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Republicans plan to solve wage stagnation and entitlements … on your back

Establishment Republicans have a plan to help workers because they hear you after all the clamor that has formed around Donald Trump. That is how they bill it anyway — a plan to help laborers. They have heard through their marble walls that some of you are not happy with wages that have been stagnant for decades. So, they have hatched a brave new plan.

Are you ready to see some innovative thinking now that they have had the better part of a decade to come up with something?

Their creative plan to help the common worker is to make it illegal for unions to withhold union dues automatically “so that you have more money in your paycheck.” That’s it. Boost your pay by stripping as much away from unions as they can. The marvelous creativity here is in how they manage to construe that as being for the benefit of the American worker to such a degree that they even believe it themselves.

Never mind that unions are the only thing that might give you enough unified strength to get your pay or benefits improved against cost-slashing corporations. Never mind that your pay stopped going up as soon as Reagan started breaking unions and as soon as Bush I started shipping factories to Mexico in that great sucking sound to the south.  That is when pay stagnated while corporate profits soared … unless you were working in upper management where your pay rocketed into the Vanderbiltian stratosphere.

What the Republican establishment calls “the Employee Rights Act” (ERA) is just another disembowelment of unions to make sure that the corporate execs and stockholders continue to get the lion’s share of corporate fat. How else will they build up their bonuses and dividends and buy back the company’s own stocks in order to inflate the value of their stock-options? Money going to union bosses could be going to them.

Now, some of you hate unions. I can understand that because unions have used a lot of their own evil tactics to coerce membership. I used to hate unions, too, because of all their goldbricking; but it’s a well established historic fact that — corrupt as they have sometimes been — they are the only thing that significantly forced up wages, working conditions and benefits for decades. Even non-union shops only paid more in many cases because they had to match or beat union shops in order to keep the unions out.

 

The Heritage Foundation has a plan for the working man

 

(And woman. I just wanted that line to rhyme.) Steve Moore, a visiting fellow of the Heritage Foundation, is concerned that union leaders are getting rich and fat off these dues. Maybe they are, but corporate executives also get rich and fat when there are no union leaders, and the Heritage Foundation wants to assure you they have what is best for your income in mind.

According to Moore, “The ERA puts the GOP firmly on the side of working-class Americans and higher pay. (“Stephen Moore: Republicans Can Give Workers a $1 Billion Pay Raise“) You see, the neocons are not formulating their plan for the sake of helping their rich constituents — the one percenters who back both parties. No, they are doing it to put a billion dollars in your pocket. They are glad to do that since all of that money would otherwise go to people who campaign against the wealthy corporate bosses who own the politicians.

If you’re going to give money back to the proletariate, do it by stripping it from unions that seek to diminish the grasp of the one-percenters. Take the money from the one area that might in the long run help workers get more money for their labor because unions just help workers redistribute wealth to themselves. We know the wealth rightfully belongs to the corporate leaders and stockholders and that redistribution to the people doing the work simply appeals to the envy of the working class. It is most important that we keep the wealthy rich so the workers have something to aspire toward. For all those reasons, you can know by the ERA that the GOP is now firmly on the side of the working class.

Why is it that the only plan establishment Republicans can ever come up with to help labor and improve wages is a plan that helps the establishment, such as giving tax breaks to stock investors that put their taxes lower than the middle class. They repeat inanely that those investors are the “job creators” until people believe it is true because it has been said so many times. True, they are the job creators … in Mexico … in China … in India where they moved all of their factories.

 

The “entitlement” trap

 

Have you noticed that governments, whether they are run by Democrats or Republicans, have no problem with underfunding their employee retirement plans? Even the most liberal cities have struggled to find ways to get out of paying the pensions they promised. The only thing that stands in their way is government employee unions. The citizens of those governments (municipal, county and state) had no problem deriving the benefits of new roads and parks, etc., off the backs of government employees by promising them “great government benefits.”

We have probably all talked at one time or another about how so and so that we know got a good government job with great government benefits like that was a good move for them. We probably even recommended a job like that to a friend or two: “The benefits are great, man.” We knew the benefits were the one thing that could drive our neighbors or relatives to take a government job in spite of all the red tape that comes with working for the government.

Will we now insist that our fellow citizens be treated fairly by taxing ourselves what it takes to honor those promises that we knew were being made? I doubt it. For many, those coveted government benefits have turned out to be a lie all along because governments never paid for the program as they went … always figuring some future government would deal with the problem of underfunding, but that never stopped them from continuing to hold out the promised retirement benefits. We’ve known these programs were underfunded for decades now.

Several states and municipalities declared bankruptcy during the Great Recession just so their citizens could escape the higher taxes that would be pushed on them in order to make good on the promises made to those other citizens who served them. Can you believe those nasty employees felt “entitled” to what was made as a promise of deferred gains in their retirement years if they would work below going wages at present? Greedy bastards.

I’m not talking about the wealthy people who serve at the head of local government and who sit on counsels. I’m talking about the gal who mowed your park lawns or sat in a back office drawing up sewer plans or drove the bus. I’m also not talking about the lazy four guys who stood around a hole while one guy leaned on a shovel and sometimes pretended to dig.

We all know those inefficiencies in government existed and were inexcusable, but there are many government employees in low-paying and mid-level positions who worked diligently for benefits for twenty years that they are now being deprived of just as they hit retirement. What about them? Do the bad apples we sometimes tolerated justify shorting our promises to those who worked dutifully at their tasks?

The reason they are said to be “entitled” is because you and I already extracted the work out of them. They are entitled to the benefit because they already paid for it with their labor. Now, surprise, surprise, they want what our leaders promised them for decades. Greedy bastards.

And what about your entitlements?

 

The Social Security slough

 

Nowhere are fraudulent promises more true than in Social Security. Some people who talk about balancing the budget by taking the money from entitlements like Social Security have forgotten that the reason they, themselves, are entitled to those benefits is that it was their money in the first place! They only allowed the government to take it (and very reluctantly even then) based on the government’s pledge of the United State’s good faith and credit that the money would be there for them when they retire or become disabled.

