From: glevy@PRATT.EDU
Date: Sun Oct 24 2004 - 13:55:39 EDT
Note the reference to Bob Pollin, a former New School student who studied with the late David M. Gordon. /In solidarity, Jerry >>http://www.counterpunch.org/bates10222004.html >> >>Weekend Edition >>October 22 / 24, 2004 >>"Hurt the People Who Vote For Us" >>Kerrynomics: Seems Like Old Times >> >>By GREG BATES >> >>Robert Pollin's excellent Contours of Descent: U.S. Economic Fractures >> and >>the Landscape of Global Austerity provides a snapshot of Clintonomics >> that >>should be required reading for those in the anybody-but-Bush school. It's >>a taste of things to come. Pollin writes: >>"Unlike Clinton, Bush is unabashed in his efforts to mobilize the power >> of >>government to serve the wealthy. But we should be careful not to make too >>much of such differences in the public stances of these two figures, as >>against the outcomes that prevail during their terms of office. It was >>under Clinton that the distribution of wealth in the U.S. became more >>skewed than it had been at any previous time in the past forty >> years-with, >>for example, the ratio of wages for the average worker to the pay of the >>average CEO rising astronomically from 113 to 1 in 1991 under Bush-1 to >>449 to 1 when Clinton left office in 2001." >> >> >>Such skewing was conscious policy, as will be reviewed momentarily. >> Pollin >>reports that Clinton's tax policy did reverse some of the regressive >>taxation under Reagan but not all of it. And, he notes, "The fact is >> that, >>insofar as the end of the Cold War yielded any peace dividend under >>Clinton, it took the form of an overall decrease in the size of the >>federal government rather than an increase in federal support for the >>programs supposedly cherished by Clinton, such as better education, >>improved training, or poverty alleviation." >> >>Pollin allows that the Earned Income Tax Credit (EITC), the most >>significant initiative under Clinton, more than doubled from $9.3 billion >>to $26.8 billion during his two terms. But food stamps, >>"dropped by $8.5 billion a decline reflecting a large increase in the >>percentage of households who are not receiving food assistance even >> though >>their income level is low enough for them to qualify. Under Clinton's >>presidency, the decline in the number of people receiving food stamps-9.8 >>million-was 17 percent greater than the decline in the number of people >>officially defined as impoverished, and was accompanied by a dramatic >>increase in the pressure on private soup kitchens and food pantries. >> >>"And while the EITC does correct some of the failings of the old welfare >>system, it has created new, and equally serious problems. Moving poor and >>unskilled women from welfare onto the labor market exerts a downward >>pressure on wages, and the national minimum wage itself is too low to >>allow even a full-time worker to keep just herself and only one child >>above the official poverty line." >> >> >>But wasn't Clintonomics the policy that created boom times? Poverty did >>decline under Clinton by almost 4 percentage points. Yet, as Pollin >>explains, in the prosperity of the 1990s, this small drop back to the >>level it was in 1974 is reprehensible: "Per capita GDP in 2000 was 70% >>higher than it was in 1974, productivity was 61% higher, and the stock >>market was up 603%." >> >>Clinton's presidency did see a stop to the declining wages from 1993 to >>1996, according to Pollin. And in the next 3 years wages rose sharply. >> But, >>"the real wage gains were also, in turn, largely a result of the stock >>market bubble. The Clinton economy of the late 1990s, whose successes >> were >>so heavily dependent on the stock market, offers little guidance as to >>what such an alternative path to sustained improvements in real wages >> might be. >> >>"Moreover, conditions under Clinton worsened among those officially >>counted as poor. This is documented through data on the so called >> "poverty >>gap," which measures the amount of money needed to bring all poor people >>exactly up to the official poverty line. The poverty gap rose from $1,538 >>to $1,620 from 1993-99 (measured in 2001 dollars)." >> >> >>The good news is both not so good and not repeatable. As Pollin points >> out >>in his chapter "The Down Side of Fabulous": >>"The conclusion is clear: the overall rise in consumption spending in the >>Clinton years-which was itself central to the economy's overall growth in >>this period-was driven almost entirely by an enormous increase in >>consumption by the country's richest households, tied to the similar >>formidable increase in wealth for those households." >> >> >>Pollin