Bribes Work: How Peterson, the Enemy of Social Security, Bought the Roosevelt Name

Posted on by

Bribes work. AT&T gave money to GLAAD, and now the gay rights organization is supporting the AT&T-T-Mobile merger. La Raza is mouthing the talking points of the Mortgage Bankers Association on down payments. The NAACP is fighting on debit card rules. The Center for Budget and Policy Priorities and the Economic Policy Institute supported the extension of the Bush tax cuts back in December. While it seems counter-intuitive that a left-leaning organization would support illiberal extensions of corporate power, in fact, that is the role of the DC pet liberal. This dynamic of rent-a-reputation is greased with corporate cash and/or political access. As the entitlement fight comes to a head, it’s worth looking under the hood of the DC think tank scene to see how the Obama administration and the GOP are working to lock down their cuts to social programs.

And so it is that the arch-enemy of Social Security, Pete Peterson, rented out the good name of Franklin Delano Roosevelt, the reputation of the Center for American Progress, and EPI. All three groups submitted budget proposals to close the deficit and had their teams share the stage with Republican con artist du jour Paul Ryan. The goal of Peterson’s conference was to legitimize the fiscal crisis narrative, and to make sure that “all sides” were represented.

Now this tidy fact is not obvious if you check the Peterson Foundation publicity for its “Fiscal Summit:”

On Wednesday, May 25, 2011, senior Administration officials, policy experts and Democratic and Republican elected leaders will come together in Washington to discuss solutions to the nation’s fiscal challenges at the 2011 Fiscal Summit: Solutions for America’s Future, convened by the Peter G. Peterson Foundation…..The American Enterprise Institute, Bipartisan Policy Center, Center for American Progress, Economic Policy Institute, Heritage Foundation and Roosevelt Institute Campus Network will present and discuss their own proposed packages of solutions for achieving long-term fiscal sustainability at the Summit. These leading policy organizations, representing diverse perspectives, received grants from the Peter G. Peterson Foundation to develop comprehensive plans to address the nation’s projected long-term debt and deficits.

Why, after spending considerable resources, such as a website called New Deal 2.0, with virtually daily posts by Roosevelt fellows debunking deficit terrorism, and more formal work, such as a well-researched and argued paper by Tom Ferguson and Rob Johnson debunking deficit cutting in general and assaults on entitlements in particular, has the Roosevelt Institute cast its lot with a sworn enemy? Make no mistake, not only did the Institute undermine its raison d’etre by attaching its name to the Peterson anti-entitlements campaign, but as we’ll discuss later, the end product, as would be expected, bolstered particular initiatives that are contrary to FDR’s legacy, the Institute’s more general “progressive” objectives, and sound economics.

As the sorry history of drug funded research shows and this example confirms, sponsored research has this funny way of delivering findings flattering to its funders. At best, whoever championed this unholy alliance at Roosevelt is guilty of a spectacular lapse of judgment. At worst, this is naked careerism, selling out one’s sponsor to curry favor with more powerful backers. One way to assure one’s influence and job security in the foundation realm is access to big donors. Who better to cultivate than one of the freest spenders in the economics policy space?

The Roosevelt Institute is far from the only example of left-wing institutions having their missions undermined and eventually controlled by conservative patrons. We’ve complained before about the cluelessness of left-leaning organizations in the US. One of the big reasons that what is now the center of the political spectrum here is extreme right pretty much everywhere else is that there has been an orchestrated, forty-year campaign to make American values consistent with the needs and interests of large corporations.

Doubt me? Dial the clock back to the Eisenhower era. The highest marginal income tax rate was 91%. Ike, a Republican, was firmly of the view that New Deal programs were a permanent feature of the political landscape. From a 1954 letter to his brother Ed:

Now it is true that I believe this country is following a dangerous trend when it permits too great a degree of centralization of governmental function….But to attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything–even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon “moderation” in government. Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.

Because the notion of having government policies promote the welfare of the middle class was so widely shared, it seemed inconceivable that these values could ever come under assault. Yet anyone who saw that the Commie-bashing of the 1950s was followed by the radicalism of the later 1960s would conclude that the American psyche was capable of large shifts, and there was no reason to leave this process to chance.

We’ll skip over how the process of moving America to the right was launched; we cover that ground in short form in ECONNED; readers can also check Bill Black’s discussion of its founding document, a memo by top corporate lawyer and later Supreme Court Justice Lewis Powell staking out its objectives and many of its key tactics.

At the risk of oversimplifying such a complex, multifaceted campaign, several elements appear to be critical to its success. First was the sheer amount of resources devoted to it: an imperial armada of think tanks, advertising dollars, political donations, polling and focus group road testing. Second and related was the creation of viable, lucrative career paths for those who signed up for the cause. Third was the utter denial, followed by deer-in-the-headlights paralysis, within the left as to the effectiveness and relentlessness of this effort. Too many assumed that ordinary people would never sign up for policies that were detrimental to their well being. They failed to understand that people vote based on identity much more than interests, and a concerted effort at rebranding could make conservative economic policies sound attractive by linking them to success. Only losers could possibly be in support of redistribution and social safety nets (and they have been increasingly portrayed as parasites). Fairness went out the window; plutocracy was in.

The success of this effort has been so complete that its organizers are now engaged in what in military terms would be depicted as a mopping-up operation, that of cleaning out the last pockets of isolated resistance. One of the key steps is the conversion of what were once left-leaning organizations and think tanks into message-carriers for the right. Mind you, while the end result is very much like that of parasitic fungus turning ants into zombies and killing them so they can become a food source (eeew), the process requires a tad more finesse.

Just as the Democrats pretend to offer an alternative to Mussolini-style corpocracy when they are loyal servants of big businesses donors, so to does the image of diversity of opinion in the foundation/think tank world serve as useful cover for control that the right wing has achieved over messaging on economic issues.

We’ve discussed some examples of conservative parasites gaining control of once-liberal hosts in earlier posts. In the UK, the formerly solidly leftie think tank Demos has now been successfully colonized by the right via its increased, and now near total dependence on conservative funders. Yet it continues to play on its historical brand, using its “Open Left” logo on papers that promote bald faced bank friendly twattle, thus misleading the public into thinking that there is right-left consensus on what to do about banks, which they urge should be somewhere between nothing and helping them even more.

In the US, the brass-knuckle leader of the effort to convert the tattered remnants of the left to the conservative cause is the long standing entitlement foe, billionaire Blackstone Group co-founder Pete Peterson. His Peterson Foundation provides funding for a large array of organizations, including initiatives at his think tank, the Peterson Institute. We’ve discussed various Peterson efforts on this blog: the Peterson Foundation’s “America Speaks” program, which used a series of faux town hall meetings with openly manipulative facilitators to try to deliver focus group type results depicting broad-based willingness to cut entitlements to reduce the budget deficit. That plan backfired, not only failing to deliver the desired Potemkin consensus, but also generating bad press for its ham-handedness.

Another scheme was Peterson’s use of the highly-respected Columbia Teachers College to develop a program to carry a deficit scare message to high school students in the form of “fiscal responsibility” education. As Dean Baker wrote:

No one has done more than the billionaire private-equity investor Peter G. Peterson to stir America’s anxiety over deficits, debt, and what Peterson (among others) considers out-of-control entitlement-program spending. Those same concerns now lie at the heart of a “fiscal responsibility” curriculum being developed for America’s high schools. The curriculum bears the stamp of Columbia University’s prestigious Teachers College, but reflects the focus suggested by the Peter G. Peterson Foundation, which provided $2.4 million in funding for the project.

Teachers College gave Remapping Debate access to a set of 24 lessons set to be test-taught in four states this spring prior to a wider roll-out in 2011-12. Heavily weighted toward the themes and arguments of Peterson and other deficit hawks, the trial lessons could be seen as part of an effort by one of the country’s wealthiest men, now 82, to spread his gospel to coming generations…

Note this unholy alliance began when the Teachers College approached the Peterson Foundation for a mere $50,000 grant to devise a course to teach high school students about personal finance. Peterson dangled much more money before the college and imposed its own agenda.

It isn’t clear how much the Roosevelt Institute got beyond thirty pieces of silver for selling out its brand, but the Peterson campaign got plenty of value for its money. The Roosevelt contribution came form a network of college students it had established in 2004 to promote “progressive activism”. Yet their paper was presented as a “Millenials” “citizen-produced deficit reduction plan” product, it was allegedly stood for the views of an entire generation. On par with the “America Speaks” approach of any outreach hopefully being mistaken as representative or thorough, the report’s authors “engaged” 1000 people “in person” and 2000 online. With no methodological rigor (neutral questions and consistent survey methods, for starters) this is a garbage in, garbage out process. But it’s pretty clear from the apocalyptic tone that this was a “sentence first, verdict afterwards” process:

Young people across the country recognize that those in power have made choices over the last 15 years that led us down the path to fiscal turmoil….Any solution to our fiscal trouble must not only resolve the gap between spending and revenue but also address the underlying causes.

Let’s consider whether this scaremongering is well founded. This is one small piece of a much larger argument in the Ferguson/Johnson article:

Now just ask the obvious question that a citizen or politician who had any choice would before embarking on the austerity route to budgetary consolidation: What are the chances that the policy will work? That is, actually reduce the deficit while also stimulating growth?

The striking fact that emerges from their [Alberto Alesina’s and Silvia Ardagna’s] tables is the meager number of successes. They indentify 107 separate cases of major fiscal contraction in the OECD between 1970 and 2007. Only 26 of these 107 qualify by even their Rube Goldberg definition as leading to “growth.” Now also set aside all qualms about definitions and whether countries were booming or in recession when they started cu#ing the budget. Just focus on the overarching pa#ern: Only nine of those “growth” cases actually achieved major reductions in debt to GDP ratios. That shouts out a demoralizing result: that 92% of the time countries tried fiscal contraction, it did not lead to growth with big reductions in debt to GDP ratios. We are not surprised that even a recent IMF study has now repudiated Alesina and Ardagna’s core argument. As Ireland is now discovering, the royal road to reducing debt to GDP ratios runs elsewhere. Arguments that current levels of debt to GDP profoundly threaten future U.S. economic growth are mere assertions crying out for empirical evidence. They should carry no weight in national policy debates.

This article also has a long section discussing the considerable shortcomings of the CBO projections on which the student paper relies, in particular its failure to calculate net rather than gross debt. The famed Carmen Reinhart/Kenneth Rogoff warnings about Bad Things Happening when government debt exceeds 90% of GDP is based on net debt levels; making that adjustment alone takes even the dire version of the long-term forecasts out of the danger zone. Other dubious assumptions are its oddly low productivity growth projections.

Gee, if these students had done their homework, they’d understand the blowout in debt levels was due to the global financial crisis, so if they want to “address underlying causes” they should first and foremost urge ruthless action to curb risk-taking at the TBTF banks. Had they merely bothered to read the Roosevelt paper by Ferguson and Johnson, or consult pretty much any account of why government debt levels have risen they would know that:

The “explosion” story can be immediately dismissed. The simple fact is that the deficit did not swell tidally until the financial crisis hit. While George W. Bush’s tax cuts destroyed the Clinton budget surpluses, tax revenues poked along at a rate that kept the deficit from blowing out until the economic equivalent of Hurricane Katrina hit. It was the one-two punch of the bank bailouts and the Great Recession that led to today’s giant gap between general revenues and expenditures.

Yes, the plan has a “Too Big to Fail” tax (described only at the wishful thinking level), but as we’ve discussed, following the Bank of England’s director of stability Andrew Haldane, taxes will never work to curb bankster adventurism; a high enough levy would wipe out the industry, so prohibition, meaning tough regulations, is the only viable remedy. Moreover, the paper touts a faddish, noxious idea for further financializing the economy from the faux liberal group, the Center for American Progress:

Folks, what will the net effect of this be? To introduce a ton more intermediaries and complexity into the provision of public services, which will give all the participants the opportunity to rip out more fees. And who will invest in projects with such uncertain returns? Investors will demand super high expected returns, which means even less goes into the provision of the actual services. And you’ll also need an a new cohort of assessors to determine if and how much the projects should pay out, leading to higher annual charges. The “lower costs” is the Big Lie cubed.