They probably even mumbled that the money wouldn’t be there when they retired, and now here they are. Some of them are such saps they are already willing to lie down and let the government keep that money without a fight, accepting the mantra that it is bad to feel entitled to that which you created and provided in the first place.

Establishment Republicans have a similar answer to solve the federal government’s huge deficit problems. Their solution is to whittle down your retirement benefits under social security because YOU are the problem, not them. Their talking point is targeted at making anyone who expects to receive those benefits appear greedy via a concerted plan of turning “entitlement” into a dirty word.

Before you let them strip you of your dignity, try to remember that you’re “entitled” to those benefits because the money was actually yours in the first place. You’re simply entitled to get your own money back. So, talking about these “entitlement” people as if they are someone other than you and are the problem with America is the same as talking about homeowners as being the problem with real estate because they think they have a right to own the home they’ve been paying for. If they’d just let the banks keep the home, we wouldn’t all have to bail out these miserable banks. Greedy homeowners, feeling they are entitled to retire in the home they have been paying for all these years!

Politicians, however, want to use Social Security funds to balance the budget that both parties have refused to balance for thirty-plus years. Republicans mostly railed against Social Security when it was created as something that was taking people’s money away and redistributing it to government to waste. Now they rail against those who want their money back.

The only difference between Republicans and Democrats on Social Security is that Democrats still think it is the money is owed back to you (though they have no idea how to make the math work after decades of their own profligacy with the money). Republicans think the best thing to do with this money that they kept telling you you would never see once the government got it … is to make certain that you never do see it! They want to fulfill their own predictions.

In the end, who was the greater thief? The group that promised your money back but now doesn’t know how to deliver on its promise and still balance a budget they never tried to balance in the first place? Or the group who kept warning you that, once you let government get its hands on the money, you would never see it again and now wants to make certain you actually never do see it again?

While neither party has shown any will to actually balance the budget, they have no problem finding ways to make the wealthy wealthier. Republicans are concerned, of course, that union dues only make Democrats wealthier — the wrong people — because 90% of union political contributions go to Democrats. Is it any wonder that union contributions go mostly to Democrats when the ERA is the most creative thing the Republican-controlled congress could come up with as an answer for laborers who are finally concerned that their wages haven’t risen against inflation since 1977?

This is their best plan? Give the unions one last stab in the back so that laborers have even less strength in negotiating wages? A little candy now to deprive you of a lot more later?

You see, everyone could have a job if everyone were willing to work for scrap meat as they ought to; but greedy American workers keep thinking they are entitled to some of that corporate revenue so they can live better than their Central American competition. If they wanted to be competitive, they would downsize to corrugated metal shacks. Unions are the reason people don’t have good paying jobs. They keep insisting that the jobs pay better, which forces those jobs to leave the country.

That’s how much establishment Republicans care about wage stagnation. They care enough to make certain it continues so that corporate leaders can keep inflating their overstuffed bonuses and pack their golden parachutes and puff up their stock options. The Employee Rights Act is the establishment’s most creative plan in years to help the flagging economy.

 

The government’s self-created entitlement trap

 

Now, to be sure, there is a lot of greedy entitlement thinking in this world, too — the kind where people feel entitled to assistance just because they need it or want it and where they endlessly suck off the government and give nothing productive back — but what I want to remind people of here is there is also genuine entitlement where you are only receiving something that you personally earned and that was promised to you; it came out of your paycheck in the first place, and it was supposedly held in trust for you.

You are not greedy if you refuse the idea of pushing back your retirement age from what was originally stated and demand the government provide the retirement benefit that it promised you when it took your money that you were reluctant to trust to government in the first place. So, before you let politicians strip away the retirement benefits you already put in your labor for on the basis that it is inevitable now, make certain you strip away every benefit they ever promised to themselves first. (And watch how fast they sue the government they helped create.) Make sure they do a lot of other things first. Don’t make it easy for them to get out of their promises by making “entitlement” a nasty word.

It’s nasty when people feel entitled to other people’s things, and apparently your politicians feel entitled to your things, which they already extracted from you for decades based on a pledge to give it all back. Why bend over and make it easy for them to kick you in the keister? Force them to end every entitlement of every politician alive today, especially those who have already retired, before they touch one cent of yours … for those retired politicians are the ones who made the promises in the first place.

It is one thing to feel entitled to things you never earned; quite another to feel entitled to that which you already did earn.

 

Deepening one’s view of the responsibilities and entitlements of property of ownership:

Raising kids that don’t feel entitled to everything they want just because they want it:

Moving beyond simple entitlement thinking to responsibility thinking:

  • Auldenemy

    Another Dave analytical masterpiece. Your articles are becoming like a drug. If I were a cruel dictator I would make you write every single day (of course you wouldn’t be allowed to criticise my dictatorship….LOL).

    Everything you have written here is a mirror image of what is happening in the UK when it comes to pensions and social security. Our very Right Wing government keeps damning the unemployed and has hammered unemployment benefits. They have also frozen them for 4 years (so if inflation gets going big time those at the very bottom will become even poorer).

    I totally agree about those who are lazy bums who don’t want to work, also single mothers expecting to raise children courtesy of the State (and thus tax payer). But these are the exceptions, not the rule. It is as if every bank teller, on a modest wage, working 9 to 5 and a perfectly decent citizen, was cast as scum because of the senior bankers and traders who have systematically ruined and looted our economies (with full backing from their respective governments and central banks).

    The One Percent brigade (the looters in big government, big banking and big business) are trying their damndest to deflect public opinion away from the fact that they caused 2008 to happen by their combined negligence and greed. Who is the easiest group to kick, the unemployed and sick. Even the disabled here in the UK are being whacked with benefit cuts. Yes, some of them will be fakers but most are NOT.

