Rep. Paul Ryan, per Mike Allen’s Playbook:

House Budget Committee Chairman Paul Ryan (R-Wis.), in text for luncheon speech of Chicago Economic Club: “Class warfare may be clever politics, but it is terrible economics. Redistributing wealth never creates more of it. Sowing social unrest and class envy makes America weaker, not stronger. Playing one group against another only distracts us from the true sources of inequity in this country – corporate welfare that enriches the powerful, and empty promises that betray the powerless.”

Paul Krugman responds:

Actually, for the most part critics of his plan haven’t focused on the distributional issues so much as on the nonsense he’s talking; they’ve been playing the arithmetic card, not the class warfare card. But yes, the Ryan plan does impose huge sacrifice on the poor and the middle class, while cutting taxes on the rich and corporations.

And this is, of course, the game conservatives have played over and over again since Reagan. Without exception, their policy proposals call for sacrifice on the part of most people, but lavish tax cuts on high incomes — and when you point this out, they yell “class warfare”.

Krugman comes close to getting it, but stops himself on simple facts and doesn’t look at the big picture. It’s not that Republicans complain when they get called out for the factual consequences of “their policy proposals call for sacrifice on the part of most people, but lavish tax cuts on high incomes.” It’s that when Republicans push policies like the Ryan budget, they are perpetrating class warfare. It’s not that Ryan is whining about getting called out. It’s that he’s following the Karl Rove playbook and attacking his opponents for his own weakness. His play is a massive assault on working Americans by wealthy elites; it would create an even-greater transfer of wealth from working Americans to the rich than what is already taking place. Ryan is hitting back at his critics for doing exactly what his actual proposal does: wage class warfare. It’s intended to be a distraction and to the extent that Krugman doesn’t throw it right back in Ryan’s face it seems to have worked on The Shrill One.

Matt Taibbi has laid what is probably his most exhaustive look into Goldman Sachs:

It wouldn’t be hard for federal or state prosecutors to use the Levin report to make a criminal case against Goldman. I ask Eliot Spitzer what he would do if he were still attorney general and he saw the Levin report. “Once the steam stopped coming out of my ears, I’d be dropping so many subpoenas,” he says. “And I would parse every potential inconsistency between the testimony they gave to Congress and the facts as we now understand them.”

I ask what inconsistencies jump out at him. “They keep claiming they were only marginally short, that it was more just servicing their clients,” he says. “But it sure doesn’t look like that.” He pauses. “They were $13 billion short. That’s big — 50 percent of their risk. It was so completely disproportionate.”

Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn’t make a massive short bet and didn’t bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a “big short” and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?

This issue is bigger than what Goldman executives did or did not say under oath. The Levin report catalogs dozens of instances of business practices that are objectively shocking, no matter how any high-priced lawyer chooses to interpret them: gambling billions on the misfortune of your own clients, gouging customers on prices millions of dollars at a time, keeping customers trapped in bad investments even as they begged the bank to sell, plus myriad deceptions of the “failure to disclose” variety, in which customers were pitched investment deals without ever being told they were designed to help Goldman “clean” its bad inventory. For years, the soundness of America’s financial system has been based on the proposition that it’s a crime to lie in a prospectus or a sales brochure. But the Levin report reveals a bank gone way beyond such pathetic little boundaries; the collective picture resembles a financial version of The Jungle, a portrait of corporate sociopathy that makes you never want to go near a sausage again.

Again, read the whole piece. Taibbi has done some of the best reporting on the financial collapse broadly and the actions of Goldman Sachs specifically. Much of this article isn’t new information so much as a thoroughly accessible presentation of the case against Goldman. Taibbi is really bang the drum loudly for criminal prosecution of Goldman Sachs executives. I hope he gets it, but frankly I’m not optimistic.

Reuters:

A majority of top Wall Street bond dealers and money managers say spending cuts alone cannot solve the U.S. budget problems and tax increases must be part of the mix.

In a Reuters survey conducted on Tuesday, 17 out of 29 fund managers and economists representing major Wall Street bond dealing firms said the Republicans’ favored option of spending cuts alone would not a work.
…
In contrast, of the money management firms in the Reuters survey, which oversee nearly $2 trillion in investments, 13 favored a mix of spending cuts and tax hikes.

So bond dealers and money managers, unlike Republicans, recognize that solving the budget problems require a combination of tax increases and spending cuts. Of course I don’t really care what bond dealers and money managers and their Wall Street brethren think about solving budget problems. But it’s fairly remarkable that even people who are very conservative and normally side with Republicans are capable of recognizing that increasing revenue has to be part of the equation here. Maybe someone should show them the Congressional Progressive Caucus’s budget?

Writing at New Deal 2.0, Marshall Auerback makes a strong case for creating a WPA-inspired Job Guarantee program. Much of the post explains the importance of prioritizing job creation over spending cuts right now, which I obviously agree with, but the explanation of how a specific job creation program could work is smart and inspiring.

