[lbo-talk] Obama economist an apologist for Wal-Mart

Max B. Sawicky sawicky at verizon.net
Tue Jun 10 18:44:27 PDT 2008


About spending, I found out recently that the nation's bridges are funded in two different ways. One is through a grant to states just for bridge construction, repair, and maintenance. It's about $5b a year. The other is through earmarks. The really big projects are all earmarks, because they are so expensive they would eat up a state's grant, which it needs for all the small stuff. The bigger projects tend to have a better rationale for Federal support (though there are certainly exceptions). If you roll through lists of earmarks, many of them will strike you as perfectly sensible. They merely lack some overarching Federal program to fund them.

Now you have all these characters ranting about earmarks, including some liberals, to prove they hate govt waste. But the really gigantic waste is the inflation of the defense budget. The "bridge to nowhere" (which was itself a waste) hardly compares.

I conclude that all earmark talk is a distraction from the hideously expensive, not to say destructive U.S. "national security" apparatus.

Shane Taylor wrote:
> Max Sawicky wrote:
>
>> No question that it would be nice to see a
>> recognizable liberal mind among Obama's
>> visible advisers. There aren't any yet.
>>
>> Furman is v-e-r-y smart.
>>
>> Furman worked for Rubin, but Rubin is not
>> in the same place as he was in 1992-2000.
>> Guards should be up, but full-throated
>> denunciations are not yet in order. To
>> see where they are now, anyone can
>> masticate the Hamilton Project papers.
>> They're all on-line.
>>
>> The Sun article -- and we should know The
>> Sun sucks -- exaggerates in saying JF sees
>> Wal-Mart as any kind of model. I invited
>> JF to join my blog and he put up two bits,
>> one of which was a Wal-Mart piece. It
>> proved how broad-minded I am.
>>
>> JF is not anti-union, and he is
>> pro-minimum wage (also EITC).
>>
>> My unsolicited advice: save your
>> ammunition. We can't have a crazy person
>> in the WH.
>
> And McCain is a crank.
>
> Shane
>
>
> TRB: The Illusionist
> Watch John McCain saw the budget in half!
> by Jonathan Chait
>
> The New Republic
> Wednesday, June 11, 2008
>
>
> If you accuse John McCain of agreeing with George W.
> Bush on economics, he'll come back at you with the one
> big issue where he and Bush disagree: spending. McCain
> may (now) approve of the Bush tax cuts, but he
> lacerates the president for his spendthrift ways.
> This, McCain says, is a "fundamental" difference
> between him and Bush.
>
> But you know who else disagrees with George W. Bush on
> spending? George W. Bush. The president has been
> lamenting excessive spending for years now. Bush's
> line is the same as McCain's: The tax cuts are swell,
> but "[t]hat's just one part of the equation. We've got
> to cut out wasteful spending."
>
> Actually, McCain is following the pattern of not just
> Bush but every Republican president since Ronald
> Reagan. Phase One is to enact tax cuts and promise
> that they'll cause revenues to rise, or will cause
> revenues to fall (leading to spending cuts), or
> somehow both at once, so, either way, there's no
> possibility that it will lead to deficits. Phase Two
> is deficits. Phase Three is to blame the deficits on
> big-spending congressional fat cats and to issue
> increasingly strident threats to cut expenditures,
> without going so far as to identify actual programs to
> cut.
>
> One of the tropes of this phase is railing against the
> evils of pork-barrel spending. President Bush's
> position is that earmarks are really bad. ("The time
> has come to end this practice [of congressional
> earmarking]," he urges. "So let us work together to
> reform the budget process, expose every earmark to the
> light of day and to a vote in Congress.") McCain's
> position is that earmarks are really, really bad. He
> likes to hold up for ridicule a federal program to
> study bear DNA, and he has taken to using the same
> language to taunt congressional appropriators ("I'm
> their worst nightmare") that he otherwise reserves for
> Hamas.
>
> Another trope is the embrace of the line-item veto as
> panacea. Reagan crusaded for the line-item veto, as
> did George H.W. Bush. Today McCain vows, "I will seek
> a constitutionally valid line-item veto to end the
> practice [of earmarking] once and for all." When
> then-Vice President Bush was making the line-item veto
> a big issue in the 1988 campaign, economist Doug
> Holtz-Eakin studied state budgets over the previous 28
> years. He concluded that "over time, in the hands of