    If there was any real justice and some of those One Percenters in banking were jailed for their corruption, would the public then call for everyone who ever worked in a bank to be jailed. Of course not. So how the heck the UK government is getting away with robbing pensioners, the unemployed and the disabled while doing nothing about on going corrupt banking practices, huge salaries and bonuses for failing elite banksters and allowing some of the richest companies and individuals in the world to get away paying peanuts in income tax, is beyond me.

    What annoys me about analysts like Peter Schiff and Mike Maloney is that they think off shore tax havens for the super rich are fine and in fact there should be no income tax at all for anyone! That might sound great in theory but all I know is that in the days when life was like that the super rich ruled over the masses like Kings of old, making most citizens into drones working for next to nothing. Dickens writings had a huge impact because in the vast array of his characters was displayed the massive chasm between the few haves against the endless have nots. The London of 19th century Dickens had poverty as keen as that of modern day Calcutta. At least 75% of the population worked a 12 hour day for peanuts.

    So the Schiff/Maloney view of none taxation doesn’t work. It is one shared by most analysts in the gold and silver community (along with their followers). I have been accused many times by one American responder to the topic of taxation as being a, ‘Communist’. I am not a Communist, but nor am I an extreme Right Wing person thinking the West will be fine as long as there is no taxation and everyone has a gun, lots of bullets and plenty of gold and silver. That view might have worked in the Dodge City era of the Wild West but it won’t work in the 21st Cenutry era of large populations condensed into towns and cities across the Western hemisphere.

    Schiff recently made the absurd declaration that the mega rich would invest in more company start ups, thus creating more employment if there weren’t taxes! Well there is estimated to be trillions of ill gotten loot hiding away in off shore accounts (the vast salaries of CEOs and top banksters and politicians). Take Tony Blair (who should be serving a jail sentence as a war criminal). He and his wife have a £24 million property portfolio in the UK alone. Add to this their personal wealth from book deals, speeches and Blair being paid a fortune by JP Morgan as a part time, ‘advisor’ and here is one couple with enough wealth to easily start up a few businesses. Why bother when huge fortunes just land in your lap because you belong to team One Percenter.

    This is the first article I have read that so intelligently assesses what is going on and how the One Percenters love using that word, ‘Entitlement’ to make all those at the bottom of the heap look like scum who have never done a day’s work in their lives. What folk need to understand is there are scum bags at ALL levels of society, there along side the majority who are not. Sadly the real scum has a nasty habit of rising to the top, hence the mess we are in now which wouldn’t you know it, that scum has got even richer by!

    Multum In Parvo

    • You’re a good writer with a good education.

      I am amazed at how easily the well-healed establishment has managed to turn “entitlement” into a nasty word — at how readily so many people say, “Yes, delay my Social Security longer and reduce my benefit when I finally get there. I don’t want to be one of those lazy entitlement people, living off of other people’s money” WHEN IT IS THEIR MONEY, TAKEN FROM THEM FOR THE EXACT PURPOSE OF SUPPLEMENTING THEIR RETIREMENT WHEN THEY HIT 65.

    • steve jones

      That’s one of the best pieces I’ve ever seen in a comments section!!!

      • Auldenemy

        Thanks Steve. That was very kind of you. I think David Haggith is a deeply perceptive guy and a brilliant writer. Very few financial writers manage to express things in such a human way. So I really enjoy his articles and the responses to them (other than the odd idiotic ones).

        • steve jones

          Agreed re David, combining the razor sharp analysis with his writing is a treat to behold.

    • steve jones

      By the way old, Mike Maloney has moved to Puerto Rico to avoid paying US tax…isn’t it currently defaulting ….because it doesn’t collect enough tax?? Maloney says the US government should run balanced budgets but isn’t willing to do his bit.

      • Auldenemy

        Yes Steve, I was watching him sitting among exotic plants as he sat doing one of his short videos from his home in PR. As you say, the problem with some of the very people who rightly show us the corruption of the on-going global paper Ponzi scheme, is that they themselves also want something for nothing (as in they want all the infrastructures to exist by which they make their wealth but don’t want to pay a penny in taxes that make those infrastructures possible). I totally agree about too many taxes and government intervention but the irony is that the biggest, ‘entitlement’ sector of all since 2008 has been the mega banks, Wall St and big Corps.

  • cdndmf

    I give you full marks, Dave, for bravely venturing to discuss the merits of Unions and the now so-called ‘entitlement programs’. Union largess and corruption maybe was or was not a significant drag on the economy in the 1970’s, but that was forty years ago, and they can’t reasonably be ‘blamed’ for much since. I do admire how effectively ‘union’ was turned into a four-letter word, usually through revisionist storytelling by supply-side economists. What destroyed the American railroads and then knee-capped the American auto industry? Why, it was “the Unions” of course. It’s never the stupidity and arrogance of an intransigent executive class that refused to recognize and adapt to the changes in a given industrial landscape. It will be interesting to see if Tesla becomes the next Ford and Ford becomes the next Pennsylvania Railroad, who gets blamed.

    • To be sure, as QE says below, unions sowed their own demise through many bad practices that angered people. That created opportunity for management and politicians to paint them all bad, and they did a remarkable job of convincing people that unions were right next door to being communist.

      Like you say, though, somehow the aristocracy of CEOs who were running things into the ground in the 70s didn’t get blamed for how incredibly short-sighted and greedy they were. I remember Henry Ford III being interviewed by Mike Wallace, I think it was, on Sixty Minutes and he was asked why Ford made such terrible cars as the exploding Pinto. Ford answered, “We know they’re junk, but we keep making them because America keeps buying them. They are what people want.” (I’m not sure he used the word “junk,” but he said something very similar, and I was stunned by his candor.