There’s also more sneaky pro banking industry policies included in the very skeletal discussion of corporate tax reform. It urges lowering tax rates and eliminating “tax expenditures”. While the corporate tax code could use a scrub, some of its complexity is due to the difference in various types of companies (the most obvious being the depreciation tax shield). The “lower tax rate” idea is usually bundled with a proposal to end the US policy of taxing corporations on their worldwide income. If this plan also envisages going to territorial taxation, that’s another boondoggle to big international companies, since it will be even easier for them to dodge paying taxes in the US.

The paper also appears to cherry-pick the recommendations made in another Roosevelt Institute paper, one by Joe Stiglitz. He advocates looking at the asset as well as the liability side of the government balance sheet, and in particular, investing in infrastructure, since it can generate very high returns. But this sort of idea is underplayed in the Peterson paper, and ideas like a bonus tax to correct incentives are completely absent.

It also stunningly enshrines the canard that tort reform will have a meaningful impact on health care costs and therefore (you have to love the Orwellian language) proposes to reform “the way Americans seek redress for medical malpractice.” Trial lawyers are big Democrat donors; they are a perennial target of the right, and the inclusion of this idea is a sign of conservative influence on the document.

The president of the Roosevelt Institute just announced that he is stepping down. I can only hope the board looks seriously into what led to this embarrassing dance with the devil and takes measures to assure this type of compromise of the Institute’s fundamental purpose can never happen again. It would also serve them well to conduct a broad-based search to find a leader who is truly dedicated to carrying on the proud legacy of FDR. There are so many fauxgressives in the marketplace that this will take more effort and scrutiny than they might imagine.

Print Friendly, PDF & Email


  1. F. Beard

    Her leaders pronounce judgment for a bribe, her priests instruct for a price and her prophets divine for money. Yet they lean on the LORD saying, “ Is not the LORD in our midst? Calamity will not come upon us.” Micah 3:11

    More uses of the word “bribe” in the Bible

    Perhaps if the Left read the Bible they might be more bribe resistance?

    1. Yves Smith Post author

      I doubt Buddhists or New Age types are keen about bribery either :-)

      1. Dave of Maryland

        New Age types – I know a few – are ga-ga stupid. They think the world is getting better day by day. The Aquarian Age of peace & brotherhood is at hand! The Purple Ray is coming, the world is full of indigo children, Lightworkers are everywhere, spaceships from the Pleiades are about to land, you must be prepared for this cosmic, mind-shifting event.

        It’s worse than you can imagine. Here is the website for one of my suppliers:

        Among the dreck, they happen to stock books I can sell, but it’s embarrassing.

        1. frances snoot

          Poets see what those without feeling think irrelevant. And yet, at the end, when our bodies render themselves useful to the planet, are we not merely feeling?

          1. frances snoot

            “We, that are of purer fire,
            Imitate the starry Quire,
            Who, in their nightly watchful spheres,
            Lead in swift round the months and years.
            The sounds and seas, with all their finny drove,
            Now to the Moon in wavering morrice move;
            And on the tawny sands and shelves
            Trip the pert Fairies and the dapper Elves.
            By dimpled brook and fountain-brim,
            The Wood-Nymphs, decked with daisies trim, 120
            Their merry wakes and pastimes keep:
            What hath night to do with sleep?”


          2. Francisco Sistaca, un pawnee

            Bartleby. But nothing stirred. I paused; then went close up to him; stooped over, and saw that his dim eyes were open; otherwise he seemed profoundly sleeping. Something prompted me to touch him. I felt his hand, when a tingling shiver ran up my arm and down my spine to my feet. 245
            The round face of the grub-man peered upon me now. “His dinner is ready. Won’t he dine to-day, either? Or does he live without dining?” 246
            “Lives without dining,” said I, and closed the eyes. 247
            “Eh!—He’s asleep, aint he?” 248
            “With kings and counsellors,” murmured I.

    2. KFritz

      What percentage of the bribe takers in Western Europe derived culture have read the Bible since Herr Gutenberg printed it? What percentage heard it at church services during the 1000 years before that? Familiarity with “chapter and verse” is a sure-fire cure for what ails us.

      1. Nathanael

        Off topic, but reading the Bible cover-to-cover, carefully, tends to be a good way to make people atheists, too.

        1. F. Beard

          If for no other reason, the Left should read the Bible to counter the hypocrisy of the Right. I suggest the Old Testament since it also applies to the Jews and covers such relevant topics as usury, debt-forgiveness, oppression of the poor, favouritism to the rich, etc.

        2. JasonRines

          I have read the bible cover to cover three times. Read Genesis. But try approaching Christians to have a conversation about it. You’ll be looked at like Satan himself and ignored thereafter in church. I could live with a bible of the Gospels only. As for prophets, Daniel used calculatable numbers forecasting the reformation of Israel to 1947. I am a firm believer in a creator and energy realms but the management is 5d or circular. Mankind has penned God in 3d, pyramid paradigm. All scripture is inspired by God rings true to me. Religions seem to be the organizations that take the longest to evolve. What is believed today on which god or gods is the right one and how to behave based on such beliefs will be largely different several hundred years from now.

      2. Dave of Maryland

        More importantly, what percentage read it before Gutenberg, and to what extent is Gutenberg to blame for the current mess?

        1. Dave of Maryland

          PS: Current use of the Bible in Catholic services (i.e., pre-Reformation) is limited to the Gospels & Letters of Paul. Anything else you have to get on your own. The Old Testament was typically cherry-picked to be God’s Greatest Hits. Which is still more than it deserves.

        2. F. Beard

          and to what extent is Gutenberg to blame for the current mess? Dave of Maryland

          Be specific. What part of the Bible is responsible for the current mess?

          1. KFritz

            IF, and only if, there is a particular verse than can convince an intelligent person that an already widely known book is the key to revivifying this civilization–that’s the dangerous verse.

    3. Foppe

      It seems a bit childish to lump in these think tanks with ‘the left’. INET too is little more than heterodox keynsianism; as for ND2.0, I tried reading a few of the papers they put out the last year or so, but it mostly seemed mainstream dime-a-dozen-analysis/drivel to me.

    4. craazyman

      Word on, dude!

      “The prophets prophesy falsely, and the priests bear rule by their means; and my people love [to have it] so: and what will ye do in the end thereof?”

      -Jeremiah 5:31

      1. F. Beard

        I noticed this above your quote:

        ‘They are fat, they are sleek, they also excel in deeds of wickedness; they do not plead the cause, the cause of the orphan, that they may prosper; and they do not defend the rights of the poor.

        ‘Shall I not punish these people?’ declares the LORD, ‘On a nation such as this shall I not avenge Myself?’ Jeremiah 5:28-29

        1. craazyman

          Beard if you Google Thoreau’s Cape Cod you’ll meet in the Appendix the Very Reverend Samuel Treat, Calvinist Preacher to God’s children of Eastham Massachusses sometime in the 1600s.

          He did not have the poetry of the prophets, but he had the passion. Read and enjoy . . . bowahahahahahaha . . . from Rev. Treat’s Collected Sermons:

          “Some think sinning ends with this life; but it is a mistake. The creature is held under an everlasting law; the damned increase in sin in hell. Possibly, the mention of this may please thee. But, remember, there shall be no pleasant sins there; no eating, drinking, singing, dancing, wanton dalliance, and drinking stolen waters: but damned sins,bitter, hellish sins; sins exasperated by torments, cursing God, spite, rage, and blasphemy. — The guilt of all thy sins shall be laid upon thy soul,and be made so many heaps of fuel….

          [6] “Sinner, I beseech thee, realize the truth of these things. Do not go about to dream that this is derogatory to God’s mercy, and nothing but a vain fable to scare children out of their wits withal. God can be merciful, though he make thee miserable. He shall have monuments enough of that precious attribute, shining like stars in the place of glory, and singing eternal hallelujahs to the praise of Him that redeemed them, though, to exalt the power of his justice, he damn sinners heaps upon heaps.”

          1. F. Beard

            I have learned to be suspicious of human interpretation of the Bible so I just read it myself. For instance, a person whose exegesis I respect says that torment in Hell is necessary to prevent the inhabitants from making the place even more hellish for each other. He says further that solitary confinement would not be the solution since that would be cruel.

          2. F. Beard


            You seem to have me confused with a conservative; in fact I am a radical libertarian.

  2. rafael bolero

    As I grew up in the 50’s, 60’s, I came to dislike advertising for several reasons. After the first Oil Shock in 1974, I remember the blatant oil-industry full-page ads in Time, Newsweek, suggesting foreign and domestic policy; this was too heavy-handed, and it disappeared into more subtle underwriting Masterpiece Theater while just running policy silently in DC, I guess. Now, everywhere I turn, there is an ad, a TV spot, a political hack job, a think-tank quote stuck in the middle of an AP “news” story–the corporate money just floods everything blatantly again. Living in a total propaganda state, corporate propaganda totalitarianism, is horrible. I mean, the feeling of being surrounded by all the lies and manipulation even if I’m just trying to play pool in a lower-class bar. Turn on the faucet in the sink, and a corporate hologram will appear in the water telling me entitlements are poltergeists stalking my house. Yeah, the internet seems like a free place to escape, but when you walk out your front door, there’s the next ad…a sane person wants to get out of here….

    1. yankeefrankee

      I hear ya buddy. The whitewash is nonstop. That trash “TBTF” Sorkin garbage is on HB-HO right now, makes me want to gag. Thing is that most people don’t really believes the propaganda but I guess they feel helpless because its everywhere all the time. I used to watch hollywood movies but they always make me feel sick these days, so I’ve tuned out. The assumptions about what it means to be a good American — work a corporate job, pay your taxes dutifully, support the troops, vote once in a while for one douche or another, keep your credit score up… its empty and it feeds the beast.

  3. Nicola Pagett

    Pete Peterson’s goal is to amass as many billions for himself as possible, while at the same time putting elderly nursing home patients out on the streets to die (such as my Mother suffering from Alzeiheimer’s)

    Peterson deserves to be hanged.

    Today exiledonline is running the following headline in it’s “What You Should Know” section:

    Pete Peterson – The Blackstone Billionaire Funding the “America Can’t Afford Social Security/Medicare” Campaign – is Also Responsible for Massive British Care Home Industry Disaster That Could Put Thousands Of Elderly On The Streets…. That is, Unless Taxpayers Bail OUt Care Home Company That Netted Huge Profits For Pete Peterson….

    Click on that and it links you to this article:

    “The future of Southern Cross Healthcare and the 31,000 old people living in its care homes is causing anxiety across the UK establishment, from the Houses of Parliament to the City….
    the UK’s biggest care homes company, which looks after more than 30,000 old people, has been struggling with a business model brought in under the previous owner, private equity firm Blackstone….”

    1. Foppe

      Something similar has been happening to children’s creche operators in the Netherlands. Hedge funds (or similar) buying up (often recently privatized municipal creches who even got dowries paid for by the taxpayers) creches, stripping them of all assets, especially RE, and then letting them rent the properties back (I get the feeling the RE was often sold to different parts of the same hedge fund, so that they could sell the creche itself while keeping the revenues associated with rents). And all of this is, of course, allowed to happen, because who are we to impede the free market.

  4. attempter

    Sorry to say “I told you so”, but I’ve warned against the Roosevelters before. They were always willing to temporize and to try to appease. Now we see that it’s not just liberal cowardice, but corruption as well. The two are inseparable, really.

    The CAP was openly a corporatist racket from the start, founded with the goal of outdoing the Republicans at their own corporatist game.

    Of course, we’ll never get anywhere as long as we’re still talking about bonus taxes as opposed to doing away completely with bonuses and bonus recipients.

    1. Yves Smith Post author

      There are quite a few good people there, I suggest you look at the roster before jumping to conclusions. Their more serious work is a better metric of what they are about than blog posts. Those are targeting a broad audience and I think frankly shoot for a much lower level of sophistication than serves the Institute.

      1. Tao Jonesing

        The fact “there are a quite a few good people there” means two things. First, those good people lend an air of legitimacy and credibility to the Roosevelt Institute. Second, it neutralizes those good people by bringing them into the tent, much as Obama is neutralizing Elizabeth Warren, which tends to prevent public criticism, again lending an air of legitimacy and credibility to the Roosevelt Institute.

