An example of the free market solving things

It’s a basic tenet of free-market conservatism that the profit motive will naturally provide society with the most efficient balance of all its demands. If society really needed it, it would naturally be profitable, and if it’s unprofitable, that means it’s unnecessary.

And yet:

Cancer medicines desperately needed by sick children and adults are in short supply, undermining the ability of U.S. doctors to administer treatments, top oncologists warned this week.

Many drugs are scarce because there is no incentive for drugmakers to manufacture low-cost generics, which have slim profit margins for pharmaceutical companies.

Well, the free market has certainly solved the awful problem of corporations not making sufficient profits. Sadly for those of us who aren’t a corporation (or a CEO or major shareholder in a corporation), it hasn’t quite solved the problem of people dying of “the most common and treatable cancers.” But at this point I suspect that many free-market advocates have forgotten that those are the kinds of problems that the free market was originally touted as being able to solve.

In fairness, it’s not impossible to have a sane sort of free market where “slim profit margins” doesn’t translate to “don’t bother.” After all, for a pharmaceutical company that makes lots of different drugs, producing a few that are only barely profitable hardly seems like an unbearable burden. But America’s 21st century free market, where the primary goal of business isn’t to actually produce a product or advance public interests, but simply to chase ever-higher profit margins at the behest of shareholders, is not it.

The answer must be in the middle!

Perhaps the most annoying thing about the debt ceiling debate, after the fact that the ransom the GOP gets for raising the ceiling is likely to further tank our economy, is that, win or lose, the Republicans have successfully dominated the economic narrative and made it all about deficits.

There are few mainstream voices challenging this assumption, on the left or the right – not President Obama, not Sen. Reid or Rep. Pelosi, and certainly not the news media. The main point of contention is tax hikes, but the kind of modest tax hikes that are on the table aren’t going to do much of anything to make these spending cuts less catastrophic.

But all that aside, the point is that the talk, unfortunately for America, is all about deficits. And the punditry, needless to say, is busy talking about who to blame for them. The answer to that is pretty simple, of course – Reagan and the Bushes – but it’s not the answer the punditry wants. Rather than accept that a) the decisions that led us to our current deficit and debt situations were both finite and unnecessary, and b) that these decisions were deliberately designed to shift wealth upwards and limit true economic growth, most of the pundits who aren’t predisposed to far-left thinking are convinced that our debt and deficit problems are systemic.

We expect this from the right-wing side of the punditry, of course, what with all their hypocritical rhetoric about small government. But in some ways, the centrists are even more annoying, because their reflexive belief that both parties are extremists on opposite sides of the spectrum requires them to put stock in the conservative mythology about entitlement spending, yet they still assume a completely unearned stance of rationalism.

In reality, of course, both Democrats and Republicans are well to the right of the kind of governing this country needs; one party just happens to have strayed so far to the right that they’ve gone off a cliff and are tumbling ever faster into incoherence.

To clarify, this is what centrism looks like:

It’s the banksters. It was Bush. It was Obama. It was Reagan. It was the people who couldn’t afford a house and borrowed more than they should have. It’s the unwed welfare mothers who get paid more to have more illegitimate children. As usual, post modern America is too busy yelling and trying to assign blame for the current pickle we are collectively in rather than solve the problem.

Gratingly smug condemnation of both sides for finger-pointing and blame-assigning? Check. Reference to “post modern America,” as if all this partisanship and divisiveness is some brand new thing? Check. (After all, it’s not like the US was ever so sharply divided between two ideological viewpoints that it triggered a civil war or anything crazy like that.)

 There are two completely different groups who are mostly responsible for the mess. [...] You can probably figure out who they are:

Well, to be sure, I can readily point to who I think they are, but I’m also willing to place a bet on what you’re about to say, my centrist friend.

the very poor and the very rich

Oh, you are a reliable one.

They’re an enormous drain on the system and they’re clobbering everyone in the middle.