makes clear that the modicum of good news was temporary, >>unsustainable, and costly. "The stratospheric rise in stock prices and >>debt-financed consumption and investment booms produced a mortgaged >>legacy. The financial unraveling had begun even as Clinton was basking in >>praise for his economic stewardship." >> >>But how can we blame Clinton for the stock market boom? As Pollin shows, >>Federal Reserve Chairman Alan Greenspan not only knew of the "irrational >>exuberance" of the market back in 1996, but in minutes of a September >> 1996 >>meeting stated that, "I guarantee that if you want to get rid of the >>bubble[raising margin requirements on stock speculators to lower how much >>they can borrow] will do it." But Greenspan, like Clinton, was not >> willing >>to confront Wall Street. Instead, the Clinton administration and the Fed >>presented a united front in advancing across-the-board financial >>deregulation in the name of market efficiency and modernization. >>The yawning gap in wealth distribution was by design. Quoting from Bob >>Woodward's The Agenda, Pollin reports that: >>Clinton himself acknowledged only weeks after winning the election that >>"We're Eisenhower Republicans here We stand for lower deficits, free >>trade, and the bond market. Isn't that great?" Clinton further conceded >>during this same period that with his new policy focus "we help the bond >>market and we hurt the people who voted us in." >> >> >>Just as Bush's personnel were key players in past Republican >>administrations and therefore represent no real break with the past, a >>Kerry administration would employ key players from Clinton's >>administration. As discussed later key members of the team-Roger C. >>Altman, Gene Sperling, and Sarah Bianchi who worked for Gore-are mapping >>out the Kerry economy. >> >>Kerry's economic policy shows the promise of moving the country >> rightward, >>just as Clinton's did. In fact, Kerry is running right so fast that he's >>running against the promises he made during the primaries. In a May 3, >>2004 interview with the Wall Street Journal, he proclaimed that he was >>scaling back some promises in an effort to woo business. These "involved >>paring earlier proposals to expand college-tuition subsidies and provide >>aid to state governments, to help achieve the higher priority of halving >>the federal deficit in four years," the Journal reports. Regardless of >>what one thinks of this particular trade-off, it is yet another sign >> that, >>in his bid for the presidency, nothing is safe. >>Another example of Kerry's rightward push is his orientation toward the >>bond market. As mentioned earlier, Clinton admitted his rightwing >> position >>in saying that he was helping that market while hurting his voters. With >>Kerry, we are already one step farther right, and the guy hasn't even >> been >>elected yet. As the Wall Street Journal concluded that May 3 article: >>Liberals worry that, in the White House, Mr. Kerry is likely to tack even >>further toward the center. Some on the left complain Mr. Kerry is already >>doing so-undercutting the populism that was a key part of Mr. Clinton's >>1992 campaign. "The risk is that he's going to run the way Clinton >>governed, rather than the way Clinton ran," says Robert Kuttner, editor >> of >>the liberal American Prospect. "No president ever got elected by >> promising >>to appease the bond market." >> >> >>Kerry's advisors make clear where his presidency would take us. As the >> New >>York Times headlined March 28, 2004, it's "A Kerry Team, A Clinton >> Touch." >>Four people are at the heart of the team. Roger C. Altman was a deputy >>Treasury secretary in the early Clinton years who got derailed by the >>Whitewater scandal and resigned. He's back, having invigorated his wallet >>with stock market wealth. The three other team members are Jason Furman, >>an economist trained at Harvard, Gene Sperling, who served under Clinton >>for all of the eight years, and Sarah Bianchi who served as Al Gore's >>health care specialist and later policy advisor during the 2000 campaign. >>And the man in the wings is Clinton's former secretary of the Treasury. >>"This group is consulting literally daily with Bob Rubin," Altman told >> the >>Times. >> >>"The right tax code will spark job creation at home," Sperling claimed. >>Gone is any whiff of aid to the poor, any sense that government could >>reinvigorate the New Deal politics of FDR, which long ago sought to >> employ >>people directly instead of paying companies to do it indirectly-the >> latter >>being at greater cost to the taxpayer per job created, and a far more >>dicey form of insuring the economic health of the