Sunday, January 5, 2014

Class War Update

The Year of the Great Redistribution

One of the worst epithets that can be leveled at a politician these days is to call him a “redistributionist.” Yet 2013 marked one of the biggest redistributions in recent American history. It was a redistribution upward, from average working people to the owners of America.
(Photo: Kimberlyki/cc/flickr)The stock market ended 2013 at an all-time high — giving stockholders their biggest annual gain in almost two decades. Most Americans didn’t share in those gains, however, because most people haven’t been able to save enough to invest in the stock market. More than two-thirds of Americans live from paycheck to paycheck.
Even if you include the value of IRA’s, most shares of stock are owned by the very wealthy. The richest 1 percent of Americans owns 35 percent of the value of American-owned shares. The richest 10 percent owns over 80 percent. So in the bull market of 2013, America’s rich hit the jackpot.
What does this have to do with redistribution? Some might argue the stock market is just a giant casino. Since it’s owned mostly by the wealthy, a rise in stock prices simply reflects a transfer of wealth from some of the rich (who cashed in their shares too early) to others of the rich (who bought shares early enough and held on to them long enough to reap the big gains).
But this neglects the fact that stock prices track corporate profits. The relationship isn’t exact, and price-earnings ratios move up and down in the short term. Yet over the slightly longer term, share prices do correlate with profits. And 2013 was a banner year for profits.
Where did those profits come from? Here’s where redistribution comes in. American corporations didn’t make most of their money from increased sales (although their foreign sales did increase). They made their big bucks mostly by reducing their costs — especially their biggest single cost: wages.
They push wages down because most workers no longer have any bargaining power when it comes to determining pay. The continuing high rate of unemployment — including a record number of long-term jobless, and a large number who have given up looking for work altogether — has allowed employers to set the terms.
For years, the bargaining power of American workers has also been eroding due to ever-more efficient means of outsourcing abroad, new computer software that can replace almost any routine job, and an ongoing shift of full-time to part-time and contract work. And unions have been decimated. In the 1950s, over a third of private-sector workers were members of labor unions. Now, fewer than 7 percent are unionized.
All this helps explain why corporate profits have been increasing throughout this recovery (they grew over 18 percent in 2013 alone) while wages have been dropping. Corporate earnings now represent the largest share of the gross domestic product — and wages the smallest share of GDP — than at any time since records have been kept.
Hence, the Great Redistribution.
Some might say this doesn’t really amount to a “redistribution” as we normally define that term, because government isn’t redistributing anything. By this view, the declining wages, higher profits, and the surging bull market simply reflect the workings of the free market.
But this overlooks the fact that government sets the rules of the game. Federal and state budgets have been cut, for example — thereby reducing overall demand and keeping unemployment higher than otherwise. Congress has repeatedly rejected tax incentives designed to encourage more hiring. States have adopted “right-to-work” laws that undercut unions. And so on.
If all this weren’t enough, the tax system is rigged in favor of the owners of wealth, and against people whose income comes from wages. Wealth is taxed at a lower rate than labor.
Capital gains, dividends, and debt all get favorable treatment in the tax code – which is why Mitt Romney, Warren Buffet, and other billionaires and multimillionaires continue to pay around 12 percent of their income in taxes each year, while most of the rest of us pay at least twice that rate.
Among the biggest winners are top executives and Wall Street traders whose year-end bonuses are tied to the stock market, and hedge-fund and private-equity managers whose special “carried interest” tax loophole allows their income to be treated as capital gains. The wild bull market of 2013 has given them all fabulous after-tax windfalls.
America has been redistributing upward for some time – after all, “trickle-down” economics turned out to be trickle up — but we outdid ourselves in 2013. At a time of record inequality and decreasing mobility, America conducted a Great Redistribution upward.
Robert Reich
Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations; Locked in the Cabinet; Supercapitalism; and his newest, Beyond Outrage. His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at

