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Right on cue again, we have Born Again Deficit Virgin Judd Gregg with dire warnings about our debt but no acknowledgement of his own party contributing to the mess as our own Jon Perr rightfully pointed out. This is from C-SPAN's Newsmakers Nov. 15, 2009. Despite Gregg's warnings for the United States if we don't get our debt under control, the last thing he thinks we should be doing is to repeal any of those Bush tax cuts for the rich to fix it.

I would like to know just how repealing those tax cuts would "reduce the productivity of the nation". The only thing I've seen reduce our productivity has been our crappy trade laws which have resulted a race to the bottom with industry running to the country with the lowest wages for labor and the least constraints on those who pollute or have the least protections for their workers in place, which has driven jobs out of the United States with our unwillingness to put some protectionist measures in place to secure our workforce. Maybe someone else can explain this man's twisted logic to me, but I sure as hell don't get it.

I hope the Obama administration is enjoying their kick in the teeth from someone that they once considered for a Cabinet position. I think Gregg and his ilk will be happy to see this country continue to spiral into economic ruin as long as they think it will win them elections and they can shift any of the blame for what's happened away from themselves.

Frates: Senator I wanted to ask you. Do you see the cost issue as a political landmine, and if so, how?

Gregg: Well, I think the cost issue is at the essence of what is the biggest problem our nation has confronting us after the threat of terrorism and weapons of mass destruction, and that is the impending fiscal meltdown of our nation. We’re going to take our, we’re taking ourselves down on a road to third class status as a nation. You cannot grow the government from 20% to 26% of our G.D.P. and pass all the debt that’s going to generate—because no matter how much you raise taxes you can’t catch your tail when you get that bit—onto our children, because they can’t pay for those debts.

You know, you get…let me try to put this in context. When the public debt goes from 38% of G.D.P. to 80% of G.D.P., that essentially means that the debt, well the financing of that debt, that is going to exceed the cost of anything else in the government, including military expenditures, national defense. And in fact if we tried to get into the European Union—which we’re not trying to do—but if that’s the proof of industrialized states that set certain standards for what a government does—we could not get into the European Union beginning about 2013 because our public debt would be too high. We’d be over their 60% threshold.

And we’re seeing already international statements from China, from other places that they’re worried about our debt. And they’re the ones who buy the debt. And if they start to worry about our debt what does that mean? Well we’re going to have to raise the price, in other words, we’re going to have to raise the interest that we’re going to pay on that debt in order to get those folks to buy our debt. We’re also seeing the international ratings agencies like Moody’s say “well gee, we don’t know if you stay on this path which is unsustainable, we may have to downgrade your debt”.

All of this leads to an instability in our nation because there are only two things you can do when debt gets so high that you can’t afford to pay it. You basically have to inflate the economy, which means you devalue the dollar and you put in place one of the cruelest takes which is inflation, or you raise tax levels so high that you reduce the productivity of the nation and it becomes a downward spiral where basically as productivity drops you drop your, your revenues drop again. So we’re on an unsustainable path. It’s that simple. And you shouldn’t aggravate that unsustainable path by adding another 3 trillion dollar program on top of it.

Swain: Senator we just learned from AP, our wire story that the White House has now told domestic agencies that their budgets will be frozen or even cut by 5% as it signals a big push to take on the deficit next year. Do you have a reaction to that?

Gregg: If it’s true it’s great. I mean, that’s one step that should absolutely occur. We should freeze discretionary spending, but as Willy Sutton said, and that would be good, but as Willy Sutton said, why, when he asked why do we rob a bank? Because that’s where the money is; the money is in entitlements. The money and the problem is in the fact that we’re facing a 60 trillion dollar unfunded liability already without this new major health care entitlement being put on the books being proposed by the House and the Senate Democratic leadership. Without that even on the books we already are short 60 trillion dollars as we go forward. So those are the challenges we have to face up to and address, but yes, if the administration comes forward with a discretionary freeze of a 5% cut in discretionary spending I will strongly support that effort.

Does anything illustrate the bubble some people live in better than this New York Times column?

BEATING up on the wealthy seems to be the order of day. I suspected that. But a recent Wealth Matters column touched a particularly raw nerve. It looked at how even people with sizable fortunes were concerned about money in this recession and the impact that could have on the rest of us.

Readers rejected the attempt to understand the concerns of the rich.

