And Now, the Catfood Party (2)

Like most establishment pundits, Thomas Friedman (and
apparently most of the rest of the nation) came away
from the awful reality show called the Republican
Presidential debates quite discouraged. While some
prominent conservatives in the party are openly casting
about for a way to inject some sanity into the race and
perhaps another candidate the New York Times columnist
is talking up another party. “Eventually the `circular
firing squad’ that is the Republican primary will be
over and the last man standing will be the party’s
nominee for president,” wrote the scribe of flat earth
fame. “If that candidate is Rick Santorum, I think
there is a good chance a Third Party will try to fill
the space between the really `severely conservative’
Santorum (or even Mitt Romney) and the left-of-center
Barack Obama.” (Notice how he puts the unnamed party in
capital letters, probably to set it off from the
already existing alternatives, like the Green Party, or
Socialist Party.)

Friedman says he hasn’t made up his mind whether he
would support an alternative candidacy but he has a
nominee to head its ticket. It’s former U.S.
comptroller general David Walker, a former senior
executive at PWC auditing firm and currently the chief
executive of something called the “Comeback America
Initiative.” Walker’s background and activities are
interesting and instructive, but of most significance
is what it is that he proposes to do to get “America’s
fiscal house in order.”

What’s the big problem? The deficit, which “is primarily a spending problem” but “not only a spending problem.”

One dollar in new revenue is needed for every $3 in spending cuts, excluding interest, says Walker – and
that should be accomplished through tax “reform” that
makes our system “simpler, fairer and more competitive,
while generating more revenue,” Friedman quotes him
approvingly. “The Republicans are simply in denial
about this,” says Walker.

Meanwhile, the Democrats “are still in denial about the
need to renegotiate our social insurance contract,”
says Walker. He complains the President Obama “is not
talking about the fundamental reforms in Medicare and
Medicaid that we need, and he is not ready to touch
Social Security.”

In 2008, Walker wrote, “We need to re-impose tough
budget controls, constrain federal spending, decide
which Bush tax cuts will stay, and engage in
comprehensive reform of our entitlement, healthcare and
tax systems. A bipartisan commission that would make
recommendations for an up-or-down vote by Congress
would be a positive step to making this a reality.”

When the President was convinced in 2010 to set up the
“bipartisan” National Commission on Fiscal
Responsibility and Reform – otherwise known of as the
“Simpson Bowles” panel – the chief potential targets
for spending cuts were Social Security, Medicare and
Medicaid, the three principal economic security
programs for seniors, people with disabilities and the
very poor. As the intent became clear, Senior and
disability activists around the country took to
referring to it as the “Catfood Commission,” an
allusion to the really existing seniors who have
resorted to eating pet food when their meager incomes
have run out.

First we had the catfood commission; now we have the
catfood party.

Some on the Left have taken to saying the U.S. has
become a “Third World” country. Sound catchy, but it’s
way off the mark. If the country were really
impoverished, there would be some legitimacy to the
idea that we really couldn’t afford to properly meet
the needs the elderly, people with disabilities and the
poor. Yet, ours remains the richest, most powerful
nation on the planet, one that spends trillions of
dollars on foreign wars and maintains an upper crust
that consumes voratiously and ostentatiously. It’s all a
matter of equities and priorities.

Walker correctly notes that “We are not Greece, where
the government grew too big, promised too much and
waited too long to restructure,” adding “but we’re
making many of the same mistakes.”

And we’re getting the same advice from the same people.

The creation of the deficit commission coincided with a
call by the International Monetary Fund (IMF) to reduce
the U.S. federal budget by reforming Social Security.

“Since benefits can be fully funded for almost three
decades by the bonds held in the trust fund, the IMF is
effectively suggesting that the government default on
these bonds and not give workers the benefits that they
already paid for with their Social Security taxes,”
economist Dean Baker wrote at the time.

“It is a bit striking to see a recommendation like this
from the IMF for two reasons,” wrote Baker of the
Center for Economic and Policy Research, July 9, 2010.
“First, the only reason that the country is facing such
a large deficit and debt is that economists at the IMF
and elsewhere were not able to see the $8 trillion
housing bubble. It was the collapse of this housing
bubble that wrecked the economy and caused the deficit
to skyrocket. In other words, the IMF wants U.S.
retirees to take a hit because the economists who work
at the IMF and other such places do not know how to do
their jobs.”

“The other reason why this suggestion from the IMF is
striking is that the economists there can often retiree
with huge pensions in their early 50s. It not uncommon
for a former IMF staffer to be able to be getting a
six-figure pension when they are just 51 or 52,”
continued Baker. “So we have the people who wreck
economies drawing $100,000 pensions at age 51,
complaining about the $14,000 a year in Social Security
benefits that real workers begin drawing in their
sixties. Excuse me for not taking this one seriously.”

But it was taken seriously, very seriously.

For two years now, the litany has become all too
familiar. Major media editorialists and economic
writers constantly refer to Social Security and
Medicare as “the two long term drivers of the budget
deficit,” as the Financial Times did last week.
Actually, Social Security has never contributed to the
budget shortfall and the problem with Medicare is the
continuing skyrocketing cost of medical care.