Sunday, April 7, 2013

Progressives Fight Obama on Social Security

Progressives Push Back Against Obama's Social Security, Medicare Austerity

President Obama’s plan to include Social Security cuts in his budget plan is well summed up by Vermont Senator Bernie Sanders as a “bitter disappointment.”
Obama closed his 2012 campaign with a populist flourish that seemed to suggest he was finally coming to believe his own rhetoric about the need for growth, as opposed to austerity. The strength of his message earned the president a mandate: a popular vote margin of almost 5 million, a landslide win in the Electoral College and significant gains in Senate and House races.
But, now, he proposes to squander that mandate in pursuit of a “grand bargain” with House Republicans – a bargain that would replace the current approach to calculating cost-of-living increases for Social Security recipients with a “Chained-CPI” scheme. The change will harm not just seniors, children and people with disabilities but a fragile economic recovery.
Additionally, the president is reported to be prepared to propose some means testing for Medicare.
This is not Paul Ryan privatization. But it is a classic austerity cut.
It is wrong economically, and politically.
“Social Security is not driving the deficit; therefore it should not be part of reforms aimed at cutting the deficit. The chained CPI, deceptively portrayed as a reasonable cost of living adjustment, is a cut to Social Security that would hurt seniors,” says former Secretary of Labor Robert Reich. “There are several sensible reforms to Social Security that should be considered to help make it sustainable, including lifting the ceiling on income subject to Social Security from $113,700 to $200,000 or more, as well as instituting a 1 percent raise in the payroll tax rate, a rate that hasn't changed in over 20 years.”
Reich, a Democrat, warns that the president’s plan abandons a historic partisan commitment.
“(Ever) since Social Security's inception in 1935 and Medicare's 30 years later, Republicans have been trying to get rid of them. If average Americans have trusted the Democratic Party to do one thing over the years, it's been to guard these programs from the depredations of the GOP,” explains the former Clinton administration Cabinet member. “Why should Democrats now lead the charge against them?”
The president’s pursuit of a “grand bargain” was quickly rejected by House Speaker John Boehner.
Yet, despite the record of Republican obstruction, the White House has placed a major Social Security cut on the table.
 “Social Security is too important to the economic security of the American people to be used as a bargaining chip. The president's own Secretary of the Treasury and former Director of the Office of Management and Budget has written about the budget,” says Nancy Altman, a founding co-director of Social Security Works. “The problem is not Social Security; the problem is the mismatch between outlays and revenues in the rest of the budget.'  Applying the so-called chained CPI to Social Security cuts the benefits of every single Social Security beneficiary, now and in the future.  The very groups who worked the hardest and voted in the highest percentages to re-elect the president -- working families, women, people of color, young Americans -- will be the ones hurt the most by the cuts the president is reportedly including in his budget.”
That’s a message that was echoed frequently Friday, as progressives pushed back against the president’s plan.
“What the president is proposing is going to hurt a lot of people,” said Sanders.
The senator from Vermont is not going to let that happen without a fight. He has launched a petition opposing the president’s approach. It reads:
At a time when the middle class is disappearing, poverty is increasing and the gap between the rich and everyone else is growing wider, we demand that the federal budget not be balanced on the backs of the most vulnerable people in our country.
A federal budget that reduces the deficit by cutting cost-of-living adjustments for Social Security and disabled veterans, raising the Medicare eligibility age and lowering tax rates for the most profitable corporations in this country is not a grand bargain. It is a bad bargain.
We oppose the chained-CPI, a new way to measure inflation and consumer prices designed to cut benefits for Social Security recipients, disabled veterans and their survivors.
We are strongly opposed to benefit cuts to Social Security, Medicare, Medicaid, education, and the needs of our veterans.
We demand a budget that puts millions of Americans back to work in decent paying jobs.
We demand a budget that makes sure that the wealthiest Americans and most profitable corporations pay their fair share.
Within hours of the White House confirmation of the president’s plan, the petition had already attracted more than 33,000 signatures.
John Nichols
John Nichols is Washington correspondent for The Nation and associate editor of The Capital Times in Madison, Wisconsin. His most recent book is The “S” Word: A Short History of an American Tradition. A co-founder of the media reform organization Free Press, Nichols is co-author with Robert W. McChesney of The Death and Life of American Journalism: The Media Revolution that Will Begin the World Again and Tragedy & Farce: How the American Media Sell Wars, Spin Elections, and Destroy Democracy. Nichols' other books include: Dick: The Man Who is President and The Genius of Impeachment: The Founders' Cure for Royalism.
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Thursday, January 31, 2013

