Why the Fiscal Cliff is a Scam (part 2)

By lambert strether of Corrente.

Paul Jay of Real News Network interviews Jamie Galbraith. Yves published part 1 of this interview last week.

More at The Real News

As Yves said, you should share this with all your friends. This passage caught my eye:

[GALBRAITH:] If, for example, [incompr.] suggestion which has been in the news, you raise the eligibility age for Medicare, then what you’re doing is privatizing it in part. What you’re saying is that people who have employer-based insurance or other forms of private insurance have to hang on to that when they’re 66 and into, say, 67 [incompr.] they hit the age when they can shrug it off and get onto Medicare. That’s privatization. That’s what it is. And I think that should also be off the table.

I like how Galbraith frames raising the Medicare eligibility age as a form of stealth privatization, which also has the great merit of being true.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. Max424

    Government, get your stinking paws off my Medicaid!

    You almost feel like givin’ it to them, dontcha? Let the stupid asses take their chances with the ever beneficent Mr. Market.

    My hyper-conservative, dittohead Uncle receives Medicaid, Social Security and a Navy pension (25 years in, retired at 50). Could the guy be more of a Gallic Socialist? The government practically spoon fed him his entire adult life, will care for him and provide relative comfort till the day he dies, and here I am, a guy who has never taken a dime* from Big FedGov, striving mightily to preserve his right to be an ungrateful sponge, from people just like him!

    This country is weird beyond measure.

    *Nor probably ever will, they way things are going (to the neo-liberal Dogs of Privatization, is where they’re going).

    1. YouDon'tSay?

      I guess the only upside is that they’re gradually dismantling the American Empire. At some point when enough stuff has been off-loaded onto the parasitic financial class and everyone else is pretty much fed up with the whole arrangement, it’s gonna occur to a sufficiently large minority that there’s really no point in continuing on with business as usual, and then the fabric of US society will begin to unravel in earnest. The masters of the universe have already signaled their willingness to screw over just about everyone, including the military (the actual people, as opposed to the arms suppliers) and other public sector service providers, so one wonders who in the world they think will save them then? Hired gun private security forces and emergency services providers no doubt, although it remains to be seen how much loyalty their money will be able to buy, especially when they’ll be pushing “cost effectiveness” (aka wage and benefit cuts) on those people too. It should be fun watching all this unfold over the course of a lifetime, but thankfully I’ll be spared most of that drama. To the kids out there who are willing participants in all this privatization malarkey I say only, good luck with that! Hope it all turns out well for you.

      1. nonclassical

        .”.don’t say”-wrong-here’s what’s coming:

        “While the Occupy movement has forced a public discussion of extreme corporate influence on every aspect of our lives, behind closed doors corporate America is implementing a stealth strategy to formalize its rule in a truly horrifying manner. The mechanism is the Trans-Pacific Partnership. Negotiations have been conducted in extreme secrecy, so you are in good company if you have never heard of it. But the thirteenth round of negotiations between the United States and eight Pacific Rim nations will be held in San Diego in early July.

        The TPP has been cleverly misbranded as a trade agreement (yawn) by its corporate boosters. As a result, since George W. Bush initiated negotiations in 2008, it has cruised along under the radar. The Obama administration initially paused the talks, ostensibly to develop a new approach compatible with candidate Obama’s pledges to replace the old NAFTA-based trade model. But by late 2009, talks restarted just where Bush had left off.

        Since then, US negotiators have proposed new rights for Big Pharma and pushed into the text aspects of the Stop Online Piracy Act, which would limit Internet freedom, despite the derailing of SOPA in Congress earlier this year thanks to public activism. In June a text of the TPP investment chapter was leaked, revealing that US negotiators are even pushing to expand NAFTA’s notorious corporate tribunals, which have been used to attack domestic public interest laws.

        Think of the TPP as a stealthy delivery mechanism for policies that could not survive public scrutiny. Indeed, only two of the twenty-six chapters of this corporate Trojan horse cover traditional trade matters. The rest embody the most florid dreams of the 1 percent—grandiose new rights and privileges for corporations and permanent constraints on government regulation. They include new investor safeguards to ease job offshoring and assert control over natural resources, and severely limit the regulation of financial services, land use, food safety, natural resources, energy, tobacco, healthcare and more.

        The stakes are extremely high, because the TPP may well be the last “trade” agreement Washington negotiates. This is because if it’s completed, the TPP would remain open for any other country to join. In May US Trade Representative Ron Kirk said he “would love nothing more” than to have China join. In June Mexico and Canada entered the process, creating a NAFTA on steroids, with most of Asia to boot.

