Weekly Audit: The Real Legacy of Reaganomics

 

By Lindsay Beyerstein, Media Consortium blogger

Sunday marked the 100th anniversary of the birth of B-movie actor-turned-conservative president, Ronald Wilson Reagan. On the eve of the centennial, economist Yves Smith talked Reaganomics on the Real News Network. Smith argues that Reagan’s real legacy is the deregulation of the U.S. economy that set the stage for the economic meltdown of the late 2000s:

But [with] financial services, you have companies that have state guarantees. That’s the bottom line with the banking system. Ever since the 1930s, we in advanced economies have made the decision we’re not going to let the banking system fail. So if you don’t regulate banks, you have set up the situation that we have now, which is that you have socialized losses and privatized gains. And what have we seen come out of that? Financial crises. When we had a heavily regulated financial system, we had nearly 40 years of hardly any financial crises. When we started deregulating the banks, you saw increasing in frequency and increasing in significance financial crises directly resulting from that.

Spot of Tea?

Ordinary Britons are rallying to the defense of the welfare state. Faced with the deepest public spending cuts in living memory, citizens are taking to the streets to force deadbeat companies to pay their taxes, Johann Hari reports in The Nation. Their federal government has pledged to slash £7 billion in public spending. Cuts to subsidized housing alone will force 200,000 people out of their homes.

A group of friends in a local pub were galvanized by the news that Vodafone, one of the UK’s leading mobile phone companies, owed an astonishing £6 billion in back taxes. Calling themselves UK Uncut, the friends staged a protest outside Vodafone headquarters in London. The meme went viral. In the following days, several Vodafone stores were temporarily paralyzed by peaceful sit-ins.

Hari argues that the success of UK Uncut can teach American progressives a lot about how to build a grassroots counterpart to the Tea Party.

Persistent vegetative states

Big or small, liberal or conservative, state governments are screwed. That’s the upshot of Paul Starr’s latest essay in The American Prospect. Unemployment remains at recession levels and there is little political will to raise taxes. States can’t deficit spend like the feds do. So, the only option is public service cuts, which means firing teachers, doctors, firefighters, and other public workers.

Starr argues that the economic stimulus was a good start, but one that didn’t go far enough. As part of the stimulus, the federal government picked up a larger share of the states’ Medicaid costs. This was a good thing, in Starr’s view, because the extra federal dollars saved jobs while providing health care for the poor. Starr argues that state budget woes during recessions are so predictable, and the consequences so dire, that the Medicaid subsidy should kick in automatically whenever unemployment rises past a predetermined threshold.

Anti-union bill dead in CO

A bill to end collective bargaining for public employees in Colorado died in committee this week, according to Joseph Boven of the Colorado Independent. The bill would have abolished an executive order signed by former Gov. Bill Ritter, which gave state employees the right to organize. If the bill had been enacted, this kind of organizing would become illegal. This bill, sponsored by Sen. Shawn Mitchell (R-Broomfield), was just one of many attempts by Republicans to scapegoat public sector unions for what Mitchell calls the “financial Armageddon” facing state governments.

Smurfs rob Moms

“Smurfing” is money laundering slang for recruiting a lot of low-level accomplices to move money in untraceably small increments. But the word may soon have a new derogatory connotation.

Kevin Drum of Mother Jones reports that a kids’ video game, Smurfs’ Village, is depleting parents’ bank accounts, one wagon of Smurfberries at a time. Capcom’s game offers kids the chance to build the village from scratch. Along the way, they can pay real money for in-game resources. One mother was shocked to receive a $1,400 bill from Apple because her daughter bought innumerable imaginary props, such as $19 “buckets of snowflakes,” and a $100 “wagon of Smufberries.” The purchases require a password, but critics say it’s too easy for clever kids to circumvent the security. As Drum says, if adults want to waste their real dollars on virtual Farmville paraphernalia, that’s fine, but such a racket has no place in kids’ games.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Mulch: Clock Ticking for Climate Change Legislation

By Sarah Laskow, Media Consortium blogger

Seven months out from the midterms, electoral anxieties are hampering potential climate change legislation. Election years are a time to pass easy, politically popular policies, and climate change legislation does not fit that bill. For the Senate’s climate change legislation to have a chance, Congress has to sweep through the financial overhaul faster than any bill in its history. Otherwise, politicians’ focus will shift to the midterms before they pass a climate bill.