McKibben Speaks to Vermont Statehouse

'Bringing It All Back Home': How Vermont Can Lead on Localizing the Climate Fight

Environmentalist Bill McKibben, author of some of the most widely read literature on climate change and co-founder of the group, brought his message about the dangers of global warming to lawmakers in his home state of Vermont on Wednesday, telling members of the Statehouse assembly that every state government (like every nation large and community small) must do what it can to meet the challenge—the greatest one ever faced by humanity—posed by climate change. Courtesty of the author, his full prepared remarks follow:
It is a great and signal honor for me to be here at my second-favorite legislative body on the planet. You are actually a match for the Ripton Town Meeting in wisdom, civility, and earnest effort, falling short only in the selection of baked goods. I look forward to the first Tuesday in March for many reasons, but the most important are probably these particular maple cream cookies that my neighbor Barry King always bakes; since our great mutual friend Willem Jewett is now your Majority Leader, perhaps he can bring some up some time, because that’s really all you’re missing.limate change expert Bill McKibben speaks to legislators and members of the public in the House chamber at the Statehouse in Montpelier on Wednesday (Photo: Burlington Free Press / Glenn Russell)
I’d like to thank Speaker Smith for this invitation, and also for his clarion call to this great assembly to make climate change a priority; I know he will meet with a good reception, because just a quick glance around the chamber reveals some of the country’s most devoted environmental legislators. Tony Klein, Margaret Cheney—and from your sister body the Senate I want to take a moment to salute Ginny Lyon for her hard work over the years. Of course Governor Shumlin has been a leader on this issue throughout his career, in both legislative and executive capacities—and also as an outstanding communicator. His straightforward declaration, from the first morning of our trauma with Irene, that it was an effect of climate change is a model of the way we need our leaders to talk about the world we find ourselves in.
It is that world I want to address today. I know that you all know about climate change, but I want to take just a couple of minutes to bring you up to date scientifically. I wrote the first book for a general audience about what we then called the greenhouse effect, way back in 1989. At that time, few anticipated how rapidly the crisis would advance. So far human beings have raised the planet’s temperature about a degree Celsius—a quarter century ago few scientists predicted the effects of that relatively small increase. But the earth turned out to be very finely balanced. The extra solar energy trapped by carbon in the atmosphere—less than three quarters of a watt per square meter of the earth’s surface—has already done very large things. This past summer, for instance, saw the catastrophic melt of the Arctic ice sheet—there’s now, by area, half the ice that Neil Armstrong saw when he looked down from the moon.
We have, in other words, taken one of the largest physical features on earth and broken it, and others are close behind. The chemistry of the earth’s oceans, for instance, is now changing as seawater absorbs carbon from the atmosphere—it is now 30% more acidic than it was four decades ago, a dangerous development for the marine food chain upon which all of us ultimately depend. For those of us who dwell on land, however, the most conspicuous changes have to do with hydrology, the way that water moves around the planet. If you want one physical fact to explain this century, it’s that warm air holds more water vapor than cold: the atmosphere is about five percent warmer than it was 40 years ago, a staggering shift that more than anything else signals that we’ve left behind the Holocene, the 10,000-year period of benign climate that underwrote the rise of human civilization. That increase in atmospheric moisture also loads the dice for both drought and flood—for the kind of extremes we’re seeing more and more commonly on this planet. The scientists have long linked extreme weather to our new heat, but for the last few years they’ve been joined by the part of our economy that we ask to analyze risk. Here’s how Munich Re, the world’s largest insurance company, put it in its annual report for 2010, the hottest year ever recorded. Globally globally, loss-related floods have more than tripled since 1980, and windstorm natural catastrophes more than doubled, with particularly heavy losses from Atlantic hurricanes. This rise cannot be explained without global warming.
If you want one physical fact to explain this century, it’s that warm air holds more water vapor than cold: the atmosphere is about five percent warmer than it was 40 years ago, a staggering shift that more than anything else signals that we’ve left behind the Holocene, the 10,000-year period of benign climate that underwrote the rise of human civilization.