      So great was the arrogance among CEOs at the time that he thought he could just come right out and say it, and it wouldn’t matter. They were untouchable. They could get away with anything. But that was the same time in which I and a lot of other guys in high school were saying, “I think we’ll switch to something European. They’re way cooler and better built.” Others were switching to Japanese. And the result of Ford and the other two of the big three thinking they could keep building crap because people would keep taking it was that they lost customer loyalty and market share that they never gained back.

      They went into the red quickly after that interview (not saying the interview itself had anything to do with the automotive industry crash). The fact is that they had huge customer loyalty, but they abused it, and they eventually lost it.

      As dumb as dinosaurs … like IBM who thought that personal computers were a flash in the pan — a novelty. So, they came late to the show, negotiated a lousy contract with Microsoft, and little Microsoft steamed right past Big Blue, leaving it forever in the dust.

      It is sometimes spectacular to see just how dumb CEOs can be. I mean, to qualify for the REALLY big bonuses, you have to be able to take one of the world’s largest banks and crash it straight into the rocks. If you can master that, you’re worth the big money!

      As for Brave, I’m anticipating see stipes and lost readership for saying something good about unions, so successful was the campaign to turn America against them.

      –David

  • QEternity

    Unions sowed their own demise. There was (and still remains) a need for unions to protect workers and bargain for ‘fair wages’. They became less relevant and accepted by the general public when they learned how union workers could not be fired for poor work at automakers, and it seems bad cops are always protected no matter their malfeasance. For a union to effectively gain the confidence not only of their members, but the public at large that said union is necessary and useful, they should not ‘work the system’ the same way that corporate America works the system. One look at the messed up Illinois and California public union pensions shows how out of control they became.

    My father was a union member in a union that rarely struck because their jobs could have been off-shored almost anytime. They didn’t hold up the employer all the time, they did what a union should do — ensure a safe workplace, fair worker treatment, honest pay for work provided, and a partnership with an honest company. sadly, just as greed has infested the boardroom of CorpUSA, so it has the leadership of the unions.

    http://www.pensiontsunami.com for more on what’s happening around the nation with public union pensions.

    • Michiganmitch

      Responding here to your comments in “Beat the Press” because your comment shows up in my e-mail but not at “Beat..”. Curious that you have not addressed the fact that I have pointed out that most claims you make are based upon falsehoods. Proved you wrong about Krugman and deficits and about Obama’s rampant spending with citations and you blouse right over them. Again, your faulty assumption that DEBT CANNOT BE ONGOING is silly and being a reserve currency has little to do with it. If that were the case, why does the UK exist? It has been in debt for a thousand years and the pound was once the reserve currency. “Obama did nothing to address debt’? Cutting the deficit is the first step and he has set a record at that, 1.4 t to 500 b. “One nuke would change that”? One? What about the thousands we would rain down on whoever made that deadly mistake and how would that cause our financial system to collapse? So I can add exaggerating danger to basing enlargements on falsehoods as another problem you have. Over 80% of economists viewed the stimulus as beneficial. Job creation came immediately and has continued unabated for 70+ months with another 250,000+ job creation month in April.. Again, 2 to 3 million jobs were created or saved according to the majority of economists. The biggest problem was the stimulus was too small. We should have wasted at least 2 t and the demand gap from the bubble deflation would have been filled, millions more jobs would have been created and the slow pace would have been dramatically accelerated. I agree with you on several points, the ACA wasn’t enough but it was a step in the right direction as medical inflation has been slowed and millions more are protected. Socialized med is the way but I suspect you don’t agree there. I also agree about the war bit and what a waste that is. We should invest on infrastructure instead to create 13 million jobs and spur growth for decades.

      • QEternity

        I’m sorry but you’ve proved me wrong about nothing, but you just keep on believing that.

        If debt were so good, Zimbabwe should be king of the world for nations. After all, they had debt and printed out the wazoo to cover it.

        Argentina should be on a pedestal, as should Greece, Italy, Spain, France, and a host of other countries.

        The only thing you’re proving is your lack of understanding of ‘king dollar’, and how the Fed affects the entire world, let alone what I pointed out previously about the petrodollar system.

        If this debt you love were so good why not pile it all on higher and deeper? Hell, why should people work? We could just issue debt, hand out free money, and buy from the Chinese forever! Sounds like a plan, eh?

        Try to get beyond that confirmation bias. Look beyond our shores to the history of sovereigns that have borrowed way beyond their ability to manage it. In the end it always ends in tears.

        Personally, I am diversified and protected against most eventualities and have been for some time.

        Got gold?

        • Michiganmitch

          So you helped to inflate that gold bubble in a time of record low interest rates and inflation causing gold to be wildly overpriced? Buying high is never good. Perhaps you shouldn’t listen to the Glenn Becks of the world. Again you have dismissed the facts. “If debt were so good, Zimbabwe should be king of the world” and if debt were so bad, the UK and the U.S. wouldn’t exist so there, gotcha. Yes I did prove you wrong, Obama didn’t double the deficit, Krugman doesn’t endorse perpetual deficit and neither does Keynes and i provided citations. The term confirmation bias seems to flummox you. Learning lessons from hundreds of years of history with the USA and UK and debt isn’t confirmation bias, it is called common sense.

        • Exactly. That’s the lunacy of that kind argument that says national debt doesn’t matter when you can print your own sovereign currency. In that case, create enough of it to give everyone a fat paycheck without needing to work, and we’ll all be merry! After all, if there is no limit to how much debt a nation create, why not step up the game!

          It’s insane.

          • Michiganmitch

            No one said it didn’t matter, but in relative terms, it isn’t the debt, it is the burden that is of consequence. BTW, your claim regarding the debt spiking a trillion in 6 months or whatever, if accurate, where was the commensurate spike in interest rates that one would anticipate? Oh and wonder why was CNNEWS the only outlet who covered this with all the RWNJ outlets that exist? I couldn’t find mention of that anywhere else and likewise I couldn’t find a rate spike in what our government’s cost of borrowing is. On the debt, doesn’t seem as if Dean Baker is in crisis mode.
            http://cepr.net/blogs/beat-the-press/interest-on-the-debt-is-near-a-post-war-low
            Krugman either.
            http://krugman.blogs.nytimes.com/2016/05/07/where-do-trumps-bad-ideas-come-from/?_r=0

            • If you had been reading this blog, you’d know that the Fed controls interest rates and does whatever it needs to do to hold them on target AND that its primary means of controlling interest rates in recent years has been by buying government debt. The claim of spiking a trillion dollars can easily be verified, as it has been covered by a number of outlets.