Heavily funded Political Action Committees are not the
only way representatives of the very wealthy throw
their weight around in the political arena. There is
Peter G. Peterson, former U.S. Secretary of Commerce
and co-founder of the Blackstone Group – an American-
based financial-services company, who set up the group
bearing his name. Less than three months after the IMF
call for action on Social Security, Walker took leave
as president and CEO of the Peter G. Peterson
Foundation and assumed leadership of the new heavily
endowed Comeback America as a vehicle “to engage
Americans and assist key policymakers in making
government more future-focused, results-oriented,
responsive, efficient, equitable and sustainable.”

More from carl bloice And Now, the Catfood PartyThe
Peterson group was launched with a grant of $1 billion.
Its board of directors includes:

J. Michael Cook (chair), Independent Director,
former Managing Partner and CEO of Deloitte
Worldwide, and former chair of the American
Institute of CPAs. (AICPA); Ernest A. Almonte, CEO
of Almonte Group LLC, former chair of the AICPA,
and former auditor general of Rhode Island; Norman
R. Augustine, independent director, and former
chair and CEO of Lockheed Martin Corporation;
Michael J. Critelli, independent director, and
former Chairman and CEO of Pitney Bowes; Harold E.
Ford, Jr.; executive vice chair of Bank of
America/Merrill Lynch, and Former Congressmember
(D/TN); Mel R. Martinez, executive vice president
of JP MorganChase and former U.S. Senator (R/FL)
and Secretary of Housing and Urban Development ;
William D. Novelli. Professor in Practice at
Georgetown University’s McDonough School of
Business, former CEO of AARP, and co-founder and
former president of Porter Novelli; Andrew L.
Stern, Senior Research Fellow at Georgetown
University’s Public Policy Institute, and former
President of the Service Employees International
Union (SEIU); Paula Van Ness, Consultant, and
former CEO of the Starlight Children’s Foundation
and the Make-A-Wish Foundations; Joshua S. Weston,
Director, and Former CEO of Automatic Data
Processing (ADP), Rev. Jim Wallis, CEO and editor
of the Sojourners and Walker, of the Comeback
America and former U.S. comptroller general and CEO
of the U.S. Government Accountability Office (GAO).

Friedman didn’t mention it in his column about Walker
but he has spoken before of the existence of Americans
Elect, a group founded and funded by Wall Street
heavies who are using the internet to secure a third
party spot on the ballot in case things don’t turn out
as they wish in the Presidential primaries.

“If anything, Americans Elect and David Walker
epitomize all that’s wrong with American democracy.
Americans Elect is the creature of multi-millionaires
and billionaires, who now have the ability to spend
infinite money putting their thumbs on the scales of
American democracy thanks to the Supreme Court’s
Citizens United decision,” wrote Robert Kuttner, co-
editor of American Prospect magazine. “Walker himself
enjoys his enlarged megaphone thanks to the billion
dollars that retired private equity mogul Pete Peterson
put into the austerity crusade.”

The conservative online magazine American Thinker noted
this week that “Though Americans Elect is succeeding at
the moment in concealing the identities of its donors,
its seed money man and chairman (whatever that scary
title means in the context of an American political
party) is known: Peter Ackerman kicked off the group
with a $5,000,000 contribution. Ackerman (b. 1946) was
a key Wall Street sidekick to 1980s junk bond king and
nearly two-year compulsory guest of the federal
government, Michael Milkin. Ackerman’s wealth is not
known to the dime, but the number surely runs to nine
figures, maybe ten. And, most importantly for figuring
out what Americans Elect is all about, Ackerman was an
Obama supporter in 2008.”

In 2007, while still in government service, Walker was
drawing parallels between the U.S. and the fall of the
Roman Empire, warning that there were “striking
similarities,” including “declining moral values and
political civility at home, an over-confident and over-
extended military in foreign lands and fiscal
irresponsibility by the central government.” The
country’s leading auditor evidently missed the then
looming storm of the current economic crisis.

“The real problem facing the country was the housing
bubble, which was growing ever larger,” economist Baker
wrote last week. “Unfortunately, people like David
Walker and his merry band of deficit hawks, financed by
the likes of Peter Peterson, sucked up much of the
oxygen for coverage of economic issues. There were many
news shows and stories devoted to their apocalyptic
warnings of budget doom. There was no time to waste
talking to people yelling about things like an $8
trillion housing bubble.

“Of course one of the ironies of this story is that the
bursting of the housing bubble led to an economic
collapse which resulted in much bigger deficits than
anything that Walker and his crew ever warned about. One
of the other ironies is that being completely wrong
about the nature of the problems facing the economy does
not seem to have affected Walker’s standing in public
debates one iota, at least it sure hasn’t in Thomas
Friedman’s world.”

“After months of nutty, gravity-free Republican primary
debates, how great would it be to have presidential
debates in which a smart independent like Walker was in
the middle to challenge both sides and offer sensible
solutions,” wrote Friedman.

Heaven help us.