So let’s think about Vermont for a minute. Even before Irene it was clear that things were very different here. Choose your gauge: ice out dates, lilac bloom, start of sugaring season. Most obvious was the more than 85% increase in severe rainstorms, the gullywashers that do farmers no good and cause a world of trouble for road crews. I’ve always found the easiest public officials to talk about global warming with work in municipal DPWs—they’ve spent the last decade trading out small culverts for bigger ones, because the old book no longer works. As one Australian mayor said on Monday, after the second great flood of his tenure, “these storms are supposed to be one in a hundred year events, not one in two year events.” For us, though, Irene was a defining moment. It saw the greatest rainfall in the state’s history, 11.23 inches recorded in Mendon. If anyplace should be able to cope, you would have thought it would be Vermont—the remarkable recovery of forest cover in our state should have meant less flooding than from the great storms of the 20s and 30s when most of those slopes were bare. But this was just too much water—it wasn’t just off the charts, it was off the wall the charts were tacked to. From now on we need to know that Irene is what nature is capable of producing for us. You know better than anyone else in the state the true cost—in lives and in hopes, yes, but also in deferred plans, busted budgets, foregone opportunities. God forbid the next one comes before we finish paying off this one.
But the next one will come, and much else with it. We’ve increased the temperature one degree so far, as I’ve said, but we’ve burned enough coal and oil and gas to guarantee almost another degree of temperature increase in the decades ahead. That is to say, even if we do everything right we are going to come right up to the 2 degree red line that the world’s governments have declared is the absolute and final red line for climate chaos. We shouldn’t go there, obviously—if one degree melts the Arctic, we’re fools to find out what two degrees will do. But we will go there—and if we don’t do everything right the most recent reports of radical organizations like the World Bank make clear that we’re headed for a global temperature increase of 4-6 degrees, which would create a planet straight out of science fiction. Among other things, the agronomists estimate that from this point on each degree increase in global temperature will cut grain yields ten percent. Try to imagine our earth with 40% fewer calories. This is the biggest challenge by far that humans have ever faced, and we must do absolutely everything we can to stop it.
That means getting off hydrocarbons as soon as possible. The fossil fuel industry, we now know, has 2795 gigatons of carbon in its proven reserves, the coal and oil and gas they’re planning to burn. The scientists, sadly, tell us that to have any hope of staying below two degrees we can only burn 565 more gigatons. That is, the fossil fuel industry has five times the amount of inventory on hand that we can safely use. To put it another way, we have to figure out some mix of technology, legislation, economics, and personal and societal change that can somehow keep 80% of current reserves in the ground. You—this legislature--played a small but noble role in that job last session by banning fracking—all we need is new hydrocarbons. But the only way to accomplish what needs accomplishing in the very short window of time that physics affords is an all-out effort, here and everywhere else. You can’t control ‘everywhere else,’ but you can try to provide some leadership—indeed Vermont has already played an outsized role., which began five years ago in Addison County with the march up Rte 7 that some of you joined, has become the largest climate campaign on the planet, having organized 20,000 rallies in 191 countries, what CNN described as the ‘most widespread political activity in the planet’s history.’ That kind of advocacy produces results—look at a country like China, which followed our development path too closely with its coal-fired power plants, but now also leads the world in sun and windpower. I can tell you that when I’m in China, I invariably find mayors and provincial chiefs who have met alumni of Efficiency Vermont as they spread out around the planet with their wisdom. In fact, many Chinese officials I’ve met know about two American states, California and Vermont, and they are under the impression they’re roughly equal in size and importance. I never let on. But that’s a powerful example of what we can do as Vermonters.
You can’t control ‘everywhere else,’ but you can try to provide some leadership—indeed Vermont has already played an outsized role.
So let’s talk about next steps.