              Google it. You can find similar articles in the National Examiner and Fiscal Times. Just look at the national debt clock then and now, and you can verify it for yourself. Or go to this site that posts the treasuries own stats: http://www.treasurydirect.gov/govt/reports/pd/debttothepenny.htm and look at the total national debt on the last day of October and compare it to the last day of April.

              Krugman’s point of view doesn’t surprise me in the least. He failed to see the Great Recession coming and has been totally in favor of your approach to the economy throughout the Great Recession.

            • Auldenemy

              Are you NUTS…..central banks control interest rates. What planet are you on. Either stop being a cretin or Google a cretin site to join.

            • Michiganmitch

              Where in either of my posts did I state that interest rates were governed by any agency other than the Fed? Please, find the quote for me. Oops, you can’t! Instead you call me names. My point is debt were out of control at this point, why no action from the Fed?

            • What you said was, “Where is the commensurate spike in interest rates that one would anticipate” if the debt skyrocketed? Auldenemy’s response and mine is, “Why would there be any spike in interest rates when 1) the Fed has been the main buyer of government debt for years now, and the Fed doesn’t need to be enticed by a rise in rates to buy government debt; in fact, 2) the Fed buys government debt as its means of driving interest rates down; and 3) the Fed controls interest rates. Therefore, there is no reason to expect a huge upsurge in the debt to raise interest rates, and the facts of the debt increase speak for themselves. One doesn’t need to extrapolate whether the debt skyrocketed by looking at interest. One can easily see what the debt was at the end of October and what it is today.

        • Auldenemy

          He is just some idiot QE (there are always a few on every financial site and they usually vanish when they realise everyone has sussed them). I suppose they are bored attention seekers who instead of debating politely just want to trash everyone.

      • Your comments have nothing to do with this article. Please stay on topic. You’ve apparently chased someone down to this site as the ally you thought you’d corner them in and bat them round. From what I’ve read by QE, good luck with that.

        Your own claimed facts are bizarrely false. You say Obama cut the budget deficit back from 1.4 trillion to 500 billion. We just added one trillion dollars to the national debt between the start of the fiscal year and this month. So, while there may be only half a trillion for the year showing on paper, we’ve actually doubled that amount in half a year. ( http://cnsnews.com/news/article/terence-p-jeffrey/6-months-budget-deal-debt-more-1-trillion ) Whatever we actually add to the debt in a year is the ACTUAL deficit for the year. Anything else is smoke and mirrors. Things look a lot better on budgeting paper than they do in reality. (Of the one trillion added to the debt over the past six months about 350 billion of that was due to expenses ratchet up in the month’s prior, but that still leaves 650 billion added in deficit spending in half a year, putting the real annual deficits right in there at 1.3 trillion or nearly the number you use as the starting number for Obama’s time in office. Moreover, that huge deficit would be vastly worth if not for artificially low interest with the Fed sucking up the national debt.

        Moreover, the FORTY-THREE presidents before Obama, managed to ratchet the debt up to $10.6 trillion. It took the lifetime of the nation to get it that high. Today the national debt is over $19 trillion. So, in two terms Obama has managed to almost double everything done before him.

        To be sure, he has had ample help from Republicans, and some of the debt that was added during Obamas term was spending approved during George Bush’s term after Bush crashed the entire US economy (again with help from nearly everyone in both parties). But to pretend like Obama has somehow reduced the deficit is untruthful in the extreme.

        80% of economists viewed the stimulus provided by the Fed as beneficial. These same 80% failed to see the Great Recession coming EVEN AFTER IT HAD ALREADY STARTED. 80% are complete idiots who cannot even find signs of a recession when we’re already in the middle of one that was as deep as the Great Depression. It’s depth has never been felt because the dinosaur economy has been propped up by the greatest money-printing campaign worldwide in history, and still we have a huge mess on our hands that is only getting worse.

        You say the much vaunted recovery would have been better if more money was spent; but Japan spent a lot more money than the US on its QE (in terms of the size of its economy), and the results were far worse. Of course, they also had a nuclear catastrophe, massive earthquakes and a tsunami, so not entirely a fair comparison. Europe has spent vast amounts on QE, and is slowly doing worse and worse and now having to go into the bizarre world of negative interest rates because the law of diminishing returns has brought the benefits of QE down to almost nothing.

        You say Obama has saved the US on medical inflation? You must not live in the US. Nearly everyone’s medical expenses in the US have gone up faster than they were rising before Obamacare, except for those who had no medical coverage who are now covered by those who did have medical coverage. As those costs went up, most people saw their benefits drop. They did not get to hold on to the same plans they once had, as insurance companies reduced benefits to try to keep costs from rising as quickly as they otherwise would have. I know the insurance my family has is substantially lower in quality than what we had prior to Obama.

        Job creation? Yes, all the jobs that were lost thanks to Bush policies have been regained, except that they haven’t. The number of aliens who have acquired jobs during the Obama period is almost exactly equal to the number of jobs that have been added. Since these are new people who have been added, guess where all the jobs went? These people are willing to work for less with lower benefits. We simply unsourced the outsourcing for those jobs that cannot be moved out of the country by moving the cheaper labor here.

        Those who had those jobs now sit on the sidelines because they are no longer counted as “unemployed” once they outlive their unemployment eligibility. So, yup, the jobs are back, and they mostly pay less and they mostly went to aliens. Where else do you think those aliens got their new American jobs? You can’t add a couple million people and have them all employed without adding a couple million jobs. That’s just math. New people require NEW jobs. and job creation has just barely kept up with population growth.