        Countries would be obliged to conform all their domestic laws and regulations to the TPP’s rules—in effect, a corporate coup d’état. The proposed pact would limit even how governments can spend their tax dollars. Buy America and other Buy Local procurement preferences that invest in the US economy would be banned, and “sweat-free,” human rights or environmental conditions on government contracts could be challenged. If the TPP comes to fruition, its retrograde rules could be altered only if all countries agreed, regardless of domestic election outcomes or changes in public opinion. And unlike much domestic legislation, the TPP would have no expiration date.

        Failure to conform domestic laws to the rules would subject countries to lawsuits before TPP tribunals empowered to authorize trade sanctions against member countries. The leaked investment chapter also shows that the TPP would expand the parallel legal system included in NAFTA. Called Investor-State Dispute Resolution, it empowers corporations to sue governments—outside their domestic court systems—over any action the corporations believe undermines their expected future profits or rights under the pact. Three-person international tribunals of attorneys from the private sector would hear these cases. The lawyers rotate between serving as “judges”—empowered to order governments to pay corporations unlimited amounts in fines—and representing the corporations that use this system to raid government treasuries. The NAFTA version of this scheme has forced governments to pay more than $350 million to corporations after suits against toxic bans, land-use policies, forestry rules and more.

        The slight mainstream media coverage the TPP has received repeats the usual mantra: it’s a free-trade pact that will expand US exports. But trade is the least of it. The United States already has free-trade agreements that eliminated tariffs with most TPP countries, which highlights the fact that the TPP is mainly about new corporate rights, not trade. Besides, under past free-trade agreements, US export growth to partner countries is half as much as to countries with which we do not have such agreements. Since NAFTA and similar pacts went into effect, the United States has been slammed by a massive trade deficit, which has cost more than 5 million jobs and led to the loss of more than 50,000 manufacturing plants.

        How could something this extreme have gotten so far? The process has been shockingly secretive. In 2010 TPP countries agreed not to release negotiating texts until four years after a deal was done or abandoned. Even the World Trade Organization, hardly a paragon of transparency, releases draft negotiating texts. This means that although the TPP could rewrite vast swaths of domestic policy affecting every aspect of our lives, the public, press and Congress are locked out. Astoundingly, Senator Ron Wyden, chair of the Senate committee with official jurisdiction over TPP, has been denied access even to US proposals to the negotiations. But 600 corporate representatives serving as official US trade advisers have full access to TPP texts and a special role in negotiations. When challenged about the conflict with the Obama administration’s touted commitment to transparency, Trade Representative Kirk noted that after the release of the Free Trade Area of the Americas (FTAA) text in 2001, that deal could not be completed. In other words, the official in charge of the TPP says the only way to complete the deal is to keep it secret from the people who would have to live with the results.

        The goal was to complete the TPP this year. Thankfully, opposition by some countries to the most extreme corporate demands has slowed negotiations. Australia has announced it will not submit to the parallel corporate court system, and it and New Zealand have rejected a US proposal to allow pharmaceutical companies to challenge their government medicine formularies’ pricing decisions, which have managed to keep their drug costs much lower than in the United States. Every country has rejected the US proposal to extend drug patent monopolies. This text was leaked, allowing government health officials and activists in all the countries to fight back. Many countries have also rejected a US proposal that would forbid countries from using capital controls, taxes or other macro-prudential measures to limit the destructive power of financial speculators.

        However, we face a race against time—much of the TPP text has been agreed on. Will the banksters, Big Pharma, Big Oil, agribusiness, tobacco multinationals and the other usual suspects get away with this massive assault on democracy? Will the public wake up to this threat and fight back, demanding either a fair deal or no deal? The Doha Round of WTO expansion, the FTAA and other corporate attacks via “trade” agreements were successfully derailed when citizens around the world took action to hold their governments accountable. Certainly in an election year, we are well poised to turn around the TPP as well. To learn more and get involved, go to tpp2012.com.”

        1. Max424

          If I was a Sky-God in Parallel Universe 28, running a booking operation for the rest of my parallel Sky-Gods, analyzing the shenanigans of the capitalists down here on this sad planet, I’d lay odds that by 2050, 25% of the earth’s inhabitants will be slaves.

          Not indentured servants or debt serfs,* but slaves –humans wholly owned and operated by someone or something, most of them by all-powerful multi-national conglomerates.

          This is one of the few socio-economic concepts that was readily clear to me in my youth: Capitalism is slavery, and the purer its form, the more robustly slave it becomes. It is a one-world system seeking concentrated power, it will soon stamp out any strains of human goodness, it will eventually trump then supplant nation-states, hence, Pure Capitalism will produce Total Slavery. World-wide. Always.

