How Washington treats it heroes during the holidays

http://www.thedailyshow.com/watch/thu-december-16-2010/9-11-first-responders-react-to-the-senate-filibuster

As you probably know, it's been almost a decade since 9/11, and the NYC first responders are still fighting to get health care compensation for the multitude of illnesses likely caused or exacerbated by the toxic dust when the towers fell. This predicament was also described in Michael Moore's "Sicko". Obama and the Congressional Dems are working on a bill that would provide no-cost care to them for 10 years, but of course the GOP senators are blocking it to prevent a moral victory for their rivals during this unusually productive lame duck session. Many of the responders have private insurance, but the copays for respiratory diseases and cancers are of course still significant. And worker's comp won't cover them because they can't medically prove that their conditions were 100% caused by work activities. But forget these technicalities and excuses. Yes it's expensive to care for them, but what message are we sending if we turn our backs on the first responders, people who risked everything to help their fellow man during a disaster that was not of their doing? And it's even worse when our gov't is to blame for partially creating/training Al Qaeda, failing to prevent the attack, and now ignoring the health needs of the people who were sent in to clean up their mess. Heck they weren't even sent, they went in willingly because that's who they are.

Helping the responders wouldn't be unprecedented, and it seems like a no-brainer to the rest of us. Dialysis is so expensive and life-extending that the Nixon admin. approved Medicaid to cover any American who needs it (this was America's first experiment with socialized medicine). US servicepeople who were exposed to Agent Orange in Vietnam are covered for various diseases related to the toxin (unfortunately the Vietnamese, many of whom fought on our side and were exposed in much greater number/magnitude, are not included). So why not cover the 9/11 heroes? The GOP defends its filibuster by saying that they don't have the time to handle the issue now, and it would be "disrespectful" to their families, the institution of Congress, and the Christmas tradition if they kept working this week. I think Mrs. McCain and McConnell will survive if hubby is out of town for a few more days. And what better way to celebrate the birth of the Prince of Peace than to show compassion to hundreds of Good Samaritans in need? As you can see, it's just BS. The GOP threatened to shut down Congress unless the Bush tax cuts were extended, but they won't sacrifice an hour of their holiday vacation for people who showed us the best of what America is, and paid the price. Of course Jon Stewart was the only media source to cover this issue. 

http://www.npr.org/2010/12/20/132145959/pentagon-health-plan-wont-cover-brain-damage-therapy-for-troops

Another problem is the VA's Tricare insurance coverage for "cognitive rehabilitation" for war veterans with the common condition of TBI (often the result of insurgent IED and mortar attacks). Depending on how you diagnose, 5 to 60 thousand soldiers and vets may have TBI. CR therapy is quite expensive ($50k per patient), but it has been scientifically shown to improve functionality and quality of life in the civilian sector (car accident victims, stroke, etc.). In some cases, patients were unable to even read or speak full sentences before therapy, but regained those critical skills after. It is a personalized, holistic, unorthodox treatment, so of course some in the medical and health care policy communities are skeptical, and it doesn't really fit the VA bureaucracy classifications. But when 5 of the 12 major private insurers cover CR, there is likely some medical benefit. When Obama was a senator (and presidential hopeful) in 2008, he and 69 other Congressmen wrote to Tricare urging them to cover CR: "Given the prevalence of TBI among returning service personnel, it is difficult to comprehend why the military's managed health care plan does not cover the very therapies that give our soldiers the best opportunities to recover and live full and productive lives." Now a spokesman for Obama said that the president has "no comment" on the issue, and his Defense Sec. Gates is also not explicitly supportive, since they are leading an effort to cut Pentagon costs to get the deficit hawks off their backs (vet health care is a major gov't expenditure as my tax email showed). So Tricare is playing all sorts of games, saying the data is inconclusive, or they should wait until the therapy is proven so they know they're not doing more harm than good.

We criticize the Muslim militants for brainwashing youth to become suicide bombers, or the Soviet Union for sending in soldiers to clean up Chernobyl protected only by a 50 cents dust mask, but considering these failures, are we doing much better? If we keep ignoring and abusing patriots after they sacrifice everything for what the gov't tells them is their duty, America will eventually run out of patriots (or turn off future patriots) and we'll be a much weaker nation as a result. The gov't can't take their loyalty for granted, and we waste such precious resources at our own peril. Maybe we should consider all these costs the next time we engage in military adventurism. With all this talk about gov't living within our means, then we shouldn't fight a war we can't afford, especially when our survival and our allies are not in immediate peril. And is money really the issue if maintenance costs for our bloated nuclear arsenal (in the tens of billions, and the GOP refuses to reduce it to START Treaty recommendations, fighting Obama on yet another irrational front) would easily pay for cognitive rehab and 9/11 responder care for life?

