Saturday, Nov 13, 2010 06:14 ET

Eric Cantor’s Pledge of Allegiance

by Randy Shannon

Jeremy Grantham manages one of the largest asset funds in the world. He has been a consistent critic of the bubble economics of the Federal Reserve and the big banks. In a recent interview on MSNBC he called for direct government hiring of the unemployed. Below are some key excerpts from his interview.

What I worry about most is the Fed’s activity and — QE2 is just the latest demonstration of this. The Fed has spent most of the last 15, 20 years— manipulating the stock market whenever they feel the economy needs a bit of a kick. I think they know very well that what they do has no direct effect on the economy.

So, what are they going to use as ammunition if they cause another bubble and it breaks, let’s say, in a couple of years? Then we might have some real Japanese-type experiences.

The way you address a weak economy, particularly very substantial excess unemployment is through fiscal policy. You must either bribe corporations to hire people who have been unemployed, which they did in Germany. A lot of economists think that’s perfectly effective.

Or you must go in there and hire people yourself as a government. I would never do it unless there was clearly quite a few million extra unemployed. I wouldn’t go after too many skilled labor because there’s never— enough of them to go around. And that does cause crowding out. I would go after the— what I called lightly-skilled workers.

The kind of people who were building the extra million houses in— in ’05, ’06 and ’07. And find— and find jobs for them. We have an infrastructure that is decades behind schedule.

We could insulate every house in the Northeast. These are high-return projects, great— for society in general. And to— to allow people to sit there unemployed. Their skills are deteriorating. Their family morale goes to hell. And— it’s a deadweight on society. And you have to remember when— when the government hires someone, it doesn’t pay the full price like a corporation does.

The government, pays a lot for someone sitting down unemployed. All the many ways that unemployed get helped plus— the government carries the atrophying of the skills. Society loses that, the longer they’re unemployed.

Continue reading Top Asset Fund Manager Calls for Direct Government Hiring of Unemployed →

by Randy Shannon

November 12, 2010

Congressman Jason Altmire addressed a meeting organized by the Pennsylvania Alliance of Retired Americans to celebrate the birthday of Social Security on September 1, 2010 at the Community College of Beaver County. The purpose of the meeting was to ask Altmire to pledge to defend social security against any proposed cuts from the Deficit Commission. Altmire refused to make such a pledge.

The corporate Democrats, including Blue Dog Altmire, are trying to conflate the issue of the deficit with social security. They are blowing up a small problem with social security into a paper tiger to cover their plan to steal the Social Security Trust funds to finance the deficit caused by the tax cuts for the wealthy, the wars, and the bank bailout.

The Social Security Trust Fund has a $2 trillion surplus that will grow over the next few years due to interest payments even though the recession has caused a drop in tax revenues. The surplus is designed to cover the retiring baby boomer generation. The little problem is that in 35 years this surplus will be all paid out and the fund will only be able to pay 80% of the planned distributions. The solution to this problem is simple. Raise the cap on income subject to the social security tax. Of course the financial elite oppose paying their fair share of taxes.

In any case this Social Security future shortfall is not a problem that needs to be solved right now. And it is not a problem that has any relationship whatsoever with the deficit. Social security is funded by a direct tax. The money in the trust fund is lent to the government by buying special social security bonds. The US government must pay these bonds just like all the other bonds that it has sold around the world.

In this video ( that unfortunately has poor sound quality) I queried Congressman Altmire on this point. My question, which is cut off at the beginning, was: “Regardless of the deficit, do you have any concern and do you have any plans to address the expected shortfall in social security payments 35 years from now.” The purpose of this question is to show that Altmire’s plan to, as he says “consider the whole recommendation of the deficit commission” is part of the corporate elite’s agenda to confuse social security with the deficit.

In his answers Altmire conflates the issue of social security with the issue of the deficit. By default he admits that he has no actual concern about social security and no plans to address any future problems of social security. His concern and his plan is how to safely steal our money to pay for the deficit created by the bankers. This depends on confusing the public and twisting the arms of all the politicians to sign on to the scam.

A big thank you to PDA Vice President, retired IBEW member, and South Heights Councilman Robert Schmetzer for recording and publishing this video document.

The Hijacked Commission

By PAUL KRUGMAN

Published: November 11, 2010

Progressive Change Campaign Committee

Adam Green, co-founder

Take a deep breath. The Huffington Post and CNN reported this morning that President Obama is ready to cave again to Republicans — this time on the Bush tax cuts he campaigned against in 2008.

