FB Share
Email This Page
add comment
Print

Reich writes: "Earth to Washington: The economy is slowing. The recovery is stalling. At the very least, repeal the sequester."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)


Earth to Washington: Repeal the Sequester

By Robert Reich, Robert Reich's Blog

27 April 13

 

conomic forecasters exist to make astrologers look good. Most had forecast growth of at least 3 percent (on an annualized basis) in the first quarter. But we learned this morning (in the Commerce Department's report) it grew only 2.5 percent.

That's better than the 2 percent growth last year and the slowdown at the end of the year. But it's still cause for serious concern.

First, consumers won't keep up the spending.Their savings rate fell sharply - from 4.7% in the last quarter of 2012 to 2.6% from January through March.

Add in March's dismal employment report, the lowest percentage of working-age adults in jobs since 1979, and January's hike in payroll taxes, and consumer spending will almost certainly drop.

Median household incomes continues to decline, adjusted for inflation. Another report out today showed consumer confidence fell in April.

Second, the recovery continues to be wildly lopsided. The only thing really keeping it going is the rip-roaring stock market. But the stock market only boosts the wealth of the richest 10 percent of Americans, who own 90 percent of stocks (including 401-K retirement accounts).

But no economy can maintain momentum just on the spending of the richest 10 percent.

Third, American exports can't possibly pick up the slack. In fact, they're dropping. Europe is falling into recession because of austerity economics. Japan is still a basket case. China's economy is slowing. Much of the developing world's economy is dependent on exports to the developed world - so don't hold your breath for developing countries to bail us out.

So what is Washington doing? Worse than nothing. It has now adopted the same kind of austerity economics that's doomed Europe - cutting federal spending and reducing total demand. And the sequester doesn't end September 30. It takes an even bigger bite out of the federal budget next fiscal year.

Earth to Washington: The economy is slowing. The recovery is stalling. At the very least, repeal the sequester.

You don't have to be an astrologer to see the dangers ahead.



Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.


 

Comments   

We are concerned about a recent drift towards vitriol in the RSN Reader comments section. There is a fine line between moderation and censorship. No one likes a harsh or confrontational forum atmosphere. At the same time everyone wants to be able to express themselves freely. We'll start by encouraging good judgment. If that doesn't work we'll have to ramp up the moderation.

General guidelines: Avoid personal attacks on other forum members; Avoid remarks that are ethnically derogatory; Do not advocate violence, or any illegal activity.

Remember that making the world better begins with responsible action.

- The RSN Team

 
+43 # Barbara K 2013-04-27 06:49
This sequester is totally nuts! Come on, a good Dem should introduce a Bill to repeal it. No more games, lives and livelihoods are at stake here. Congress needs to stop coming up with these maniacal ideas that cause the rest of us to suffer. We will remember come election time next year, you can be sure of that. People are getting their smarts back. We remember all the bad things you have put us thru. You may be thinking of winning next election, but this is not going to win you anything but defeat next year. Everyone who refuses to vote to repeal the sequester can kiss their high-paying job good bye. We've had enough of your selfish games.

..
 
 
+7 # MidwestDick 2013-04-27 08:22
Isn't Rep Grayson already on it?
 
 
-24 # Vern Radul 2013-04-27 10:52
The sequester was Obama's idea.
 
 
-5 # Vern Radul 2013-04-27 14:27
Denial was Obama supporters idea.

.................................
White House economic adviser Gene Sperling admits that, yes, in fact, the sequestration was President Obama's plan. Said Sperling on the Meet the Press program on March 3, "We put forth the design of" the sequestration, Sperling finally admits after a long exchange with the program hot.

http://www.speroforum.com/a/PYIJGMGUJB27/73742-White-House-official-admits-budget-sequester-was-Obamas-idea
 
 
+2 # BradFromSalem 2013-04-29 04:40
It was Obama's idea! Are you guys glad that a lefty like me has openly admitted that the Sequester was Obama's idea. Whoops, I said it agin.

How come that is virtually the only idea of Obama's that the Republican's latched onto? How come almost no Democrats supported the idea.