        It’s a win-win for the Roosevelt Institute.

        1. Valissa

          Yup! There are many good people who work in corporations, many good people who work for the gov’t, many good people in finance, many good reporters who wish they could be real reporting. SO that doesn’t seem to be the real issue. It’s the leaders and financial backers whose ethics and morality are of most concern, as they direct and pay the good people at the lower levels.

    2. DownSouth

      Whether one wants to issue a blanket condemnation of the Roosevelt Institute or not is arguable, but there’s little doubt that Yves is correct when she concludes that “Roosevelt is guilty of a spectacular lapse of judgment.”

      I began to have serious doubts about the Roosevelt Institute’s judgment when New Deal 2.0 ran this highly biased and revisionist post by William Hogeland. Hogeland is part and parcel of the growing chorus being assembled by the banksters to rewrite history so as to revive the reputation of Alexander Hamilton. Hamilton is, after all, the banksters’ Godfather.

      And history is important. As George Orwell noted in 1984, in the pre-Oceania era in order “to be efficient it was necessary to be able to learn from the past, which meant having a fairly accurate idea of what had happened in the past.”

      It became quite obvious that Hogeland was firing blanks when, on the above-linked thread, I cited some historical information concerning Hamilton from one of Kevin Phillips’ books, Wealth and Democracy. But instead of attacking the veracity of the information, Hogeland’s first rattle out of the box was instead to attack the messenger. Here is Hogeland’s response:

      Re Phillips: The young Phillips who developed the ruthless Nixon “Southern strategy” derided William F. Buckley as “Squire Willie” becasuse Phillps saw (brilliantly) the politcal future of conservatism as populism, not aristocracy. The Bush family are considered conservative, but Phillips’s kind of conservatism allied Phillips with liberals in assaulting what he saw as their dynastic ambitions and undermining of liberty. Regarding Hamilton, everything Phillips says about his finance plan is true, but where Phillips seees the most important result as the split between Federalists and the Democratic-Republicans he prefers, I’m looking elsewhere, for other significances, and I just don’t agree that when you really get down to where they lived, “Jefferson’s now-victorious party, the Democratic-Republicans, consisted of a more homespun and egalitarian crowd…” The critique by Phillips of Hamilton is much like that of Madison, and it’s intellectually completely consistent, to me, with Phillips’s kind of conservatism, which is the conservatism of that very Democratic-Republican patrty. If it’s useful to see liberalism as the ideology of capitalism, it’s also useful to see Hamilton as the liberal, and Madison’s attack on Hamilton’s projects as coming from a liberty-oriented Southern right. And as I keep saying, I think there was a another, radically different, equally significant, largely overlooked attack on Hamilton, coming from a kind of populist left, which Hamilton himself by no means overlooked: his programs were intended, first and foremost, to subdue that left.

      How anyone could even remotely “see Hamilton as the liberal,” as Hogeland suggests, is completely beyond the pale. Hamilton was neither liberal by the 18th-centruy definition of liberal nor by the 20th-centruy definition of liberal. Yes, Hamilton was indeed an advocate of big government, just like the 20th-century “liberal,” and very much unlike the 18th-century “liberal” who advocated small government. However, the 20th-century liberal is an advocate of big government in the service of the working- and middle-class, and not big government in the service of a wealthy, aristocratic elite as Hamilton was.

      After reading that blurb from Hogeland, one can only come to the conclusion, as Big Brother did, that


      After Hogeland, I began looking at the Roosevelt Institute the same way I do the NY Times. They at times take up the mantle of fighting the good fight for the little guy, but when push comes to shove, you certainly don’t want them protecting your backside. In the heat of battle they are guaranteed to capitulate, leaving your rear unprotected. I suppose the NY Times can trot out the excuse that it has to be “balanced” in its coverage, but what is the excuse of a so-called advocacy organization like the Roosevelt Institute?

      1. DownSouth

        And of course the Roosevelt Institute and the NY Times are both quick on the trigger to abandon the search for truth and factual reality. This, perhaps more than anything else, is what I find most disturbing.

      2. Valissa

        Agreed. Hogeland’s love for Hamilton a very big clue indeed. However I have always been skeptical/suspicious of the the motives of the Roosevelt institue or any other think tank of any political persuasion, esp. those founded by the wealthy elites. Their interests are typically not mine (except perhaps a taste for good scotch).

        On the one hand I harbor no generic resentment of the wealthy elites as a class (I am NOT a Marxist!), as all societies throughout time, once they got past the small bands hunter-gatherer stage, have had wealthy elites. Their existence is a given. Also within the elites there are many good, kind and compassionate people who try to do good with their wealth and influence (I have met a few of those). History shows that progress and advancement generally is led by a society’s elites and that often the other parts of society to benefit from this. To be clear, that I do not have any sort of love or admiration or sympathy for the elites as a group, I am just practicing my own code of fairness.

        What concerns me is the nature of the power relations, or social contract, between the elites and the other layers of society. What I see happening is that this contract has broken down (as it does cyclically throughout history) and that the elites as a group have become much more predatory, much more openly and unashamedly predatory and elitist. Our society has culturally become more and more commoditized and corporatized. And corporations are inherently authoritarian, not democratic in nature. The balance of power between the elites and the rest of us has gotten quite out of hand, IMO.

        Sometimes I wonder if it was such a good idea to make the top tax rate as high 90%. It’s human nature to be resentful of that much tithing to the gov’t so not really surprising that some within the elite would seek to undermine that (note all those neuroeconomics experiments about fairness). So the pendulum is now swinging to the other extreme and the wealthy don’t want to pay any taxes at all. Even raising the rate on those over $250K does very little because of all the tax loopholes the wealthy and the corporations aleraady have bought for themselves. Sadly I don’t see any kind of reasonable tax reform on the horizon.

        1. DownSouth

          This average majority accepts and respects the social role of people whose talents and education are superior, as long as they occupy appropriate positions within the social structure. The same people, however, will react with criticism, disrespect, and even contempt, whenever someone as average as themselves compensates for his deficiencies by flaunting an upwardly-adjusted position. The judgments pronounced by this sphere of average but sensible people can often be highly accurate, which can and should be all the more remarkable if we take into account that said people could not possibly have had sufficient knowledge of many of the actual problems, be they scientific, technical, or economic.
          ▬Andres M. Lobaczewski, Political Ponerology: Science on the Nature of Evil Adjusted for Political Purposes


          Since inequalites of privilege are greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal truths spring from, and that general interests are served by, the special privileges which they hold.
          ▬Reinhold Niebuhr, Moral Man & Immoral Society

          1. Paul Tioxon

            This is a well worn path taken by all of the formal and informal organizations of the dominant political class of the wealthy. But they have used others. I would like to direct your attention to one of the founding fathers of modern electronic banking, Richard E Sprague. He has a book easily located on line in its entirety for free. It is titled:”The Taking of America, 1-2-3″. Here is an excerpt from the intro, it speaks for itself.

            – 3 –
            This book is not about assassinations, at least not solely about assassinations. It is not just another book about who murdered President Kennedy or how or why. It is a book about power, about who really controls the United States policies, especially foreign policies. It is a book about the process of control through the manipulation of the American presidency and the presidential election process. The objectiveof the book is to expose the clandestine, secret, tricky methods and weapons used for this manipulation,and to reveal the degree to which these have been hidden from the American public.Assassinations are only one of many techniques used in this control process. They have been importantonly in the sense that they are the ultimate method used in the control of the election process. Viewed inthis way, an understanding of what happened to John or Robert Kennedy becomes more important becauseit leads to a total understanding of what has happened to our country, and to us, since 1960. But theimportant thing to understand is the control and the power and all of the clandestine methods put together.”

            Today, we actually have advanced in the public’s political analysis of power in America, beyond what he painfully learned without the help of the internet, cable channels and decades of hindsight. To continually expose and debunk and most importantly, put together a coherent narrative of analysis that can be simply outlined, communicated and added to with unfolding events and the facts surrounding them has a powerful affect on society. The fact that virtually everyone whose face shows up on tv or whose voice goes out over the radio, states with absolute certainty that Lee Harvey Oswald killed Kennedy, is absolutely oblivious to over 80% of the population that knows that is the biggest establishment lie in history, should make you feel more than hopeful that the Peterson Initiative will go nowhere.


        2. attempter

          On the one hand I harbor no generic resentment of the wealthy elites as a class (I am NOT a Marxist!), as all societies throughout time, once they got past the small bands hunter-gatherer stage, have had wealthy elites.

          I don’t follow the logic. All societies have had rapists and regular murderers as well, so you also have no opposition to them? (You just said you have no “generic” opposition to political mass murderers and capital robbers because they’ve always existed.)

          (I also have no idea what content the term “Marxist” is supposed to convey here. It sounds like a contentless slur.)

          Their existence is a given.

          No it’s not. The people can do away with them the moment we choose. It’s nothing but a political choice.

          (But they’re thrilled to hear someone like you parrot their lies about their existence being a law of nature.)

          Also within the elites there are many good, kind and compassionate people who try to do good with their wealth and influence (I have met a few of those).

          Can you give an example, or are we supposed to fantasize? I sat here for a couple of minutes trying to think of an example of someone from today’s “elites” who tries to do good, and came up blank.

          For example, I can’t think of one who tries to use his wealth to politically organize outside the kleptocracy. Nor can I think of one who espouses, publicizes, and funds anti-corporate fights.

          1. Valissa

            Recommend reading:

            (1) Guns, Germs and Steel, by Jared Diamond.
            (2) Europe Between the Oceans: 9,000 BC – AD1000, by Barry Cunliffe
            (3) War in Human Civilization, by Azar Gat
            (4) Elite Cultures: Anthropological Perspectives, edited by Cris Shore and Stephen Nugent

            The first 3 books are all what I call Long Histories as they all cover at least 10,000 years of history.

            The 4th book is a collection of essays mostly on elites in tribal cultures (ethnographic focus) but the intro includes a discussion of the EU from an anthropological perspective. Quite enlightening. The editors admit this is a brand new sub-field of anthropology with much work to be done.

            From the back cover of this book:

            The book addresses a number of fundamental questions about the nature of elites and society, such as:

            – How do elites in different societies maintain their position of dominance
            -How do elites reproduce themselves over time?
            -How do elites represent themselves?
            -How can we study elites anthropologically?

          2. attempter

            Thanks for the non-response, but I’ve read Jared Diamond and found nothing but Just-So stories.

            I don’t doubt that he gives part of the picture as far as how the criminals have won so far. That means nothing for your claim that we’re doomed to be saddled with them forever. Nor did you try to argue against my point.

            And it’s glaring how you started out claiming to know altruistic “elites”, but you’re now unable to give specific examples of them when asked.

      3. attempter

        I thought the Hogeland posts were useful once you disentangle the pro-democracy information from the implicit pro-1788 stuff.

        It was funny the way he wrote with such implications but then kept backpedalling when challenged on them. He kept denying that he meant to stick up for Hamilton at all, as opposed to just neutrally commenting. If true, then how many misunderstandings should one have to endure before you figure that you’re not communicating well and need to change your expression?

  5. Bruce Krasting

    Everyone hates Peterson. Yves calls him a “Devil”. Maybe so.

    But only a fool would look at Social Security and conclude that everything is fine. Nothing to worry about here at all.

    I suggest that those concerned with this focus on what the SSTF said in their annual report. To fix SS an IMMEDIATE and PERMANENT increase of SS taxes by 2.2% or an across the board cutback in benefits of 16% is required.

    That is a very big deal. Its time for the defenders of SS to wake up to reality. The recession of 2008-09 took SS off the tracks. It will never get back on the tracks unless changes are made.

    If you love this system, fix it. If you don’t fix it, it will blow up in less than a decade and all those folks who are desperately in need of this program will fall through the cracks.

    Roosevelt would never have wanted that to happen. Why do those who believe in this dream fail to see this? The staunchest defenders are actually the ones who will bring SS down, not Peterson.

    1. Foppe

      Oh, it’s you again.
      I’m a bit confused by your post, though. Where in this article was SS, or the SSTF discussed? Or do you just have a bot that auto-posts a reply like this every time Roosevelt or a few other key terms are posted to blogs you monitor? I’d almost get the feeling you didn’t read the post.

