Are Conservatives to Blame For the Worse Economic Collapse Since the Great Depression

Are Conservatives To Blame for the Financial Crisis

The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.

Predictably, many conservatives sought to blame the bogeymen they always blamed. In March of 2008, Sen. Jon Kyl (R-AZ) blamed loans “to the minorities, to the poor, to the young” as causing foreclosures. Not long after, conservative commentator Michele Malkin went so far as to claim that illegal immigration caused the crisis.

This tendency to shift blame to minorities and poor people for the financial crisis soon developed into a well-honed narrative on the right. Swiftly and repeatedly many conservatives blamed affordable housing policies—particularly the affordable housing goals in place for the two government sponsored mortgage finance giants Fannie Mae and Freddie Mac and the 1977 Community Reinvestment Act that applies to regulated lenders such as banks and thrifts—for the massive financial crisis that occurred. This despite the fact that as recently as 2006 prominent conservatives, including FCIC Republican member and American Enterprise Institute Senior Fellow Peter Wallison, were arguing that Fannie and Freddie needed to do more lending to low-income communities and minorities.

Last week, the Republican minority on the congressionally created Financial Crisis Inquiry Commission continued this tradition of willful blindness, issuing their own self-described nine-page "primer" on the financial crisis—one that attempts to lay the blame once again on Fannie Mae, Freddie Mac, and the Community Reinvestment Act. The picture they paint is reflective of a mindset they displayed last week when all four Republican members tried to ban the phrases "Wall Street," "shadow banking," "interconnection," and "deregulation" from the final report.

These terms are important to understanding what happened in the 2000s. But equally damning is this—the minority members of the FCIC got their facts wrong, their time frames jumbled, and their selection of relevant facts skewed to reflect their libertarian biases. The ideological imperative to blame the government, and more importantly to avoid the culpability of laissez faire economics, have overridden all other considerations, including those of actually looking at the facts.

As the FCIC staff reports released so far in the run up to the final report have demonstrated, the primary fuel of the financial crisis was a hands-off approach to regulation. This ideologically driven lack of regulatory oversight allowed tremendous growth of the "shadow banking system," a largely unregulated web of complex financial transactions that essentially served the same functions as the existing banking system—attracting short-term funds from those seeking safe, liquid investments and using these to finance long-term loans, particularly residential mortgages—but without government oversight to ensure that these activities were being done safely and soundly.

As the FCIC staff reports demonstrate fairly conclusively, it was the shadow banking system’s unregulated private securitization of mortgages that caused the financial crisis, not affordable housing policies. The FCIC staff has done an excellent job of compiling the facts, and we encourage you to check out the FCIC’s comprehensive reports to date. In our view, below are their most persuasive arguments,
Look at the market share

The market activities of the relevant parties clearly show the problem with the argument made by the minority FCIC members. The market shares of Fannie Mae, Freddie Mac, and CRA-regulated lending institutions dropped tremendously during the housing bubble. Meanwhile, the market share of private mortgage securitization, which the FCIC majority largely blames for the crisis, and which the FCIC minority completely ignores, grew in lockstep with the rise of the housing bubble.

The relative market share of Fannie Mae and Freddie Mac dropped fairly dramatically during the 2000s bubble, from a high of 57 percent of all new mortgage originations in 2003, down to 37 percent at the height of the bubble in 2005 and 2006. Notably, this decline occurred contemporaneously with the unsupported rise in housing prices and the deterioration in underwriting standards that virtually all observers blame for the collapse of the housing markets.

Similarly, the market share of financial institutions for which CRA applied has been steadily declining since 1977, when CRA was passed. CRA-regulated institutions, primarily banks and thrifts, accounted for only 28 percent of all mortgages originated in 2006 (the height of the bubble), a significant decline from their share in the late 1990s and early 2000s. As with Fannie and Freddie, this market share drop occurred in lockstep with the rise of the housing bubble.

In contrast, the market share of private mortgage securitization, a pillar of the “shadow banking system” that was not backed by the federal government and not regulated for safety and soundness in the way that Fannie, Freddie, and regulated banks and thrifts were, rose sharply and contemporaneously with the rise of the housing bubble. In 2002, the share of mortgages originated by private securitization was just over 10 percent of the total market. Over the next four years, this share grew rapidly, accounting for nearly 40 percent of all mortgage originations by 2006. As a percentage of all mortgage-backed securities, private securitization grew from 23 percent in 2003 to 56 percent in 2006.
Look at the default rates

Equally conclusive are the default rates of mortgages originated for these various lending channels. If the conservative view was correct, one would expect to see mortgages originated for Fannie and Freddie securitization, as well as those originated for purposes of CRA, to default at higher rates, since these were the loans directly subject to affordable housing policies. In fact, we see quite the opposite, as these loans have performed exponentially better than those originated for private securitization, which the FCIC Republicans ignore.

Mortgages originated for private securitization defaulted at much higher rates than those originated for Fannie and Freddie securitization, even when controlling for all other factors (such as the fact that Fannie and Freddie securitized virtually no subprime loans). Overall, private securitization mortgages defaulted at more than six times the rate of those originated for Fannie and Freddie securitization.

Similarly, mortgages originated for CRA purposes have performed at much higher rates than loans originated for private securitization, going into foreclosure 60 percent less often than loans originated by independent mortgage companies that were key to providing the mortgages needed to supply private securitization.

