of his namesake's "news" site may be, though. For the second time in a month, Breitbart.com posted a false story that was later taken down after it turned out to be totally untrue.

Apparently, a story about Paul Krugman going bankrupt vent viral, getting picked up and reposted on the popular conservative website. Turns out, the story was satire, invented by a fake news website called The Daily Currant. Who knew? Well, Breitbart.com should have. However, before it was proven to be a non-story, it also wound up on Boston.com, which is actually a serious news source. Asked why Breitbart picked up the story in the first place without first vetting it for accuracy, they replied it was because Boston.com was a "trusted" news source. Great answer. It would later come out that Boston.com posted the story "by accident" while Brietbart did it on purpose.

It should come as no surprise that a hyper-partisan website like Breitbart.com would post satire as truth, especially when it is a story that bashes a well known liberal like Krugman. I am pretty sure, too, that the folks over at Breitbart wanted to believe this story, even if perhaps they doubted its veracity.

As a result, is it any wonder that our so-called news organizations are considered to be so untrustworthy? Additionally, can we even call them news organizations when stories such as this one trump actual news stories that are actually true and virtually ignored?


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When satire becomes news

By Frank Moraes 

We all make mistakes. But the tendency for conservative media outlets to fall for hoaxes and to assume that satire is straight news is amazing. But it is no accident. In David Brock's book Blinded By the Right, he describes himself not so much as a political extremist but as a journalistic amateur. His turn from conservatism was more about his learning how to do the job. The watershed came when he was writing The Seduction of Hillary Rodham. It was the first time he did enough research to get a full picture of his target. In his earlier Real Anita Hill, he only talked to people who said bad things about Hill and so that was the narrative he created of her. (He has since repudiated the work.)

I think this is more generally the problem with conservative media. And it is why they often get stung. They are so keen to slime anything that is not conservative that they do not stop and do the most basic research. I am no journalist, but when I find an article by an unknown writer or news agency, I research them. When I discovered Kathleen O'Brien Wilhelm, I spent much more time trying to figure out if she was for real than actually writing about her. This is basic "I don't want to look like an idiot" work. The conservative media do not seem to have any such concerns.

Last Wednesday, The Daily Currant published an article, Paul Krugman Declares Personal Bankruptcy. That seems a straightforward enough title. But check out the lede:

Economist and columnist Paul Krugman declared personal bankruptcy today following a failed attempt to spend his way out of debt.

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Self-defeating austerity

By Frankly Curious

The International Monetary Fund (IMF) has just put out a paper on austerity. It argues that in the medium term, austerity is self-defeating. This is because austerity causes the economy to shrink by a greater percentage than the debt shrinks.

When deficit scolds talk about the national debt, they almost always do it in raw numbers. This is because "$14 trillion" sounds a lot more scary than "Our debt is equal to about our yearly productivity." But the proper way to look at government debt is relative to GDP or even more so Potential GDP. Traditionally, the way to get debt paid off is to outgrow it. This is how we got rid of most of our debt from World War II. (At least we did until that great debt cutter Ronald Reagan got into office.)

Given this fact, when looking at debt, we have to look at two variables: the size of the debt and the size of the economy. Those who would have us cut and tax our way out of debt introduce the concept of "confidence." This is the idea that businesses will see that the government is "serious" about debt, think the economy will soon by roaring, and so start investing in capital equipment and hiring people. This is a ridiculous idea that shows a shocking level of ignorance about how businesses actually work. As we have seen again and again, when the government cuts its spending, businesses correctly determine that the bad economic times will continue. This is exactly why business groups were against the Sequester.

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There is no long-term budget problem

By Frank Moraes 

Alan Blinder is a economics and public affairs professor at Princeton. Recently, he got placed in the middle of the argument between Paul Krugman and Joe Scarborough when Scarborough claimed that Blinder was on his side. Blinder didn't like that much. Yesterday, he wrote a short article at Politico, "Morning Joe's Accuracy Deficit." He says that he and Krugman only disagree about some very minor details.

Blinder claims there are three issues regarding the budget. In the short term, we are already doing too much deficit reduction. In the medium term (ten years), we have already done about what we should do. And in the long term, things are going to be very bad indeed. He is right about all this. The problem is that, like most people (including Krugman at times), when it comes to the long term, he is being deceptive.

In his new book, After the Music Stopped, Blinder claims:

The government can cover no more than a small fraction of the projected deficits by raising taxes. Sorry, Democrats, but the Republicans are right on this one. Americans are used to federal taxes running about 18.5 percent of GDP; they will not allow them to rise to 32 percent of GDP. Never mind that a number of European countries do so; we won't.

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Raising minimum wage won't hurt employment

By Frank Moraes

Minimum Wage in San Francisco: $10.55 per hour!