        I kept your comments up because they are insane so worth responding to, but keep don’t come to this site to chase down people who didn’t consider that insanity worth responding to elsewhere. What you have written here are blatant lies. They’re not even mistakes, and they had nothing to do with the topic. If you don’t write on topic, I’ll delete the comments, not because I disagree with them but because you’re abusing the site by using it to carry on a conversation that belongs elsewhere just because someone doesn’t want to respond to you there. This site doesn’t exist for that; but the ignorance of your comments was stunning.

        • QEternity

          Actually Dave he should be here so he’ll get an honest education. The other site CEPR moderates comments. I guess my last was not approved though there was nothing controversial in them.

          • I deleted his last because it, again, had nothing to do with this article. He’s welcome to comment on articles and won’t be deleted for his views.

            • Auldenemy

              Agree! Also what he wrote about the UK and a thousand years of debt was utter garbage, as in it was precisely unsustainable debt after WWI that saw the debasement of our 925 silver currency to 500 and following WWII turning it into cupro-nickel. The £ lost its status as the world reserved currency because of its shrinking empire and massive war debts and in time the same will happen to the US.

        • Michiganmitch

          Bag it idiot.

          • QEternity

            See, now that’s the sentiment of a true, blind partisan in action.

        • Donald Sergent

          Damn, Dave–I didn’t know you had a Stinger missile for flying trolls!

          • Michiganmitch

            Except he missed.

        • Michiganmitch

          I have read several of your pieces and comments and in substance, I agree with much of what you write. However, there is a lotta bullshit in your response, Dave. “Nearly everyone’s medical expenses in the US have gone up faster than they were rising before Obamacare,”. Provide a citation for that comment, please. Anecdotes about things like personal insurance policies are unreliable and should be avoided in blogs like this. One should rely on Kaiser and others who aggregate effects and are capable of citing actual trends. Seems as if you have a real problem with Obama and Krugman too. So yes we need stimulation that only a massive infrastructure project would provide and yes an investment in our country is imperative. That investment will be funded with debt and higher taxes, especially for those who have enjoyed historically much lower taxes for their income and wealth levels.

          • I wasn’t going to respond to this because I’ve learned it is a waste of time to do other people’s statistical research for them. You’ll just do as you’ve already done with several other points that I have supported at your request … troll on to the next thing you demand proof for. That’s how trolls operate. They never provide their own research for their claims but always demand you provide more evidence for yours. When you do at a level that they cannot factually contest, they just troll on to demanding evidence for the next point. (It’s like shooting at someone’s feet to make the dance, and I’m not going to dance.)

            HOWEVER, I came across this article today, so bounced back here to post it as it won’t take much time to do that:

            http://www.zerohedge.com/news/2016-05-12/what-could-have-possibly-raised-your-costs-hillary-cant-answer-why-obamacare-costs-a

            Even Hillary, the champion of socialized health care with her own program that she promoted under Bill Clinton’s presidency, admits to the nation in a town meeting that Obamacare has resulted in health costs rising in most markets and that she doesn’t know why that is.

            Let me ask you to prove your bizarre notion that health care costs have NOT risen under Obamacare or that they have risen less than they were rising prior to Obamacare.

            –David

            • Michiganmitch
            • “Never said health care costs haven’t risen … You tend to put words in people’s mouths.”

              Like these?

              “The ACA wasn’t enough but it was a step in the right direction as medical inflation has been slowed.”

              O.K. I overstepped in saying you said health care costs have not risen under Obamacare, but not in the second part of my statement that you said “they have risen less than they were rising prior to Obamacare.”

              My point is that you are wrong in your initial statement that Obamacare has slowed there rate of increase. Your first article is about how much the federal government’s spending on health care is coming in below their original estimates on what the federal government would spend under Obamacare. That has very little to do with what I’m spending on health care. The article only says that the new for the government has not been as bad as their projections feared. In fact, it’s been a little bit good.

              In fact, the same publication links to another article ( http://www.vox.com/2014/9/10/6121631/the-pay-less-get-more-era-of-health-care ) that talks about how the growth in the individual costs of medical treatment already slowed way down PRIOR TO Obamacare. One can readily use the article they link to to prove that the slowdown in the rate of healthcare inflation began well ahead of Obamacare.

              Here is another article that shows the same thing: http://content.healthaffairs.org/content/34/1/150

              Both those article that I just provided links to are consistent with the second article in your list: Healthcare cost increases began a BIG slowdown PRIOR TO Obamacare.

              Your second article, which talks about the slowdown in healthcare inflation, is from back in 2013 before the EXPENSIVE mandates of Obamacare went into effect. You may recall that, while the act passed in 2010, it did not start to become implemented until 2012, and then Obama, himself, stalled the plan’s mandates even further. Your second article points out that health care costs started dropping in 2010, well ahead of the actual implementation of Obamacare.

              Since you want facts from Kaiser, Kaiser says in your second article that 77% of the decline in health care costs that were known back when the article was written were due to factors having nothing to do with Obamacare. You might be tempted to leap from that to saying something like “That means 23% of the slowdown in health inflation was DUE to Obamacare.” That would be a leap too soon, as none of the inflationary effects of Obamacare (its expensive mandates) had kicked in yet.

              So, there may have been some initial reduction in costs because the whole reason Obama wanted to delay his own mandates was that they would be expensive and raise a lot of resistance to the plan’s implementation. In other words, Obama made sure the planned savings kicked in well ahead of implementing those things in the plan that would ratchet up costs.

              In fact, Kaiser says in that article ““The remaining 23 percent result from changes in the health care system, potentially including higher deductibles and other cost-sharing that dampen patients’ use of services, as well as various forms of managed care and delivery system changes.” According to Kaiser, then, even that portion of the health inflation slowdown that resulted from changes in the healthcare system, was due primarily to the stiff rise in deductibles (which people were electing because health care insurance was going up so drastically in its premium costs). Because people were chasing higher deductibles to keep their premiums down, people were also using health care less. (Hardly an improvement.)