“That’s so stupid that you ought to be slapped for it,” one woman wrote. My favorite began: “Bowties and Reaganomics are for losers. You can cry for the rich all you want, the rest of us will be happy to see them get taxed.”

The vehemence in these e-mail messages made me wonder why so many people were furious at those who had more than they did.

Uh, because we're paying for it when we're out of work and don't have affordable health care?

And why are the rich shouldering the blame for a collective run of bad decision-making? After all, many of the rich got there through hard work. And plenty of not-so-rich people bought homes, cars and electronics they could not afford and then defaulted on the debt, contributing to the crash last year.

"Collective run of bad decision-making"? Let's back up there a minute, pal. As anyone with half a brain knows (yes, even people who write for the New York Times), the financial services industry pushed our country over the economic brink through an assortment of unethical and illegal practices. Someone maxing out their Visa is not exactly in the same category; they merely bought the crack. Wall Street marketed and sold the crack. See the difference?

But in this recession, anger flows one way. Eric Dammann, a Manhattan psychoanalyst, theorizes that a lot of people are angry that the rules of the game seem to have changed.

“There’s always been envy and hatred toward the rich, but there was also a strong undercurrent of admiration that was holding these people up as a goal,” Mr. Dammann said. “This time it’s different because it feels like it’s a closed club and the rich have an unfair advantage.”

Gee, ya think? When corporate gains are privatized and losses are socialized, you think maybe the working people have finally had enough of picking up the slack? Can you say "market manipulation"? Can you say "front running"?

What is troubling is that the anger has hardened for some into a suspicion that all wealthy people are motivated purely by self-interest, said Brad Klontz, a financial psychologist in Hawaii and a co-author of the forthcoming book, “Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health” (Random House).

“The script goes like this: Money is bad, rich people are shallow and greedy, and people become rich by taking advantage of others,” Mr. Klontz said. “But the same people who say money is bad say money is connected to their self-worth — they wished they had it and you didn’t.”

Would you like me to explain the difference, Brad? People who have earned their money through providing a service or product, people who hire others and treat them fairly - we still admire those wealthy people. We'd like to be like them.

Wall St. traders - bloodsucking scum who, as Elizabeth Warren puts it, made their money through selling "tricks and traps" - tricks and traps that destroyed our economy and sent them running to Washington with their hands out - those wealthy people can kiss our collective grits.

Go read the rest. It's all about how "good" wealthy people are suffering by association, how they do their fair share, they fund scholarships, live "modest" lives...

Let's be blunt, shall we, Mr. and Mrs. Wealthy Person? You get hefty tax write-offs for those donations. Yes, you like the feeling of helping, but you really like the tax write-offs - and your pictures in the society pages. Wealthy people haven't been paying their fair share of taxes for a really long time, but like to think they're "giving back" quite enough through supporting charities. (Oh, and it's voluntary. Unlike the banking bailout the rest of us are paying for.)

You're not giving back anywhere near what you're taking. Seen the pictures on the news of Americans lining up like cattle for free health care? That's our reality. So if you really want to help, start lobbying to change the tax laws. Support real healthcare reform.

Because for some odd reason, they don't pay much attention to us.

During the 2008 presidential campaign, I documented 10, then 10 more and yet another 10 moments in the extremism of Mike Huckabee. Now, fresh off his victory in the straw poll at the so-called Values Voters Summit, the one-time Baptist minister and former Arkansas governor turned Fox News host called for the United States to leave the United Nations. Following his use of the late Ted Kennedy to fight mythical "death panels" and his tacit endorsement of ethic cleansing in the Middle East, the 2012 White House hopeful's latest statements can mean only one thing.

It's time for still another 10 moments in the extremism of Mike Huckabee:

31. Huckabee Calls for the U.S. to Leave the UN
32. Huckabee Uses Ted Kennedy to Push Death Panels Myth
33. Huckabee Warns of "Union of American Socialist Republics"
34. Huckabee Says Governors Should Ignore Court Rulings
35. Huckabee Sees "Hand of God" in Prop 8 Victory
36. Huckabee Claims Civil Rights of Gays Not Being Violated
37. Huckabee Opposes Two-State Solution in Middle East
38. Huckabee Calls for Abolition of IRS and Putting Politics in the Pulpit
39. Huckabee Parrots GOP's "Club Gitmo" Talking Point
40. Huckabee Headlines Electromagnetic Pulse Conference

31. Huckabee Calls for the U.S. to Leave the UN
The United Nations has been a favorite right-wing punching bag for generations, the bogeyman of Birchers and Birthers alike. At this weekend's "How to Take Back America" shindig (an event which featured sessions such as "How to Recognize Living under Nazis & Communists"), Mike Huckabee added his name to the list.