Ah, it’s the aggrieved middle-class citizen, bravely standing up to the government that just won’t cut him/her a break. I’ve long felt that centrists are basically conservatives, primarily as a function of the real vs. perceived position of the Overton window in American discourse, and this is a good example. Sure, our centrist friend recognizes that the rich are fucking them over, but like all conservatives, they compensate by finding an even less privileged group than themselves and scapegoating them.* There’s just no rational line of thought that could lead one to believe that the politically powerless, frequently disenfranchised, economically disempowered lower class is even capable of screwing the middle class over.

Yet, according to the author, “Washington basically represents these two groups almost exclusively.” Yes, the poor middle class just can’t catch a break.

They bring some reasonable evidence to bear in their indictment of the upper class, beginning with this chart:

This is an awesome chart

Uh, I guess it’s pretty cool…

This is an awesome chart on the income sources of the very top of the American income scale I pulled from Business Insider. Look at the squiggles on the far left and then the far right. A century ago, the very wealthy vaulted America full bore into the industrial age. They built big, successful business. The businesses represented their wealth and value. Bottom line: they created stuff. The far right tells a different story. The uppermost of the uppermost have evolved from a class of creators and innovators into a bunch of overpaid assholes who create very little if anything.

So far, quite reasonable. But remember, our friend is a centrist, and being fair and balanced requires pretending that the shit-blisteringly stupid opinions are equally valid simply by virtue of being opposed to the reasonable ones. So, what evidence will they bring to the table to demonstrate that the lower class is also guilty of driving our country into debt?

I don’t have any charts about the lower end

Oh. So none. Okay. Well, I don’t want to lob any accusations, but it almost sounds like your opinion about the lower class isn’t based on facts so much as prejudice and a cheap attempt to claim intellectual superiority by placing yourself between – and thus somehow above – two opposite points of view.

but with stats like 14% of all Americans using food stamps, why go there?

Why go there? You mean, why go in the direction of actually providing evidence for your assertions? Well god, I don’t know, maybe so that we have some reason to believe that you’re not just a classist chucklefuck?

For starters, food stamps only cost about $70 billion in 2010, and overall they’re not a huge chunk of federal welfare spending. But let’s look beyond just food stamps, since unlike our centrist friend we’re interested in actual facts and data. Income security cost the federal government $622.2 billion in 2010, which is about the same as the defense budget. Medicaid, another means-tested program (which thus also counts as welfare, I suppose) cost another $272.8 billion. So, total federal expenditures to poor people: about $900 billion. (All data comes from the White House Office of Management and Budget.)

That’s a lot of money – I’m certainly not going to claim otherwise. It’s a dire situation, to be sure. But need I point out that we’re in a major recession? Let’s go back in time to 2006, back when the shit was still en route to the fan. Total welfare expenditures for 2006, again including both income security and Medicaid: $478 billion dollars.

That’s right, welfare spending has nearly doubled since 2006.** So let me just reiterate that this problem is not systemic; it’s the result of a depressed economy in which more people are in poverty.

So do we blame the poor for being poor, as our centrist friend does? Sure, if we’re assholes. But going back to their food stamp example, consider this (warning: pdf): the median annual income for a household receiving food stamps in 2009 was $8,532. The average household receiving food stamps had between 2 and 3 members (so no, centrist friend, the root issue here is not women who pop out baby after baby; asshole). The problem here is not, as the author implies, that food stamps cover too wide a range of households. It’s that too many households are living in poverty.

And we can blame the rich for that, for reasons I don’t need to rehash.

* From here on I’m going to use the singular “they;” please address any objections to my Twitter stream.
** And no, inflation is not the culprit here; there’s not a lot of inflation going on these past few years, and $478 billion in 2006 money is $517 billion in 2010 money.

Emphasis on Twit #7

In which neo-Nazis are suddenly big fans of left-wing politics.

http://twitter.com/#!/DinaFraioli/status/94915856496209920

For added fun, note that Ms. Fraioli doesn’t appear to have actually read the article she links to, which describes the Norway terrorist suspect and his views as “right,” “far-right,” and “right-wing” no less than four times.

