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 variously 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.”
The 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.”
[dc “A[/dc]fter 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.