But even if these facts didn’t exist, the FCIC Republican narrative fails miserably in explaining the financial crisis. To illustrate why it fails, let's perform a simple thought experiment our colleague Matthew Yglesias has suggested: Let us suppose that the GOP's argument is correct, and that government affordable housing policies were 100 percent responsible for the housing bubble and the flood of unsustainable mortgages that were originated during the 2000s.

How could the FCIC Republican argument possibly explain the analogous housing and financial bubbles that occurred contemporaneously in other countries such as Iceland, Ireland, the United Kingdom, and Denmark, which did not have Fannie or Freddie Mac or CRA? The FCIC majority argument has a plausible and compelling explanation for the global credit bubble—that an unregulated and overleveraged shadow banking system systematically underpriced credit risk. The FCIC Republican minority has no explanation for these contemporaneous bubble-bust cycles that occurred in other countries.

Or consider that a virtually identical bubble occurred in the U.S. commercial real estate mortgage market. There is no government policy FCIC Republicans can point to that encouraged lenders to loosen underwriting standards for malls or office buildings. (see graph)

Commercial versus residential real estate

What’s more, this commercial real estate had a large exposure to private securitization, as did credit card debt, student loans, and auto loans, all of which experienced bubble-bust cycles that were similar to that which happened in residential real estate. (see graph)

Asset-backed securities issuance

Moreover, the FCIC minority narrative fails to explain the huge private-sector demand for subprime and Alt-A mortgages, or the mortgage-backed securities created out of these mortgages. The crux of the FCIC Republican argument is the affordable housing goals and CRA created the demand for risky subprime and Alt-A mortgages, which in turn created the huge demand for the private mortgage-backed securities that led to the 2000s housing bubble.

But this ignores the huge existing demand for private mortgage-backed securities. Even after Fannie and Freddie plunged into the market for these mortgage-backed securities, they never accounted for more than a fraction of the demand for these securities. (see graph)

Fannie and Freddie accounted for a fraction of the demand for private mortgage-backed securities issued between 1998 and 2007

Instead, the common thread was under-regulation at every level of the financial system leading to a general real estate bubble. The bursting of the bubble first in the subprime home mortgage market was a symptom of just how little consumer protection was left, as federal regulators told state authorities who tried to stop more abusive mortgage companies to stand down due to federal preemption doctrines.

It is kind of funny in a dark way that the same people who lied to America about WMD in Iraq and are the primary culprits in the Great Recession, want us to believe the best way to handle the deficit is to cut Medicare and other programs that make the difference between life and death for millions of Americans.

Enlightened Founders Favored Pluralism Not a Law Setting a National Day of Prayer

Federal Judge Barbara Crabb recalled an inconvenient truth with her ruling that the National Day of Prayer, which was established by Congress in 1952 and is celbrated this May 6, is unconstitutional.

Specifically, the judge for the Western District of Wisconsin determined that the prayer law “violates the establishment clause of the First Amendment to the United States Constitution.”

But the broader message is really about the spirit of the Constitution.

Though it is too seldom acknowledged by contemporary politicians and jurists -- including members of the Obama administration, who have joined fundamentalist conservatives in griping about Crabb's ruling -- the initiators of the American experiment were keenly aware of the dangers associated with the imposition by civil government of religious tests, requirements and calendars.

Men of the Enlightenment who had rejected the cruel construct of a “divine right of kings” and waged a revolution against a colonial empire that claimed its imperial reach was sanctioned by God, they knew the folly of mixing religion and politics.
 
And they were explicit in their determination that the United States must not go the way of the old monarchies of Europe, where state religions, state prayers and attendant rules and regulations served as the apparatus for constraining popular discourse, dissent and diverse expressions of faith.

So they established a Constitution that left no doubt of their determination that the United States would not dictate which religion was superior or inferior, or require an expression of faith as a qualification for citizenship.

They were explicit in this regard, weaving into the initial outline of the American experiment a blunt rejection of any “religious test.”

“The senators and representatives before mentioned, and the members of the several state legislatures, and all executive and judicial officers, both of the United States and of the several states, shall be bound by oath or affirmation, to support this Constitution; but no religious test shall ever be required as a qualification to any office or public trust under the United States,” reads Article VI, section 3, of the U.S. Constitution.

In case anyone missed the point, when the Constitution was amended to include a Bill of Rights, written into the first of the amendments were two specific declarations:

The first enshrined the principle that “Congress shall make no law respecting an establishment of religion.” This meant that the federal government could not identify a preferred faith or set of prayers or practices. In effect, it barred the establishment of the sort of state religions that kings, czars, kaisers and potentates had employed to provide a fantasy of “moral cover” for their abuses of power.

The First Amendment also recognized that the government had no authority to prohibit the “free exercise” of religion, meaning that the state could not tell Americans how to pray or not pray, how to worship or not worship, how to express their faith or not express their faith.

If there was any lack of clarity, the matter should have been resolved one year into the tenure of the nation’s first president, George Washington, when he used a letter to the Hebrew congregation in Newport, R.I., to hail the “enlarged and liberal policy” that said: “All possess alike liberty of conscience and immunities of citizenship. It is now no more that toleration is spoken of, as if it was by the indulgence of one class of people, that another enjoyed the exercise of their inherent natural rights.”

America did not “tolerate” religious diversity. It embraced that diversity, welcoming Christians and Jews, believers and nonbelievers into a polity where, Washington explained, “The government … gives to bigotry no sanction, to persecution no assistance.”