Looking to top John Bolton's hypothetical about lopping off 10 floors of the United Nations building, Huckabee called for casting the whole institution into the sea. To a standing ovation, Huckabee declared:

"It's time to get a jackhammer and to simply chip that part of New York City. Let it float into the East River, never to be seen again."

32. Huckabee Uses Ted Kennedy to Push Death Panels Myth
In their ever-escalating effort to derail health care reform, Republicans from former Alaska Governor Sarah Palin to Obama's ersatz negotiating partner Chuck Grassley warned of mythical government "death panels" which would "pull the plug on grandma."

To make his version of the case, Governor Huckabee turned to the example of the late Senator Kennedy. Just moments after criticizing Democrats for defying "good taste" by claiming "Congress must hurry and pass the health care reform bill and do it in his memory," Huckabee announced:

"It was President Obama himself who suggested that seniors who don't have as long to live might want to just consider taking a pain pill instead of getting an expensive operation to cure them. Yet when Sen. Kennedy was diagnosed with terminal brain cancer at 77, did he give up on life and go home to take pain pills and die? Of course not. He freely did what most of us would do. He chose an expensive operation and painful follow up treatments."

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Back in April, the Daily Show's Jon Stewart offered some sound advice for frothing at the mouth Tea Baggers, "I think you might be confusing tyranny with losing." Now five months after their Tax Day outburst, thousands of vein-popping Obama opponents descended Saturday on Washington for Tea Party II. But while Glenn Beck's furious followers alternately slandered the President as a "fascist," a "communist" and worse, they remained unencumbered by either the thought process - or the truth.

Here, then, are 10 Lessons for Tea Baggers:

1. President Obama Cut Your Taxes
2. The Stimulus is Working
3. First Ronald Reagan Tripled the National Debt...
4. ...Then George W. Bush Doubled It Again
5. Republican States Have the Worst Health Care
6. Medicare is a Government Program
7. Barack Obama is Not a Muslim
8. Barack Obama was Born in the United States
9. 70,000 Does Not Equal 2,000,000
10. The Economy Almost Always Does Better Under Democrats

1. President Obama Cut Your Taxes

As in April, the Tea Baggers continued to display their fundamental misunderstanding of U.S. history and the American Revolution. Apparently, the right-wing zealots are outraged by no taxation with representation.

As promised, Barack Obama in the stimulus package delivered on his pledge of tax relief for 95% of American households. Obama's American Recovery and Reinvestment Act (ARRA) didn't only jump start gross domestic product and refill empty state coffers in the second quarter of 2009. As Nate Silver thoroughly documented, "Obama has cut taxes for 98.6% of working households."

Nevertheless, raging Tea Baggers spouting Republican Tax Day lies took to the streets not to thank the President, but to blame him for the tax cuts they received.

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The Mayo Clinic, the world famous institution cited by all sides in the contentious health care debate, defines schizophrenia as a serious brain disorder "in which reality is interpreted abnormally" resulting in "hallucinations, delusions, and disordered thinking and behavior." Apparently, that affliction is now running rampant among supporters of the Republican Party. As recent polling about conservative beliefs regarding Medicare, taxes, supposed "death panels," President Obama's citizenship and more shows, the crisis of Republican schizophrenia has reached epidemic proportions.

Here, then, are the five symptoms of incurable Republican schizophrenia:

(If you exhibit one or more of these warning signs, see your physician immediately. If you don't have health insurance - and if your state voted Republican, you're much more likely not to - Democrats will try to provide it for you.)

1. "Keep Government Out of Medicare." In July, Rep. Bob Inglis (R-SC) described an angry constituent who confronted him at a South Carolina town hall meeting, "keep your government hands off my Medicare." Despite his best efforts to explain that Medicare is a government program, the voter, Inglis lamented, "wasn't having any of it."

But as new data from Public Policy Polling revealed, that same cognitive failure is now far more widespread than swine flu. While 39% of all Americans responded that the government should "stay out of Medicare," 59% of self-identified conservatives and 62% of McCain voters hold that oxymoronic view.