Do really think that we are so stupid that we believe that if Obama proposes something we would like it? It was and and is a terrible, disatrous idea. But it was just that and idea. When have Republicans since 2009 ever taken an idea from the President and used it to craft actual legislation. Congress, controlled by Republicans passed this idea into law. They own its consequences, since the President has since been man enough to say, he was wrong and ask for its repeal.
 
 
+6 # MidwestTom 2013-04-27 18:34
"We will remember come election time next year". Another thing to remember; about 2 or 3 years ago Congress finally forbid members trading on insider information. Well, while we were all watching Boston, both houses passed legislation exempting member for prosecution for insider trading. The worst part is that our supposed watchdog media hardly mentioned it.
 
 
-55 # moafu@yahoo.com 2013-04-27 06:55
Earth to Robert Reich:
No person, company nor nation can borrow its way out of debt !
 
 
+1 # BradFromSalem 2013-04-29 04:42
Prove it!
 
 
+23 # Edwina 2013-04-27 07:32
Such good advice we can be sure Washington will not take it. The financial sector still think there is wealth to be wrung out of the economy: privatizing public goods & services, as in Greece & Cyprus; looting pension funds and Social Security & Medicare.
 
 
+2 # Vincent L. Guarisco 2013-04-27 08:17
These were the seeds we planted and thus bitterly sowed. In depth and breadth, our failure was bound to happen in a debt based society with on-demand inflation that is tweeked by the FED using fiat money loans issued to the Gov (with interest). Take a bow Mr. Fed. We no longer have the most prominent ranking in investor confidence. Not only do we no longer keep pace in ideas, culture, goods and services, but we are not even close in many sectors. Our riches are increasingly lost, and we now dwell in financial crisis. We are indebted to Asian central banks; teetering on the brink of another economic meltdown. The real problem was and remains, the "Federal Reserve Act."
 
 
+28 # tonywicher 2013-04-27 08:35
No nation can or ever has "austeritized" its way out of debt. Austerity further depresses the economy, kills jobs, decreases revenue and increases the deficit. That is what is happening in Europe now, that is what is happening here and that is what happened in Germany in 1930. We are heading the same way. Anybody who thinks austerity is he answer is a dupe of the financiers. They want austerity too - for everybody but them. What we do need to restore the economy is investment in the future, in infrastructure and education. This is what creates wealth and jobs, not Wall Street speculation.
 
 
+9 # Vincent L. Guarisco 2013-04-27 11:03
Hi Tony, Good comment. It's true, Job creation is the winning ticket. Plus, we have to stop exporting our jobs overseas. Recovery starts from the bottom up. Not the top down. Indeed, you have to have jobs for consumers to spend money. No Jobs=no money to spend. Also, the too big to fail (and jail) boyz have to be broken-up. Gee, there used to be a thing called "anti-trust" law. I guess that went bye bye as well? In solidarity for recovery and prosperity for all of us...
~Vince
 
 
+5 # tonywicher 2013-04-27 19:53
The only right way to break up the banks is by restoring the full Glass-Steagall act of 1933 fully separating commercial from investment banking. Once this is accomplished we can have a credit system managed by a national bank such as the First and Second Bank of the United States of Hamilton, Monroe and Adams to restore our economy to full employment and productivity. This anti-monetarist credit system is the truly American system of economy, the memory of which is almost lost.
http://larouchepac.com/restorethebank
 
 
+14 # motamanx 2013-04-27 08:51
The Tea Party and its fellow travellers do not care about the country. Their only concern is that President Obama fails. It's an insane concept, probably treasonous, and those who voted for them were sorely mistaken.
 
 
-1 # DaveEwoldt 2013-04-27 09:01
What Reich fails to realize, as all good neo-liberals do, is that if the 2% growth were to be in anything other than fairy dust, it would mean 2% fewer resources for future generations.

We simply must get over this mindless addiction to growth as a measure of progress and prosperity. It's killing us, the planet, and will spell the end of Western industrial civilization. One rational alternative is steady-state, relocalized economies that focus on becoming better instead of bigger.
 