      Anyway, if the republicans (and clinton etc.) are allowed to defund the SSTF, then it seems to be just as allowed to just print money to fund it later on. People without savings don’t really care about inflation anyway, and it’s about time the rich lose some of their savings.

      1. Foppe

        (Yes, the SSTF was mentioned as something Peterson “attacks”, but he doesn’t attack it because it’s in principle unsustainable; he just attacks it because his ideological crap can be used to make incremental changes that in the end add up to chance the system in such a way that “anyone in good conscience” can no longer defend it. However, this has nothing to do with “economic reality”, and everything to do with creating a self-fulfilling prophecy, and then pretending that this was inevitable. Consequently, I don’t see the point in talking about the “sustainability” of the SSTF, as it is just playing into the hands of the corporatists.

      2. Bruce Krasting

        You say:

        People without savings don’t really care about inflation…

        It is is the people without savings that are most hurt by this. Wake up!

        1. The Green Visor

          Yeah, ’cause 10% inflation means that your savings is worth 10% more. Yeah, that’s the ticket.

          And your debts, with 10% inflation, they are 10% bigger. Yeah, that’s right. That’s the ticket, yeah.

          And if you have no money, then everything costs 10% more, and since no one has a job, and nothing is indexed to inflation, you won’t be able to afford it. Yeah, that’s the ticket. Yeah.

          Listen to Bruce Kasting you sheeple, he knows everything. Yeah, that’s the ticket!

        2. Foppe

          Because they’re going to be helped by SS cuts? I must be missing something. All the inflation would mean is that the nominal payouts would have to be raised accordingly.

          As it stands, all Obama and every other president has done is cut SSTF funding and make it less likely that the IOUs will be paid back. As such, the question isn’t whether SS is or isn’t economical; the question is whether you care enough about your fellow countrymen to sacrifice some. Politics trumps economics, both ways.

          Anyway, I don’t really see the point in arguing with you, considering the fact that your arguments consist mostly of pithy one-liners such as “wake up”.

          Next time, please try to respond to the body of the article rather than the thing you care about that you saw was glancingly mentioned in the introductory paragraph, but otherwise irrelevant to the topic at hand.

    2. Parvaneh Ferhadi

      Well, Peterson seems to be the one who does the hating, at the very least he doesn’t seem to care much for people who are getting old and didn’t make as much money as he did, so he looks to punish them by withdrawing the funds they need to survive.

      As to the viability of SSTF, I guess you’ve got a point there. But that seems to be more connected to the changes made to the SSTF in the 60ies (turn over surpluses to the treasury) and the fact that the fund actually has no real money in it at all, just intragovernmental IOUs) than it is connected to the general idea of Social Security as envisaged by FDR.

    3. F. Beard

      The recession of 2008-09 took SS off the tracks. Bruce Krasting

      Since the bankers caused that then why should the poor pay for it?

      Plus you apparently do not understand that the government is not revenue constrained when it comes to spending; it is restrained by price inflation in the dollar. Furthermore, the depression would be even deeper without the funds introduced into the economy by SS.

    4. Yves Smith Post author


      Go read the Ferguson/Peterson paper, and then we might have an intelligent discussion. The ideas that SS is in any kind of trouble has been debunked so many places that you are simply showing how doctrinaire you are by repeating that canard.

      1. Valissa

        I rather thought his position outed him as a Petersen troll. Any blog that’s as good as NC and gets as much attention as NC does, naturally attracts trolls/shills from the very organizations you criticize so well. Tho sometimes it’s hard to tell the difference between purposeful trolls and mere sympathizers.

      2. Anonymous Jones

        Bruce is, as always, either completely confused or completely off his rocker.

        At the same time, the zealousness with which he pursues his idiotic ideas about SS does bring up a good point, which I think should always be identified when taking people like Peterson to the woodshed for their duplicity, and that is, we do not have an entitlement problem *so long as* medical expenses can be controlled. Clearly, the annual rises in medical expenses we are accustomed to now (if they continue at this rate) will outstrip the nation’s economic resources in a few decades. This is the thing, Peterson’s scare tactics work *because* there is a real problem with entitlements, not the idea of entitlements themselves, but the underlying business (the provision of medical services) that is so crucial to the biggest entitlement program of them all. I think this should always be mentioned in this debate. It works to pre-emptively defuse all the but the zealous, misguided ones like Bruce.

        1. LeeAnne

          There is a health care sector crises in this country that only gets conflated with Social Security for deceitful partisan propaganda purposes.

    5. David Hewitt

      I keep getting the impression, upon seeing an author’s affiliation listed as Roosevelt Institute, that they must be right-leaning. But then I would see an exception. So, earlier this week I spent some time poking around on the Roosevelt Institute’s web site, trying to get a fix on their ideological orientation. I am grateful for this discussion, as it helps to clarify my perception.

      I think it is appropriate to defend Social Security here because it goes to the heart of why Peter G. Petersen is wrong about everything. Bruce Krasting says “…only a fool would look at Social Security and conclude that everything is fine…” I see the same kind of subtle manipulation of the narrative here that Petersen uses. For the past 18 months or so I have been trying to increase my understanding of Social Security (I observed my 63rd birthday yesterday, got my first SS check last July). The Social Security Trust Fund consists of Treasury instruments, hardly “worthless IOUs” as the conservative narrative would have us believe. The last I heard, the SSTF stands at over $2 trillion. As long as we can believe in the “full faith and credit” of the US, those obligations will be repaid. The effect of the one-year reduction of the FICA payroll tax, enacted last December, from 6.2% for employees to 4.2%, is to either reduce contributions to the SSTF when receipts exceed obligations, or draw down the SSTF at a faster rate when receipts are less than obligations on a given day. Projections by the Social Security Administration still say that the program will pay full benefits until at least 2037. But the way B. Krasting puts it, it sounds like there is imminent danger of the failure of the program — which is the same thing we hear from Peter G. Petersen. We could keep everything the same for two decades before deciding what to do to ensure that SS recipients will continue to receive 100% of promised benefits. Various experts say that some simple tweaks, such as raising the cap on wages (currently at $106,800), would enable the program to pay full benefits, with COL increases, in perpetuity.

      An actuarial I know likes to point out that by raising the cap, or finding another mechanism to assure full benefits past 2037, the SSTF would never need to be touched, and so whatever remains in that fund would never need to be repaid. Wouldn’t you think everyone would like the idea of not needing to repay $2 trillion, or whatever remains? But I don’t trust the Democrats not to cave and agree to Republican demands to “fix” (eviscerate) the program. If they cave, Petersen wins, and all the bribes will have borne bitter fruit.

  6. frances snoot

    “In 2008, Walker was personally recruited by Peter G. Peterson, co-founder of the Blackstone Group, and former Secretary of Commerce under Richard Nixon, to lead his new foundation. The Foundation distributed the documentary film, I.O.U.S.A.,[4] which follows Walker and Robert Bixby, director of the Concord Coalition, around the nation, as they engage Americans in town-hall style meetings, along with luminaries such as Warren Buffett, Alan Greenspan, Paul Volker and Robert Rubin.”

  7. rc whalen

    You are far too impressed by the “progressive” agenda of FDR. It was Mussolini style corporate statism, as you suggest. I’ll take rich individuals with money and the freedom to spend it. The basic problem with the so-called left in the US is their refusal to read Animal Farm. If you study Orwell, a devoted socialist who supported the labor party in the UK all his life., then this prattle about the progressive legacy of FDR takes on the proper perspective. There is no third path as many of our friends at Roosevelt Institute want to pretend. Orwell knew this first hand.


    1. Billions for me, None for you

      I’ll take rich individuals with money and the freedom to take money away from others. I’ll also take rich individuals with the ability to turn poor people into nutritious Soylent Green.

      Soylent Green, from your people to our people, making the world a better place, one person at a time. Soylent Green, on supermarket shelves everywhere next to the Gulf Shrimp and Fukushima milk. Ask for it by name. Try our new Soylent Veal, the most tender Soylent product yet. By the children for the children, Soylent Veal nourishes. It’s the youngster in you.

    2. DownSouth

      rc whalen,

      When you say that “the ‘progressive’ agenda of FDR…was Mussolini style corporate statism,” that’s entirely too heavy-handed.

      I think Chris Hedges comes a lot closer to the truth. Even though America’s aristocratic elite was never in danger of completely losing control during FDR’s presidency, the “left,” “progressives” or “liberals” were nevertheless able to avail themselves to a democratic political community that had enough virtue and honesty to disprove the Marxist indictment, which you faithfully parrot, that government is merely the instrument of privileged classes. I would say that neither side gained a complete victory, and it seems like the fact that the welfare state was ushered in under FDR serves as quite a counterfactual that disproves your assertion.

    3. Foppe

      Amusing. Yves starts talking about the corrupting confluence of bribery and ideology, and suddenly Whalen and Krasting both decide to show up in the comments section. Oddly, I have rather a lot of trouble parsing both of your comments.

      You start off by acknowledging that the right consists of (or is backed by) corporatists/fascists, but then you continue by saying “I love being rich without having any obligations towards my fellow countrymen”. Is this a non sequitur intentional, or what?
      Then you simultaneously correctly note that FDR didn’t really want to be as “harsh” on the rich as he became out of necessity, and incorrectly try to reaffirm the convenient determinist fiction that paradigm shifts are impossible in politics, because every society necessarily consists only of rich egotists and poor altruists, handily absolving you of any responsibility to try to outgrow the former. But how, then, do you explain the Eisenhower quote? By presuming a conspiracy, or by thinking he really was a Marxist? Give me a break.
      In your last sentence, however, your ideological leanings show most clearly. Apparently it is impossible for you to even imagine that there could be affluent people who prefer living in a country that tries to offer decent living conditions for the many over living in one where they have to pay lower taxes while living in guarded communities with slums surrounding them.
      It may well be that the Rooseveltians are naive in presuming their brand of Keynsianism is methodologically radical enough to really fix the ails facing the US and the world, but that hardly “proves” that there aren’t different ways to organize society than the pathetic free market ‘solution’.

      1. Anonymous Jones

        Great comment.

        “Apparently it is impossible for you to even imagine that there could be affluent people who prefer living in a country that tries to offer decent living conditions for the many over living in one where they have to pay lower taxes while living in guarded communities with slums surrounding them.”

        What’s so amazing about the lack of imagination is that you *don’t need any imagination*. I meet people *all the time* who want to live in a country with less inequality. I meet honored and capable professionals from Denmark who look at the inequality in the US with disgust and say they would never want their taxes lowered if this was to be the result.

        Many people cloak themselves in the garb and the ideas of democracy, but you know, don’t really mean it. This is the thing, as you touch on, no one in the democracy is bound to vote any particular way or for any particular policy. No one has to vote for an unequal society that seems more efficient but leaves the voter with less happiness because of lower relative consumption. It’s bizarre that people like Whalen think that other people (the “losers”) are just going to be OK with this and roll over (because this is the “fair” and “moral” thing to do, let the rich take everything and leave table scraps to be fought over by everyone else). The whole underlying concept is preposterous. No one cares what Whalen and his ilk think about their just desserts. People want opportunity and also safety and security, not a “free” market that gives us Extremistan. I can’t believe we have discussions like this. It’s just disheartening that something so fundamental is so misunderstood by supposedly “intelligent” human beings.

    4. craazyman


      save the rich from themselves
      save the rich from themselves


      Professor A. V. Airy
      Senior Economist and Big Pecker
      From his collected work:
      “Lectures on Macroeconomic Policy When a Country is Overwhelmed by an Existential Plague of Soul Loss Manifesting in Deflation of Monetary Spirit in the Form of Reduced Social Cooperation Leading to Destruction of MonetaRY vELOCITY Below that of Equilibrium Community-Enhancing Soul Freedom Levels For All Citizens with Inspired Imagination”

  8. Deb Schultz

    It’s really remarkable how unquestioningly the existence of these billionaire, personal-interest ‘forums’ are not just accepted, but touted as the means of finding solutions to ‘our’ problems. Me, I think the problem is that there are too many of these privately funded ‘think tanks’ that somehow have a great deal more influence than my neighbors and I do, no matter how conscientiously we try to interact with our political representatives.