So much of conservative economic analysis comes down to, "I kind of paid attention to the lectures that term and I got a C in Econ 101." It is certainly true that you can understand a lot of what is going on in the economy by understanding some simple economic theory. But you can also go very wrong with this if your understanding is too limited. This is what we get from a lot of libertarian leaning people.

Let's consider the minimum wage. A very simple understanding of it indicates that if you raise the minimum wage, it will result in fewer jobs as employers drop marginal employees. But it doesn't work this simply. First, minimum wage employees do some of the most basic (and important) work at a company. Most companies could survive for a month or two without a CEO; they can't survive without the janitorial staff.

Much more important is the issue of company profits. A common myth among conservatives is that if a company's taxes are raised, the company will simply pass on the cost to the customer. Belief in this myth belies a shocking level of ignorance about not only how companies operate but also how markets themselves work. Undoubtedly, some increased costs will be passed on. But much of the increased costs will just have to be absorbed -- profits will decrease and the company will be forced to become more efficient.

The same goes on with the minimum wage.

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Unreasonable reasonable Republicans

By Frank Moraes 

(Ed. note: See also Chait's follow-up, after Scarborough threw a tantrum at him yesterday morning, "Joe Scarborough Hates Moms, PowerPoint." -- MJWS)

Do you know who is a real Reasonable Republican? Joe Scarborough. And that pretty much explains why the search for the lauded Reasonable Republican is such a foolish errand. When you find them, they simply have all the stupid policy prescriptions of other Republicans but don't think that rape victims ought to have to carry their pregnancies to term.

Of course, in Scarborough's case, since he isn't in office, his thinking has been heavily influenced the Very Serious People in Washington. This was fully on display a couple of weeks ago when Paul Krugman came on Morning Joe to discuss the economy. Scarborough just could not understand what Krugman was talking about. How could the budget deficit not be the most important issue facing the nation when everyone Joe knows thinks it is?!

You think I'm kidding? After the show, Scarborough took to Politico to write a column, "Paul Krugman Vs. the World." In it, he wrote: 

But maintaining calm was not as easy for Council on Foreign Relations president Richard Haass, who agrees with former Joint Chief chairman Michael Mullen, that longterm debt poses the greatest threat to America's national security.

In other words: "I've talked to other people who know nothing about economics and they agree with me!"

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There is no fucking spending problem

By Michael J.W. Stickings

Appearing on Fox News today, House Minority Leader Nancy Pelosi said the following:

It is almost a false argument to say we have a spending problem. We have a budget deficit problem that we have to address.

She's almost right.

It's an entirely false argument to say the U.S. has a spending problem, and to the extent there's a deficit problem it's a problem of revenue, specifically not enough of it, not expenditures.

But if you really do want to cut spending, the place to look is defense, where a bloated military sucks up an extraordinary amount of the overall budget. It isn't discretionary spending, which is government spending in a whole range of areas, which is at an historic low thanks in large part to recent cuts that President Obama himself supported alongside Republicans and a good number of Democrats.

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Deficit morality

By Frank Moraes

Last week, Neil Irwin over at Wonk Blog wrote an article that sounded really fun, Joe Scarborough, Paul Krugman and the Economist-Pundit Divide on Debt and Deficits. But I really hated it. I like what he is trying to do: explain why these pundits are so focused on the deficit even though the facts all say it is stupid. Unfortunately, it all comes off like apologetics.

It all follows from an appearance Paul Krugman made on Morning Joe earlier last week. Joe Scarborough just could not believe (during the segment and then in print after it) that Krugman was right when everyone Scarborough talks to disagrees. As any number of people have pointed out (including Krugman), this isn't about economics or even politics; it is about sociology. Most of the people I talk to each day have very little knowledge of economics, but I don't assume they are right just because there are a lot of them. This kind of polling approach to science just manages to allow people to not think seriously about things.

In the afternoon, Kevin Drum at Mother Jones kicked back a bit, (Almost) Nobody Is Serious About the Deficit. He notes that everyone knows that the long term deficit must be dealt with. So why is there disagreement about the short term deficit? His answer:

For conservatives: They aren't. They just don't like spending lots of money on poor people. Their real desire is to cut welfare spending, and deficit hawkery is just a handy excuse for this.

For centrists/lefties: They accept the economic argument in theory, but are more attuned to practical politics than economists are. The idea that we can safely ease the pressure for action on the debt today, but still count on politicians to virtuously cut borrowing in the future, strikes them as laughable. We're humans, not Vulcans

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A good day for sanity

By Michael J.W. Stickings

It may be that "the House GOP is adopting a minority posture," as The Hill suggests, or it may just be that they finally realized that their hostage-taking strategy was a political loser, but whatever the case it was indeed a good day for sanity in Washington with Republicans backing off debt ceiling armageddon and, while still posturing stupidly (no pay for Congress? -- how unconstitutional), conceding that they won't in fact take the country to the brink of economic meltdown to get their extremist right-wing way on fiscal policy.