 
+2 # Merschrod 2013-04-27 14:53
Dave we have a taste of the steady state - unemployment - shrinking wages. And that was after a couple of decades of declining prices of consumer goodies (cheapo from the People's Republic). You can live within a small budget, but you need a job!

Back to eccon and ecology model for a minute - Your assuming that growth, value added, is directly linked to the material and energy world, but that is the old industrial model, and not the creative service model. Poor assumption.
 
 
+1 # tonywicher 2013-04-27 18:20
That is the worst economics I ever heard. Growth is not "a measure" of progress and prosperity, it IS progress and prosperity. Right now about half of the U.S. population, and much more than half of the world population are living below the poverty level. There are exactly two choices: grow the national and world economy, or let billions of people starve to death. There are some very rich people, such as those occupying Buckingham Palace who favor such economic policies that will reduce the population to a more easily manageable 1 billion or so, thus reducing the burden on Mother Earth and her limited resources.
 
 
-5 # cmp 2013-04-27 09:22
Oh, Chicken Little.. The sky ain't falling..

I did my duty yesterday. I turned on the corporate controlled, Liquid Crystal Display for my average of 8 plus hours. Let me tell you, "I can Cyrstal Gaze with the best of 'em.."

In fact, I'm so skilled at the art, that I no longer even care that I haven't known my neighbors name for the last 30 years..

The crystal never lies.. I was told to vote for a Shrub. Twice. But, I now have these very vivid images. That, all I have to do Is "Change..."

And, "Believe..."

I had this astrological image last night though. I saw these "Dancing Stars." I, now see them descending on Boston and providing "real," Star Studded Support.

All is fine.
 
 
+15 # MainStreetMentor 2013-04-27 09:37
Mr. Reich: You're preachin' to the choir. We all know spending is the answer to bootstrap economic recovery. The people you need to convince of that is: The Grossly Opulent Party, (GOP). Get them to agree to a $10/hr min wage; Get them to vote to repeal the sequester; Get them to stop filibustering EVERY Democrat sponsored bill ... then ... we'll have a chance at job creation and a REALLY stimulated economy.
 
 
-13 # Vern Radul 2013-04-27 10:18
The sequester was Obama's idea.
 
 
+6 # bikewriter 2013-04-27 13:55
Yes it was. He thought it would force the issue,making the Repubs take action based on their sense of responsibilty and concern for the American people and their economy. He was wrong. They have neither. Having drunk too much Fox Fool-aid they think that sinking the economy will someone reduce the deficit and have now dug their heels into that cowpie.
 
 
-6 # Vern Radul 2013-04-27 16:06
Actually, Obama did it because he wanted it to pass.

And it was Obama who signed it into law.

Not republicans.

Republicans are amateurs compared to Obama. Not one of them could have convinced you to cheer for it or pretend it was some kind of eleven dimensional chess strategy.

On March 1, 2013, across-the-boar d cuts of $85 billion [went] into effect, wreaking havoc on most government operations.
...
It was Obama who swallowed whole the corporate argument, previously championed by Republicans, that the national debt was Crisis Number One and that entitlement programs were the root cause. From the moment in January of 2009 when Obama served notice that Social Security and all other entitlements would be put on the chopping block, he became the chief mover and shaker for so-called entitlement reform. He created the model for austerity, through his Simpson-Bowles deficit reduction commission. It was Simpson-Bowles that provided the basis for the massive cuts offered by President Obama in 2011. When the Republicans balked at even a modest tax increase for the rich, it was the White House National Economic Council Director, the corporate deal-maker Gene Sperling, who came up with the sequestration scheme, which was timed to explode right after the 2012 elections. The idea was to make every popular constituency in the country scream – and accept the inevitability of massive entitlement cuts.

http://tinyurl.com/SequesterThis
 
 
-6 # tonywicher 2013-04-27 19:56
Absolutely correct! Obama fools Democrats by blaming everything he does on Republicans.
 
 
+1 # Merschrod 2013-04-27 14:56
Speaking of Bootstraps. Look at the great sustainable economy in Puerto Rico follwoing "Operation Boot Strap." For you youngsters that means going back to the 1950s! No no boots!
 