More on taxes and unemployment

Well, the WSJ is totally correct that extending unemployment will keep official unemployment higher than cutting it, but for a far more cynical reason.  We use U3 unemployment as the measure of official unemployment, and to qualify as unemployed under U3 a person has to be actively searching for a job.  There are plenty of folks who are only nominally looking for jobs: doing it because it's a requirement to collect the unemployment benefits.  If you cut the unemployment benefits, they'll no longer have a reason to search for a job, and they'll stop.  As soon as they cease looking for employment they cease to be counted in U3 unemployment.  Voila, lower official unemployment!

The fact that we use U3 unemployment as the measure of official unemployment fairly dramatically understates the actual labor slack in the economy.  Looking at a measure like U6 (which is U3 unemployment plus people who've stopped seeking work for economic reasons, people who would like a job but haven't looked recently, and people who are working part-time for economic reasons but want to work full-time), that measure of unemployment is up around 17%.  And the spread has increased.  3 years ago U3 was 4.7% and U6 was 8.5%.  Today it's 9.8% and 17.0%.  It's a lot easier to tell people they should care about austerity and so forth when you can claim unemployment is 9.8% than if you have to acknowledge it's at 17%.

Also, a pretty good graph of the effect of different kinds of economic stimulus, from Moody's a couple years ago when they were looking at this stuff the first time around: http://motherjones.com/files/legacy/news/feature/2009/01/bang-for-the-buck.jpg

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Very true, thanks J. Yeah U3 is a pretty limited metric and doesn't capture real labor market conditions. I don't know why more economists and politicians don't cite the U6 data - that should shock anyone that almost 1 out of 5 able-bodied people can't find work or can't find enough work. That's about 25.5M people, and many more if you include dependents. That is a critical mass for voting leverage. Well, the unemployment rate among white collar workers is quite a bit lower, and if they and the retired are doing most of the voting, well then we know what kind of economic policies we'll get.

"Managers and college grads still are more likely to be working than Americans overall. The unadjusted unemployment rate hit 8.5% in January, compared with 4.1% for management and professional workers and 3.8% for college graduates." (I'm assuming these %s are based on U3 from 2009).

http://www.jsonline.com/business/39650377.html

Haha, so all the tax cuts that the GOP loves (dividends/cap gains, Bush cuts, corporate cuts) deliver the least bang for buck, while all the spending they want to cut (food stamps, unemployment) are the best. When will America wake up to this? Good job to the GOP governors who refused stimulus money for infrastructure projects and such (and often those red states are the ones with the weakest economies and most crumbling infrastructure, like Gov. Jindal's Louisiana). Yeah it's totally ridiculous that companies get to report accelerated depreciation to the IRS but use more conservative depreciation measures for SEC filings. So they pay less tax and appear more profitable to shareholders?

http://www.npr.org/2010/12/09/131940665/Sen-Alexander-Tax-Deal-Will-Create-Jobs

NPR was interviewing #3 GOP Senator Alexander yesterday (who sits on the Appropriations, Budget, Health/Labor Cmtes. so he should understand this stuff) about the tax cut deal, and the host kept prodding him to explain why it's justified that high earners get a tax cut, and in fact a disproportionately expensive cut vs. lower earners (1/4 of the amount goes to the richest 1% of Americans). Instead of an intelligent response, he parroted the cliche "We are trying to create jobs and you don't raise taxes on anyone during a recession." Then why did they oppose Obama's stimuli, which included tax breaks for businesses that hire new workers? Isn't that better than giving every rich person money even if they don't preserve/create a single job?

He also stressed that this was not a tax cut, since the taxes are currently low but are scheduled to increase. So letting the cuts expire would actually be a tax hike (I guess if the Dems let the cuts expire, the GOP plans to blast them for "raising taxes"). But that is ridiculous logic. It was a temporary tax holiday all along (since Bush and the GOP in 2000 didn't have the votes to make it permanent); the regular tax rate is the higher one. That's like me taking a vacation from work, and when I return, I complain to my boss that he's increasing my hours! I guess Alexander realized that he couldn't give a good answer to the question, so might as well kill the conversation with some misdirection. He is a lawyer after all.