Clearly, building on the Efficiency Vermont model is key. This session you’ll have the chance to build an equally robust program aimed at ‘thermal efficiency.’ Which is an awkward name—another way of saying it is, it’s high time Vermont stopped heating the outdoors. Putting in insulation will create jobs, and it will save low and middle-income Vermonters serious money. It’s straightforward and obvious good policy even absent the climate crisis, and I hope you’ll make it a priority, pay for it in a logical way, and keep pushing it hard till every building in the state is up to snuff. Because—given the climate crisis—one of the things we most need to do is reduce our use of energy. The more we reduce it, the easier it becomes to meet our needs with electricity, specifically renewable electricity. That’s the only chance we have moving forward, and it’s increasingly a good chance. A University of Delaware study released this month demonstrated, by running 28 billion computer simulations of different weather conditions, that by 2030 the country could provide reliable electricity from renewables 99.9 percent of the time at reasonable cost—but only if we simultaneously practice efficiency, and build out our renewable network. Governor Shumlin, skilled civil servants like Liz Miller and Deb Markowitz, and this legislative body—you guys--have pointed us in exactly the right direction—we need 90% or more of our power from renewable sources, and I fear the science indicates we need it even faster than you’ve called for. This is an emergency.
Which brings me to controversy of the moment, the call for a three-year moratorium on windpower development in this state. It’s not perhaps the most important issue, but it is the most contentious, so let me address it with some care. I am glad that there are people standing up for our mountains, and for the rest of creation that inhabits them; it is good to see that the environmental message has sunk deep roots. I yield to no man or woman in my affection for the high forests of this region—I’ve explored them, written about them extensively, and done my best to help the legion organizations dedicated to their preservation. But I also read the science carefully, and am thoroughly convinced that by far the greatest threat to their integrity, biology, and beauty is the onset of rapid climate change; the scientific community is in agreement that, as we heat the earth, we stand on the brink of triggering earth’s 6th great extinction event, one that will decimate species everywhere including here. The computer modeling shows a dramatically warmer world won’t support the birch-beech-maple forest we love, and that the hemlock will be driven north of the Canadian border. In other words, the future of these mountains depends on our ability to get ahead of the global warming crisis. So: Let me say that if there is anything in my description of that crisis so far that leaves you thinking we have three years to spare for a ‘time out,’ then I’ve done a poor job indeed. We need to be doing all we can be doing on every front, and with real purpose and dispatch. I completely agree with our junior Senator Mr. Sanders who on Monday blasted the idea of a moratorium—among other things, this state leads the nation in green jobs per capita. What kind of signal would you be sending to the one set of businesses really ramping up here? I find it, truly, hard to imagine that after even the Boehner-led U.S. House of Representatives, as backward a legislative body as we have ever seen in our nation’s history, managed to extend incentives for wind, this forward-looking body will go the other direction. It is important to try and choose sites wisely, and it would be good public policy to figure out how, perhaps using the model of Germany and Denmark, to share the financial benefits of these installations widely among the people who live among them. That’s simply good law-making, a challenge to which you are entirely equal.
We do not need them, as I say, on every ridgeline, but I continue to hope for the day when I see [windmills] on top of Middlebury Gap, the ridgeline above my home, turning with slow and stately beauty, the breeze made visible and the future illuminated.
But I recall, last year, when the leading opponents of “big wind” in Vermont told 7 Days thing like, “They are making climate-change victims out of the people who live around the projects,” and that it was akin to “burning villages in order to save them.” Let me say that I think such statements are incorrect. Climate change victims are, say, the 150,000 displaced from their homes on Monday in chaotic flooding in Mozambique. Ask a hero like Sue Minter how we’d even begin to deal with 150,000 people--a quarter of Vermont—displaced; it would be beyond even her skills. Burning villages can actually be found, in places like Tasmania or for that matter Colorado, where record wildfires in the last year have taken lives and wrecked communities. So I think we should plan carefully but quickly to minimize the ecological footprint and maximize the energy gain. That energy gain is real: every spin of that windmill blade reduces the need, somewhere, for burning coal or gas or oil; in New England, first of all, where we still have lots of fossil-powered electricity being generated. But it also reduces by some small amount the pressure on a Bangladeshi peasant farmer or a doctor fighting the spread of dengue fever. We do not need them, as I say, on every ridgeline, but I continue to hope for the day when I see them on top of Middlebury Gap, the ridgeline above my home, turning with slow and stately beauty, the breeze made visible and the future illuminated.