 
+12 # Vincent L. Guarisco 2013-04-27 09:56
In extending my comment after my earlier post on this thread, I would add -- our situation is dire -- we're in big trouble! Lets get real. our whole way of life has been "sequestered." The Constitution is being shredded: Lets take inventory: After 9/11, the Patriot Act of 2001, the Military Commission Act of 2006, the Citizens United v. Federal Election decision of 2010, the NDAA resolution of 2012 and CISPA is currently headed for the Senate.

If you want to repeal something, I say a great place to start is the "Citizens United v. Federal Election decision of 2010."
Until we do so, our elected officials (no real choice there) will only represent corporate interest. You know, the ones who fill their campaign coffers to the hilt, so they get their way. I expect to see a lot more grief (and poverty) as time marches onward. The white shoe boyz seem to have the ball in their court.
 
 
-9 # Vern Radul 2013-04-27 10:17
Robert, you knew Obama would do this last fall in the lead up to the election when you were doing everything you could do to urge people to buy into the lesser of two evils scam once again.

You got what you wanted and voted for.
 
 
-3 # tonywicher 2013-04-27 18:41
I voted for Obama in 2008 hoping he would be the anti-Bush, a new Roosevelt. After about two months it dawned on me that he IS Bush. I'm viscerally anti-war, he's at least as as pro-war as Bush. Bush invaded Afghanistan and Iraq, Obama invaded Libya and it looks like Syria is next. Obama has his own private assassination squad just like Cheney did, and he claims the right to kill anybody anytime, citizen or not. His contempt for the Constitution exceeds that of Bush, if that could be possible. And he is a 100% Wall Street Stooge. He is 100% banker owned. He is a CIA insert. I am proud to say I did not vote for him in 2012. Not that voted for Romney. Are you kidding? I went with Rosanne. I liked the guillotine. But I saw my fellow Democrats, bamboozled by the "lesser of two evils" argument that I once accepted myself, vote for this utter bum. But somehow I had the feeling that they would quickly become disillusioned this time. I recommend we join the Republicans, Tea Party or anybody else that wants to impeach this guy. We need to change the paradigm here. Bush should have been impeached and so should Obama, for usurpation of power and war crimes, and for being in the pocket of bankers. Let's clean house here, folks. Let's restore the Constitution and the institution of the presidency.
 
 
-1 # tonywicher 2013-04-27 20:03
Well, I don't know if Reich got what he wanted or has been just another deluded liberal like many others. I'm willing to be charitable.
 
 
+2 # reiverpacific 2013-04-27 10:18
It's easy to figure: -why the Hell should THEY -as in the deeply established, corporate-run status-quo insiders care, no matter which right-wing party of the three they hew to? All they want is pundit-sourced, mildly favorable numbers put about by their patsy owner media, to prove that some of them are awake and present occasionally.
They have smugly cosy jobs and benefits we are all paying for (Yes, contrary to popular reactionary bull-pucky, 96% of Americans pay taxes -but some who don't are either too poor or at the other end, rich enough to stash their obligations offshore) and extended benefits even when they are voted out or leave office -with plentiful, better-paid lobbyist positions open as the living proof that "The evil men (and women) do lives on after them".
Otherwise, we'd be in the midst of an infrastructure revitalization, jobs boom and the resultant upsurge in support for small businesses (and unfortunately big boxes too -but people would possibly look beyond tacky-cheap and sweatshop sourced with a bit more to spend).
It's more and more frustrating from where I'm sitting, trying to rebuild the shattered remains of a once decently sustainable and remunerative businesses from nothing.
Change my broke, kilted arse!
 
 
-3 # havershelly 2013-04-27 10:55
Why? Do you really think that whatever Congresses replaces the sequester with will be better? Dream on. At least military spending is taking a tiny hit -- a fraction of what it should be but probably the only such hit we'll ever see. And Social Security and Medicare are not being cut -- we know that neither Obama nor Congress will protect those in any agreement.
 