To maintain that happy circumstance, Thomas Jefferson explained in his 1802 letter to the Danbury Baptists: “Believing with you that religion is a matter which lies solely between man and his God, that he owes account to none other for his faith or his worship, that the legitimate powers of government reach actions only, and not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should ‘make no law respecting an establishment of religion, or prohibiting the free exercise thereof,’ thus building a wall of separation between church and state.”

While the founders survived, there was no mystery about their “original intent” with regard to that wall of separation between church and state. Indeed, when the greatest of our public services, the post office, was developed, it was determined without serious debate that mail would be delivered seven days a week.

Only in the late 1820s did some Christian groups object. And their complaints were quickly rejected by Congress, which adopted the position — stated by Kentucky Sen. Richard M. Johnson — that: “our government is a civil and not a religious institution.”

A century later, long after the last of the founders and those inspired and instructed by them had died, Sunday mail service was stopped. It was not until the mid-1950s, in response to Joe McCarthy’s “red scare,” that the motto “In God We Trust” was approved by Congress, along with the initial National Day of Prayer legislation.

Crabb’s ruling, in a case initiated by the Madison-based Freedom From Religion Foundation, seeks to restore Jefferson’s “wall of separation between church and state.” It is not her point or purpose to undermine the practice of religion. “It is important to clarify what this decision does not prohibit,” the judge wrote. “Of course, ‘no law prevents a (citizen) who is so inclined from praying’ at any time. And religious groups remain free to ‘organize a privately sponsored (prayer event) if they desire the company of like-minded’ citizens. The president too remains free to discuss his own views on prayer. The only issue decided in this case is that the federal government may not endorse prayer in a statute.”

Anticipating the outcry her decision would stir, Crabb continued: “I understand that many may disagree with that conclusion and some may even view it as a criticism of prayer or those who pray. That is unfortunate. A determination that the government may not endorse a religious message is not a determination that the message itself is harmful, unimportant or undeserving of dissemination. Rather, it is part of the effort to ‘carry out the founders’ plan of preserving religious liberty to the fullest extent possible in a pluralistic society.’ The same law that prohibits the government from declaring a National Day of Prayer also prohibits it from declaring a National Day of Blasphemy.”

That is a reasoned judgment, a judgment grounded in a core value of the American experiment. Indeed, if it took courage for Judge Crabb to issue this historic ruling, it was the courage of the founders.

For Some Believers Hate is an Addiction That Serves Their Agenda

Religion Does Its Worst

So Terry Jones, the Florida pastor who organized a Koran burning on March 20, wanted “to stir the pot.” Mission accomplished. Perhaps he’d care to explain himself to the family of Joakim Dungel, a 33-year-old Swede slaughtered at the U.N. mission in Mazar-i-Sharif by Afghans whipped into frenzy through Jones’s folly.

On reflection, no, there’s nothing Jones can explain to Dungel’s family, or the other U.N. staffers murdered. Jones is not in the explanation business. He’s a zealot. How else to describe a Christian who interprets his faith not as grounded in love and compassion but as a mission to incite hatred toward Islam?

There’s no discussion with a bigot like this: You can’t be argued out of something you haven’t been argued into in the first place.

Jones is not alone in this Islamophobic campaign in the United States, which is what is most disturbing. But before I get to that, let’s talk about the murderous Afghan mob and its enablers.

Hamid Karzai, the Afghan president, was one such enabler. He was a fool to allude to Jones’s stunt, performed before a few dozen acolytes. Why elevate this vile little deed and so foster mayhem?

Karzai is a man who will stop at nothing to disguise his weakness. His benefactors and underwriters — the West — are those he must scorn to survive.

The foolishness did not stop with Karzai: The imams of Mazar chose to use Friday prayers to stir up the crowd. As for the killing itself — whether by infiltrated Taliban insurgents or not — it was a heinous crime against innocent people and should be denounced throughout the Islamic world, in mosques and beyond. I’m still waiting.

Staffan de Mistura, the top U.N. envoy in Afghanistan, did not honor the dead by failing to denounce the perpetrators of the crime in a statement. He was right to call Jones’s Koran burning “insane and totally despicable;” he should have used the same words about the slaughter of his men. Not to do so was craven, a glaring omission.

All this madness began at the Dove World Outreach Center in Florida, home to Jones’s mini-church. As my colleague Lizette Alvarez chronicled, an unrepentant Jones believes Islam and the Koran only serve “violence, death and terrorism.” That’s as dumb as equating Christianity with Psalm 137 that says the “little ones” of the enemy should be dashed against stones.

But such incendiary views about a world religion now find wide expression in the United States where “stealth jihad” has become a recurrent Republican theme.

Several Republicans, including former House Speaker Newt Gingrich and Representative Peter King, have found it politically opportune to target “creeping Shariah in the United States” at a time when the middle name of the president is Hussein. (A Newsweek poll last year found that 52 percent of Republicans agreed with the statement that “Barack Obama sympathizes with the goals of Islamic fundamentalists who want to impose Islamic law around the world.”)

I spent time last year with Paul Blair, a pastor in small-town Oklahoma, a state where Islamophobia is rampant. He told me Muslims were “not here to coexist but to take over.” He told me there are only two possibilities in Islam — “the house of Islam or the house of war.”