I do give the opponents of windpower one important point. They have said, correctly, that it is not a silver bullet. And in that they are absolutely right. We’ve had our magic fuel—coal and gas and oil were good stuff, extremely useful, and it’s too bad the carbon they release is destroying our earth. No silver bullet. Maybe, though, enough silver buckshot, if we are diligent about picking up every piece and deploying every tool. We have to make sure the steps we take will actually help—the carbon numbers, say, for industrial biomass don’t look very promising. But there are literally dozens of other things we could be doing.
To wit: transportation policy should look towards electrification just like other sectors. I drove here today in my new Ford C-Max plug-in hybrid. It got the first 25 miles off its electric motor before the gas kicked in—for many Vermonters that’s a day’s commute. Since I have solar panels on the roof of my house, I drove it as far as Middlesex off the sun. We need incentives to make sure the same minor miracle can happen in many driveways and parking lots. We also need a continued, full-on commitment to public transit—the ACTR buses plying our roads in Addison County are a good daily reminder of the possibility, and of course everyone on my side of the state eagerly awaits renewed passenger train service.
But just as it makes little sense to produce clean power for leaky houses, so it makes little sense to make Vermont more car-dependent. To borrow a phrase from the governor, building big box stores in farm fields is a terrible idea—in essence these places are global warming machines, feeding precisely the sprawl that will doom our larger efforts. They’re the classic example of short-term thinking, when any real thought about our future sees a very different Vermont that could be forming: one that leads the nation in local food, whose intact and thriving towns and cities are a reminder to others of how pleasant life could be.
All of that involves offense, which is fun: building things, helping people. But we also need to play some defense if we’re going to hold off the staggering rise in temperature, we have to help keep some carbon in the ground. Vermont can play a powerful role by helping block a proposed tarsands pipeline through the Northeast Kingdom; it should undergo every kind of review there possibly could be. I say this as someone who organized the largest civil disobedience action in 30 years to block the similar Keystone pipeline; do the job now so we don’t have to ask you to go to jail later!
But just as it makes little sense to produce clean power for leaky houses, so it makes little sense to make Vermont more car-dependent. To borrow a phrase from the governor, building big box stores in farm fields is a terrible idea—in essence these places are global warming machines, feeding precisely the sprawl that will doom our larger efforts.
And while you’re at it, please join the growing number of colleges and governments divesting their holdings in fossil fuel companies. These companies are the ones spending the big lobbying bucks to make sure change never happens in DC and other capitals—please help undermine their legitimacy by removing the state’s pension funds, the UVM endowment, and other holdings from their shares. As the mayor of Seattle said last month, why would they simultaneously spend millions building new seawalls and invest in the companies making that necessary. Why would we pay tens of millions to try and recover from Irene and at the same time support those corporations making the next Irene inevitable?
It’s in the shadow of Irene that I want to end. We’ve already increased the temperature a degree, and another degree is in the offing. There’s no going back on that—that’s where we live now. It’s not as sweet as the world we were born into; our iconic Vermont of long winters and glorious falls will be badly stressed. But there is no use crying about it; we must adapt to that which we cannot prevent. And so we need those strong local farms that offer us some guarantee of sustenance, and we need strong local communities of the type that came together to repair the damage of Irene. We need more of our own energy and more of our own capital—shortening supply lines is a necessary task, and often a beautiful one. It gives me great pride to come from a state that leads the world in breweries per capita, to know there are some things we won’t run short of come what may.
But just as we adapt to that which we can’t prevent, we also have to prevent that to which we can’t adapt. Temperature increases beyond two degrees are impossible, unthinkable—and yet they are coming, fast, unless we help lead the charge against them. I began by reviewing climate history, but let me end by considering the political future: the issue on which you, and every other legislator on this planet, will be judged 50 years hence is: how quickly and how boldly did you move to address the greatest challenge humans have ever faced. I have confidence that if any political body is up to the challenge, it is this one.
Bill McKibben
Bill McKibben is Schumann Distinguished Scholar at Middlebury College and co-founder of His most recent book is Eaarth: Making a Life on a Tough New Planet.
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Saturday, December 29, 2012