 
-1 # tonywicher 2013-04-27 19:34
You are just a banker dupe if you thing that debt is the problem. The problem is no growth. The first thing the government must do is a bankruptcy reorganization if the mega-banks by restoring the Glass-Steagall banking law of 1933 to get financial speculation under control. Obama is a wholly-owned subsidiary of the banks. Therefore, as I see it, our strategy should be to talk to Republicans who want to impeach Obama and make a deal with them that we will support impeachment if they will support HR 129 to restore Glass-Steagall.
 
 
-2 # Vern Radul 2013-04-27 14:56
On March 1, 2013, across-the-boar d cuts of $85 billion [went] into effect, wreaking havoc on most government operations. Social Security, Medicare, Medicaid, CHIP, the Children’s Health Insurance Program and what’s left of welfare are not directly affected, but these so-called “entitlement” programs have, in fact, always been the primary targets of this cascade of manufactured crises... Obama is fully complicit in the corporate-impos ed charade.
...
It was Obama who swallowed whole the corporate argument, previously championed by Republicans, that the national debt was Crisis Number One and that entitlement programs were the root cause. From the moment in January of 2009 when Obama served notice that Social Security and all other entitlements would be put on the chopping block, he became the chief mover and shaker for so-called entitlement reform. He created the model for austerity, through his Simpson-Bowles deficit reduction commission. It was Simpson-Bowles that provided the basis for the massive cuts offered by President Obama in 2011. When the Republicans balked at even a modest tax increase for the rich, it was the White House National Economic Council Director, the corporate deal-maker Gene Sperling, who came up with the sequestration scheme, which was timed to explode right after the 2012 elections. The idea was to make every popular constituency in the country scream – and accept the inevitability of massive entitlement cuts.

http://tinyurl.com/SequesterThis
 
 
-2 # Vern Radul 2013-04-27 14:57
Something has to be done to put a stop to republicans - and democrats - caving to obama.

He bends over backwards and falls all over himself to - pre-emptively - give republicans anything they want. He's a republicans wet dream of a president. And his supporters still fall all over themselves to make excuses for him and cheer while he drones them.

http://www.speroforum.com/a/PYIJGMGUJB27/73742-White-House-official-admits-budget-sequester-was-Obamas-idea

........................

Thousands of Medicare patients lost chemotherapy because of Obama's sequester.

In one series of clinics in NY, over 5,000 Medicare chemotherapy patients are now being turned away because of the sequester. Multiply that nationwide.

http://americablog.com/2013/04/medicare-cancer-patients-sequester.html
 
 
-2 # tonywicher 2013-04-27 19:02
Yes, here is what has to be done. Stop thinking about party politics. Start thinking about what is right and good for the country. Bush should have been impeached for about a million reasons but he wasn't. Obama should be impeached for all the same reasons, and more. Join with the Republicans to impeach him. If he is impeached, then all the skulduggery that has been going on since 9/11 and long before, under both Republican and Democratic administrations will be exposed. We can have a real house-cleaning, restore the Constitution, have a decent government again. Democrats should see that this is their real opportunity, but they won't if they think in terms of party and the lesser of two evils. We must break out of this trap with a new paradigm.
 
 
-2 # Vern Radul 2013-04-27 16:07
There is a quote attributed to Voltaire:

"The comfort of the rich depends upon an abundant supply of the poor."

Perhaps that is the basis of Obama's eleven dimensional plan to kill off enough of the poor to break the backs of the rich? Isn't he wonderful?

The rich will never suspect or see it coming?
 
 
-2 # tonywicher 2013-04-27 18:55
I think the answer is that there needs to be an abundance of poor people for the comfort of the rich, but not an over-abundance. This gets to be bothersome because they use up too many resources and are apt to get out of control. Therefore it is best to control the population with an anti-industrial , anti-growth policy that will result in the starvation of these billions of useless eaters, still leaving an abundance of servants to provide comfort and a reduced burden on our Mother Earth and her precious limited resources.
 

THE NEW STREAMLINED RSN LOGIN PROCESS: Register once, then login and you are ready to comment. All you need is a Username and a Password of your choosing and you are free to comment whenever you like! Welcome to the Reader Supported News community.

RSNRSN