2. "Barack Obama is a Muslim." An April survey by the Pew Research Center showed that 11% of Americans believe Barack Obama is a Muslim, a figure largely unchanged since its polling started in March 2008. Yet 17% of Republicans and 19% of white evangelicals (74% of whom voted for John McCain) insist the President is an adherent of Islam, despite his repeated pronouncements and decades of church attendance to the contrary.

3. "Barack Obama Was Not Born in the United States." This contagion is running rampant among the ranks of Republicans. And even with repeated treatments of birth certificates and Hawaiian newspaper announcements from 1961, there is apparently no cure.

A DailyKos/Research 2000 poll found that a stunning 58% of Republicans did not believe (28%) or were unsure (30%) that President Barack Obama was in fact born in the United States. To be sure, this is a Southern pathology, a region home to 69% of all birthers and the only part of the country to increase its Republican presidential vote in 2008. This week's PPP survey only confirmed the chronic birtherism plaguing the Republican Party:

Only 62% of respondents reported believing that Obama was born in the United States. 10% thought he was born in Indonesia, 7% thought he was born in Kenya, 1% thought he was born in the Philippines, and 20% weren't sure. Among Republicans 44% think he was not born here while just 36% believe that he was.

(In a promising development, only 10% of respondents weren't sure if Hawaii is part of the United States. On this score, conservatives were only slightly more confused than liberals and moderates.)

4. "Government Death Panels Will Euthanize My Grandma." Sadly, the Republicans' Birther and Deather psychoses represent a cradle-to-grave illness.

Despite the vaccinations administered by PolitiFact, ABC News, the New York Times and countless other care-givers, Republicans persist in their virulent health care death panel delusions. This out-of-control CTD (conservative transmitted disease) has spread like wildfire, thanks to vectors like Betsy McCaughey, Rush Limbaugh, Newt Gingrich and Sarah Palin. (Even a Republican like Senator Chuck Grassley, previously diagnosed by President Obama as sane, came down with the deather flu.)

An NBC poll this week quantified the deather madness: a staggering 45 percent said it's likely the government will decide when to stop care for the elderly. (Majorities also wrongly believe that reform proposals on the table would constitute a government "takeover" of the health care system, one which would cover illegal aliens.)

As MSNBC noted, viewers of Fox News - a strong predictor of Republican allegiance - were overwhelmingly afflicted by this health care dementia:

In our poll, 72% of self-identified FOX News viewers believe the health-care plan will give coverage to illegal immigrants, 79% of them say it will lead to a government takeover, 69% think that it will use taxpayer dollars to pay for abortions, and 75% believe that it will allow the government to make decisions about when to stop providing care for the elderly.

5. "President Obama Raised Taxes on Working People." The Republicans' profound cognitive disorders are not limited to their hallucinations about Barack Obama's birth or the health care imbroglio. As the Tea Party movement shows, furious right-wing zealots are outraged by no taxation with representation.

As promised, Barack Obama in the stimulus package delivered on his pledge of tax relief for 95% of American households. Obama's American Recovery and Reinvestment Act (ARRA) didn't only jump start gross domestic product and refill empty state coffers in the second quarter of 2009. As Nate Silver thoroughly documented, "Obama has cut taxes for 98.6% of working households."

Nevertheless, frothing at the mouth Tea Baggers spouting Republican Tax Day lies took to the streets not to thank the President, but to blame him for the tax cuts they received. While Andrew Sullivan described their unreasoning mania as "adolescent, unserious hysteria," the Daily Show's Jon Stewart diagnosed their disorder:

"I think you might be confusing tyranny with losing."

Back in April, I appropriated Daniel Patrick Moynihan's classic statement to conclude that with their rag-tag band of revolutionaries, secessionists and agitators for violence, Republicans were "defining political deviancy down." Sadly, the delusional and the deviant are now descending on town hall meetings with guns. The Republican schizophrenics are no longer just a danger to themselves.

UPDATE: Newsweek adds the "Five Biggest Lies in the Health Care Debate" to its list of "Seven Falsehoods About Health Care." Meanwhile, the RNC added to a new pathology, suggesting in a poll that "GOP voters may be discriminated against for medical treatment" under a Democratic health care plan.

(This piece originally appeared at Perrspectives; the image via Huffington Post.)

Take a look at this ad from America's Health Insurance Plans, the insurance industry lobby.