It's just sad to see Obama and Summers defending this tax cut BS so fervently, and to their fellow Dems to boot. I don't really blame Obama for his actions considering the circumstances, but stop trying to polish a turd. They are actually saying that if we extend the tax cuts, we'll certainly avoid a double-dip recession. I guess the GOP isn't the only party engaged in fear-mongering.

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I think the attached chart pretty much lays out the answer to your question as to why there's such intense pressure to ditch the unemployment insurance and extend the Bush tax cuts for the wealthy. (as you might imagine, education and income are pretty highly correlated)

I was just reading a paper the other day about how much more pro-poor the US would be if elections were held on the weekends (most poor people can't get off time to go vote on weekdays like high-income people can). It's no surprise that the most conservative states often have the shortest voting hours and the most onerous voting registration requirements.

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Thx, A. I wonder why community organizers don't try to mobilize the urban poor more during elections. Maybe since most cities vote liberal anyway, and minorities/lower income folks are more likely to be Dems, less of a need? I know there were allegations of people getting packed into buses from the ghetto and whisked to the polling stations, but I'm not sure if it was just propaganda, and also not sure if there's anything wrong with that.

As you said, our voting system is the most inaccessible of all modern, developed democracies. In France I believe the window to vote is several days if not weeks, India too (due to people living in remote areas maybe). In other nations voting occurs on weekends or national holidays. There is absolutely no damn reason to have an election on a work day, especially when the working poor can't get paid time off and may work 12 hours a day over multiple jobs. Plus in other nations there isn't so much red tape for registering. In many cases a voter can "register" (or whatever equivalent) on election day. Hell, even in Iraq the polls stay open Fri-Sun. But all those scenes of Americans waiting in lines all day to vote in inner-city areas is just unacceptable. Voting shouldn't be such a sacrifice, unless the system is designed to prevent those people from participating. Making voting nearly impossible for the lower class is one thing, but how do we control the influence of the rich in politics? The 1st Amend. seems to protect an individual, org, or corporation's "right" to basically contribute limitless cash to political causes, and the Supreme Court seemed to affirm that last year.

In Australia and Belgium (among others), voting is mandatory with small fines for absentees. Maybe that wouldn't fly here, but I know Arizona passed a bill to include a cash lottery as incentive to get people to the polls. We'll see how effective it will be. I wonder if even mail-in or online/phone voting would help the poor that much (Wikipedia says internet voting is already in place in the UK, France, and Switzerland, but I haven't been following that). Oregon, which has a fully mail-in voting system, is slightly better than the US average for turnout (US avg. for 2008 pres. election was 62%, OR was 67%).

http://www.slate.com/id/2108832/
http://en.wikipedia.org/wiki/Voter_turnout#International_differences
http://elections.gmu.edu/Turnout_2008G.html
http://www.nytimes.com/2006/07/17/us/17voter.html?ex=1310788800&en=9626060428eeb1ed&ei=5088

More on the tax compromise

http://news.yahoo.com/s/yblog_thelookout/20101209/ts_yblog_thelookout/jobless-benefits-cut-unemployment-rate-fed-economist-confirms

More data to refute the GOP's BS economic beliefs. Of course the GOP and conservative WSJ/Bloomberg Businessweek used Fed data to calculate that if Obama's request to extend unemployment benefits goes through, it will result in 0.4-0.8% higher unemployment during the duration of coverage vs. if the benefits expired. We know that "handouts" are disincentives to find work. But there is another side of the coin. The Fed study's authors state that a "second stimulus" is created due to unemployment benefits, but I guess the sophisticated business press overlooked it. The recipients are more likely to stay afloat (thereby averting some of the social costs of unemployment), and they are very likely to spend most or all of their benefits to survive, which injects more cash into the economy, which in turns spurs investment, hiring, growth, and deficit reduction (all the things that the GOP claims their policies promote). The Fed estimates that some 700,000 new jobs can be created from the benefits being spent. Spending by people on unemployment will also trickle to small business owners who are not eligible for unemployment insurance, and therefore depend on revenues to keep their operations going, so it's fairly egalitarian. Unemployment assistance is as big of a win-win as you can find these days, yet of course that is precisely what the GOP opposes and wants to cut. Why anyone who earns less than $150K/year and isn't an extremist Christian would support the GOP these days is beyond me. I'm not saying we all should be Dems, but at least quit the party that doesn't give a shit about you and all the hard-working, honest folks who are getting crushed by economic forces out of their control.