    It’s also breathtaking to think about the sums of money people like Peterson have to spend, at a time when so many of us are frightened about our own futures and those of our children. The influence business is one of the few that seem unaffected by the Great Recession. And what is the thing they are trying to make us all believe? Why, that we can’t afford to support ourselves through mutual self-insuring — i.e., through a genuinely social and shared government. We can’t afford old age pensions, we can’t afford health care, we can’t afford public schools, or public transportation systems, according to the Petersonites. No, we must stop spending on all those things, as quickly and harshly as possible!

    When I think of this, I find there is one thing I do agree with Peter Peterson on: We can’t afford this government if this government is going to continue to support the likes of Mr. Peterson.

  9. Roos Clues

    I have to say, I’ve not been happy with my experiences with Roosevelt Inst. I’m a very experienced blogger/academic, and I’ve offered to help them cover some domestic policy issues their blog tends to ignore. No one’s followed up.

    A few other observations:

    1) Check out how many ostensibly left-wing groups line up behind the “Defund the Professoriate” line. I completely agree that college costs are too high, and so too with many grad schools. But there’s no need to into the whole radical deregulation adventurism that TAP, CAP, and other “special reports” have advanced. “Do it yourself” U is basically a prescription for Hamburger College and Walmart Grad School.

    Moreover, from a purely pragmatic perspective, why on earth would “left” groups want to de-tenure and defund about the only social group that still reliably supports their other goals?

    2) The whole “health care costs are too high” mantra is another trap for the left. Check out CAP’s report on Tricare, which amazingly advances the idea that military families need to pay MORE for health care. They’ve bought into the whole “skin in the game,” consumer-directed health care of the right.

    Let’s be serious: policy aimed at reducing demand for health care means giving less to the middle class and poor. IF you really want to reduce demand, give people better commutes, more humane work schedules, early childhood care, etc. Making a poor working mom pay a $40 as opposed to a $10 copay for a pediatrician visit isn’t going to solve the deficit.

    Yes, there’s a ton of waste, and we should target that. But the whole Klein/Yglesias/Orszag/CAP complex is trying to look all “serious” by staging a shotgun attack on health care costs, when it’s health care waste they should be fighting.

    3. A serious left would focus on waste and abuse by the finance sector, extractive industries, crappy retailers, internet and media conglomerates, and many other industries. Why it chooses to direct most of its fire at doctors, professors, and scientists is something that’s hard to understand…until you read about Peterson funding in something like the post above.

    1. JTFaraday

      ““Do it yourself” U is basically a prescription for Hamburger College and Walmart Grad School.”

      Defund Walmart grad schools? Hey, why not.

      A big part of the problem with media “progressives” is that they DID go to Hamburger college and Walmart Grad school. Some of these people you complain about–TAP, Klein, Ygelias– all Robert Reich productions. He also teaches policy at Berkeley. If education by Robert Reich is not a Walmart education, I don’t know what is.

      You’d better learn to “do it yourself.”

    2. Yves Smith Post author

      With all due respect, you somehow managed to miss that their blog is only for Roosevelt Institute fellows. The exceptions are pretty rare (the Hogeland series). The idea that their unwillingness to take your posts is a sign of anything is pretty presumptuous. Their objective is not to cover the economy, but promote the Institute’s work. And you are not part of that.

      1. Roos Clues

        Well, I have very little sense that the “fellows” are working on some common Roosevelt project(s), or are all in the same building. Most seem to have other full-time jobs. And I’m talking not just about “not hosting my work,” but showing little interest in linking, starting a conversation, etc.

        I suppose my bottom line at this point is that their (and your) hostility to me suggest that the American left is hopelessly divided among lone wolves. Probably best for those with a conscience in this country to fight for global equality, rather than try to combat the centrifugal tendencies among US progressives. Jodi Dean’s Blog Theory helps explain the “decline of symbolic efficiency” we’re all participating in.

        1. Yves Smith Post author


          With all due respect, do you have the foggiest idea of how institutes and think tanks work? Or did you even bother to research Roosevelt to see how to approach them? I don’t know their inner workings, but my impression is they don’t fund research by non-Fellows. So you need to be a Fellow. Did you bother understanding that or figuring out how you might become one? Saying “you aren’t covering this beat” might not have been appealing if it’s not a beat they regard as high priority given their mission. You basically asserted they ought to cover areas you have some expertise in.

          You don’t look for a job and a company and say, “Gee I’m a good guy with ideas, you really ought to hire me.” You understand what their needs and roles are and see if there is a fit and then see if there is a way to get your foot in the door. The tenor of your comments indicates you didn’t do basic homework. There’s an undertone of a sense of entitlement which is off-putting.

          1. ambrit

            Finding out Roos’ age group would help. I don’t know about the ‘high end educated’ crowd, but down here on the street the younger cohorts show a disturbing lack of ability to defer gratification.
            Re the Roosevelt Institutes ‘in crowd’ mind set; I can understand the need to restrict the conversation to those ‘in the know’ for pragmatic purposes. That being so, if we assume that there is some ‘sinister’ purpose behind the whole process, who exactly are the end use recipients for all this work? What I mean is, whom are the Roosevelts trying to influence? Those would be good targets for counter arguements.

          2. Yves Smith Post author


            This isn’t a matter of “in crowd” v. “out crowd”, it’s a matter of budget and priorities and branding. And I didn’t want to raise this issue, but it is not inconceivable that his work was given consideration and it didn’t meet their quality standards.

          3. JasonRines

            How come then you don’t go to work at Goldman Yves where you would be considered a ‘Fellow’ and have your opinion heard? Why thousands of hours doing it the hard way? Because you have integrity and therefore someone qualified to provide opinion. I don’t need to be a fellow when being one means voting for self-destructive policy and making blanket vows to gain such access.

            Do I have to be a Bishop to opine about the church? Or have a PhD to discuss economics with Alan Greenspan? The problem with insitutions is they stop permitting two way dialogue by setting the whole bar so high to gain access you either have to have already been born to privalage or spend half a life attempting to gain access.

    3. craazyman

      It seems to me you’ve never heard of the University of Magonia. It’s free and open to anyone who can look up. It’s half way between Andromeda and the end of the Milky Way, hang a left then a right and you’ll see it.

      No tuition and no hamburgers. But beers and weed, dude. and red wine and xanax.

      If you search the same skies, you see the same stars. That’s all you really need to learn. All the stars are there, no matter how much you pay to see them. nudge, nudge.

  10. john

    Excellent post and the kind of thing that needs to be done frequently these days: the euphemistic use of “funding” and “donations” for bald face bribery has to be stripped back where ever possible. The riot hose of cash the right uses to silence public interest wherever it crops up will continue to be overwhelming until a critical mass awake to the astonishing criminality that exists in our elites.

    The US still has among the best criminal justice systems in the world when the crimes in question are the ones of physical violence. The “deregulatory” era has been one in which the elites have, by eliminating numerous laws, made their preferred crimes legal so long as they are committed with their attorney’s blessing. Per your post yesterday, apparently now the banks want divine rights so they can eliminate the legal expenses as well.

    It was DSK’s misfortune as one of these elites to have committed in New York the violent kind of crime our system assiduously prosecutes, or at least to have presented a good enough case to a grand jury to get himself cuffed. That is what the rule of law should look like, but we will not see it in the elite world until we all agree that a bribe is a bribe and then the whole thing crashes down.

  11. jenahill

    Dear Yves,
    We are on exactly the same page here. Last year I worked in DC on the Americans for Responsible Taxes Campaign. As communications coordinator and writer I was blocked and maligned by large left leaning non profit managers for asking them to seriously challenge DC insiders, ahem electeds and their staff.
    It was a shock to see folks at the organizations constantly watering down the message and sucking up to administration officials who had no intention of working on behalf of the middle class and much less the poor. They of course would defend themselves hey look at what we did get for people, but always and ever worried about access to people who don’t care whether children go hungry and families go homeless.
    Recently I joined the FACT coalition an arm of the GFI which is joining with the UK based TJN, and found out they are going to use America Speaks as their communications arm. When I saw the email that they were considering using America Speaks – I was disappointed and disgusted for all of the reasons you mentioned. Looks like I’m joining another organization that wants to be considered legitimate, and the ultimate goal is not to create institutional change, but to get the best we can get considering the “political realities”. Recently I was at a budget briefing by the National Women’s Law Center and they said that a triggered budget cap, an amelioration of the McCaskill bill might be the “best we can get,” I spoke up and said are you saying that is what we should be advocating for? She responded, well no, we should be asking for fewer domestic discretionary cuts….blah, blah, blah.
    When so many Americans are suffering, jobless, homeless, hungry, desperate, the left should really be putting on the pressure. But instead they capitulate to the corporate interests that are sponsoring a continued gutting of the American worker and middle class.
    One group I work with is Grassroots Organizing a leader in the Shohio protest at JP Morgan Chase HQ. We have been working to create a movement of regular working and poor people who want a better life, because clearly the corporatized version of life is destroying even the minimal opportunities needed to just get by in America. This is a crisis beyond proportion and the left is simply absent on the front lines of protecting our most vulnerable.

    1. Billions for me, None for you

      clearly the corporatized version of life is destroying even the minimal opportunities needed to just get by in America

      That is just music to my ears!

      Say jenahill, while you’re vegetating or organizing, or whatever it is you poor slobs do in your slums, why not kick back with a Soylent Green Shake. Now in 3 flavors. Correxit-free, Cesium-Free, and Benzene-Free, Soylent Green Shakes really refresh after a long day picketing. Why not try one today? Soylent green is people. People feeding people for a better world for you and me.

        1. anon2


          People have different ways of coping with the situation you’ve described so well, and accurately, above.

          In 1729, Jonathan Swift suggested in “A Modest Proposal” that impoverished Irish might ease their economic troubles by selling their children as food for rich gentlemen and ladies. And so I think “Billions for me, None for you” might be continuing this tradition of black humour and satirical hyperbole, in the face of what you rightly described as “a crisis beyond proportion”.

  12. Jay B

    Yes Yves, I agree.
    Your overall message is correct, they have triumphed, and that triumph is, on balance, very damaging to all but a few.
    And, those who are getting co-opted should be grabbed by their lapels and slapped awake. Thank you. Please keep up the good work.
    But, how do we undo their ill deeds? I suggest we don’t stand a chance until they fail spectacularly. Unfortunately that appears imminent.
    As you point out, the world’s experiment with $600 trillion in derivatives lacks adult supervision to ensure system stability. As we saw in 2008, a $2 trillion margin call can precipitate catastrophe. The Euro is on the brink. Those who can see and understand systemic-risk indicators are not optimistic. Like L.B. Smaghi says in his FT interview, contagion indicators are higher than 2008.
    So, if, when this next crash occurs, we will have an opening for action. I suggest we all think about what each of us can do when that opportunity arrives.

  13. Valissa

    The Republicans typically love to bash Fannie Mae and Freddie Mac. Yet when they had both the house and senate in 200-2006 and Republicans dominated and ran the relevant committee Fannie and Freddie continued as normal (despite the attempts of some Repubs) due to the fact that enough of the Republicans on that committee got bought.

    Team Obama bought most of the netroots and that really paid off for them as an investment. Politics right now seems to be about 80% about money and any ideology that supports money as king.

    I keep thinking of that 3 year old Chinese girl who famously said “I want to be a corrupt official when I grow up.”

  14. CaitlinO

    Here in Texas, following tort ‘reform,’ the way we get redress for medical malpractice is to get no redress at all. The limits are so low that my dear friend, maimed by a botched knee transplant, could not find a lawyer who could afford to take on her case, even though it was open and shut.

    Texas doctors can and do cripple patients out of laziness and carelessness with no fear of consequence. Patients who are victims of doctors’ mistakes face a lifetime of limited mobility, compromised health, shortened life spans and poverty as many are unable to support themselves at their previous levels.

    The conservatives won this battle big time to the cost of innocent patients who now have no recourse at all for the injuries they suffer.

  15. Valissa

    Behold the continuing Corporatization of Education… I’m guessing this idea came out of one or more of the think tanks on the faux left-right continuum. Everyone in power loves to play at social engineering, as every ideological group seeks to transform others inot their own so-called better vision of the world in order to “save” it.