In my view, a universal Job Guarantee program would be the best way forward and truest to the spirit of the WPA. The jobs would pay basic wages and benefits with a goal to provide a living wage. The program would take all comers — anyone ready and willing to work, regardless of education, training, or experience. We could adapt the jobs to the workers. As the late Hyman Minsky put it, we could “take the workers as they are”, work them up to their ability, and then enhance their skills through on- the-job-training. Additionally, the guaranteed public service job would be a counter- cyclical influence, automatically increasing government employment and spending as jobs were lost in the private sector, and decreasing government jobs and spending as the private sector expanded. Such a program would remain a permanent feature of our economy, acting as a buffer stock to put a floor under unemployment, while maintaining price stability whereby government offers a fixed wage which does not “outbid” the private sector, but simply creates a stabilizing floor and thereby prevents deflation.

More shrill words from The Shrill One:

Well, what I’ve been hearing with growing frequency from members of the policy elite — self-appointed wise men, officials, and pundits in good standing — is the claim that it’s mostly the public’s fault. The idea is that we got into this mess because voters wanted something for nothing, and weak-minded politicians catered to the electorate’s foolishness.

So this seems like a good time to point out that this blame-the-public view isn’t just self-serving, it’s dead wrong.

The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.

What has become more clear than anything else for me over the last year or so has been the extent to which publicly made arguments relating to austerity, tax policy, and accountability for the financial collapse by elites are so incredibly dishonest that addressing them head on is a futile effort. It’s good to see Krugman sidestep any efforts to treat these arguments from elites as being made from good faith and instead goes right after the truth. It’s not enough to merely rebut the idea that we need austerity as opposed to stimulative spending. Instead, as Krugman does, it’s time to discredit these arguments by the rich and the powerful as purely in their own self-interest and against the interests of the other 98% of America.

There are two sorts of arguments relating to class warfare in the US today. The first is made by elites with the intention of protecting their existing interests and expanding the transfer of wealth from working and middle class Americans to the richest of the rich. This is the bulk of the economic arguments made in America today, specifically when it comes to tax policy, entitlement spending cuts, and the roll-back of collective bargaining rights for workers. The second kind of argument is made by people like Krugman who are almost exclusively trying to get the public to notice that the first kind of argument in furtherance of class warfare is being made day in and day out in Washington and in the press. The great irony with this situation is that a key plank of the arguments of elites in favor of expanding their class warfare against the rest of America is that any modest request that they contribute more to the economic well-being of the country is derided as class warfare. As there is not a meaningful or respected alternative in public discourse to the first group of argument-makers, the simple reality is that elites are winning and winning handily in their push for class warfare against working Americans.

Krugman is shrill:

Employment has risen from its low point, but it has grown no faster than the adult population. And the plight of the unemployed continues to worsen: more than six million Americans have been out of work for six months or longer, and more than four million have been jobless for more than a year.

It would be nice if someone in Washington actually cared.

It’s not as if our political class is feeling complacent. On the contrary, D.C. economic discourse is saturated with fear: fear of a debt crisis, of runaway inflation, of a disastrous plunge in the dollar. Scare stories are very much on politicians’ minds.

Yet none of these scare stories reflect anything that is actually happening, or is likely to happen. And while the threats are imaginary, fear of these imaginary threats has real consequences: an absence of any action to deal with the real crisis, the suffering now being experienced by millions of jobless Americans and their families.

It really is remarkable to watch the leading liberal economic voice in the New York Times sound more and more and more like Atrios. Like Atrios, Krugman makes clear that the real threat to the economy isn’t the deficit in the future or inflation appearing some day, but joblessness and a weak economy now.

Which brings me back to the destructive effect of focusing on invisible monsters. For the clear and present danger to the American economy isn’t what some people imagine might happen one of these days, it’s what is actually happening now.

Unemployment isn’t just blighting the lives of millions, it’s undermining America’s future. The longer this goes on, the more workers will find it impossible ever to return to employment, the more young people will find their prospects destroyed because they can’t find a decent starting job. It may not create excited chatter on cable TV, but the unemployment crisis is real, and it’s eating away at our society.

The top priority for policy makers has to be reducing unemployment. Ezra Klein notes that, “In the last year, unemployment rate has fallen by 8% and Fortune 500 profits have increased by 81%.” So the economy is working for someone, but the corporations are not reinvesting their record profits into job creation, otherwise we’d see more of a drop than from 9.8% unemployed to 9% unemployed. But decision-makers in Washington are more cared about cutting corporate tax rates and ensuring high corporate profits than actually helping the other 98% of Americans hurting by the slow economy, let alone the 9% of Americans who are unemployed. As Krugman says, nobody in Washington actually cares.