The next international climate negotiations are just weeks after the November midterms, and failure to pass a bill now means that the United States could show up once again without a solid platform from which to negotiate. After working on climate legislation for over a year, leaders on the Hill and in the executive branch are getting nervous.

At this point, any climate legislation that reaches the president’s desk will have far less impact than advocates once hoped, but Congress can still pass a bill that moves the country forward on this issue.

Tick tock

Sens. John Kerry (D-MA), Lindsay Graham (R-SC), and Joe Lieberman (I-CT) are working on a bill. On Thursday, Sen. Graham half-promised it would come a couple of weeks after Congress’ spring recess. That’s not the end of the process, though, as Kate Sheppard reports for Mother Jones. The Environmental Protection Agency will also take a crack at the bill and weigh in on its cost and overall environmental benefits.

That process could take a month and a half, Sheppard says, and on Capitol Hill, Democrats are getting antsy. “If the legislation isn’t ready to go to the floor by Memorial Day, it probably won’t make it there at all this year,” Sheppard writes.

Connie Hedegaard, the outgoing Danish Minister of Climate and Energy who hosted this year’s international climate negotiations at Copenhagen, also noticed the unease in a series of meetings with environmental leaders ranging from Todd Stern, the U.S. Special Envoy for Climate Change, to Carol Browner, head of the White House Climate and Energy Office. Hedegaard told Inter Press Service (IPS) that “she got the sense that they are not sure “what will fly and what will not fly or when” with regards to U.S. climate legislation.”

“I definitely get the feeling that if [the legislation] fails this time then it would not come until after the midterm elections,” Hedegaard said.

That means the U.S. would go to the next round of international negotiations empty handed. As IPS notes, midterm elections “take place Nov. 2. The Cancun climate conference starts Nov. 29.”

Energy reduction is key

As far as anyone can tell, the Kerry-Graham-Lieberman bill is not going to do a great job limiting carbon emissions. Don’t expect that to change between now and May, or whenever the bill comes to a vote. In the absence of a real cap on carbon, Grist’s David Roberts has some advice for the trio of senators on what they can do:

“The main goal with your bill should be to establish a framework whereby a carbon price is implemented and steadily raised. The initial price can be low — low enough to avoid the kind of political backlash that has poisoned previous efforts — and phase in over time so affected industries have time to prepare … In exchange for reducing the role of carbon pricing, you should push to strengthen and expand the clean energy and efficiency provisions in your bill.”

In other words, the bill can avoid the politically treacherous cap-and-trade system, as long as it pushes through strong policies for programs like energy efficient appliances, home insulation, and other actions that reduce the amount of energy we’re using.

Who watches the watchmen?

Climate legislation, even in weakened form, is still on the table, so the amount of finger-pointing over its difficulties has been limited so far. But in The Nation a few weeks back, Johann Hari threw a stink bomb at big environmental groups, arguing that their increasing coziness with the corporate world had checked their political strength and led them to advocate for milquetoast environmental policies.

This week, the magazine published responses from the groups profiled, who called the story “plump with distortions of reality” and “a toxic mixture of inaccurate information and uninformed analysis.”

The responses are worth a read, as is Hari’s original article. In his rebuttal, Hari asks the critics to point out specific inaccuracies in his story and worries at the defensiveness of the environmental community. “Do none of these people feel any concern that the leading environmental groups in America are hoovering up cash from the worst polluters and advocating policies that fall far short of what scientists say we need to safely survive the climate crisis?” he writes.

Local action for green jobs

If big environmental groups are not as perfect as one might hope, more local environmental efforts can still make an impact, albeit on a different scale. Chris Rabb and Colorlines profile three grassroots efforts to create green jobs in three corners of the country. In Los Angeles, solar panels went up on roofs; in New York, more low income communities won access to public transportation; and in Arizona, a Navajo group formed to advocate for more green jobs in their community.

“We need all kinds of solutions–local, state, and national–and as we’ve seen the people need to make it happens,” says Rabb.

This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

 

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