See what's missing? The words "public option." Or really, any attack on the current plan in Congress at all. The spot associates AHIP with a reform banning denial of coverage for pre-existing condition in exchange for getting every American covered, gently asks for the final bill to be bipartisan, and... that's it.

Similarly, Olympia Snowe, who signed on to the letter calling for a delay in the deadline for reporting a health care bill out of the Senate, positively called for a public option on day one in a speech this weekend in Maine.

What this shows me is that we have now moved beyond the public option as the fulcrum point for the health care debate. We don't know what form it will take or how accessible it will be to all Americans, but if there's a bill signed by the President, it will include a public option. The major players have given up on that score and moved on to other issues to try and derail health care, particularly costs. We've seen much more criticism about cost controls and surtaxes on the wealthy over the last week than any discussion of the public option.

That's because those other facets of the policy don't poll as well as a public option does. They're also harder to explain and quantify. And the forces defending the status quo have found a much easier path by arguing for more delay, questioning costs, lying about the impact on small businesses, claiming that Democrats are engaging in class warfare, raising specters about rationing, and generally using that fiscal scold pose, saying we cannot pay for health care reform while protecting federal health care funding for their districts and localities. On the far right fringe you have lies about how the bill "outlaws private insurance," but in general, the status quo forces think they can trap the bill with a discussion about its cost, not its function.

Of course, the larger effort here is to destroy the Democratic agenda and basically ensure a first term without substantive accomplishments. And Obama is right to use Jim DeMint's "Waterloo" line against him, make it famous, and condemn those who would turn an urgent need for tens of millions of Americans into a game of political hardball:

Just the other day, one Republican Senator said, and I’m quoting him now, “if we’re able to stop Obama on this, it will be his Waterloo. It will break him.” Think about that. This isn’t about me. This isn’t about politics. This about a health care system that is breaking America’s families, breaking America’s businesses and breaking America’s economy. And we can’t afford the politics of delay and defeat when it comes to health care. Not this time, not now. There are too many lives and livelihoods at stake.

What we may see is a brief scaling back on the deadline, which should still leave enough time to report a bill out of both houses in September and reconcile them by October. But the fights ahead for health care appear to be playing out over cost and who pays. The public option is in the bill, as long as it gets dragged over the line.

(h/t Josh @ The Seminal)

'Nuff said.

Hmm. You know, I don't remember the Washington Post going out on a limb to warn us about the consequences of invading Iraq, or the hazards of deregulation, or anything else that led us into this mess. But suddenly, they're very, very concerned about anything that impedes the ability of those working in the financial services industry to make outrageous profits at our expense.

So now they know what it's like to be on the losing side of the class war, huh?

In New Dilemma, Banks Cite Two Paths to Disaster

Some bank executives warned yesterday that the government is forcing them toward a disastrous choice between accepting restrictions on compensation that could cripple their ability to compete with rivals, or returning billions in federal aid, which could retard lending and damage the economy.

The possibility of a newly weakened banking industry also raised concerns among businesses in the wider economy that already are struggling to find financial firms willing to lend them needed money.

"We're all going to lose on this thing," said an executive at a large bank that took federal aid. He and other bankers expressed shock at the rapid progress of legislation that could impose large pay cuts on thousands of workers, and dismay that the industry is at the mercy of an angry Congress.

Some members of Congress, however, said those concerns were overstated and that limits on pay schemes tied to short-term profits were long overdue.

A wave of public fury, which is driving the bills before the House and Senate, was unleashed over the weekend by reports that American International Group had paid $165 million in retention bonuses to employees at the unit that gutted the company and forced a massive government intervention.

Let's Put Down the Pitchforks:

At the end of the day, the thing to get outraged about is not the $440 million in bonuses at AIG or the $10 million that Citigroup is spending to redesign its shrunken executive suite. These may seem like princely sums, but they are almost insignificant compared with the real outrage: the hundreds of billion dollars of taxpayer funds that have been put at risk to keep AIG and Citi from failing and taking the whole financial system down with them. Let's keep our attention on the elephant rather than the pimples on its behind.

[...] As the financiers see it, there's a big difference between the government that sets tough terms for participation in its financial rescue programs and a government that is a fickle and unreliable partner, that tries to micromanage their businesses and changes the rules of the game with every zig and zag of public opinion. That may be an exaggerated view, but it is the financiers' view and one we need to be mindful of, since at this point we need their money and cooperation as much as they need ours.