    Former tennis star Andre Agassi teams with L.A. bankers to finance charter school construction. The Canyon‐Agassi Charter School Facilities Fund is an unusual for-profit investment fund that intends to finance as much as $750 million in charter schools nationwide.,0,527620.story

    Former tennis star Andre Agassi has joined with Los Angeles bankers to create an unusual for-profit investment fund for construction of as much as $750 million worth of charter schools in urban communities across the country.

    The goal of the fund is to develop 75 schools serving 40,000 students over the next three or four years while earning a financial return for investors, which include Citigroup Inc. and Intel Corp.

    “It’s a novel business model,” said investment banker Bobby Turner, fund manager at Canyon Capital Realty Advisors. His Century City firm is Agassi’s partner in the Canyon‐Agassi Charter School Facilities Fund. “We expect to attract investors who realize that making money and making societal change don’t have to be mutually exclusive,” Turner said.

  16. Jim Haygood

    The “explosion” story can be immediately dismissed. The simple fact is that the deficit did not swell tidally until the financial crisis hit. While George W. Bush’s tax cuts destroyed the Clinton budget surpluses …

    Where is this quote from? If Clinton had been constitutionally permitted to run for a third term in 2000, the recession of 2001 would still have occurred, thanks to the tech bubble having popped in March 2000. Coupled with the loss of capital gains tax revenues during the 2000-2002 bear market, the budget would still have swung into cyclical deficit.

    But while decrying Austerianism, the anti-Austerians simultaneously deplore tax cuts which boosted consumers’ purchasing power. Odd, that.

    Contrary to the claim that the deficit did not swell until the financial crisis hit, the accrual based accounting used in the annual Financial Report of the United States shows that large deficits were incurred throughout the decade. Bush’s Medicare Part D added three or four trillion to Usgov’s negative net worth at one whack, in the year it was enacted.

    Odder still that ‘progressives’ rail on about Bush’s tax cuts, but never mention his lavish political gift to the doddering oldsters, which was very much in the spirit of extending the loveless pity of the Rooseveltian welfare state.

    All this ferocious talk about progressive left vs. extreme right has an distinctly antique ring to it, like reading old communist propaganda denouncing ‘colonialist puppet regimes’ and such. Demonrat-Repugnican ideological wars are like watching the last pair of toothless old boomer dinosaurs on the planet thrash each other to a pulp in a prehistoric tar pit, whilst roaring epithets at each other: ‘Deficit terrorist!’ ‘Liberal spendthrift!’ PAP! A strategic lash of the tail, and the old herbivore bites the dust, drool trickling down its leathery chin. The Left is dead, and so is the Right. O frabjous day, calloo, callay …

    1. Valissa

      Very astute comment, I enjoyed it very much!

      “All this ferocious talk about progressive left vs. extreme right has an distinctly antique ring to it, like reading old communist propaganda denouncing ‘colonialist puppet regimes’ and such.”

      So true, LOL… very well put! The definitions of left-right, etc. are all breaking down (so sound outdated), but there is, as of yet, nothing to replace them. In the meantime most people are in a state of agitation and anxiety as an unknown future bears down upon them.

      “Demonrat-Repugnican ideological wars are like watching the last pair of toothless old boomer dinosaurs on the planet thrash each other to a pulp in a prehistoric tar pit, whilst roaring epithets at each other…”

      Great imagery! Politics becomes more and more like pro-wrestling every year.

    2. Yves Smith Post author


      You really need to get a grip on facts. Im no fan of Clinton; a great deal of misguided financial deregulation and further subsidies to the housing industry took place on his watch. But your statements about the deficits are made up.

      First, the rise in the deficit under Bush was a self inflicted wound, the result of large tax cuts at a time of ballooning expenditures. Since when do you cut taxes in a time of war?

      Second, go look at data rather than making stuff up. Federal debt to GDP (gross, not net) was 23% prior to the crisis. It is projected to grow to 76% by 2013 and stabiliize there.

      And we debunked the idea that any serious intervention was needed in the wake of the tech bubble in ECONNED. Unlike the 1929 crash, it was not stoked by debt, even at the peak, margin lending as a % of total market cap was bupkis. There was no blowback to the financial system. Greenspan overreacted, pure and simple. And there is a good deal of work that shows that the Bush deficits, because so much military spending took place overseas (the rise in contracting meant a lot of the expenditure ultimately went to subcontractors that were local) and the tax cuts favored the rich, who save and invest rather than spend, meant that his deficits didn’t generate anywhere near as much stimulus as it could and should have.

      Saying the troubling rise in the deficits is due to anything but the crisis is counterfactual.

      1. frances snoot

        Counterfactual assertion does not always indicate the wrong answer. It is only within the construct of state/church defined ‘truth’ that the word counterfactual retains any relevance. Facts are amassed according to the desires of the perceptual base: a point well documented in the carefully wrought entry. What is being ignored to the benefit of the industrial-capitalist criminals (men who have ‘suddenly’ grown hearts and brains to pack their tin-cased cans of rhetoric) is the move to an entirely different exchange-rate module: a move away from nationalistic/sovereign digress in preference for a globally administered regional valance of multilateral exchange. All the moves within the US of A conditioned “change we can believe in” are moving in the direction of the convenience of those who are set to operate the new system.

        The slate is being wiped clean.

    3. Hugh

      “But while decrying Austerianism, the anti-Austerians simultaneously deplore tax cuts which boosted consumers’ purchasing power. Odd, that.”

      Nothing odd about it. It’s plain flat out wrong. Tax cuts have a rotten multiplier effect because they go disproportionately to the wealthy who don’t need them for consumption and even when some of them go to the rest of society they are used to pay down debt or just to keep up with commodity price inflation, so again no increase in consumer buying power.

      The real beneficiaries of Medicare Part D were the big pharmaceutical companies. Medicare was expressly forbidden to use its market share to negotiate better prices with BigPharma. Sending it through a welter of competing plans was not only confusing to seniors, and anyone else who looked through them, but the whole concept of adding on a layer of insurance plans was just another fee-extraction scheme. Part D costs much more than it needs to not because of those greedy old elderly but because of those greedy corporate looters.

      Accrual accounting is just part of the dog and pony show of deficit terrorism. Basically, it tells us that we could never afford a national government even though we have had one for more than 200 years.

    4. DownSouth

      Jim Haygood said:

      Bush’s Medicare Part D added three or four trillion to Usgov’s negative net worth at one whack, in the year it was enacted.

      Odder still that ‘progressives’ rail on about Bush’s tax cuts, but never mention his lavish political gift to the doddering oldsters, which was very much in the spirit of extending the loveless pity of the Rooseveltian welfare state.

      “Lavish political gift to the doddering oldsters”????

      Surely you jest, either that or you’ve bought hook, line and sinker into Big Pharma’s lies. Bush’s Medicare Part D was hardly a gift to oldsters. Quite the opposite, it was a multi-trillion dollar political gift to none other than ****drum roll**** Big Pharma.

      The most spectacular failure of faith-based reliance on the private sector was the new Medicare drug benefit, passed in 2003. The plan was full of contradictions from the outset. Its GOP advocates insisted that they could obtain drug coverage cheaply by relying on the private sector. But the costs of the program mushroomed as it made its way through the legislative process, even as the scope of the coverage came to look more and more limited. In the end, the bill had to be slammed through Congress in the dead of the night, after holding the House vote open for an unprecedented three hours (most votes last only 15 minutes) so that Republican leaders could threaten and cajole. The chaos was replicated upon implementation. Confused by the array of options and dismayed by the drug coverage’s limits, many seniors did not or could not sign up. While many of these initial enrollment problems were eventually overcome, around a tenth of the Medicare population remained without any drug plan after the new program’s implementation, including a stubbornly high number of low-income beneficiaries. More ominously, a fifth of seniors covered by the new Medicare drug benefit reported not filling prescriptions because of the cost—-a rate twice as high as that found among seniors enrolled in employment-based plans or military veterans’ coverage, even after controlling for differences in the health and socioeconomic characteristics of enrollees. Many of those for whom cost was a barrier to taking prescribed medicine presumably fell into the infamous “doughnut hole” in Medicare drug coverage, which required that seniors pay for all of their drug costs between $2,400 and $3,800 in a given year.

      The main reason for the divorce between the high costs of the new insurance and its meager benefits is simple: Republicans insisted that Medicare stay out of the business of directly providing drug coverage. Independent analyses based on the experience of other programs suggested that Medicare would likely obtain steep discounts on drugs if it purchased them directly. But the pharmaceutical industry went all out to head off the threat—-even poaching the Republican who wrote the legislation in the House as its new lobbying chief upon his retirement (negotiations began while the bill was being written). The end result was a program that spend hundreds of billions but only modestly relieved the growing risk on senior’s shoulders.
      ▬Jacob S. Hacker, The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream

    5. F. Beard

      But while decrying Austerianism, the anti-Austerians simultaneously deplore tax cuts which boosted consumers’ purchasing power. Odd, that. Jim Haygood

      Since the government backed counterfeiting cartel, the banking system, disproportionately benefits the rich then the rich should pay a disproportionate share of taxes. But I agree, taxes should be cut. The FICA tax should be eliminated but workers should still receive SS credits for years worked.

  17. Susan Truxes

    Oh, those institutions. Very good article. I think I know roughly where I stand at any given time: I am for good, enduring social institutions. On the ground institutions like social security and medicare; justice; education. I’m ambivalent about think-tank institutions because I’m never sure what they are saying. As far back as the 70s I was having trouble discerning left from right. I basically ignored everything but THE NATION. But imposing this filter only helped a little. Because everything is always negotiable. If Andre Agassi and LA can build good schools, fine. The risk of financializing on the ground institutions like education can be offset by what value is given in exchange. The problem with the social security flap is that nobody has offered a better value. How do we consolidate resosurces, cut abuses and waste and offer a better retirement product. If by financializing you mean devaluing, then yes I’m against this death by a thousand cuts. If by financializing you mean improving and creating better value, then it could be OK. Regardless of politics, there are practical solutions to be implemented.

    1. Valissa

      “If Andre Agassi and LA can build good schools, fine.” It’s not the city of LA that’s building or supporting the charter schools. It’s Agassi partnering with LA bankers. As for any of these schools showing up in LA (from the article I cited above), it seems unlikely for now:

      It’s uncertain whether the fund will provide financing for any Southern California charter schools. Real estate here is more expensive than in many other urban markets, and California provides less funding per pupil than some other states do.

      It is surely in the realm of possibility that this banker based, for-profit education will improve the quality of education in some way. But the history of for-profit educational institutions at the college level is not so encouraging.

  18. steelhead23

    Is this tendency for 501(c)(3) organizations due to corruption of the organizations themselves, or is it a manifestation of the larger system? A system that requires money to provide amplification for voice. I am reminded of PBS’s struggle. For many years it received substantial government backing. Inasmuch as it didn’t present a strong American Exceptionalism bias, it became a target for a bitter right-wing attack for perceived liberalism. In response, PBS has tended to become softer on issues, particularly those that question the motives of the national government, anti-imperialism, etc.

    The elite-sponsored view that America is the greatest country on Earth for all time has also come to mean that absolutely free markets are the primary hallmark of a free people. And no one should be surprised that this exceptionalism and this freedom has absolutely corrupted the nation to the point that even erstwhile liberal voices become mouthpieces for the elite. It is going to get worse.

  19. Hugh

    I scanned the post and comments and found no mention of the two terms that describe this process of liberal organizations acting like conservative ones: the veal pen and Trojan horses. You take these out of the mix, looking at the left, and you will find that there isn’t much of a left left.

    One of the great things about the web is that it is such a great repository of memory. It is a place where you can run but you can’t hide. After a while, enough of a record is built up that you really begin to see who is who and what is what. This can be a slow incremental process, many small pieces falling into place, finally giving a coherent picture. Or as we saw during the healthcare debate, there can be a precipitating event that crystalizes our understanding of the actors and the actions.

    The truth is that liberal organizations, like MoveOn, or liberal A list blogs, like dkos, firedoglake, the Huffington Post, aren’t much more than extensions of the Democratic party, that is they favor Democratic corporatism to the Republican version, a distinction without a difference really. The same can be said for unions. Trumka can say that Democrats can’t take unions for granted, but this is precisely what Democrats have been doing, and unions and union leaders like Trumka have been letting them do, for decades.