That sort of message is going out in a lot of U.S. churches. It’s dangerous. Already, Muslims are victims in 14 percent of religious discrimination cases when they make up 1 percent of the population.

In Europe, too, rightist politicians peddle divisive anti-Muslim bigotry, with some success.

Muslims have work to do. They should have the courage to denounce unequivocally the Mazar murder. Jihadists have too often deformed a great religion with insufficient rebuke. From Egypt to Pakistan, it must be understood that Islam cannot at once be a political force and above criticism. Once you enter the democratic political arena on a religious platform, your beliefs are no longer a private matter but up for legitimate attack. Pakistan’s violence-inducing blasphemy laws are an affront to this principle.

Jones, by contrast, lives in a nation where the law defends even his folly. I’m a free-speech absolutist and so I support that. But he must examine his conscience: How is it consistent with religious faith to stir hatred and killing? And how can the Islamophobes, spreading poison, justify their grotesque caricature of Islam in the thinly veiled pursuit of political gain?

This column is full of anger, I know. It has no heroes. I’m full of disgust, writing after a weekend when religious violence returned to Northern Ireland with the murder of a 25-year-old Catholic policeman, Ronan Kerr, by dissident republican terrorists. Religion has much to answer for, in Gainesville and Mazar and Omagh.

I see why lots of people turn to religion — fear of death, ordering principle in a mysterious universe, refuge from pain, even revelation. But surely it’s meaningless without mercy and forgiveness, and surely its very antithesis must be hatred and murder. At least that’s how it appears to a nonbeliever.

You can follow Roger Cohen on Twitter at twitter.com/nytimescohen .

 I don't agree with every word, but some good insights into free speech, freedom of religion and responsibility. Christianity and Islam both have a history of violence from some of their adherents. It wrong to use those religions as a cover or excuse for doing and saying hateful things.


Why Ryan’s Medicare Proposal Is Not Like The Plan Members Of Congress Get - Ryan is honest. An honest to goodness serial lair.

Climate denialism myths at the U.S. House Hearing on climate change

Wisconsin Gov. Scott Walker (R) knows what most conservatives know. You can steal more, lie more and get paid more the average street crook, if you run for office as a Republican - Scott Walker Gives $81,500 Government Job To Top Donor’s 26-Year-Old College Dropout Son

Texas Conservatives Create Real Death Panel

Texas Conservatives Create Real Death Panel

Besides whacking education jobs and trashing university research, the Texas Legislature is considering yet another way to avoid raising even one more precious penny of tax money.

A state Senate subcommittee on Medicaid spending is offering its own final solution:

Let people die.

Our very own death panel voted last week against adding $23 million in lifesaving medications for poor Texans with HIV, essentially turning away the 2,000 new patients who will need help in the next two years.

At a meeting where the Senate Finance Subcommittee on Medicaid restored $4.5 billion for health care, including money for mental-health services and nursing home patients, those 2,000 Texans didn't make the cut.

Senators asked Dr. David Lakey, the state health commissioner, what will happen to new patients.

The Associated Press quoted his reply:

"The natural progression, without any medications, would be that they die."

With help from federal money, the state will continue buying medications for current patients -- about 14,000 Texans earning less than $30,000 a year.

But as more patients lose their jobs and insurance, more Texans will need help.

To you and me, they might be our neighbors or family members.

But to state agency officials forced to rank dire needs, and then to the subcommittee led by state Sen. Jane Nelson, R-Flower Mound, making the final decisions, those Texans were "priority 2."

There's still a chance the money might be restored.

The Associated Press quoted Lt. Gov. David Dewhurst saying vaguely that when the final budget is passed, "lifesaving drugs will be included."

But that wasn't the way the subcommittee voted Thursday. Senators approved the $4.5 billion toward the most important budget items but discarded $2 billion in secondary requests, including the money for new patients.

Lakey's agency has announced a meeting Friday in Austin to discuss how to serve those patients.

Taxpayers actually save about $3,500 a year serving new patients at the state level instead of through county hospitals, according to the Houston Chronicle.

Conservatives lied about Democrats creating a "death panel" with health care reform. Maybe it was, among other petty reasons, a way to distract from their own, very real death panel agenda.

To Right-Wing Media, Schoolteachers & Auto Workers Are Just Like Terrorists. Republicans put on quite a show claiming to be the populist party of the middle-class. The truth says otherwise.

Assault on the Middle Class - Tea Bagger Republican Budget Plan Targets Everyone but the Rich

Assault on the Middle Class - Tea Bagger Republican Budget Plan Targets Everyone but the Rich

The first decade of the 21st century was tough on the middle class in America. From 2001 through 2007, median household incomes actually fell after accounting for inflation. And as wages stagnated, huge costs such as health care and higher education continued to rise dramatically. And this was even before the onslaught of the Great Recession, which destroyed almost $20 trillion in wealth and nearly 9 million jobs. As a result, from 2007 to 2009, income for the median American household dropped by more than 4 percent, the largest two-year decline in 35 years.

The deep recession also dramatically exacerbated an already hefty federal budget deficit. Now, Republicans in the House of Representatives are trying to solve the latter problem—the federal budget deficit—by making the former one—a middle class still struggling to keep its head above water—even worse.

Their plan is to reduce government spending on a tiny slice of the federal budget, including many programs on which middle-class Americans depend heavily but which the wealthy can easily live without. For most American families, this will mean more financial pain than they can easily bear after the struggles they experienced over the past decade.