A final point on outrage: We need to save some of it for ourselves. While it was Wall Street that got rich by peddling new ways for Americans to live beyond their means, the decision to do so was ours. It was we who ran up the credit card bills, we who drew down the equity in our homes and we who refused to tax ourselves for the government services we demanded. Wall Street bankers may have been the pushers, but it was we Americans who became addicted to the easy credit.

Why, it's not the drug dealers who cause all the problems! It's the people buying the drugs!

Via the Daily Bail, this fantastic showdown between Rep. Brad Sherman, Mark Haynes and Erin Burnett over the taxes on AIG bonus payments. Daily Jail enthuses:

Guess who wins this contest of wit and intelligence. If you thought brunette bimbette, then you are you asked to leave the site.

I have been trying to restrain myself in descriptions, but this video is terrific. You will enjoy it.

Some of the Sherminator's great lines: "I want all bailouts to stop. I want capitalism. Bailouts are not capitalism. TARP is not capitalism. We should have AIG in receivership. It should have been in receivership for months now. We don't have to hunt the witches, we know who they are. What do AIG executives know about running a financial services company? They only know how to destroy one. We need some limitations on salary and bonus. The goal is to get them off the TARP system entirely. Give back the money and run your companies. This is about people who think they are really important but work at bailed out companies. I'm against bailing out Wall Street, period. If they want capitalism, let them have capitalism and give the money back."

Watch it.

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Rick Sanchez shows us some of the debate that took place on the floor of the House today over taxing executives' bonuses. Lawrence O'Donnell was pointing out on Rachel's show that this might not sit too well with Grover Norquist. A whole lot of Republicans just broke his no raising taxes pledge.

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From Fox News Sunday March 15, 2009. I think the only interests Chris Wallace may have in mind during this line of questioning are his own as he hammers Austan Goolsbee about a line in the introduction of the President's budget.

Wallace: Finally I want to get into a little bit of the Obama budget with you. 3.6 trillion dollars which calls for major tax increases on the wealthy. And I want to read you something from...the President's budget. "While middle-class families have been playing by the rule, living up to their responsibilities as neighbors and citizens, those at the commanding heights of our economy have not."

Mr. Goolsbee, it's a blanket statement from the Administration. People who make money have not played by the rules?

Goolsbee: I think you're stretching a little bit the blanket statement. It's not saying that it's been illegal. It's saying the rules of the game that the American economy has followed for decades is that the core strength of the economy is middle class workers. Over the last eight years before this President came into office we saw an unbelievable squeeze on the middle class like nothing we have seen in decades.

We go through the first boom in recorded economic history of the country where the median family income falls by $2000 while corporate profits and overall GDP rise dramatically.

Wallace: But, but...

Goolsbee: The President is saying in his budget that he is carrying out the recovery package and in the budget giving a tax cut to 95% of working people and that people who make more than $250,000 a year will go back to the rates that they were at the end of the nineties. That they pay a bit more. That isn't going to bring the economy down. And that style of thinking that it's going to trickle down and we should just keep cutting taxes at the top got us where we are today. It didn't solve the problem.

Wallace: But Mr. Goolsbee, again I'm quoting directly from the President's budget here, this is page five of the President's budget. Again he's saying those at the commanding heights of our economy, I assume that means people who are more than middle class have not played by the rules and then again let's go to this statement from page five "There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in favor of so few."

And again I guess what I'm asking is there seems to be a moral argument here that somehow people who have made money have done something wrong and need to pay for it and what you're saying, you say "there's something wrong when we allow the playing field to be tilted". The argument seems to be there's something wrong when the government allows people, rich people to keep their own money.

Goolsbee: Well we cut taxes by trillions of dollars for people making more than a quarter million dollars a year over the last eight years. That wasn't a magic elixir for growth. It was a very week recovery and we stumbled into the worst economic crisis in multiple generations.

Wallace: Why make the..I understand the economic argument. Why make that a moral argument? Something wrong. People at the commanding heights of the economy have not played by the rules. Why the moral argument?

Goolsbee: Well look you're taking a line from the introduction that sets the stage for the discussion which is we need to go back to an issue of balance. So in the nineties we had a more balanced view. We've gotten out of balance. People at the commanding heights of the economy with incomes over $250,000 a year have been receiving trillions of dollars of tax cuts while the middle class has been squeezed like never before. That squeeze on the middle class is what got us into this crisis. It's why the President is committed to renewable clean energy that makes us secure from foreign energy dependence. For reforming the education system. For health care. All of those things are about relieving the squeeze on the middle class so we don't get into this again.

