Considering the election results, and how Democrats won that election on the two prongs of doing away with tax cuts for the rich and protecting Medicare, this is pretty weird. Making it even weirder is the fact that by just not negotiating, by stepping off the curb at the end of the year, tax rates would go up to a top rate of 39.6 without any old people getting hurt.It's very frustrating, though not surprising to those who have followed the Obama Administration's cautious and even conservative take on economics - and by conservative I mean conservative, not the screaming-mimi hysteria that passes for conservative in today's Republican Party - to see the Democratic President insistently frame today's economics needs in Republican-friendly and pro-cyclical terms.
Raising the Medicare eligibility as nothing more than a political gift to Republicans who will repay it with the nothing other than more demands to privatize the program is a bad idea now. It was a bad idea a year ago and hasn't improved with the passage of time. It's also entirely unnecessary.
What the economy really needs now is serious stimulus in the form of government spending that creates jobs and provides a multiplier effect in the private economy. Instead Obama focuses the debate on stimulus around tax cuts. His political operation is promoting a Twitter hashtag #My2K, to emphasize the $2,000 on average the White House estimates are at stake in the middle-class portion of the tax reductions that expire January 1. That's not bad in itself: it allows people a way to put the fight in a concrete image for themselves, i.e., a stack of bills adding up to $2,000. It also encourages people to engage in some way. Personally, I try to post something on Twitter every day with a #My2K hashtag griping about Obama not defending benefits on Social Security, Medicare and Medicaid. Because they are promoting it so actively, the Obama team is presumably paying some attention to what is posted there.
But Obama is nevertheless framing economic issues in terms of deficit reduction in the middle of a recession. He should be using this opportunity to reaffirm the idea of positive government action for the benefit of working people. He should be aggressively confronting the very real and very damaging issue of extreme and rising economic inequality. Robert Reich in As Washington Fiddles over the Fiscal Cliff, the Real Battle Over Inequality Is Happening in the Heartland 12/10/2012 reminds us how sadly misguided this approach is:
Washington has a way of focusing the nation’s attention on tactical games over partisan maneuvers that are symptoms of a few really big problems. But we almost never get to debate or even discuss the big problems because the tactical games overwhelm everything else.This is what the Democrats are stuck with as long as they remain captive to neoliberal doctrines of deregulation, reduction of workers' rights, cutting government services including Social Security, Medicare and Medicaid, and a vague faith that education will somehow make everything all right someday. The depression and the spectacular financial crisis of 2008 created a remarkable historical opportunity for center-left parties around the world to take leadership and define a new, progressive politics. Their general failure to do so in the US in Europe staggers the imagination.
The debate over the fiscal cliff, for example, is really about tactical maneuvers preceding a negotiation about how best to reduce the federal budget deficit. This, in turn, is a fragment of a bigger debate over whether we should be embracing austerity economics and reducing the budget deficit in the next few years or, alternatively, using public spending and investing to grow the economy and increase the number of jobs.
Even this larger debate is just one part of what should be the central debate of our time — why median wages continue to drop and poverty to increase at the same time income and wealth are becoming ever more concentrated at the top, and what should be done to counter the trend.
It's not nearly enough for Obama and the Democrats to blather about asking the plutocrats to "pay a little bit more" in taxes. As Reich points out, the super-rich aren't being so timid in their attempts to exploit the crisis for their narrow class interest:
The dilemma isn’t just economic. It’s also political. As money concentrates at the top, so does power. That concentrated power generates even more entrenched wealth at the top, and less for the middle class and the poor.Tags: austerity economics, barack obama, fiscal cliff, grand bargain, medicaid, medicare, social security
A case in point is what’s now happening in Michigan. In the state where the American labor movement was born – and where, because of labor unions, the American middle class once had the bargaining power to gain a significant portion of the nation’s total income – Republicans and big money are striking back.
Legislators in the Michigan state House, followed almost immediately by Republicans who dominate the state Senate, voted Thursday afternoon to eliminate basic union organizing and workplace protections for both public and private-sector workers. Michigan Republican Governor Rick Snyder says he'll sign the measure.
This anti-labor blitzkreig was launched and coordinated by “Americans for Prosperity” – a group developed and funded by the right-wing industrialists and billionaire campaign donors Charles and David Koch, to “pave the way for right to work in states across our nation.”
The Koch brothers are the same ones, not incidentally, who several years ago backed a group called "Citizen’s United," on its way to the Supreme Court for an opinion by the Court's Republican majority that opened the floodgates to big money corrupting our federal and state governments. (The brothers Koch have also entertained Justices Scalia and Thomas at strategy meetings they’ve organized of Republican donors.)