The spending bill passed by the House, known as House Resolution 1, or H.R. 1, for fiscal year 2011 ending September 30, would slash funding for a wide range of activities that middle-class families rely on—services such as inspections of food, drugs, and consumer products; road building; mass transit; public elementary and secondary education; workplace safety; and law enforcement. Of course the government provides these services to the advantage of everyone—rich, poor, and middle class alike—but it is only the rich that can afford to buy their own replacement services should the government be forced to stop providing them. The rich will be able to shrug off the new costs but the middle class will feel them quite keenly.

The House Republican budget plan, for example, includes substantial cuts to law enforcement grants to states and localities. This will mean fewer police on the beat, and less training and worse equipment for those cops who are left. Obviously, there are plenty of ways in which effective public law enforcement benefits rich people along with middle-class families. But if those services degrade, families who are extremely wealthy can always purchase private security guards or move to a gated community.

Similarly, the massive cuts to federal support for education—from pre-kindergarten through college—included in H.R. 1 would certainly be felt much more severely by the middle class than by the wealthy. The rich can afford to send their children to private schools, hire private tutors, and provide private enrichment classes and activities. They can also afford to send their children to the priciest private universities without the need for federal financial aid.

But where do those same cuts leave middle-class families? The middle class needs good public schools to educate their children, and Pell Grants to allow their kids the opportunity to access the benefits of higher education. Some families may be able to scrimp or dip into savings to pay for 12 years of private elementary and secondary school but the sacrifices required are enormous. Most others will have to make due with public schools targeted for extensive cuts by House Republicans. And if the Republicans get their way, you can forget about college tuition assistance.

Cuts to education and law enforcement are only one part of the assault on the middle class. If passed, the House plan would also slash funding for all manner of transportation projects. That means fewer highway miles repaved, fewer new roads and bridges, and less frequent bus and train service. That will be merely inconvenient for the very wealthy. They can hire a driver or call a car service so that hours sitting in traffic aren’t wasted for them. Or they could build a home office so they can telecommute, skipping the traffic altogether. The middle class, however, doesn’t have those options.

Conservatives might say that if the government stops building and maintaining good roads, or providing mass transit options, and traffic begins to pile up, then the private sector can always step in. Perhaps some enterprising company will build their own highway and charge a hefty toll for those willing to pay. No burden for the wealthy commuter but now the middle-class commuter has to factor in the cost of the new tolls along with rising price of gasoline.

And speaking of gasoline, Republican budget cuts are likely to make that problem worse as well. Their plan includes big cuts to the Commodity Futures Trading Commission. The CFTC may not be the agency that first pops to mind when thinking of crucial middle-class services. But the CFTC is responsible for regulating and cracking down on speculation that can drive up the price of commodities like oil. The head of the CFTC, Bart Chilton, recently warned that energy speculation is currently at record highs and is pushing up prices at gas pumps. If the House Republicans get their way, the CFTC will have fewer resources at its disposal to find and stop this kind of speculation, which means higher gas prices.

Again, that may not have a particularly large impact on people who haul in millions of dollars a year, but for most Americans, it’ll hurt.

Hurting quite a bit more, and in a more literal way, will be the cuts proposed for the agencies charged with ensuring the safety of America’s food supply, pharmaceuticals, and consumer products. Currently, safe in the knowledge that the Food Safety and Inspection Service, the Food and Drug Administration, and the Consumer Product Safety Commission are on guard, consumers can currently choose between products based on price and quality without fear that if they choose to save a little money by picking up a generic brand they won’t end up sick or hurt. But House Republicans propose major cutbacks to FSIS, the FDA, and the CPSC. These cutbacks will mean fewer inspectors and safeguards, which in turn means more tainted meat or defective toys.

No one benefits when thousands of pounds of rancid meat get shipped to local grocery stores but the implications are less severe for those who can afford to always purchase the highest-priced products.

Of course, the House budget cuts a lot more than just foundational middle-class services. Low-income families seem to be a favorite target, too, as do children. Taken altogether, the sum total of these cuts are so severe that they would mean the loss of hundreds of thousands of jobs over the next two years as well as overall slower economic growth in the long term. But the attack on the basic building blocks of a middle-class life—education, security, ability to get to and a from a job, confidence in the safety of products purchased at the grocery store—is particularly galling given how central a strong middle class is to broad economic growth.

When millions of middle-class families are struggling to get past the worst economic disaster in 70 years—when we just exited a decade in which median household incomes actually fell in real terms—it is baffling how anyone could truly believe these kinds of cuts will help. But this is what happens when an ideological commitment to “smaller government” intersects with an economic worldview in which the rich matter more than anyone else. You end up with a budget that slashes public services that middle-class Americans depend upon but that wealthy people can do without.

The incredibly sad irony of this situation is that the middle class has been bearing the brunt of this skewed conservative economic philosophy for some time now. Their incomes were falling at the same time that huge tax cuts were being bestowed on the richest 1 percent. Their jobs were disappearing at the same time that taxpayer dollars were being used to bail out the largest banks in the country. And now House Republicans cut their services while simultaneously protecting benefits for oil companies, multinational corporations, and trust-fund heirs.

Reducing the budget deficit may be a laudable goal but doing it this way is anything but.