Wallace: Simple question. Do you think maybe this is over-written?

Goolsbee: I think it's very well written.

Wallace: Did you write it?

Goolsbee: No.

As long as Wallace plays the good water carrier for the haves and have mores I'm sure his anchor chair is safe at Fox News.

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Joan Walsh and Peter Beinart do a pretty good job here of tag teaming Nancy Pfotenhauer on her punishing the rich talking point. It was nice to watch a panel where they didn't let her talk over everyone the entire time as she likes to do if they let her.

HUGHLEY: Nancy, what do you think? Is he a communist?

PFOTENHAUER: I heard communist and socialist thrown around, and they are two different things. If you want to talk about communism, that's more "From each according to his ability, to each according to his needs." So it would be more the redistribution of wealth aspect.

I do think his tax the rich thing is punishing prosperity, which is an antithetical to the American dream, and completely ignores the fact that the top five percent of the earners in this country, they do earn about 36 percent of the income. They pay about 60 percent of the income tax, and the bottom 40 percent pay zero. So I'm not sure that's the way he should be going. So that would speak to the redistribution act.

WALSH: But why is it --

PFOTENHAUER: Excuse me?

BEINART: Sorry, go ahead.

HUGHLEY: We just turned into Jerry Springer. Who is going to say -- Joan, what were you saying? You were about to say something.

WALSH: I think that we have had a situation. We are not punishing the rich. Let's be honest. In this country, we have a game that is rigged. If you're born wealthy, you stay wealthy. It's very hard to climb out of the middle class into wealth.

It's still possible. It's a great country. We provide a lot of opportunity. But the rich are finally about to pay their fair share, and Obama, finally a president did what he promised to do. He gave a tax cut to 95 percent of the country. And if you're lucky enough to be in the top five percent who will pay a little bit more, well, you're a lucky person to start with and you should be paying more.

(CROSSTALK)

BEINART: What happens is Republicans always play this game, Republicans always play this game when they start talking about taxes. They start talking about taxes, and then they add the word "income taxes."

PFOTENHAUER: I will talk about payroll.

BEINART: Payroll taxes are much more regressive. They fall much more aggressively on poor people. So do sales tax. So Republicans always talk about income taxes are so weighted against the rich. That is actually the most progressive part of our taxes.

PFOTENHAUER: Let me talk then, particularly, to payroll taxes. When you include payroll taxes with income taxes, the numbers do drop, but not demonstrably.

So you can look at it. You still see the top earners paying the lion's share of both the income and the payroll taxes, and you see the prime earners -- I'm not arguing for anybody to pay more taxes. In a recession, no one's taxes should be raised.

Since President Obama is not talking about raising anyone's taxes other than the upper earners I don't think Nancy is really too worried about everyone's taxes. Just the types she used to lobby for. Just a hunch.

Full transcript to follow.

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The California budget mess is rapidly turning into a full-blown crisis, thanks to being held hostage by some of the legislature's minority Republicans:

LOS ANGELES — The state of California — its deficits ballooning, its lawmakers intransigent and its governor apparently bereft of allies or influence — appears headed off the fiscal rails.

Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects.

Twenty-thousand layoff notices will go out on Tuesday morning, Matt David, the communications director for Gov. Arnold Schwarzenegger, said Monday night. “In the absence of a budget we need to realize this savings and the process takes six months,” Mr. David said.

And what seems to be the problem? This may sound familiar:

Democrats, who had already given into Republicans’ long-held dreams of large tax cuts for small businesses and for some of the entertainment industry and a proposed $10,000 tax break for first-time home buyers, balked at Mr. Maldonado’s request that the Legislature tuck a bill into the package that would allow voters to cross party lines in primaries.

“I think with an open primary, we would have good government that would do the people’s work,” Mr. Maldonado said.

The Party of No, faced with fiscal disaster, invariably holds out for political advantage. Faced with Solomon's decision, they will always insist on cutting the baby in half.

Paul Krugman warns:

Everyone should be paying attention to the political/fiscal catastrophe now unfolding in California. Years of neglect, followed by economic disaster — and with all reasonable responses blocked by a fanatical, irrational minority.

This could be America next.