> Republicans and Democrats alike, the line-item veto
> fails to cut spending." Apparently Holtz-Eakin has
> failed to share these findings with McCain, whom he
> serves as chief economics adviser.
>
> McCain's crusade against domestic spending is a wild
> misdiagnosis of the problem. Most conservatives
> believe their main error has been to deviate from the
> true small-government faith, and McCain has embraced
> the narrative. "We were elected to reduce the size of
> government and enlarge the sphere of free and private
> initiative," he told the Republican group GOPAC. "Then
> we lavished money, in a time of war, on thousands of
> projects of dubious, if any, public value."
>
> The audience is meant to take this to mean that the
> size of government has expanded under Bush largely
> because of pork-barrel spending or other domestic
> outlays. In fact, the growth of government under Bush
> is mostly due to higher spending on defense and
> homeland security, which have grown from 3.6 percent
> of the economy to 5.6 percent. Domestic discretionary
> spending (that is, programs other than entitlements)
> has fallen as a share of GDP, from 3.1 percent to 2.8
> percent. (These numbers come from Richard Kogan of the
> Center on Budget and Policy Priorities.)
>
> McCain is promising to cut taxes by $300 billion per
> year on top of the Bush tax cuts, which he would make
> permanent. In addition to this, he promises to balance
> the budget in his first term. When asked how he could
> possibly pull this off, McCain has asserted that he
> could eliminate all earmark spending, saving $100
> billion per year.
>
> I don't find this explanation persuasive. The first
> point I'd make is that $100 billion is, in fact, less
> than $300 billion. The second point I'd make is that
> McCain won't even cut $100 billion, or anywhere close.
> By conventional measures, earmarks only account for
> $18 billion per year. McCain gets his number by
> employing an unusually broad definition of what
> constitutes an earmark. McCain's definition includes
> things like aid to Israel and housing for members of
> the military that are not "pork" as the term is
> understood. When asked if he would eliminate those
> programs, he replied, "Of course not."
>
> So we're left with a pot of money closer to $18
> billion. And McCain surely won't eliminate even that.
> He has frequently found himself campaigning at places
> funded by federal earmarks and beloved by the local
> citizenry, and he keeps inadvertently showing how
> impossible it is to fulfill his promises. Last month,
> McCain visited a hospital in Pennsylvania and met an
> ovarian cancer patient who's being treated with a
> clinical trial program funded by an earmark. Asked if
> he would eliminate that program, he replied, "It's the
> process I object to. ... When you earmark in the
> middle of the night, you have no budgetary
> constraints."
>
> Likewise, when pressed by NPR's Robert Siegel, McCain
> insisted he supports programs so long as "there's a
> need" and only wants "to do it through an open,
> honest, transparent process that is proceeded by
> hearings and authorization." A perfectly sound
> position. But, if you're merely shifting spending from
> earmarks to the regular budget process, then you're
> not saving any money.
>
> Indeed, The Washington Post recently did a long
> reported story on the bear DNA project that McCain has
> made the butt of so many jokes. ("Three million to
> study the DNA of bears in Montana. Unbelievable,"
> scoffs one McCain ad.) The Post found that the project
> is a tool for measuring the bear population in Glacier
> National Park and has a sound scientific basis. When
> contacted by the story's author, McCain's campaign
> gave a familiar reply: "Senator McCain does not
> question the merits of these projects; it's the
> process that he has a problem with." If McCain won't
> even commit to zeroing out his single favorite example
> of government waste, it's not clear that he'll save
> any money at all.
>
> During the GOP primary, McCain presented his economic
> program as a more ideologically pure version of
> Bushism. Now he puts the same thing forward as a new
> synthesis. "It will not be enough," he says, "to
> simply dust off the economic policies of four, eight
> or twenty-eight years ago." Right; those other
> presidents had huge tax cuts for the rich combined
> with unspecified spending cuts. McCain's plan has
> those things and a joke about bear DNA. How heterodox!
>
> http://www.tnr.com/politics/story.html?id=f5a811b8-a7e3-4615-8677-7f349950a9c7
>
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