As Republicans boast that their #1 priority is to defeat Obama in 2012, we’ve seen nothing but capitulation and talk of “compromise” from the President since Election Day.

It’s time for us to ask: President Obama, ARE YOU KIDDING? Fight the Republicans already!

Sign our petition telling President Obama that Americans want him to fight the Bush tax cuts for millionaires — and that Democrats will keep losing if he keeps caving.

Click here.

I’ll be on MSNBC’s Ed Show tonight at 6:15pm EST — and will announce the progress of our petition. The White House and Democratic leaders will be watching. So please join over 28,000 others and sign now.

Make no mistake, this petition is a rallying cry.

Our days of “trusting” that Democratic leaders have some brilliant plan are over. We saw the results last Tuesday when many Obama voters were not inspired enough to return to the polls.

Progressives need to push Democratic leaders to fight for popular progressive change — and win. Sign the petition telling Obama to fight the Bush tax cuts here — then, pass this to as many progressive friends as you can think of.

Working together, we’ll push and push Democratic leaders until they finally fight for “change we can believe in.”

Thanks for being a bold progressive.

Student fees protest: ‘This is just the beginning’

• Tory HQ attacked as demonstration spirals out of control
• 35 arrested and 14 injured in violent clashes at Millbank
• Police admit being caught out by scale of student action

Video of Protest

Tens of thousands of students took to the streets of London in a demonstration that spiralled out of control when a fringe group of protesters hurled missiles at police and occupied the building housing Conservative party headquarters.

Ministers and protesters acknowledged that the demonstration – by far the largest and most dramatic yet in response to the government’s austerity measures – was “just the beginning” of public anger over cuts. Police, meanwhile, were criticised for failing to anticipate the scale of the disorder.

An estimated 52,000 people, according to the National Union of Students, marched through central London to display their anger over government plans to increase tuition fees while cutting state funding for university teaching.

Continue reading 52,000 Students March on London Tory HQ to Protest Education Cuts →

Chairmen of Deficit Commission Reveal Proposals

The chairmen of the commission unveiled their overarching recommendations for debt and deficit reduction on Wednesday afternoon, weeks before the official unveiling is expected.

The findings are not the final report of the commission, officially known as the National Commission on Fiscal Responsibility and Reform. Rather they are the specific suggestions of its two chairs, former Sen. Alan Simpson and former White House Chief of Staff Erskine Bowles. The ultimate findings will require the support of 14 members of the 18-member commission. And at this juncture it is unclear if the votes are there, sources familiar with deliberation say.

Leading public figures denounced the proposals.

Senator Bernie Sanders (VT):

The Simpson-Bowles deficit reduction plan is extremely disappointing and something that should be vigorously opposed by the American people. The huge increase in the national debt in recent years was caused by two unpaid wars, tax breaks for the wealthy, a Medicare prescription drug bill written by the pharmaceutical industry, and the Wall Street bailout. Unlike Social Security, none of these proposals were paid for. Not only has Social Security not contributed a dime to the deficit, it has a $2.6 trillion surplus. 

It is reprehensible to ask working people, including many who do physically-demanding labor, to work until they are 69 years of age. It also is totally impractical. As they compete for jobs with 25-year-olds, many older workers will go unemployed and have virtually no income. Frankly, there will not be too much demand within the construction industry for 69-year-old bricklayers.

Despite all of the right-wing rhetoric, Social Security is not going bankrupt. According to the Congressional Budget Office, Social Security can pay every nickel owed to every eligible American for the next 29 years and after that about 80 percent of benefits.

If we are serious about making Social Security strong and solvent for the next 75 years, President Obama has the right solution. On October 14, 2010, he restated a long-held position that the cap on income subject to Social Security payroll taxes, now at $106,800, should be raised. As the president has long stated, it is absurd that billionaires pay the same amount into the system as someone who earns $106,800.

With the richest people in this country getting richer and the middle class in decline, it is absurd that billionaires pay the same amount into the Social Security system as someone who earns $106,800.

AFL-CIO President Richard Trumka:

The chairmen of the Deficit Commission just told working Americans to ‘Drop Dead.’ Especially in these tough economic times, it is unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare. 

Some people are saying this is plan is just a “starting point.” Let me be clear, it is not.