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Amy Goodman just interviewed award-winning investigative reporters Jim Steele and Don Barlett on Democracy Now!(I had the pleasure of interviewing them myself years ago - they're not just smart and ethical, but very nice people.) In the interview, they discuss why Timothy Geithner's tax problems were much bigger than Daschle's - except, of course, when the Senate wants to look the other way:

AMY GOODMAN: It’s good to have you both with us. Jim Steele, let’s begin with you. Why do you think Geithner’s problems were actually worse than Tom Daschle’s tax problems?

JAMES STEELE: Well, Daschle ended up having to pay far more in taxes than Geithner did, and neither one of these cases are forgivable or can be explained away easily. But the difference with Geithner is, I think almost every American knows that you have to pay Social Security and Medicare taxes. I think just the average person on the street who draws a paycheck knows that is taken out of their check. And that’s what’s so disturbing about Geithner’s. If these were avoidable mistakes, if these were simply things he overlooked, I think the question is, why weren’t those corrected at some point before President Obama had tapped him to be Treasury secretary?

This is the thing that’s actually disturbing about both of these cases. Both Geithner and Daschle went back and paid these taxes, but only after their names were dropped into that hopper, which suggested they were going to be cabinet officers. If these were truly under those categories of those kinds of mistakes, the question is, why wasn’t that done at some time in the past, especially in the case of Geithner, where he had been audited by the IRS for previous tax years and had paid some additional taxes at that time. It was only after he was suggested for the Treasury secretary and the vetting process began that he then remitted these additional taxes.

AMY GOODMAN: Don Barlett, explain further exactly what the taxes were that Tim Geithner paid and didn’t pay and what the relation was to his work at the IMF, the International Monetary Fund.

DONALD BARLETT: Well, as Jim indicated, these are the payroll taxes—Social Security, Medicare—that everyone has to pay. And, you know, the tax code is complex. Everybody knows that. It is easy to make a mistake.

But the reason we said that Geithner’s was far more egregious is this. He signed a piece of paper acknowledging that he owed both taxes while he was employed by the IMF. He then collected the money from IMF to pay the taxes. Now, most of us, you know, the payroll taxes are withheld. We don’t get reimbursed for those taxes. It comes out of our own pocket. But Mr. Geithner not only signed a paper acknowledging he owed taxes, he collected money to pay the taxes and then didn’t pay them and pocketed the money. This is why it was far more egregious for him and why—you know, the New York Times demanded that Tom Daschle withdraw, and he did. But the same demand was not put on Mr. Geithner.

And even more disturbing is the fact that only one Democratic member of the Senate Finance Committee voted against Mr. Geithner for this reason—for this reason. That was the Iowa Senator Tom Harkin, who said he just couldn’t support it. And Harkin was right, because the message this is sending to the public of large—the tax system already is as close to collapse as you’re going to get as a result of it not being enforced evenly. The double standard on tax law—as you indicated in the introduction, Jim and I have been writing about taxes for almost forty years. Our first series that won the Pulitzer Prize was on the unequal enforcement of the tax code. And that was back in the 1970s. And since then, it has exploded. And what is happening now in Washington just captures where it is now. Here you have the Senate Finance Committee approving this, and you have the Senate overwhelmingly approving it.

The Times thinks Tom Daschle should step down, and I have to say, for these reasons and others, it wouldn't break my heart. (Although I also have to note, the Times only seems to get quite this picky about Democrats):

Mr. Daschle’s financial ties to major players in the health care industry may prove to be even more troublesome as health reform efforts proceed. Like many former power players in Washington, Mr. Daschle cashed in on his political savvy and influence to earn $5 million in recent years, including more than $2 million from Alston & Bird, a law and lobbying firm; more than $2 million from the private equity firm, InterMedia Advisors, which provided the car and driver; and hundreds of thousands of dollars for speeches to interest groups, including those representing health insurance plans, medical equipment distributors and pharmacy boards.

Although Mr. Daschle was not a registered lobbyist, he offered policy advice to the UnitedHealth Group, a huge insurance conglomerate. He was also a trustee of the Mayo Clinic in Minnesota, on whose behalf he voiced opposition to a federal loan for a freight rail line near the clinic’s headquarters in Rochester, Minn. The loan was subsequently denied by the Federal Railroad Administration.

Mr. Daschle is another in a long line of politicians who move cozily between government and industry. We don’t know that his industry ties would influence his judgments on health issues, but they could potentially throw a cloud over health care reform. Mr. Daschle could clear the atmosphere by withdrawing his name.