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.

Professor Adam Levitin has a great post on the anti-consumer agenda he sees US corporations pushing up at Credit Slips. Levitin writes:

Instead of a laboratory of experiements to help level the b2c playing field, we see a different trend emerging:  a distinct anti-consumer agenda that aims to reduce consumer bargaining power and information.  Consider the common theme that runs through the following issues:

• AT&T v. Concepcion (waiver of class actions in arbitrations)
• Attempts to bust up public employee unions (and attacks on unions in general, such as the failure of Card Check legislation)
• Citizens United (corporate speech rights)
• Attempts to retain the current corrupt swipe fee system (failure of antitrust)
• Attacks on public health insurance (prohibition on Medicare bargaining over prescription drug prices and the death of the public option)
• Attempts to first kill off and now to maim the Consumer Financial Protection Bureau

…

There might be other items to add to this list (and please feel free to note so in the comments), but to me, it paints a disturbing picture of a concerted anti-consumer agenda.

There are distinct constituencies for each of these issues, but I think it’s important to recognize that there’s a larger strategic move going on here.

Levitin is asking how this happens and what leads to it being a concerted effort. I’d point him in the direction of the US Chamber of Commerce, which is a leading lobbying body for business against consumers for almost all of the issues Levitin lists.

http://www.kcrw.com/etc/programs/ls/ls110501le_show_-_may_01_201/embed-audio

It’s a long interview, but Bill Black’s appearance on Harry Shearer’s radio show is a really good listen. Black is expert at explaining how fraud was a causal factor in size, scope, and occurrence of the financial collapse. Black is an expert on white collar crime and a former regulator who was instrumental in the regulatory response and punishment of the fraudsters who caused the Savings & Loan crisis. Black is a frequent commentator on the 2008 financial collapse and the need for increased regulation and enforcement of the banking industry. His blog, New Economic Perspectives, is a must-read for anyone who cares about understanding the financial collapse, foreclosure fraud, and the regulatory capture that has prevented there from being an adequate response to the crisis.

Yves Smith highlights a tragic piece in the New York Times about the human cost of foreclosures:

There’s a sad little story in the “NY/Region” section of the New York Times, which illustrates a not often enough discussed sort of wreckage resulting from the housing mess: that of deaths resulting from foreclosures.

Think I’m exaggerating? There have been cases of suicides, or murder/suicides of people losing their homes. But that can’t necessarily be attributed to foreclosure per se, but of personal financial disaster, with the foreclosure being the literally fatal blow. So while one can attribute their deaths to the financial crisis and therefore to the reckless behavior of major financial firms, it’s hard to pin it on foreclosures per se.

But there are some deaths that can, indisputably, be blamed on foreclosures or more specifically, the negligent management of foreclosed properties. No one should ever die because a bank failed to take proper care of a home it seized. This, just like banks seizing houses that have no mortgages on them, should simply never happen. But it is in fact taking place. [Emphasis added]

Yves’ post goes deep into how mortgage servicers are failing as property managers, as does the Times’ piece. Children are dying in Florida, falling into swimming pools of foreclosed houses and drowning. In New York, buildings which servicers are failing to keep up to code are becoming death traps. The blight of foreclosures is being added to by the blight of unkept houses – broken windows, peeling paint, un-mowed lawns, and trash in yards all reduces the value of entire neighborhoods. The point is that the extraction of money through fees and foreclosures by servicers destroys lives. It has real consequences. And, at the end of the day, no one with power is doing anything to try and stop the human damages of foreclosure fraud and foreclosure crisis.

Paul Krugman has a very good column today looking at the dishonesty in arguments put for by austerity-hawks like Paul Ryan, who push for tax cuts that will certainly increase the deficit while claiming to care about reducing the deficit. Krugman contrasts Ryan’s budget insanity (and President Obama’s better, but still misguided budget) with the proposal from the Congressional Progressive Caucus.

[T]he only major budget proposal out there offering a plausible path to balancing the budget is the one that includes significant tax increases: the “People’s Budget” from the Congressional Progressive Caucus, which — unlike the Ryan plan, which was just right-wing orthodoxy with an added dose of magical thinking — is genuinely courageous because it calls for shared sacrifice.

True, it increases revenue partly by imposing substantially higher taxes on the wealthy, which is popular everywhere except inside the Beltway. But it also calls for a rise in the Social Security cap, significantly raising taxes on around 6 percent of workers. And, by rescinding many of the Bush tax cuts, not just those affecting top incomes, it would modestly raise taxes even on middle-income families.

All of this, combined with spending cuts mostly focused on defense, is projected to yield a balanced budget by 2021. And the proposal achieves this without dismantling the legacy of the New Deal, which gave us Social Security, and the Great Society, which gave us Medicare and Medicaid.

Of course, the fact that Progressives have the most serious budget proposal, which targets those who can most afford to give up more while preserving programs that help keep people out of poverty, is ignored by most of the DC press corps and Beltway politicians. I’d say this is simply because elites don’t care about the deficit and do care about doing whatever possible to transfer wealth from working Americans to the rich. The deficit hysteria is kabuki theater meant to mask new and more efficient ways to having the US government become an Anti-Robin Hood, who steals from the poor to give to the rich. Krugman arrives at a somewhat more measured assessment:

The answer, I’m sorry to say, is the insincerity of many if not most self-proclaimed deficit hawks. To the extent that they care about the deficit at all, it takes second place to their desire to do precisely what the People’s Budget avoids doing, namely, tear up our current social contract, turning the clock back 80 years under the guise of necessity. They don’t want to be told that such a radical turn to the right is not, in fact, necessary.

I just don’t think there’s any actual concern about necessity on the part of austerians. Necessity is an argument, an appeal that seeks to avoid discussion and debate of more serious (read: the CPC) plans that might inflict the most superficial of pains on the rich. The larger question to me is what does it mean that the CPC can produce such a serious, effective proposal and leaders of the Democratic Party completely ignore it?

Jared Bernstein is leaving the Obama administration. Berstein, Biden’s chief economic adviser, was one of the few liberal economists in the Obama administration. Not shockingly, the reason he is leaving is because there isn’t interest to implement the ideas he thinks are necessary to get the economy on the right track:

But the official said his reasons for leaving are practical. In the face of a conservative Republican House and budget-cutting fever, Mr. Bernstein’s advocacy for more stimulus spending was going nowhere.

Sad.