Who’s running America these days?

Well, a lot of people are running America these days, but the more pertinent question is, how many of them did we actually elect to do so? Nobody voted to allow Grover Norquist’s lobby, Americans for Tax Reform, to exert legislative influence over the US, but they seem to feel entitled to do so anyway.

That’s certainly the impression I got from ATR’s response to the competing proposals being floated to resolve the debt ceiling stalemate. Incidentally, Norquist isn’t in favor of any of them because they all “dramatically increase taxes on the American people,” by which he means they let the Bush tax cuts expire. But he lets a telling statement slip in his statement:

It is a violation of the Taxpayer Protection Pledge to trade temporary tax reductions for permanent tax hikes.

What is this Taxpayer Protection Pledge he speaks of? It’s a pledge drafted by Americans for Tax Reform itself that has been signed by 95% of Republicans currently in Congress. It is an oath that the signing legislator agrees to never, ever raise taxes for any reason.

And Norquist casually asserts that these legislators should put their allegiance to the pledge first, ahead of any actual, democratically enacted laws, ahead of the Constitution, and ahead of the actual good of the American people. What right does Norquist have to warn against “violations” of his extra-democratic pledge? Who gave him the power to enforce such an oath and restrict the voting behavior of members of the US Congress? He did, essentially, with the willing complicity of a bunch of Republicans.

So, who’s running America these days? Not the voters, democracy be damned.

The upper class: not THAT rich?

Oliver Twist

You may or may not have noticed that, whenever the discussion rolls around to raising the top marginal tax rates, conservatives like to throw scare quotes around any mention of raising taxes on “the rich.” It’s hardly a surprise when a stooge like Sowell does it, but even “reputable” (damn, those scare quotes are hard to avoid sometimes) publications like Business Insider have taken to employing them.

Obama’s proposing raising taxes on “the rich.” See, I say “the rich” because some of those people aren’t all that “rich,” am I right?

No, I’m not. The top tax bracket begins at households making $373,651 a year. The one right below that is taxed almost as much (33% to the top bracket’s 35%), but even it begins at households making (depending on filing status) at least $171,851.

Now, the general conservative trope is that $170,000 a year isn’t rich. Certainly somebody making that much may not feel rich compared to the millionaires and billionaires of the world. But it doesn’t matter that they’re not millionaires. A household with an income of at least $150,000 a year is in the richest 6% of US households. These people are not the oppressed working class.

Conservatives also don’t like to talk about the way tax brackets actually work, and the fact that somebody making, say, $175,000 a year is only paying the 33% rate on about $3000 of their income. The vast majority of such a person’s income is going to be taxed at lower rates, meaning that all this talk about oppressing the downtrodden six-figure-earners with tax hikes is misleading at best. Those earning millions and billions of dollars a year, meanwhile, are being taxed in the upper tier for the vast majority of their income, at least in theory (in practice, they usually end up paying less than the lower classes, percentage-wise), which is the actual reason for all the whining about tax increases.

Michael Bay is a hack, and other unsurprising news

What ultimately makes a hack a hack, rather than an artist, is that his or her work serves to reinforce existing norms, rather than to say anything truly thought-provoking or subversive. Turn off your brain, question nothing, thanks for your ten dollars.

And the disturbing part is that, as long as you’re reinforcing those norms, you can expose children to the most vile kind of shit, and parents won’t complain. I made this post solely because these two reviews of Transformers 3 dovetailed in that direction:

Walter Chaw’s review at Film Freak Central:

Perhaps it’s time to have this conversation at some level of our culture that going into a movie deaf and blind to messages like “women are things” and “Arabs are evil” and “African-Americans are scairt” is exactly what Bay and his co-producer Steven Spielberg (for shame, man) want you to do, hope that you do, because imagine what would happen if anyone with any kind of infant moral compass were to notice that they’ve taken their 9-year-old to a movie this ugly and hateful.