One of those conspiracy theories the average American can believe in. Conservatives, with the help of a few conservative Democrats, drove the economy into the ditch - letting Wall St run wild, cutting taxes, not paying for two wars  (both of which will cost over five trillion dollars) and now the bill is due. Who do Conservatives want to pay the bill? The middle-class and working poor. Welcome to the plutocracy.

The Republican War On Academia Heats Up

The Republican War On Academia Heats Up

In March 1949, a group of Illinois college students traveled to Springfield, Ill., to protest a group of anti-Communist subversion bills introduced by state Sen. Paul Broyles, the chairman of the Seditious Activities Intelligence Commission. Broyles wanted to outlaw the Communist Party, make membership in a Communist "front organization" a felony, and require all public-sector workers -- including public school teachers and university professors -- to swear loyalty oaths.

The protests drew wide attention and prompted the hasty passage of a joint resolution declaring that "It appears that these students are being indoctrinated with Communistic and other subversive theories contrary to our free systems of representative government." A public investigation of whether University of Chicago professors were responsible for such indoctrination followed, but mostly fizzled out after a bravura performance by University of Chicago chancellor Robert Hutchins.

Hutchins later reflected on his experience.

    Since a university faculty is a group set apart to think independently and to help other people to learn to do so, it is fatal to force conformity upon it. Nobody would argue that all professors must be members of the Republican Party; but we seem to be approaching the point where they will all be required to be either Republicans or Democrats (right wing).

    I do not claim that the status of university professor should entitle a man to exemption from the laws. But I do say that imposing regulations that go beyond the laws is impractical and dangerous.

    There are fashions in opinion as well as in behavior. We are just emerging from an era in which a schoolteacher could lose her job by smoking, dancing, or using cosmetics. We should avoid entering one in which a professor can lose his post and his reputation by holding views of politics, economics, or international relations that are not acceptable to the majority.

    This is thought control.

It is a little amusing to note Hutchins' worry that all professors might be required to be right-wing, in light of the current conservative gripe that universities are dominated by left-wing "tenured radicals" who enforce their own dogmatic thought control on today's students. But it's certainly no joke to today's public university faculty when politically motivated opponents start gunning for them, for whatever ideological reason. I stumbled across the Illinois episode while researching the issue of legal restrictions on political activity by public sector employees -- a sizzling topic in the wake of the Open Records request made last week by the Republican Party of Wisconsin that seeks access to University of Wisconsin history professor William Cronon's e-mails. (In fact, if you Google the words "political activity by public university employees" the first result returned is the University of Wisconsin's guide to what is permitted and prohibited.)

The political heat is set particularly high in Wisconsin, but the Cronon affair is hardly an isolated incident. On Tuesday, Talking Points Memo's Evan McMorris-Santoro reported that a conservative think tank in Michigan is also using FOIA requests to gain access to emails sent or received by academics at three Michigan public university departments, suggesting that there is a concerted effort by the right to go after any kind of labor activism occurring in a public university academic context. The historical echoes are pretty easy to hear. In the 1950s, the enemy was Stalin. In 2011, it's unions, period.

Which is not to say that the Mackinac Center for Public Policy doesn't have a legitimate case against Wayne State University's Labor Studies Center. I would not be at all surprised to learn that academics who have devoted their careers to studying labor history or labor economics might want to apply theory to reality, and help directly organize workers. In a state with such a  potent labor history as Michigan it would be more surprising if they weren't. I'm not exactly sure how different that is from right-wing economists pushing free-market fundamentalist policy positions, but there are clearly pretty strict rules on what public university employees -- or any government employee -- can do in the political realm using their employer resources, dating all the way back to the Hatch Act of 1939.

We don't want government employees improperly influencing the political process. But drawing the line for what is appropriate for a teacher can get very tricky. And I don't think I am the only person who is troubled by the fact that at the very same time that conservatives are attempting to stamp out every last vestige of labor activism that might benefit from the taxpayer dollar, restrictions on the ability of corporations and well-capitalized special interests to influence the political process are being shredded. Unions may have once represented a "countervailing force" to the power of big capital, but they do so no longer. For all intents and purposes, the corporations have won. The spectacle of the ongoing evisceration of the Dodd-Frank bank reform bill, which was never very strong to begin with, in tandem with the incredible growth in financial sector profits so soon after one of the greatest financial crises in the history of the United States, tells us all we need to know on that front.

If we are scrupulous, we might be able to limit ourselves to rules that clearly demarcate appropriate behavior: such as a ban on using .edu addresses to support the recall of a politician or organize a picket line. But the history of our country tells us all too clearly that it is far too easy for overzealous partisans to go too far, and start implementing their own form of "thought control" by investigating "indoctrination." What happens when a professor lectures so brilliantly on the role of the labor movement in reducing income inequality in the United States that students rush from his or her class to join a protest? When does that become verboten?

In between defeating Germany in World War II and serving as president of the United States, Dwight D. Eisenhower was the president of Columbia University. In his "Installation Address" he made a stirring declaration:

    There will be no administrative suppression or distortion of any subject that merits a place in this University's curricula. The facts of communism, for instance, shall be taught here -- its ideological development, its political methods, its economic effects, its probable course in the future. The truth about communism is, today, an indispensable requirement if the true values of our democratic system are to be properly assessed. Ignorance of communism, fascism, or any other police-state philosophy is far more dangerous than ignorance of the most virulent disease.