http://www.economist.com/blogs/democracyinamerica/2010/12/tax_cuts

Also, those on unemployment benefits will probably spend all of their assistance because it is only a fraction of their former salaries, and they may have already been living month-to-month even while fully employed. Changing gears a bit, the poor spend all of their tax credits, and then some (according to this Economist piece), because they often don't own real estate and have less incentive/ability to save. Remember in 2008 how Dubya gave a $300 stimulus check to each taxpayer, regardless of income? The poor (earning <$32K) increased their spending by $384 on average, and the rich (earning >$75K, though in parts of America $75K is hardly rich) increased by only $231. So that means the economy gets more help from aid to the poor than to the rich. And the rich will get theirs anyway, since extra spending by the poor will improve earnings, dividends, and stock values for the consumer firms that the rich own/invest in. The rich may not even notice the extra bit in their paychecks, and it's such a small fraction of their disposable income anyway, so they just pocket it or let it earn an investment return. Ironically, the middle earners (between the 2 groups) spent even less of the stimulus. The author hypothesizes that this is due to many middle class Americans having mortgages and credit card debt that they would rather help pay off than spend on new purchases (I think there were news reports on this at the time). But still, that is economically sound because it reduces their risk of foreclosure, dings to their credit rating, and wasted money on exorbitant interest rates. We get the least bang for our buck by helping the rich, which is pretty much obvious to everyone but 41 senators it seems.

I see now that the Dems are revolting against Obama's tax compromise and are crafting new legislation in response. I understand some of the anger against Obama, but the real culprit is the abuse of the filibuster. I know they don't have the votes for filibuster reform either (and the Dems may not want to take that weapon off the table, because they are bound to be the Senate minority many more times in the future), but at least point the finger at the right culprit.

We don't negotiate with terrorists, unless they're GOP senators

http://www.nytimes.com/2010/12/06/opinion/06krugman.html?_r=4&ref=opinion
http://www.kqed.org/a/forum/R201012070900

I'm sure you've heard the news about the Obama Bush tax cut compromise deal. A neutral reporter on NPR commented on the deal saying that it seems the Republicans did not want to extend tax cuts to anyone until the rich got theirs. Obama likened it to holding the nation hostage. In his national press conference, Obama said that government shouldn't negotiate with hostage takers, but the game changes when the hostage (low to middle class America) is in imminent danger. Obama didn't want to let middle class tax cuts and unemployment benefits expire, so he acquiesced to the GOP and is urging his party to endorse the GOP plan to extend all the Bush tax cuts, even for above-$250,000-per-year earners (about 2% of Americans). The situation is further complicated by the GOP senators' threats to kill all legislation in the lame duck session until the tax cuts are extended, because they know the Dems are desperate to get things passed in December before they lose the House. It's possible that Obama agreed to the tax deal because the GOP will make concessions in other areas, but I'm not holding my breath. All this mess in Washington makes Afghanistan look like an easy problem.

But really, what is an inexperienced pragmatist who just took a political drubbing to do? We know that the Dems currently in power can appear politically clueless to the public, and the party mostly just avoids or bungles up the message war. We know that Washington today is not like the times of LBJ when a strong leader could kick some butt behind closed doors to keep the flock in line. And we know Obama is not that type of leader anyway, even if it would work. But maybe campaign concerns about his lack of executive experience and deferential leadership style were not unfounded. From the progressive perspective, Obama has whiffed on Afghanistan, Gitmo, health care, Wall Street reform, immigration, and Don't Ask Don't Tell. He's also failed to maintain the dominant status of his party in Washington. Heck, he froze pay for many already underpaid federal employees to cut spending, yet agreed to let the rich keep more of their money? What is this guy doing? Of course all of that wasn't 100% his fault, but it occurred under his watch, and he hasn't been the inspirational leader to the left that he was in 2008. Plus all the say-this-do-that is confusing and frustrating voters: Obama dissed Wall Street excess but refused to cap CEO pay, promoted the public option then said it's wasn't critical, etc. The left has plenty of reason to be disappointed with Obama and the party. He already lost the independents according to the recent election, and this may be the last straw for disgruntled liberal voters (there's even talk of Obama having a Dem primary challenge in 2012, but that's unlikely since it would basically signal a surrender to the GOP). Really, what was he to do on the tax cuts?