And Caroline Heldman’s review on her blog:

Transformers 3 is pitched as a “family movie” and the film studio carefully disguises it as such with misleading movie trailers showing a story about kid’s toys. (Okay, I still have an Optimus Prime robot…) Young kids were abundant at both screenings I attended, taking in the images with little ability to filter the message.

I’m not one to engage in “think of the children!” rhetoric, but that’s exactly it – the conservative moralists who are constantly shouting, “Think of the children!” are probably the least likely to have a problem with exposing children to the rampant sexism, racism, and jingoism on display in Bay’s Transformers movies. Because what those moralists fear far more is raising children who think critically about such things. Because that’s not what good capitalist drones do. So remember, kids: Turn off your brain, question nothing, and give Michael Bay your ten dollars.

Is the Republican base starting to fracture?

You might be inclined to think so, based on the strong negative reactions the GOP is currently provoking among pro-business publications like The Economist and Business Insider. It’s difficult to tell, though, when these publications keep referring to the Republican Party of Ronald Reagan as the “Republican Party of old, which was actually economically responsible.” You know, the Ronald Reagan who started us down this road of massive deficit spending from which no President or Congress has since been able to rescue us? Conservative mythology about Reagan is so astoundingly detached from reality that it’s hard to tell what kind of contemporary Republican politicians these people would actually support.

Presumably, a cadre of bland, soulless plutocrats who obediently hand tax shelters and government contracts to the right people and generally don’t draw a lot of attention to the system itself. The problem is, what you have is a bunch of zealots who, while most definitely working primarily for corporate interests, are also motivated by an ideology that the corporations themselves can find difficult to control. And Ronnie was definitely one of those zealots, but he was operating within a political realm that hadn’t gotten quite so right-wing crazy as our current one, so Business Insider has the luxury of mistaking him for sane.

Larry Kudlow: Inflation, population growth a big fat scam

Larry Kudlow is here to offer you some friendly fiscal advice:

Here’s some friendly fiscal advice:

See?

Here’s some friendly fiscal advice: Any time some Washington big shot like Ben Bernanke or Tim Geithner claims that immediate spending cuts in the debt deal will harm the economy — ignore them. Completely. You know why? Because in this great country of ours, spending never goes down. Never.

Well that’s… um. Hmm. That’s about as shocking as pointing out that my age never goes down. If you’re just looking at each year’s federal outlays, without accounting for inflation, GDP, or anything else, then of course spending is going to keep going up.

Conservatives have always had a rocky relationship with inflation. Deep down I’m sure they know that it’s an inevitable – and not entirely detrimental – side-effect of an expanding economy, but they’re also not big fans of any kind of change and are probably disproportionately likely to be shocked I tell you that a bottle of Coke costs $1.75 these days.

So my point is this: if you want federal spending in non-inflation-adjusted dollars to stay flat over the course of decades, you’re either opposed to economic growth, or you want the actual value of the federal budget to continually decrease. Either way, you’re monumentally stupid. The federal budget in 1901 was $525 million. In 2011, that’ll buy you about 8% of an aircraft carrier.

Now, Ryan’s [budget proposal] is of course a couple of trillion dollars lower than Obama’s over the next ten years. But what do they both have in common? They both go up. As in spending more, not less. As in, roughly $40 trillion to $45 trillion more. That’s a whole lot of taxpayer money, folks.

Ah, the old conservative trick of taking the federal budget, multiplying it by ten, and expecting us to be shocked that the federal government spends ten times its annual budget over the course of a decade. It’s all a one-dimensional numbers game for these simple-minded goons, which I suppose is a logical extension of their “less spending is always better [unless it's spending that benefits the upper class]” shtick. They figure if they can throw big enough numbers at you, regardless of context, you’ll eventually agree that that’s just too much money!