              The other thing this second article of yours alludes is that people could not keep their old plans as Obama had promised they would. Those great plans with good coverage and low deductibles were entirely eliminated by insurance companies as a way of keeping the price from rising into the stratosphere. At first, people were chasing plans with high deductibles to avoid a sharp rise in premiums. Then, those plans were not available at all because so few people were choosing them that they were no longer viable. (I remember poring over such choices in my own management position and in my own health care plan provided by my wife’s work.)

              So, even where there health care costs might not have risen as fast, it was because the coverage was worse (usually in the form of much higher deductibles, but also in the form fewer things being covered as plans dummied down to the government’s lowest common denominator (what a plan HAD to include).

              Your third article shows that the rate of increase in premiums (as a percentage) had been coming down for years. It reached it’s lowest rate of increase when the mandates kicked in (so the news wasn’t too bad on the premium front), but the rate of increase has gone back up to where it was prior to the mandates since then. So, as the article says, “not much to look at there.” No terrible news on premium costs or great news.

              The article, however, avoids the question I just raised of how much health care plans were ravaged by Obamacare — how much coverage is worse. The fact is premiums went up astronomically if you kept a low deductible. Those plans were phased out; so Premiums went up about the same amount in 2015 as before the mandates kicked in.

              I’ve read many article of people complaining that they lost the great plans they had, and I know my wife and I lost ours and those employees under my supervision lost theirs. Premiums did not leap as much as Republicans claimed they would (which I always thought was nothing but fear mongering, but deductibles did rise quite a bit).

              That’s all I have time for, since this article on my own blog was not about Obamacare anyway. I was merely responding to your statement that Obamacare lowered the rate of increase. I don’t think so.

            • “The rates Americans pay for coverage through Obamacare are going up, as New York joins the list of states where insurers are seeking big increases in premiums under the program, adding risk for the law as the U.S. presidential election heats up.

              New York’s health insurers are seeking to raise the amount that customers pay for individual Obamacare plans by an average of 17.3 percent for 2017. That’s alongside sharp increases in Florida, where insurers are looking for 17.7 percent more, and Washington State, where health plans are seeking a 13.5 percent increase from customers.”

              ( http://davidstockmanscontracorner.com/hillbamacare-sticker-shock-hits-motherlode-of-voters-insurers-seek-17-hike-in-new-york-and-18-in-florida/ )

      • Auldenemy

        Time you read some history ding bat. The UK was broke after WWI which is why it had to debase its 925 sterling silver coinage to 500 (starting in 1920). After WW II the UK was blown out on the debt front (had borrowed so much from the USA in the fight against Nazi Germany that it took until 2000 to pay it all back!). By 1947 the silver content of UK coins was gone completely (replaced by cupro nickel). The reason the UK £ lost its status as the world reserve currency was precisely due to its debt burdens becoming unsustainable. That is why under Bretton Woods the US $ became the world reserve currency following WWII.

        So your statement about the UK flourishing while being in debt for a thousand years is utter nonsense. It is easier to manage debt when you are growing an empire, but not possible when you are losing one. Also there is debt and then there is debt. Global debt levels all began to push higher post Nixon taking the world’s reserve currency away from the anchor of gold in 1971. That was precisely down to the debt problem of a protracted war in Vietnam. The only way to build that debt was to remove gold from the monetary equation. It was out of control debt (from the 1990s onwards) that brought about the financial crisis of 2008 and since that crisis global gobs of QE have pushed the debt into a Twilight Zone (along with stock markets that are so deformed by Central bank monetary policies and big banking manipulation that they no longer reflect in any shape or form their underlying economies). The reason NIRP is taking hold is because positive interest rates make government debt servicing impossible, but the price of that is to destroy entire pension funds along with the savings of those who didn’t take part in endless borrowing and turning their homes into ATM machines.

        As to how you think things are in the US for Main St. well, I am not qualified to say as I am British, but I assure you that both here in the UK and in Europe life is getting tough for a lot of us. We are struggling on all fronts because many of us get no rise in our incomes but our housing rent costs keep rising big time and other household bills and living expenses don’t get any cheaper. Ever growing cut backs of public services and taxing everything seems to be the order of the day.

        From my daily reading of financial and economic news across the world it doesn’t look to me as if most people in major economies are feeling everything is fine. If you think entire nations can grow on endless debt without any consequences then you are simply wrong.

        What is so cruel about government and central banks response to saving over leveraged and over greedy mega banks, is that it is Main St. who is picking up the bill. Some of Main St. deserve to, as in the most feckless who built up massive credit card, mortgage, car debt etc. However for those of us who didn’t go on an easy credit binge, who lived within our means, it sure as hell isn’t fair. The greed of bankers spewing out debt to all and everyone means that some of us are now ending up in debt just to get by! So your idea of debt and mine are worlds apart.

    • Unions were definitely their own enemy. As with ALL human institutions, corruption goes wherever the money goes. Unions gained a lot of money, and corruption found its place within them. They also, as you say, supported counter-productive policies like requiring more people on a job than the job takes, requiring that people who do one thing cannot multi-task and do something else when they’re done with their thing … and other forms of goldbricking. They made it hard to fire people who were really worthless crumbs. They even knee-capped people and cracked heads if peopled didn’t join the union.

      I’m not, of course, speaking up for any of that any more than I would speak up for corruption in any other human endeavor. There is also the other side of the coin that many people refuse to acknowledge because they are so indoctrinated against unions: Without unions, we’d all still be working twelve-hour days. Not only would the paid vacations we take as being the cultural norm in business not exist, but many people would never be allowed an unpaid vacation unless work was slow. Overtime pay? Forget it. You’d be putting in your twelve hours in the salt mine at regular pay, and regular pay would never have risen to be what it became. As for working conditions, law suits may have improved some things over time, but many people would still be standing next to smelting pots that they could barely see through the smog and trying to dodge the molten metal that sometimes spat out of the pots.