    Who among us can doubt the choice of future Americans, as between statism and freedom, if the truth concerning each be constantly held before their eyes? But if we, as adults, attempt to hide from the young the facts in this world struggle, not only will we be making a futile attempt to establish an intellectual "iron curtain," but we will arouse the lively suspicion that statism possesses virtues whose persuasive effect we fear.

It would have been nice if Eisenhower had lived up to this sentiment a little more as president during the worst of the McCarthyite hysteria, but let's take him at face value anyway. We need our universities, public and private, to be places where academics feel free to pursue whatever line of thought they want. If that pursuit spills over to action, we should be careful about what restrictions we try to enforce. Better, by far, to err on the side of freedom, because that, theoretically, is what this country is all about.

Conservatives may be planting the seeds of a backlash. On average college students tend to be culturally moderate. By making some things forbidden, conservatives may give those things the aura of a cause. Causes bring about backlash's that are all about pushing back against perceived or real injustices. Conservatives may thus be creating a union revival by making martyrs of pro-union academics. 

Republican zealot Herman Cain, a millionaire thinks he lives on a plantation. Conservative self-pity might be the unlimited fuel of the future.

Why Do Republicans Hate Freedom and Democracy

Why Do Republicans Hate Freedom and Democracy

....the Ohio House had approved the most restrictive voter id law in the nation — a bill that would exclude 890,000 Ohioans from voting. Earlier this week Texas lawmakers passed a similar bill, and voter id legislation — which would make it significantly more difficult for seniors, students and minorities to vote — is now under consideration in more than 22 states across the country

Conservatives have said voter id laws are necessary to combat mass voter fraud. Yet according to the Brennan Center for Justice, Americans are more likely to be killed by a bolt of lightning than commit voter fraud. And the Bush administration’s five-year national “war on voter fraud” resulted in only 86 convictions of illegal voting out of more than 196 million votes cast. Instead conservatives are employing an old tactic: using the specter of false voting to restrict the voting rights of minorities and the poor.

Below, ThinkProgress examines the history of conservatives anti-voter agenda:

    – JIM CROW SOUTH: In the Jim Crow South, historian Leon Litwack writes, “respectable” Southern whites justified their support for measures to disenfranchise African-Americans “as a way to reform and purify the electoral process, to root out fraud and bribery.” In North Carolina for example, conservatives insisted that literacy tests and poll taxes — which disenfranchised tens of thousands of African-Americans — were necessary to prevent “voter fraud.”

    – 1981 RNC VOTER CAGING SCANDAL: According to Project Vote, in 1981 the Republican National Committee mailed non-forwardable postcards to majority Hispanic and African-American districts in New Jersey in an effort to accuse those voters of false voting. The 45,000 returned cards were then used to create a list of voters whose residency the GOP could challenge at the polls. The Democratic National Committee sued, winning a consent decree in which the RNC agreed not to engage in practices “where the purpose or significant effect of such activities is to deter qualified voters from voting.” Similar initiatives were undertaken by the Arizona GOP in 1958, the RNC in 1962 and again, despite the decree, in Louisiana in 1986.

    –RECENT VOTER CAGING EFFORTS: During the 2004 election GOP state parties, along with dozens of unidentified groups, launched similar “voter caging” efforts designed to challenge the eligibility of thousands of minority voters by accusing them of voter fraud. And in 2008, the Obama campaign sued the Michigan Republican Committee for collecting a list of foreclosures in an effort to challenge the residency, and eligibility, of voters who had lost their home in the housing crisis.

    – US ATTORNEY DAVID IGLESIAS FIRING SCANDAL: In an unprecedented politicization of the Justice Department, in 2006 the Bush White House fired US Attorney David Iglesias for refusing to prosecute voting fraud cases where little evidence existed. The New Mexico political establishment asked for Iglesias’ dismissal after he refused to cooperate with the party’s efforts to make voter id laws “the single greatest wedge issue ever.”

    – US ATTORNEY TOM HEFFELFINGER DISMISSAL: In Minnesota, US Attorney Tom Heffelfinger lost his position when he ran afoul of GOP activists for “expressing deep concern about the effect of a state directive that could have the effect of discouraging Indians in Minnesota from casting ballots.”

    – WISCONSIN, THE KOCHS AND THE 2010 ELECTION: Last fall ThinkProgress reported that a coalition of Wisconsin Tea Party and Koch-funded groups, in an effort to stop “voter fraud” and prevent “stolen elections,” was planning a sophisticated voter caging effort that would use GOP lawyers and Tea Party volunteers to challenge the eligibility of voters at polls in the state. Earlier that year, the same groups were instrumental in defeating a voter protection law that would have criminalized any attempt to use force or coercion to “compel any person to refrain from voting.” One prominent Tea Party member behind the voter caging effort that “since the voter law did not get passed this year… we can still do this.”

As statehouses across the country move forward on voter identification bills, ThinkProgress will continue to track conservatives latest efforts to advance their century-old anti-voter agenda.

The concept of one person one vote has been called the crown jewel of democracy. There are lots of ways to be heard in a democratic republic such as the U.S., but voting is where the rubber meets the road. If you cannot vote because of all the barriers put in your way, you're just a voice in the crowd. A vote is that voice in action. Which explains why conservatives have such a long history of voter suppression. 

