Tag Archives: economics

Political Rants

The awesome power of really big numbers

The press constantly talks about how much the reconciliation plan currently under consideration in congress might cost. Of course, they know what the limit is, since the reconciliation process requires Congress to set one – it’s $3.5 trillion in spending. This is without consideration of the pay-fors, namely tax increases, savings on prescriptions drugs through national purchasing, etc.

More importantly, they characterize this high-end number as impossibly large. In fact, Meghan McCain on Meet The Press even inflated the number by $1.5 trillion, and Chuck Todd (a.k.a. Fuck Wad) didn’t seem to notice. So there’s no upper limit on exaggeration. But WTF – is $3.5 trillion really that much when you’re talking about a ten-year plan?

Lavish military spending

Look at the Defense Authorization Act the House just passed 316-113. It is $768 billion for one year. If you did the same thing with military spending as we routinely do with domestic spending, we would be talking about an 8 trillion-dollar Pentagon budget over the next ten years. That’s probably a conservative estimate, given the fact that the DOD budget increases by something like 7 to 10 percent every year.

So the obvious question for all those budget-conscious legislators questioning the price tag of the reconciliation package is this: why don’t you complain about the much more massive spending on the Pentagon? The answer is obvious. It’s the same thing Eisenhower warned us of back in 1961, as he was preparing to leave office. The military-industrial complex is alive and well.

Various flavors of Keynesianism.

Fiscal stimulus has a long track record in capitalism. Championed by British economist John Maynard Keynes back in the 1930s, the standard story goes that it fell out of favor during the Reagan era. Nothing could be further from the truth.

Reagan spent enormous amounts of money on the U.S. military. It comported with his bellicose rhetoric and policies regarding Cold War international conflicts, but there was more to it than that. Reagan’s unprecedentedly high peacetime military budgets sluiced money into high tech industries. That money made its way into virtually every congressional district in the country.

In short, it was a massive public spending program funded by debt. That model has held steady since those heady days of the 1980s, through Republican and Democratic administrations alike. Biden is no exception. During the 2020 primary campaign, I pointed out the lack of information on his web site about foreign policy. I think that was largely because there would be very little difference.

In any case, the next time someone tells you the reconciliation package is too big, remind them of our OTHER massive spending bills – the ones that blow money on tanks, planes, bombs, etc.

luv u,

jp

Check out our political opinion podcast, Strange Sound.
Political Rants

Making The case for Postal banking.

The end of the eviction moratorium this past week and the response by the Squad says a lot about the limitations of the administrative state. Mass evictions should not be a problem. The large COVID relief package passed last year included something like $40 billion in rental assistance, distributed to the states. As of now, only about $3 billion has been allocated to the people who need the help. That’s maybe 8%.

What the fuck? Why is it that when we go through the ridiculously baroque process of applying federal funds to a problem like this, the money often doesn’t get spent? David Dayen talked about this a bit on the Majority Report on Monday. Put simply, after decades of neoliberal attack on the administrative state, the means of getting government aid to people are sclerotic and dysfunctional.

Loudest voice in the room

There’s a reason why we have such an atomized, ineffective system for helping poor and working people. Ordinary people don’t have armies of lobbyists at their disposal. The eviction moratorium is a good illustration of this. The 7 to 11 million people who were at risk of homelessness as a result of the moratorium’s end are underrepresented. Their landlords, by and large, are anything but.

The difference this time around was that a formerly un-housed person became a member of the House of Representatives. Cory Bush, along with some of her allies, became, in effect, lobbyists for renters. And, amazingly, they were successful. Though I know the thought of it is intensely painful to many armchair leftists on Twitter, we should celebrate this small victory, because it is significant. In so doing, however, we must bear in mind that money still talks very, very loudly.

Why we need postal banking

What do we do about a system that easily transfers billions to corporate bankers but can’t seem to manage rent relief for people in trouble? Well, we need some method for delivering direct payments to Americans in a reliable, low-friction way. In my humble opinion, that method is setting up postal banking.

As many of you may know, postal banking is not a new idea. In fact, the Postal Service offered banking services back when I was a little shaver. The idea I prefer is one that is a bit broader than the old version. My preferred version is this: Every American – and I mean every one – gets a postal banking account. Just like getting a Social Security number, they open an account for you when you are born and you have it all your life. It would be a free, interest bearing account that allows for savings, electronic transfers, etc.

My personal preference would be that the Federal Government deposit some amount, say fifty bucks, as a little birthday gift for every newborn. But whether or not that comes to pass, your postal bank account would serve as the deposit account for any federal benefit payments. Now, if you prefer to use a private bank account, you can always transfer your funds to that bank, even set up auto transfers. But no matter what, that account would be there for you.

Put some bank in the reconciliation bill

I think this is an idea whose time has come. It would make the transfer of that $40 billion in rental assistance dead simple. It would give poor and working people access to banking services. It would, in short, make an enormous difference, and help float our beloved Postal Service as well.

Let’s put it in the reconciliation package, people! Call your reps!

luv u,

jp

Check out our political opinion podcast, Strange Sound.
Political Rants

Subsidizing oligarchy.

At the beginning of this year, Amazon.com founder Jeff Bezos was worth about $100 billion. By May, his fortune had reportedly ballooned to somewhere in the neighborhood of $130 billion. Now it appears to fluctuate between $137 and $160 billion, this last number from CNBC in October. So, it sounds like he won’t be hungry for the holidays. That’s more than can be said about the growing number of structurally unemployed and food-insecure Americans who have fallen through our inadequate and now badly shredded federal safety net.

In need of public assistanceThis Pharaoh-like magnitude of personal wealth reflects a failing economy – more specifically, an economy that fails to serve a large swath of the population. It is about more than personal wealth. Any dude with $137 billion dollars (and there’s only one, so yes, it’s a dude) possesses $136 billion more than he could ever hope to spend on himself.  The accumulation of untold billions is all about power – the power to affect the lives of millions on a whim, whether for good or ill. When Bill Gates sank a billion dollars of his fortune into distorting our educational system (and helping to undermine public sector unions in the process), he didn’t do it because we asked for his intervention. He did it because he wanted to, and because he thought his wealth gave him license. He was right … but only because we as a people have not taken steps to constrain that license.

And yet, with all of their wealth and power, the billionaires still ask for public assistance. Worse, they encourage people to jump up and down like children, competing for the rare privilege of giving them more money. The obvious example is Amazon’s HQ2 bidding process, which recently concluded with a split decision between New York City and northern Virginia, outside of DC. The cost to taxpayers in both areas will be at least $4.6 billion in tax subsidies, not counting the substantial incentives laid out through provisions of the recent GOP tax giveaway. (See David Dayen and Rachel Cohen’s piece in The Intercept for details.) Okay, $4.6 billion is lunch money to Jeff Bezos. Instead of asking underserved  communities to fork over public resources, why doesn’t he just use a small part of his $136 billion personal surplus to build his dumb-ass second headquarters and pay goddamn taxes like a normal human being?

Why? Because this isn’t about money. It’s about power, and perpetuating the cult of privilege that has been built around oligarchs like Bezos and Gates and the Mercers and the Kochs and Trump.  It’s up to us to pull this edifice down before it gets too big to demolish.

luv u,

jp