Fiscal Cliff ad nauseum

Why the “Fiscal Cliff” Bores the Snot Out of Me

Enough already!
I can’t take it anymore.
I can barely write the words “fiscal cliff” without dosing off. And I’m not alone here. Utter the term to insomniacs and out they’ll go.
The hackneyed metaphor, the breathless reporting on cable TV, the jockeying for position—it all bores the snot out of me. This story is not of the same magnitude as the November elections or the Sandy Hook massacre, yet the cable talk shows play it at the same high-pitched volume.
And after this weekend or by the end of January at the latest, Congress will have passed a budget bill that maintains middle class tax cuts and averts the alleged calamities that, in all probability, were never going to come to pass anyway.
After all, which elected official is really going to want to be held responsible for raising taxes across the board and sending the stock market into a swoon?
So the endless hours, days, and weeks of overheated commentary will have been for naught.
Plus, the outlines of the eventual deal are already in sight. Obama has—surprise, surprise--given ground on his position that there should be no extension of tax breaks for those making more than $250,000. (Watch for an additional concession on the estate tax, too. That’s what the rich really want.)
Obama has already agreed, foolishly, to cut domestic programs, which will risk a double-dip recession.
Obama has already, agreed, shamefully, to “the chained Consumer Price Index,” which will diminish the amount seniors get for Social Security. (Note: The average senior gets less than $15,000 a year on Social Security. Most seniors depend on their Social Security for more than half their income. Two out of five seniors rely on it for 90 percent of their income, and a quarter of them rely entirely on it. These seniors are barely getting by, as it is.)
What’s been lost in almost all the coverage is the fact that Obama set in motion the train of events that is leading to this regressive outcome.
He willingly invoked Republican rhetoric in exaggerating the problems of budget deficits and the national debt. For instance, he erroneously compared the nation’s budget to family budgets. He also talked about not saddling our grandchildren with debt and not putting our nation’s spending on the credit card. These are all rightwing tropes.
He appointed Peter Orszag to be his first director of the Office of Management and Budget. Orszag was on record favoring the “chained CPI.” (Orszag is now at Citigroup.)
He empaneled the Bowles-Simpson commission, which he didn’t need to do. And he packed it with people who saw dragons in every deficit.
He failed to call the Republicans’ bluff on previous occasions when they played chicken with the debt limit.
And he offered a “grand bargain” with John Boehner last year that has many of the same awful concessions he’s proposing now.
The “fiscal cliff” has been a tiresome charade, and it disguises the fact that both parties are taking us down the path of austerity.
Matthew Rothschild
Matthew Rothschild is the editor of The Progressive magazine.
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