His advisers told him that letting the middle class cuts expire would be politically risky, and the GOP would paint it as Obama "raising taxes" in a recession. He's already paranoid after the mid-terms of being seen as a tax-and-spend guy. And maybe he does really care about the struggling families who may depend on the extra bucks in their pockets from these programs. But does he think that moderates and independents will like him again because he cut their taxes a few Benjamins? As Krugman's article described, a CBO study concluded that unemployment would rise only 0.1-0.3% if Obama let ALL the tax cuts expire. The poor have the least to lose from Bush tax cuts expiring, and they have many other more serious financial troubles to worry about. It's still rolling the dice for thousands of people in this already troubled labor market, but maybe it's better than caving to "terrorists" and setting a dangerous precedent. We don't negotiate with terrorists because that sends the message that terrorism works and it's okay to use abominable methods to get what you want. The other side will play ball. Next year with Speaker Boehner and the gang of filibuster-happy GOP senators (plus plenty of easily-influenced noob Tea Party legislators), what's to prevent them from threatening Obama again? Clinton caved under Gingrich's government shutdown and transferred the burden of welfare from DC to the states (any wonder many states are in the red now?), and that was during a good economy. What will Obama do when the GOP wants to slash welfare and other programs further in 2011, because they're supposedly such fiscally responsible folks? Yes I know welfare and unemployment benefits are economically problematic because they create a disincentive to find new work, but cutting people off overnight is not the way to fix things either.

Krugman argued that Obama should call the GOP bluff and not budge on the tax cuts. I know the Congressional Dems were working on a new bill to extend the cuts only for the middle class, so he should have dared the GOP to block it (maybe they did already?). And why not fight fire with fire? If they are threatening to block everything, Reid should fire back that the Dems aren't going to include the GOP in any future negotiations, and Obama will veto all GOP-sponsored bills. Does a parent indulge her child's tantrum, or shame and discipline him instead? Bush circumvented Congress with record use of executive orders and other devices - why can't Obama do the same? Maybe he should wake up and not "stay the course"; coalition and consensus building is over. Force and push things through now because the nation needs it. His re-election is already in jeopardy, so what more is there to lose? Bottom line, don't let the GOP get away with this conduct. It's bad for Obama, his party, and the future of America. Or if this is how the game is going to be played, there's no reason the GOP should have exclusive right to misbehave. Fire right back and cut off programs close to the GOP's frozen hearts (defense projects, aid to Israel, corporate subsidies, etc.). Stop living in the dream world where politics are civil and cooperation is possible.

Maybe in the end this will be a good thing for the Dems (hear me out). Now they've taken away the GOP's deficit card for the near future. The GOP will look like fools if they lambaste the Dems on the (somewhat unavoidable in the short term) ballooning deficit when they had a chance to cut it by $900B, and instead decided to help the wealthy. But it's up to the press and public to call them out on it, and we probably won't. Plus it's not like the rich in the US are getting tax shafted versus other G8 nations. Heck, even the richest of the rich, Buffet and Gates, are telling DC to tax the rich more (http://abcnews.go.com/ThisWeek/billionaires-buffett-gates-tax-us/story?id=12259003&tqkw=&tqshow=TW)! The top tax rate in European democracies is ~42%, which is about what the rich in America are paying now when you include local/state taxes. But big differences: in Europe, taxes fund much better social programs and it's much harder to lose your job, so they need less money in their pockets for financial security. And in the US, our tax code is much more complex and corrupt, so the rich pay a much lower effective rate due to a laughable 15% rate on capital gains/dividends, plus all their crazy deductions and subsidies (remember the yacht credit that was recently eliminated? http://www.seattlepi.com/local/198998_boats10.html). And I believe the rich in the US earn more per capita than the rich in the rest of the G8 anyway.

We discussed the wealth gap a lot this year, and we've already debunked the Bush rationale that more money in the rich's pockets trickles down to help the whole economy (even Dubya's father called the justification of the rich tax cuts "voodoo economics"). So Obama, go ahead and tax the rich more, even if they sick their GOP minions on us as punishment. Keep crafting bills in Congress designed to fight the recession and help working people, and dare the GOP to block them every time. If (when) they do, go around the TV news circuit and blast them for it. Take out full-page ads and hit the campaign trail if you need to. Try to cut the debt by restricting earmarks, tax loopholes, and pet projects, and dare the GOP to oppose you. At least act like you're giving an effort. They might as well try it, because nothing good awaits them on their current trajectory.