    My own experience with think tanks came when I was researching the backgrounds of the various team members of the Iraq Study Group. My idea was to look at their affiliations and histories and from that work out who were the liberals and who were the conservatives, who were the hawks and who the doves. What I found was that they were all pretty much the same. They all circulated among the same think tanks, institutes, and centers. Their similarities vastly outweighed their differences. At heart, they were all Establishment to the core.

    I think that is what we are seeing here. We live in a kleptocracy. This is the overarching, dominant politico-economic reality of our times. But with the exception of Steve Keen, I believe, who did so in passing, there is not a single economist who has come out and acknowledged this, not Jamie Galbraith, Joseph Sitglitz, Dean Baker, Marshall Auerback, Warren Mosler, Bill Black, and more importantly, including Keen, applied this realization to their economic theories.

    So is it disappointing to see the Roosevelt Institute sell out like this? Yes, but it is hardly surprising. It gets its money from people like Soros. Soros may be a “liberal” pirate but he is still a pirate, and it is not like he is going to fund organizations which have as their goal the elimination of piracy.

      1. Hugh

        Using the word and applying the concept are two different things. The interview you cite is from October 2008. If you look at this post by Hudson from December 2010,

        you see he is still using the paradigm of people acting in good faith but making bad decisions. He blames Obama’s failures on his being a lawyer and lawyers being bad economists. The effects he describes are certainly kleptocratic in nature, but he’s still not quite there. He hasn’t put it together that Obama never failed, that kleptocracy is a system, and that Obama (and the Democrats, and the Republicans) are just its political face.

    1. Yves Smith Post author

      I’ve described the veal pen before. This is a different process at work, and affects institutions at all levels. Why do you think the Center for American Progress is so lame? And using the term “Trojan horse” would be too charitable. The Trojan horse was a gift. Here it is clearly expected that the donation will influence behavior, since anything other than generously endowed foundations always need money, and the way to keep a donor giving money is to curry favor with him. This is a bribe, period.

      1. HTML Reader

        And using the term “Trojan horse” would be too charitable. The Trojan horse was a gift.

        I do not mean to nitpick here, but the Trojan horse was not a gift. The Trojan horse was a ruse. The only people in history (was the Trojan horse an actual historical artifact or only another part of the myth?) to have thought that the Trojan horse was a gift were the people of Troy, and they only thought that for a few hours until the Greeks came out later that night.

        I think that the metaphor that Hugh was intending for the Trojan horse is the usual one: a ruse that makes is possible for someone to get past defenses that have otherwise proved impenetrable. Once you have gotten past those defenses, you take over the organization (city, whatever) from the inside.

        A bribe, on the other hand, is a payment to someone on the inside who betrays the rest of the organization. This would be the Greek Achilles paying the Trojan Hector to work for the Greeks, betraying his fellow Trojans. (My guess is that both the Greeks and the Trojans would have considered bribery to be more contemptible than the ruse that was used, which flatters the Greek readers who were Homer’s audience.)

        I do not have enough knowledge about the current circumstances to say whether this is a clear-cut case of bribery or trickery.

    2. Susan Truxes

      I’m convinced that we are all, and have always been, pretty much the same. That is the only reason we can sit down at a table and talk to each other. Different objectives at certain levels, yes. But overall objective? The same.

    3. sgt_doom

      Well, maybe not American, but there is a Canadian social economist, R.T. Naylor, was at McGill last time I checked, who has called the entire system rotten and kleptocratic.

  20. Philip Pilkington

    Very good article. Terrible that they’re trying to co-opt the Roosevelt Trust — they’re generally good folks. Love the Eisenhower quote though.

    The Peterson Institute, as I’m sure you know, recently ran their ‘Fiscal Sustainability’ conference:

    Just look at that tired old do-gooder Clinton standing up and preaching the neo-liberal gospel that directly led from his ‘reforms’ and economic ‘policies’ to the current crisis. Have you ever wanted to shout: “Get off the stage you deceitful piece of shit!” more than you do after you see Slick Willy in that photo?

    For anyone interested, a counter-conference was run last year to mark this pseudo-event. The conference — attended by more than one Roosevelt Fellow — is great and you can find video links here:

    1. Susan Truxes

      You, Philip, Christopher Hitchens, and Cockburn have always befuddled me. I do not understand your apparent positions in terms of American right and left. I’m simply too naive and ignorant. Granted, we in the US really have no right and left. Socialism crashed on the shoals of roast beef, etc. But consider all the big cattle ranchers who, 3 generations later, have now faded to less than one. And that guy is the meat processor. And what the hell is he going to do? (forgot what you said and went back to read what you said and got lost in everyone else’s posts) Anyway: he is going to process meat because we have come to a point in time where we have to keep what we must have, and stop all the rest – and clean up our messes because the messes cannot be ignored. They have a way of just sitting there and stinking until they are recycled. Now the first job is to stabilize and the next job is to clean up.

      1. Philip Pilkington

        I’m Irish — so US-style right and left just isn’t how I grew up. To me US right and left appears to be culturally determined. I have sympathy for neither.

        Quote-unquote ‘left’ wing political correctness and race/meritocratic politics disgust me — and, face it, that’s all the mainstream ‘left’ in the US have.

        The right in America on the other hand are vicious bastards. Liberals often throw around accusations of bigotry — I don’t think that’s what the right are all about. Instead, as far as I can see, the right in America have a very refined hatred of the poor — or anyone they consider ‘inferior’ (this may overlap with race, but it doesn’t necessarily have to). It’s straight out of 19th century Britain.

        The ‘liberal’ agenda seems broadly defined in contrast to what THEY SEE as the ‘right’ wing agenda — but I think they misconceive what the ‘right’ are really about.

        I come from a background where all that matters is economic policy — and NOT cultural background etc. Social democracy vs. free market. That’s all I really care about.

        Cockburn comes from a similar background (he’s Irish too) — although I think he might be a Trotskyist, which I have little sympathy for.

        Hitchens is a hack. He doesn’t have a political ideology (although he is an ex-Trot). He just likes annoying people and stirring up controversy. I’ve also seen conferences where you get a distinct impression that he dislikes women — but I’m not sure if that can be described as an ideology per se. In short, he doesn’t seem to have a positive belief system. He just likes stirring the pot and getting $$$s for his books.

        Complex topic though. That’s the best I can do for now. Definitely emphasise that European politics is very different though.

      2. Philip Pilkington

        Oh yeah, one more thing — I’m going to try to be brief on this because I could talk about it for days.

        There was a movement in the US that broadly resembled the Social Democratic movements in Europe — that was called the ‘progressive’ movement.

        However, progressives were — and are — a hotchpotch. Cultural historian Chris Lasch has done the best work on this. He shows how there were two very different types of progressives since the movement began at the turn of the 19th century.

        First there were the progressives that were similar to the Social Democrats of Europe. These were people who wanted a more balanced and equitable economy. They ranged for Thorstein Veblen right up to FDR and the New Dealers.

        Then there was another strain of progressivism. Lasch calls these the ‘New Radicals’. They included people like Jane Addams and Walter Lippman. They were more interested in cultural politics, sexual politics, race politics and social engineering.

        What are currently called ‘liberals’ in the US — including most of the Democratic Party — are heirs of the latter tradition. There are very few remaining ‘true’ progressives left. Certainly there are a number of them over at New Deal 2.0 (and in the Roosevelt Institute generally) and elsewhere. There’s a few in government — Kucinich, Sanders etc. But the movement is no longer mainstream.

        Thus ‘liberals’ — being almost wholly interested in cultural politics and the like — are easily corrupted by the rich. Why? Because wealth and class don’t really enter into their framing of the world — at least not directly.

        Okay, gotta stop that history lesson in US politics now… Fascinating topic though. One which progressives should become more familiar with. Learn from history and all that.

  21. Middle Street

    I am a HUGE fan of this website, but also a lurker. I sneek peaks at work all day long (dont have internet at home). Normally I am content to just read and learn from Yves and the whip smart commenters on this blog. But I can’t help myself – the oily tenacles of the Peterson Foundation knows no bounds nor shame.

    I used to work in Cambridge MA and keep track of events at The Dalai Lama Center for Ethics and Transformative Values at MIT. When I first heard about this org., I thought ‘alright – some of the meritocracy, esp. in the sciences, might be taking some time to understand their impact on American and global societies. Maybe, just maybe, they are thinking a wee bit more than “money money money money”. Then the announcement for this ‘event’ showed up in my email box: On Wed. Oct. 6, 2010 – ‘Comeback America: Turning the Country Around and Restoring Fiscal Responsibility’, a talk by the Honorable David M. Walker, President and CEO of the Peter G. Peterson Foundation and former Comptroller General of the United States. Introduced by MIT Chancellor Phillip L Clay.

    When I saw this I wanted to puke. Peterson was now co-opting both the Dalai Lama’s name and linking his sleaze foundation to the concept of ethics.

    Of course, in thinking about it, by having an ethics center, the powers behind MIT can sleep better at night knowing that somewhere on campus someone might be asking a polite question about the ramifications of the global corporatocracy (piracy) that fuels MIT’s foundations and grants. So I shouldn’t have been surprised that MIT would invite the Peterson Foundation to lecture about the ethics of fiscal responsibility. I’m sure it was a big hit.

    From my view from the middle of what’s left of the middle class, those oh so polite, socially liberal, well educated,
    wordly meritocrats (not sure that is a word) are driving us over the cliff with a conviction that will not be shaken.

    I think the working classes may just one day revolt – I just don’t know if it will go left or right. My gut tells me right.

  22. Deloss Brown

    At least we’re talking about it, for which I thank you, Yves. Incidentally, I’m not religious.

    “Ephesians 6:11-17
    Put on the whole armour of God, that ye may be able to stand against the wiles of the devil. 12 For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places. 13 Wherefore take unto you the whole armour of God, that ye may be able to withstand in the evil day, and having done all, to stand. 14 Stand therefore, having your loins girt about with truth, and having on the breastplate of righteousness; 15 And your feet shod with the preparation of the gospel of peace; 16 Above all, taking the shield of faith, wherewith ye shall be able to quench all the fiery darts of the wicked. 17 And take the helmet of salvation, and the sword of the Spirit, which is the word of God . . . “

  23. sgt_doom

    A thousand thanks for this blog post.

    Peter G. Peterson, originally bankrolled by Davy Rockefeller, goes nuclear.

    And the Sesame Street Sissies kowtow.

  24. sgt_doom

    And this is exactly how Wall Street (the bank/oil cartel) coopted the conservation lobby and most of the environmental lobbies (mostly now just pseudo-environmentalists.

  25. LAS

    One of the hallmarks of a psychopath is that they understand human empathies quite well, better than most; they are expert at using empathies to manipulate others. On the flip side, the psychopath feels none of the same empathy he/she applies to jerk his victims around and is entirely enert to being managed in the same manner that they control/lead on others.

    Victims cannot imagine that the psychopath is a psychopath; they continue to credit him/her with human emotions they believe are held in common and this goes on until victims have been completely ravaged.

    Where’s the happy medium of being defensive enough without being paranoid? Sometimes there isn’t one. Sometimes good people get taken in. No sense flogging the left because it got snookered by a psychopath. We all get snookered.

    What’s that saying attributed to Winston Churchill? … something like “Success is the ability to move from failure to failure without loss of enthusiasm”.

  26. Francois T

    “Second and related was the creation of viable, lucrative career paths for those who signed up for the cause.”

    Whereas nothing of the sort is even thought of on the Left. Worse still, donors to causes dear to the left are much less steady and determined than those on the Right.

    I do not think it is possible to reverse such a combination of forces; this incestuous alliance between the White House, (the everlasting capacity of Obama to accommodate the Right rank as incestuous) the über-wealthy, economic and social (not religious mind you) zealots on the Right is indeed very difficult to fight.

    It goes without saying that this alliance is systematically aided and abetted by other factors particular to the USA: 1) a press that is one of the most slothful and morally captured, to the point of depravity, in the Western World.
    2) a political culture that has accepted a absurdly outsized role for campaign contribution money. There is NO equivalent in any developed country. As Fareed Zakharia pointed out in a recent interview on Charlie Rose: “The cost of a national British election is inferior to one senate seat race in a Midwestern State. And there are a slew of restrictions in place…and it last only a month!”