          After thirty-five years –and thousands of hours– of pondering my initial conclusion, my thinking on this has never wavered even a titch.

          *There will be a lot more of those, of course. Throw those “types” into the total, and were talking 60-70% of humanity, just forty years out, will be either servants, serfs, or slaves.

          1. Carla

            Max, at first when I read your post, I said “Only 25 percent?”

            But then I read to the end, and can only say, unfortunately, that I agree.

      2. Brooklin Bridge

        Have I got a deal…

        As a species, we are not simply “group” oriented by evolutionary design; within those groups, the pattern has always been a tiny subset of manipulators and a much larger one of manipulated. The latter can never quite catch up to the former. Max24s uncle seems to sum up the experience of the manipulated subset. He thrives on being pissed on, just like Mac below (hint Mac, it’s not your fly you unzip when you want to think). And it seems to be built in. It’s not something we as a species can change any more quickly than leopards can change their spots.

        Add in to this ointment the fly that our brains are suddenly providing us with more innovation (currently in the form of exploding technology) than we know what to do with (hence the melting ice), but which the manipulators can always find a use for (hence the overwhelming vice like MSM propoganda), and you have an existential element as well to this conondrum (we are turning the globe into an Easter island).

        So I’m starting to loose hope in when comes the revolution, comrade. The argument that going to the bottom (fast or slow) has any silver lining on the other side is looking more and more like wistful BS. It’s just suffering and pain for the many followed by a horribly wrenching re-shuffling, or a horribly wrenching extinction, followed, if at all, by re-grouping and then more of the same until such time as we finally get lucky and extinguish ourselves altogether.

      1. Brooklin Bridge

        You should be attending to your bodily fluids. They’ll be compromised for sure if you stick around here!

          1. mac

            Our Government is too inefficient and is NOT run by the elected folks but by the
            hired hands they have who do what ever they want as the elected folks are busy asking for donation to continue their scam.

      2. ShMagus

        So I take it you are like his uncle and, to a lesser extent, my mother, who works as a contractor for the USPO and is waiting to get on Social Security but bitches about the fact that government is too big and gives our tax dollars away to anyone who comes along.

        That about cover it?

      3. Max424

        I’m a whiner, mac. I whine, therefore for I am.

        Too funny. The truth is, all my Uncle does is bitch, all I do is listen.

        And the thing of it is, he’s had a helluva-of-an-easy life compared to mine, yet I consider myself one lucky fuck, while he feels the gods have done nothing but piss on him since his inception.

        He’s a hater, mac. He was born with it, and will die, shrouded in it.

  2. Dan Kervick

    Yep, that’s the plan they have. Whittle away the number of people who depend on these programs, and shrink their political constituency through a gradual series of “reforms”. Then kill them. It will be easy to drown the programs in a bathtub when most of beneficiaries are too old and sick to fight back. The first step is to throw a few people out of the bathtub every few years. Once the third rail is reduced to the carrier of only a small static electricity shock, it will be easy to grab and rip out.

    1. Aquifer

      So precisely how do you propose to stop this from happening? And please don’t say “MMT” unless you also explain how you will get it instituted within a short enough time frame to prevent the demise of these programs ….

  3. Benoit Essiambre

    It’s not as if people can go without healthcare from 65 to 67. This is not a saving. This is rerouting costs through a less efficient system that makes people pay more for less (except for a few very rich individuals who get to pay much more for marginally better care which is wasteful). Ultimately this is a hit on GDP, tax receipts and it will most likely increase debt not reduce it.

  4. David Lewis

    This is absurd and just plain wrong — raising the Medicare age is worse than privatization, much worse!

    With privatization, the government would take the money they owe you (much of which you paid in over the years) and give it to a private company to “insure” you, and let them make a profit on it, but that would only be a part of the money.

    But raising the eligibility age just takes ALL the money away from you (your money!) for two more years and keeps it in the US Treasury. And if you want to put it baldly, in the Treasury is will make up for the vastly under-taxed upper income brackets, whose rates should be in the 50-60% range, not 36-39%!

  5. bluntobj

    Raising medicare eligibility is privatization, but what is worse is that it is a pure profit generating transfer to a slavering sickcare industry.

    It’s a perfect time to strip mine assets and take the cream off the top before medicare rolls around.

    Any form of health insurance distorts prices, just as any form of educational loan or subsidy distorts prices.

    Cash basis medicine, with all its pros and cons, is the only way to avoid the industrial scale farming of people for government & private money in the sickcare industry.

    1. Aquifer

      Cash basis medicine – and how much is in your wallet – enough to pay for a an appendectomy? a CABG? Ca RX?

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