And it is a significant victory for President Obama. As Jon Chait wrote yesterday:

The main credit here goes to the Obama administration for recognizing that enmeshing the debt ceiling with policy negotiations was a horrible idea that it had to stop dead in its tracks. To let debt ceiling hikes become contingent on fiscal policy agreements was to set up endless future crises that would eventually trigger default when one party or another held out for a little too much.

The whole key to making Obama's extortion-squelching plan, and saving American government from endless cycles of hostage drama that would eventually end in a default, was to credibly insist that he would not trade anything for a debt ceiling hike. After he moved his red line on tax cuts, I doubted that Obama could really make this stick. But he has. 

Even after the president's repeated concessions to Republicans, even after he showed time and time again that he was willing to give up a great deal to get a deal done, on issue after issue, even after he seemed to give up his post-election leverage to push a bad fiscal cliff deal through the Senate earlier this month, I was hopeful that he would stand firm on the debt ceiling and take a firmer line on fiscal policy going forward, refusing to give in to Republican terrorism on Capitol Hill. We'll see how the budget discussions go, but on the debt ceiling at least he deserves our enthusiastic applause.

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Scary Jack Lew

By Frank Moraes 

Let us give a little thought to Jack Lew. Obama has nominated him to replace Tim Geithner as Treasury Secretary. The Republicans are afraid -- very afraid. How can Obama choose Jack Lew?! 

And he is a scary guy, I can tell you that. Last year, Eric Cantor told Politico, "No one was more prepared and more in tune with the numbers than Jack Lew." This was in an article titled, "Jack Lew: A Liberal GOP Says It Trusts." So you know: this is Freddy Krueger scary. No. Wait. Not Freddy Krueger scary; Kermit the Frog scary. When it comes to Obama nominees, it doesn't take much to scare the Republicans. 

Jonathan Bernstein over at The Plum Line tells us that Jeff Sessions (fucktard from Alabama) is against Lew becoming Treasury Secretary. But not because Lew is a drunk or a philanderer. No, Sessions thinks he doesn't have the "gavitas" for the job. What this means is just that he's against him because that's what you do to all the nominations of a Democratic president -- especialla un oo's a colored. Bernstein is nicer: "Or, as Kevin Drum figures, it's just that Lew insists on using real math during budget negotiations." That's even worse: a edacated colored's nominee.

Bernstein argues that the real problem is that congressional Republicans have abandoned norms. Until Obama was elected, it was accepted that the president should be allowed to have the cabinet that he chose. But no longer. 

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A platinum way to blow Republicans' minds

By Michael J.W. Stickings

The Hill:

The White House on Wednesday declined to rule out minting a "platinum coin" to avoid default if Congress fails to raise the debt ceiling.

Press secretary Jay Carney on Wednesday said there is "no substitute" for Congress raising the borrowing limit but declined to explicitly rule out issuing new currency to pay the government's debts.

"The option here is for Congress to do its job and pay the bill," Carney said. "There is no Plan B, there is no backup plan. There is Congress's responsibility."

It is, but it's not really up to Congress, it's up to the Republicans, who have decided to hold the economy hostage over the debt ceiling, something neither party did until this band of right-wing terrorists took over the House and decided to use the filibuster to pursue its obstructionist anti-Obama agenda in the Senate.

So, there may not be a Plan B, but... it's possible, right?

And while it seems like a crazy idea, minting a $1 trillion coin... you know what, I'm all for it. With Republicans prepared to risk economic disaster, bluffing or not, Dems have to get a bit creative, and aggressive, and that means the White House keeping all options on the table.

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Prelude to a catastrophe

By Frank Moraes

(Ed. note: This post was written before the House vote last night. But the deal is still the deal, and it's not great. -- MJWS)

For the record, the Senate Fiscal Cliff deal is worse than indicated the day before yesterday. It doesn't raise capital gains tax rates as high as thought: only up to 20% and only on incomes above $450,000. It does not tax dividends as regular income. The estate tax was not raised as high as it should have been, thanks largely to fucktard Democrats. The sequester will only be delayed for two months; what's the point? Doctors get more money, but the payroll tax holiday is ended. As I wrote yesterday morning, this is very bad. And we get a 9-month farm bill. Nine months?!

It isn't horrible. But again: this is all we get when the Democrats hold all the cards. Just wait for a month or two when the Republicans hold all the cards. What are they going to demand? Burnt human sacrifice? Paul Krugman points out the real demon in this deal:

So why the bad taste in progressives' mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.

He goes on to say that if Obama does a good job managing the debt ceiling fight, then this deal will look pretty good in retrospect. But really: how likely is that?