Criminal Rick Scott Becomes Florida Governor to Continue Crime Spree

Criminal Rick Scott Becomes Florida Governor to Continue Crime Spree

Republican governor Rick Scott's push to privatize Medicaid in Florida is highly controversial—not least because the health care business Scott handed over to his wife when he took office could reap a major profit if the legislation becomes law.

Scott and Florida Republicans are currently trying to enact a sweeping Medicaid reform bill that would give HMOs and other private health care companies unprecedented control over the government health care program for the poor. Among the companies that stand to benefit from the bill is Solantic, a chain of urgent-care clinics aimed at providing emergency services to walk-in customers. The Florida governor founded Solantic in 2001, only a few years after he resigned as the CEO of hospital giant Columbia/HCA amid a massive Medicare fraud scandal. In January, he transferred his $62 million stake in Solantic to his wife, Ann Scott, a homemaker involved in various charitable organizations.

Florida Democrats and independent legal experts say this handover hardly absolves Scott of a major conflict of interest. As part of a federally approved pilot program that began in 2005, certain Medicaid patients in Florida were allowed to start using their Medicaid dollars at private clinics like Solantic. The Medicaid bill that Scott is now pushing would expand the pilot privatization program to the entire state of Florida, offering Solantic a huge new business opportunity.

"This is a conflict of interest that raises a serious ethical issue," says Marc Rodwin, a medical ethics professor at Suffolk University Law School in Boston. "The public should be thinking and worrying about this."

With Scott's blessing, the Florida statehouse is currently hammering out the final details of the Medicaid bill, with a vote expected in the upcoming weeks. In the meantime, Scott has moved forward on another front that could also bring new business to Solantic. On Tuesday, he signed an executive order requiring random drug testing of many state employees and applicants for state jobs. He's also urged state legislators to pass a similar bill that would require drug testing of poor Floridians applying for welfare.

Among the services that Solantic offers: drug testing.
"These changes to Medicaid are basically nothing but a business plan for Rick Scott's Solantic," says Florida Democratic Party spokesman Eric Jotkoff.

Scott's office dismiss ethics questions over the governor's Solantic ties without further elaboration. "The claims of a conflict of interest are incorrect and baseless," Brian Hughes, Scott's deputy communications director, responds in an email. When pressed by local reporters, Scott also glosses over the issue. "I believe in the principle that if you have more competition it will drive down the prices," Scott told the St. Petersburg Times last week when asked about his wife's shares in Solantic. "If you give more choices, it's better for the consumer also to help drive down price…and that's exactly what I'm going to do as governor."

Florida Democrats have blasted the governor over the controversy. "These changes to Medicaid are basically nothing but a business plan for Rick Scott's Solantic," says Eric Jotkoff, a spokesman for the Florida Democratic Party. "It's clear that he stands to greatly profit from these changes to Medicaid." The Democrats also point to Scott's past: Columbia/HCA was ultimately forced to pay the biggest Medicare fraud settlement in history, totaling $1.7 billion, though Scott denied knowledge of the fraud and escaped being personally penalized. More recently, Florida's Medicaid system has also been beset by fraud perpetrated by private health care officials. In January, five former executives of Wellcare, a managed care company, were indicted by a grand jury for running a scheme that stole Medicaid money designated for patients.

Scott's current proposal aims to save the state $1 billion by drastically overhauling Medicaid, allowing private managed care companies to bid for contracts rather than paying traditional fee-for-services. The majority of Medicaid patients receive care through private companies and HMOs, but under Florida's bill such firms would end up having vast new authority over the program, with great leeway to limit access to services or reduce benefits. The bill would also put a hard cap on the amount of money that these managed care companies could spend on Medicaid, which advocates say could particularly harm disabled and elderly patients who require costlier long-term care.

In the past, Florida's Medicaid pilot programs—which tested the waters for the proposals at the heart of the current bill—have been plagued by problems. According to a 2008 study by the Georgetown Center for Children and Families, participants experienced huge delays and restricted access to necessary treatments, says the center's co-executive director, Joan Alker. Patients found the new system bureaucratic and confusing—and HMOs were prone to dropping out without warning. Dr. Aaron Elkin, president of the Broward County Medical Association, recently declared the program to be a failure. And Medicaid patients don't have much better reviews. "It has taken four months to get a biopsy on a throat cancer due to the impediments placed by the HMOs for authorizations," one participant in the program told NPR.

Scott and Florida Republicans are nevertheless plowing ahead, arguing that slashing costs is necessary due to the state's $3.6 billion budget deficit. Yet even if the bill passes the Florida statehouse, it will likely face another roadblock with the Obama administration, which must approve the biggest changes in the measure. Though the Bush administration happily green-lighted the pilot program in 2005, Obama officials are less likely to be amenable to continuing the troubled program—much less expanding it. The Obama administration, however, is holding off from commenting on the Florida bill until it receives the final version, though officials are "aware of some of the concerns" raised about the pilot programs, says Mary Kahn, a spokesperson for the Center for Medicare and Medicaid Services.

Casting himself as a free-market champion, Scott put his opposition to "Obamacare" at the heart of his campaign. But he could ultimately stand to gain from one of the federal government's biggest entitlements—a program that's also set to expand massively under the Affordable Care Act. Concludes Georgetown's Alker: "It's especially ironic when people who speak out against government involvement in health care turn around and profit from it."

Scott was the tea party candidate. Which makes sense. The tea baggers are just right-wing nuts who have rebranded themselves so they would not be tainted with the history of the conservative culture of corruption.