    Here…well, money dictate everything in politics. It has become common to witness Congress go against a huge majority of the voters on several topics just because of the power of money. Just look at Big Oil tax subsidies; > 75% of respondents in polls want them abolish. Think Congress listen? Not really! We’ve even seen congresscritters in town halls deny the very existence of said subsidies!. (What do you think the reaction of the audience was? *evil grin*)

    Hence, those with money, a.k.a. the Right set the agenda. Only a popular revolt at the polls, a truly historic tsunami that would shake the very foundations of political conventional wisdom, like, seeing 60% of ALL incumbents getting thrown out of office in one election, could force the powers that be to stop and listen to people for a change.

    This political earthquake could only happen if another crisis like the 2008 one hit us again, but with much more force.

    Otherwise, this country will soon look and feel like Brazil edition 1945-2000; a thousand billionaires, a professional class much smaller than it should be compared to the country’s potential and the rest with the economic bare minimum with the added burden of being social outcasts and legally expandable.

    I have to wonder what kind of psychopath is Pete Peterson to be working so hard toward outcomes that will only add to the misery of countless people. What makes the fucker tick so bad?

  27. rps

    Congress will never dismantle their favorite flowing of wealth piggy banks Social Security and Medicare. The FICA gig is too sweet of a deal. Consider the percentage of people who pay in and never collect from early death to illegals to people with not enough credits that is nonrecoverable.To stop FICA would force government operations to search for other sources like Peterson’s wealth and nonprofit tax dodging foundations. In fact Peterson should praise FICA otherwise congress would be coming for his class and their tax havens, loopholes, capital gains, trust funds, etc. Peterson is another boring short-sighted, ego driven moron whose worth is not measured in intellect rather based on the fraudulent accumulation of fiat currency that’s not worth the paper it’s printed on. His ideology is a intellectually deprived Idiotology. I suggest he take his bat and ball home because the kids in the neighborhood aren’t coming out to play with him. He’s another lame brained idiot the village kicked out.

  28. wafranklin

    I am cross-posting my comments just now to New Deal 2.0 here. Andrew Rich calls his article: Speak Truth to Power (ironically)

    Comment to New Deal 2.0:

    I am sure that Yves Smith on Naked Capitalism was concerned specifically about your involvement with the Pete Peterson Foundation, which has sown the seeds of doubt, discord, distrust and destruction concerning “entitilement” (a rightwing epithet) programs, particularly Social Security, and by implication and specification, Medicare. Not only that, Peterson and his henchmen/henchwomen have attempted to blur the lines and imply that “reasonable people” will of course agree with their solution. Peterson has spent hundreds of millions of ill gotten dollars (Blackrock) attempting to subvert the polity for far too long, and now quite obviously successfully as concerns the New Deal 2.0 and Roosevelt Insitutute. As my grandpappy said, “run with dogs and get fleas” and in this case intellectual scurvy. The appearance of Walker at Peterson has not helped to get to a more rational dialogue, but then, that is not their aim. Their aim, like any rightwing thinktank is vitriolic propaganda camoflauged as intellectal pursuit–with a bunch of rightwing “intellectuals” (an oxymoron) sitting around figuring out how to make the world safe for the rich, a byproduct of which is screw the less and far less weathy–Darwinian principles apply. Or, in common terms, Screw You, I Got Mine. No sense of community on the right exists, it is all their way or the highway. Peterson assumes that his wealth allows him to tell the serfs what to do and in what order. It was Peterson and his rich friends who bribed the Congress and Executive to deregulate the financial industry, which immediately metastasized. It was Peterson and his wealthy corporate friends who destroyed and sold off our manufacturing in pursuit of leveling wages, Americans with Somalis. Peterson is as member of a group of multinational elite who owe no allegiance to the U. S. and its citizens–this elite cheats on its taxes, screws this country and steals its treasures for offshore deployment. Why in the name of God would something associated with the “New Deal” have anything to do with this bunch of crooked, dements idiots, UNLESS as Smith speculated, they gave you money. Which if true, makes you a corporate whore. This stinks just that much and more.

    Posted by wafranklin | June 3rd, 2011 at 6:29 pm

    1. readerOfTeaLeaves

      Good on you.

      As for me, I thought that ‘Millenium’ video at New Deal 2.0 was terrific, but did I take the time to dig beneath the surface…? Noooooooooo.
      Talk about egg on my face, and feeling exceedingly foolish… (gulp).

      Agree with the post that joining in Peterson’s Serious Discussion About The Terrible, Very Big Problem of Deficits only encourages those the Peterson contingent.
      They’re not about discussion; they’re about power and ideology.
      John Dean’s “Conservatives Without Conscience” unpacks their psychology very, very well: they’re tyrannical.

      The problem that ‘progressives’ make is assuming that these are reasonable people and that if you don’t show up to their functions, they you are somehow being ‘unreasonable’. It’s a mistake that I made more than one time, myself. I finally figured out they’re fundamentally about power and control (which, I suspect, has a lot to do with their rabid privatization manias – they can’t control the public space, so their only hope is to privatize everything, including water and air).

      Letting them state the conditions for what is ‘reasonable’ or a ‘key issue’ is like walking right into an alligator’s jaws.

    2. Foppe

      This is bizarre. The author proudly writes “we found sponsors for the Campus Network in the ‘Economic Policy Institute (EPI), Center for American Progress (CAP), Bipartisan Policy Center, American Enterprise Institute, and Heritage Foundation.’ Yet after giving a list containing 2 more Chicago School think tanks not famed for their nonideological approach to policy-making, he says nothing at all to address the issue of possible conflicts of interest caused by ideological differences.

  29. Jim

    “What led to this embarrassing dance with the devil?”

    Great question.

    Is it simply concentrated corporate power and wealth that has led to the corruption of government and also apparently to the corruption of the now former President of the Roosevelt Institute?

    Or, has our post-democratic structue of power also spawned a profssional/academic/bureaucratic/managerial/careerist social formation that is intimately involved with both Big Capital and Big Government?

    Does a portion of this new post-democratic professional class tend to legitimate itself on the pretense of defending the underdog(stated goals of Roosevelt institute) against precisely those same capitalist interests (to which it forms an alliance for its own benefit)?

    Does this same post-democratic professional class tend to articulate our political/economic/financial problems as primarily operational flaws rather than structural in nature(therby leaving room for their personal advancement in this national/international structure of power?

    Is the hegemony of this particular portion of our ruling elites so complete that we do not even recognize them as a key ingrediant of this evolving structure of power?

  30. frances snoot

    Time fur lunch.

    No it ain’t. It be Bud time.

    Wahl, I done cought-cha sumthang, Cleetus. It do be “the hegemony of this particular portion of our ruling elites so complete that we do not even recognize them as a key ingrediant of this evolving structure of power” bird.

    It look like a chick-in.

    Ain’t. It be might powerfool. Took me two chancets to kill it. Then it took me lotsa Bud-on-the-fire to barbie-cue its scrawny ass.

    Ain’t lunch. And that air diss-guise don’t suit.

    Nope. But it do got tits.

  31. Tom Hickey

    All principles progressives participating in the Roosevelt Institute or New Deal 2.0 should resign in protest.

  32. Hugh

    I would note that both the CBPP and EPI have posted replies at FDL where this post also appeared:

    I would note too that both the CBPP and the EPI did support Obama’s tax cut deal last December although they did express some reservations. Essentially, they adopted the Democratic line on them.

    CBPP: Statement: Robert Greenstein, Executive Director, on the Tax Cut-Unemployment Insurance Deal

    Congress should approve this package — its rejection will likely lead to a more problematic package that does less for middle- and low-income workers and less for the economy. Then, in 2012, when the economy should be stronger, the President should make clear he will veto any legislation to extend either the high-end tax cuts or the weakening of the estate tax beyond the estate-tax parameters that were in place in 2009, and he should take that case to the country.


    Lawrence Mishel, president of the Economic Policy Institute, a Washington group funded in part by labor unions, said Obama extracted some concessions from Republicans that may help the accord advance in Congress.
    “Economically, if you were going to do a deal, I think this is better than expected and will provide some help to the economy, but we need a lot more help,” he said. “I think people generally wanted to have a fight to show who was for the rich people and who was for the rest of us. That fight now will take place in the 2012 election.”

  33. KFritz

    Just visited New Deal 2.0

    Is Andrew Rich the president whose resignation has just been tendered? If so, the website hasn’t posted the news prominently and Mr. Rich’s bio/info page has posted it either.

    Further, the latest blog post is by the same Dr. Rich, acknowledging this NC post and putting forth a defense of the Institute–which would seem to be a defense of Dr. Rich, if he has, indeed, tendered his resignation in lieu of a probable dismissal.

    The post is followed by a lively discussion.

      1. Yves Smith Post author

        I haven’t looked at the ND post and probably won’t since it sounds as if Rich is treating this as a personal matter when I have no idea how this action came about (there is a great line in Dune that I can replicate only approximately: “I present a general garment and you treat it as tailor made”). I will deal with the EPI and CFPB defenses (which in the case of CFPB is straw man, have not read EPI but headline suggests the same is true) later this weekend.

        1. Foppe

          The post reads like one of those standard forms you get in return to a question sent to a customer service desk. Basically doesn’t address any of the issues you raise, and only says this:

          As for the source of the funding, our hope is that more full-throated progressive funders would support similar efforts. We, of course, would gladly participate in such programs, although the outcomes, no matter who sponsored it, will not change. The Roosevelt Institute supports an open exchange of ideas, and it has and always will maintain its support from individuals and organizations that understand and are respectful of our core values and intellectual independence.

          I guess he’s counting on people not clicking on the link to your post or something…

    1. Tim

      Since Dr. Rich has not resigned or been dismissed by the board, which is an element of this post seemingly concocted from half-understood hearsay, there isn’t really much to say about it.

      1. Yves Smith Post author

        I never said he was leaving other than of his own volition. He announced his departure earlier this week and said specifically what he is doing next. People often quit posts to take better jobs.

        1. ambrit

          Mz Smith;
          It would be interesting to find out where these ‘better jobs’ come from, wouldn’t it.

    1. Foppe

      In fact, Konszcal is so hurt that one of his friends even trots out the “Yves is a nihilist” argument to cheer him up. Only to continue with the suggestion (paraphrase) “Mike, don’t waste your time considering criticisms of you or the people you work with/for, this only distracts you from your mission”. How I love dogmatists.

  34. Tom Shillock

    Let’s stop calling people like Pete Peterson “conservatives”. That’s their term. They use it because of its implications of and associations with prudence, caution, changing policies slowly to avoid economic dislocations and so on. It is a ‘pro’ term. But of course, these people are the opposite of conservative. They are social and economic radicals of a highly destructive order. Language matters especially in politics, as Frank Luntz showed. We need to bear in mind that most Americans are uneducated even those with university degrees, nor have they much time, energy or interest in reflecting on concepts, subtle points of language, or political or economic theories.

  35. TC

    Ah, but when fictitious assets giving life to so-called conservative enterprises are wiped out by the fast approaching collapse of the trans-Atlantic banking system, how will the infiltration you fret over possibly stand? Have these groups succeeded in removing from the historical record FDR’s success in converting the TARP of his day — the Reconstruction Finance Corporation (initiated by President Hoover) — into a virtual national bank modeled on Alexander Hamilton’s conceptions for driving credit into agricultural and manufacturing capabilities vital to promoting the wealth of the nation? Have they struck from the U.S. Constitution the single sentence Preamble establishing the principle on which this nation is formed?

    F no!

    Annoying gnats like Peterson should not to be denied their penchant for discrediting the causes they claim to be driven. Any group seeking to degrade the U.S. government’s capacity for uplifting those principles around which its very existence is justified simply opens the door to their influence being destroyed once desperation born of the badly broken world view promoted over the past 40 years in support of the greatest Ponzi scheme ever devised spreads across the land in an onslaught insolvency.

    Since 100-1 among congressional constituents registered their opposition to TARP in ’08, there is not much need to worry about who will be blamed for the coming collapse. No one, relatively speaking, buys the crap Peterson is selling.

Comments are closed.