      Unions need to reclaim their place if wages are going to start rising again, and to do that they need to reform their ways (I think most have). Stop knee-capping people who don’t want to participate. Just focus on living wages, good benefits, etc. If laborers don’t fight for every cent they get, you can be sure management isn’t going to give any more than it has to. You get something in the business world by competing for it, and that means you need to compete for your rightful share of the pie, or there are plenty of others who will gladly eat it for you.

      (Just clarifying my own position here on unions where I see both a great deal of good and a great deal of bad.)

      –David

      • QEternity

        Dave, unfortunately I believe the time for most unions has long passed. A push to unionize menial jobs means the jobs will go away, or everyone gets salaried and works 60+ hrs a week. The $15 wage push will eliminate fast food jobs for automatic tellers that don’t call in sick and don’t file fake workers comp claims.

        The real root of pretty much all that ails us is Fed easy money policies that favor the rich over everyone else. We were far more egalitarian before we left the gold standard, and later Greenspan instituted the easy money standard. As a result we are pricing ourselves out of the world.

        I don’t know how this ever gets fixed shy of a ‘great reset’ somehow.

        • I see a total reboot (a debt jubilee for everyone) as the only solution that would clear everything for a healthy start. Without it, we will forever be dragged down by the debts piled around us. I don’t, however, hold out any hope that it would happen in the kind of egalitarian manner necessary in order to work or that we’d limit ourselves from quickly recreating the same mountains of debt all over again if we did have a clearance of all debt.

          I have noted with interest that this idea, which I never heard anyone talking about a few years ago is being talked about quite a bit now. I just cannot imagine it would ever happen in the kind of clean and equal manner necessary to work or that our blind politicians would ever have the smarts to establish an economy that ran on anything other than debt as the way that “money” is created.

          • QEternity

            Economist Steve Keen from Oz has discussed many times.

          • Donald Sergent

            the debt jubilee, as a one off, wouldn’t necessarily cure the trend towards unsustainable debt levels, human(social primate) nature being what it is. I cant recall the particulars, but a recurrent Jubilee would impose a limit on the supercycle that we find ourselves in. 50 year+/- jubilee cycle would impose constraints on the ability/willingness to use interest rates as a tool, rather than as an indicator of relative risk/reward. year 1-10, anabolic cycle starts again with credit issued for profitable investment,11-40 sustainable phase, 41-50 jubilee coming soon, so much less appetite for lending against non productive investment–M&A, Stock Buybacks, excessive executive compensation, promising/depending on free shit. As Heinlein so memorably phrased it-“there aint no such thing as a free lunch” Misallocation of capital has a cost- we need to keep an honest set of books./

  • Donald Sergent

    quibble- Bush may have started shifting some jobs to the Maqiladores in91-92, but “Dollar Bill” put it into high gear with NAFTA.. Do you remember all the squealing in GOP media and the House because Bill was stealing their platform. How bout Newt’s “contract ON America”? How’d that work?

    • I don’t follow on that one, Don. NAFTA was Bush’s big plan:

      “Following diplomatic negotiations dating back to 1990 among the three nations, U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed the agreement in their respective capitals on December 17, 1992.[5] The signed agreement then needed to be ratified by each nation’s legislative or parliamentary branch.”

      While Bush created and signed the plan, time ran out so that ratification by the Republican-controlled congress didn’t happen until Clinton took office. The majority support in both houses was from Republicans, though it had broad Democrat support, too. Clinton, sounding clearly all for it, however, shows there isn’t much difference between Republicans and Democrats when it comes to serving the corporate establishment.

      Both parties tried to claim credit for a bill they claimed would create American jobs, which, of course, was a ludicrous claim just like the claim today that this bill attempting to defund unions is for the good of American workers.

      I wonder how long people will keep falling for these claims just because their favorite party incants the right words over it.

      –David

      • Donald Sergent

        my bad, what I recalled was that it had been ratified and taken effect in 1994. I remember it was Bush’s project, but forgotten that it was signed in the “lame duck” period of his administration.
        That being said, what are the odds that the same timing will apply this year, with the argument that” we must ratify it or America will lose credibility as a trading partner”/
        Thanks for the correction- it actually seems to make more sense now.

        • Obama sure wants the same thing to happen again. Has there ever been such a secretive trade deal? The president who claimed he wanted to run a more transparent Whitehouse has consistently run the most opaque Whitehouse in history. Maybe congress will be given twenty-four hours to review the 1500+ pages of the TTIP. That’s a tactic Obama seems to like. If so, they should just toss it on the ground and refuse to even look at it. It’s a massive deal that merits a lot of discussion, and what I’ve heard about it sounds pretty bad. So, I think the way to deal with a president who tries to sneak something like this through by keeping it all secret (only released by another infamous leak) is just to throw it at him and refuse to even discuss it. Say, “Sorry, you didn’t give us enough time to deal with this.” However, i suspect establishment Republicans will love the deal overall since it sounds like it empowers national corporations over sovereign governments in matters related to trade.

          • QEternity

            Why shouldn’t they love it — they’re paid by their true masters to love it.

      • Lump Coal

        The same problem as with NAFTA is seen with TTIP. I’m not even mentioning that for free trade you don’t need to legislate about it. Rather lower barriers and legislation – i.e. get the red tape off the human action.

        to make sure that EU will sign they designed refugee crisis – http://independenttrader.org/immigrants-flooding-europe.html

        • From what I’ve now heard of the TTIP it is horrible. A total sell-out of national sovereignty of all nations involved in favor of corporate sovereignty. It completely serves corporate interests, and I doubt that will do any more for the average American than NAFTA did, and NAFTA was horrible for the average American.