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Senate passes bad "fiscal cliff" deal. So is it time to give up on President Obama?

By Michael J.W. Stickings

To begin, let me put it this way: There are good things and bad things about the fiscal cliff deal the Senate passed today, including:

The good: Tax rates for the wealthy go back to Clinton-era levels; federal unemployment insurance is extended for another year; and certain tax breaks for low-income Americans are extended for five years. (And, as Krugman notes: "no giveaway on Social Security, Medicare, or Medicaid. Basically, no spending cuts at all." That's huge.)

The bad: The threshold for the new/old tax rates is set at $450,000 for families and $400,000 for individuals, much higher than the $250,000 threshold Obama and the Democrats had initially sought; nothing is done about the debt ceiling, and so the Republicans can continue to use it to hold the political process and the economy hostage; the threshold for the 40 percent estate tax is set at the same level as that for income tax, which is very high, and it's also tied to inflation, which Republicans wanted, and sequestration is put off for just two months, meaning we'll be back in this whole fiscal mess sooner rather than later.

It seems like a bad deal to me, one that requires Obama and the Democrats to give up way too much to the Republicans just to get something, anything done. And it seems like they're willing to give it up without much of a fight.

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Obama to sell out Social Security?

By Frank Moraes 

(Ed. note: Frank will have more on so-called "Chained CPI" later today. Stay tuned. -- MJWS)

Ezra Klein is again reporting that a Fiscal Cliff deal is almost done. And once again, I don't get this deal. He says that we will see the 39.6% tax bracket but only for incomes over a million dollars. There will be something less for incomes over $250,000 amount. In return for this, the president gets an extension of unemployment benefits and some unnamed stimulus spending. But the payroll tax cut will end. And the biggest thing of all: we will change the way that cost of living adjustments to Social Security are made.

People are calling this new Chained CPI a reduction in benefits. It is most definitely that! But it is also a backdoor way of destroying Social Security. The program will not keep up with inflation. Over the long term, the program will become more and more irrelevant. And that's why conservatives (and to a lesser extent "liberals") have been pushing this for decades. The truth is that the current COLA for Social Security is probably too low, because of what seniors actually buy. For example, they buy a lot of drugs that don't go down in price and they buy relatively few electronic devices that do.

The trick to Chained CPI is that it assumes that people will substitute. If flashlights get too expensive, people will switch to lanterns! Really. Although it is more along the lines of energy substitution. If heating oil gets too expensive, people will switch to gas. The problem is that this is very likely not an option. When was the last time you changed your water heating system because the price of energy changed? And how much did it cost? But again, the point is not to more accurately model how prices increase; it is to destroy Social Security; or at least to cut it without anyone noticing.

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Is Obama selling us out -- again?

By Frank Moraes 

Ezra Klein reported yesterday afternoon and then again in the evening on The Rachel Maddow Show, that a debt ceiling deal is all but done: the president will take a top marginal tax rate of 37% and raise the retirement age to 67. It sounds outrageous, but Klein makes a compelling case, even though it is very much akin to tea-leaf reading. Basically, he's saying that Obama used to always say the top marginal tax rate must go back up to the Clinton levels and now he is signaling that he would take less. But this isn't new. I noticed right after the election that Obama had started saying that income over a quarter million must be taxed more -- specifically neglecting to mention how much more. So this isn't some sudden change.

Also note that Ezra Klein was completely wrong a couple of weeks ago when he said that fiscal cliff negotiations were all but done -- right before the Republicans made a week long show of how there was no progress on the negotiations. So I'm not at all certain that he is right. But as I said, he makes a compelling case. And if he is right, this is really bad.

Paul Krugman wrote exactly what I think:

First, raising the Medicare age is terrible policy. It would be terrible policy even if the Affordable Care Act were going to be there in full force for 65 and 66 year olds, because it would cost the public $2 for every dollar in federal funds saved. And in case you haven't noticed, Republican governors are still fighting the ACA tooth and nail; if they block the Medicaid expansion, as some will, lower-income seniors will just be pitched into the abyss.

Second, why on earth would Obama be selling Medicare away to raise top tax rates when he gets a big rate rise on January 1 just by doing nothing? And no, vague promises about closing loopholes won't do it: a rate rise is the real deal, no questions, and should not be traded away for who knows what.

So this looks crazy to me; it looks like a deal that makes no sense either substantively or in terms of the actual bargaining strength of the parties. And if it does happen, the disillusionment on the Democratic side would be huge. All that effort to reelect Obama, and the first thing he does is give away two years of Medicare? How's that going to play in future attempts to get out the vote?

He's completely right. If Obama does this, it will indicate that he's been playing us all along. He talks pretty, but he is nothing close to liberal. I wish I weren't so cynical that I didn't believe it entirely possible.
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