Recall that they played this same tactic back when healthcare reform was in the news. Virtually every conservative pundit was throwing around the ten-year cost of Obama’s healthcare reform proposal, and they had to, because the fact of the matter is that PPACA doesn’t cost all that much as federal programs go. (It also generates more savings than costs, but in the alternate reality in which Republicans live, that’s just impossible, so they ignore that fact.)

Now why is this? It’s because of something called the “current services baseline,” which includes population and inflation increases built into the budget.

So wait, you’re telling me that if you want to provide the same services to a larger population, you have to spend more money? That’s outrageous! Who will save us from this unendurable burden of ensuring that our children enjoy the same quality of life that we do?

This ties into my earlier comment about conservative rhetoric regarding spending and the way it deliberately ignores context. See, if you have a higher population, you make more in tax revenues (unless you do something stupid like cut taxes), which pays for the greater expense of providing services to them.

Anyway, all this business about economic expansion and population growth and inflation may muddy the waters, but there’s a fairly simple (if a bit simplistic) means of boiling it all down to a single measure of federal spending that takes all this into account: federal spending as a percentage of GDP.

A rising GDP generally means a growing, prosperous economy, and if federal spending as a percent of GDP remains at least constant, that’s potentially an indication that the federal government is taking advantage of that growing prosperity to provide a better quality of life for its populace. Generally, people are in favor of this. Small-government conservatives are not in favor of this, because all that money is money that could be going straight into the upper class’s pockets.

If federal spending in inflation-adjusted dollars were to remain flat each year in the face of a rising GDP, then spending as a percentage of GDP would obviously be going down. Only a conservative could possibly view that as a good thing.

So, if we’re measuring federal spending in a context that’s actually relevant to anything, is it true that spending “never goes down”? Well, no.

Federal Spending as a % of GDP

Source: White House Office of Management and Budget

Let’s break it down a bit further, though. The above chart includes mandatory spending – primarily Social Security, Medicare, and welfare – which isn’t dictated by each year’s budget allotment. When Congress approves a federal budget every year, the numbers they’re toying around with are known as discretionary spending.

Discretionary spending includes virtually everything else, and because it requires Congress’s approval each and every year, it’s the easiest to cut – which is why conservatives are constantly going after it with their scalpels. Anyway, here’s discretionary spending going up and down (as a percentage of GDP) over time:

Observe several things: First, most of the percentage increase in discretionary spending since 2000 has gone to defense (thank you, Bush). Second, non-defense discretionary spending has remained largely flat since Reagan and H.W. Bush worked their magic on it in the 80s.

But let’s get back to Kudlow:

Think of it this way: You’re out car shopping and thinking about buying a $100,000 Mercedes. That’s your target. But then you decide to forego the Mercedes and opt for a $20,000 Chevy instead. Well, guess what? Congress would score that as an $80,000 budget cut. Huh? We all know that it’s actually a $20,000 budget increase.

Hmm… wow. By using this car analogy, Kudlow is either a) deliberately trying to portray any federal spending as an unnecessary indulgence, or b) really fucking stupid. Actually, those options aren’t really mutually exclusive.

An analogy more applicable to the federal budget would be something like rent. Say you pay $6000 a year in rent. You know you’ll be paying rent next year, and the year after, so you know to account for that in your finances.

Say you decide you don’t want to pay that much anymore, so you move to an apartment that costs $4500 a year. It’s a poorly built apartment, and it’s farther from work, so your quality of life suffers, but you’ve decided to take that hit in order to save $1500 a year.

From Kudlow’s perspective, you’re still $4500 poorer every year than you would be if you paid no rent, but that’s because Kudlow doesn’t realize that you’d be living on the streets in that scenario and would likely lose your job as a result. That is essentially the level of stupidity and ignorance of consequences that Kudlow is bringing to the federal budget discourse.

But you’re smarter than Kudlow, so you know that you’ve actually cut your yearly expenses by $1500. Why, you could apply that money to your grocery budget! You’ve always wanted to try Kashi cereal. Or, if you’re Kudlow, you’ll just give that $1500 to a rich white guy and pretend you never had it in the first place.