country. >> >>Another principle is that "New spending must be offset by cuts in >> existing >>spending," the Times reported. Kerry has made clear that spending on >>Defense and Homeland Security will continue to outpace inflation; the >>growth of these sectors will impose draconian fiscal discipline on the >>rest of the government if Kerry were to keep his pledge of balancing the >>budget. >> >>The article also reveals what John Kerry really means by healthcare for >>all. Not single payer insurance, by far the most cost efficient and most >>effective means for insuring access to health care for all-favored by >> most >>Americans. Instead, money will be shoveled to corporations: "federal >>subsidies for some aspects of corporate health insurance," the Times >>reports. The Wall Street Journal, May 3, 2004, quotes Kerry as saying >>about his health care subsidies, "I would think American business would >>jump up and down and welcome what I am offering." >>The Wall Street Journal explained further in a sober-eyed analysis of the >>two candidates just before that third debate. On October 13, the paper >>reported: >>"Mr. Kerry balances his support for new government programs with a >>Clintonian bow to limits on government action. His health-care plan >>eschews regulatory mandates and is heavy on market-based incentives: It >>gives uninsured people tax credits to buy into existing plans, and >>encourages companies to lower health-care charges for employees by having >>the government subsidize their most expensive cases." >> >> >>Returning to the Times article, regulation of outsourcing is out the >>window, the only hope for actually addressing the more pernicious effects >>of globalization's race to find the cheapest worker. Instead, Kerry will >>"provide tax rebates to manufacturers that add jobs in the United >> States." >>And he would cut corporate taxes-already at astonishing low levels-by 5%. >>It could be a nice tax break-offset in part by forcing companies with >>overseas income to pay tax on it immediately instead of deferring it >>indefinitely. Then, to cut the deficit by $250 billion, Kerry will >>reinstate the tax rates Bush cut on those households earning over >> $200,000 >>a year. Sounds good, but there is no plan to cut back on Bush's bloated >>Defense and Homeland Security spending. Kerry claims he can save tens of >>billions a year by ending some corporate welfare subsidies. But ending >>deficit spending while increasing the Defense and Homeland Security >>budgets would be devastating nonetheless. Progressives, arguing we must >>vote Kerry to "stop the pain," should consider exactly what they are >>voting for. Lest there be any question whether Kerry's presidency would >> be >>a move to the right for the economy, Altman clarifies that "It is a >>credible, enforceable pledge that will position Kerry to the right of >> Bush >>on fiscal policy." >>In the third presidential debate, Kerry promised to level the playing >>field for the American worker, but put the matter bluntly: >>"Outsourcing is going to happen. I've acknowledged that in union halls >>across the country. I've had shop stewards stand up and say, "Will you >>promise me you're going to stop all this outsourcing? "And I've looked >>them in the eye and I've said, "No, I can't do that." " >> >> >>The Wall Street Journal pointed out (October 13), >>"In practice, both men are free traders, and their rhetoric exaggerates >>their differences. Both support a new global trade pact, as well as one >>for the Western hemisphere. Mr. Kerry says he would review all existing >>trade pacts in the first 120 days of his administration to ensure their >>fairness, but it's nearly inconceivable that he would pull out of any of >>them because of the havoc that would cause the trading system." >> >> >>Returning to the band of merry men and women who are designing >>Kerrynomics, is there any shred of remorse over what these policy wonks >>did while they worked for Clinton? Any hope that we can escape the >>accelerated transfer of wealth to the rich, that, as mentioned, went from >>a CEO-to-worker ratio of 113 to 1 to 449 to 1 during Clinton's reign? >>Bianchi was asked in general terms about the relationship between Kerry >>and the Clinton years, and framed it this way, "The Clinton-Gore >>administration had a fantastic record on the economy, and John Kerry >>supported their plan. It's a logical place for him to be >> philosophically." >> >>Greg Bates is the founding publisher at Common Courage Press and author >> of >>Ralph's Revolt: The Case For Joining Nader's Rebellion. He can be reached >>at gbates@commoncouragepress.com. >
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