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Ransom paid

Robert Reich, professor of public policy | August 1, 2011

Anyone who characterizes the deal between the President, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics.

The deal does not raise taxes on America’s wealthy and most fortunate — who are now taking home a larger share of total income and wealth, and whose tax rates are already lower than they have been, in eighty years. Yet it puts the nation’s most important safety nets and public investments on the chopping block.

It also hobbles the capacity of the government to respond to the jobs and growth crisis. Added to the cuts already underway by state and local governments, the deal’s spending cuts increase the odds of a double-dip recession. And the deal strengthens the political hand of the radical right.

Yes, the deal is preferable to the unfolding economic catastrophe of a default on the debt of the U.S. government. The outrage and the shame is it has come to this choice.

More than a year ago, the President could have conditioned his agreement to extend the Bush tax cuts beyond 2010 on Republicans’ agreement not to link a vote on the debt ceiling to the budget deficit. But he did not.

Many months ago, when Republicans first demanded spending cuts and no tax increases as a condition for raising the debt ceiling, the President could have blown their cover. He could have shown the American people why this demand had nothing to do with deficit reduction but everything to do with the GOP’s ideological fixation on shrinking the size of the government — thereby imperiling Medicare, Social Security, education, infrastructure, and everything else Americans depend on. But he did not.

And through it all the President could have explained to Americans that the biggest economic challenge we face is restoring jobs and wages and economic growth, that spending cuts in the next few years will slow the economy even further, and therefore that the Republicans’ demands threaten us all. Again, he did not.

The radical right has now won a huge tactical and strategic victory. Democrats and the White House have proven they have little by way of tactics or strategy.

By putting Medicare and Social Security on the block, they have made it more difficult for Democrats in the upcoming 2012 election cycle to blame Republicans for doing so.

By embracing deficit reduction as their apparent goal – claiming only that they’d seek to do it differently than the GOP – Democrats and the White House now seemingly agree with the GOP that the budget deficit is the biggest obstacle to the nation’s future prosperity.

The budget deficit is not the biggest obstacle to our prosperity. Lack of jobs and growth is. And the largest threat to our democracy is the emergence of a radical right capable of getting most of the ransom it demands

Cross-posted from Robert Reich’s blog.

Comments to “Ransom paid

  1. Wealth with Wealthy is Healthy.

    I understand perfectly well your Keynesian view of economics and progressive liberal politics Mr. Reich.

    As long as you doggedly chase the wealthy for more taxes and regulations you will always be one step behind those who are infinitely more creative of resolve than you ever will be. Sophism will produce votes, but reality soon will catch-up… in fact it has.

    Your master skill Mr. Reich is that of a progressive social elitist. And I seriously don’t think it has ever dawned on you just how much you irritate those who produce the wealth, the life’s blood of our economy and the revenue you so desperately need to fuel your own educational system of which you and the progressive liberal NEA dominate.

    The progressive’s attitude towards the wealthy has been going on for nearly a century now and education has been geared for the progressive’s dominance in education and politics and you have been very successful… too successful. Too successful to the point were the takers out number the makers and your constant contempt for the industrious will soon be the end of us all.

    As a former labor secretary, you have never been inclined to educate yourself to the aspects of being the generator of industry because you have always seen them as contemptible. After all, it is the foundation of progressive education (Woodrow Wilson). Using the term “ransom” to describe your perceived adversaries is inflammatory to the point of retaliation. That for the employer to invest in human resources is simply to high of price to pay… a phrase that Bob Chanin can appreciate.

    So the industrious of mind will weigh not only the irritations of people like you but also the costs and will devise alternatives to achieve their goals. They are very good at over coming adversity.

    Wealth with wealthy is healthy. Your going to have to under stand that wealth sitting with the wealthy insures a healthy business model, a necessary resource for what ultimately means job security for the employee… if they know what is good for them. Printing more money has run its course. Keynesian economics only works with a good credit rating of which you have abused for decades.

    It takes two to Tango Mr. Reich, and when you insist on government being in the middle it will always make for a stormy romance… if not destructive of us all.

  2. Funny, how the polls showed 58% of democrats approved the deal while only 26% of republicans did. Big victory for the GOP, yeah! This article is ridiculous. How can we listen to anything from someone who is completely buddy buddy with Obama? Also, Obama is quite obviously only concerned with his reelection. It’s all about the votes and anyone who does not see that is blind. I can’t stand politicians. When are we going to stop voting for politicians and elect an American.

  3. From gays to retirees to torture victims and more, virtually every liberal interest group that depended on BHO for his support has been grievously disappointed. Maybe it’s time to see this man for who he isn’t, if not for who he is! I was persuaded until now to vote for him in 2012 for the sake of potential SCOTUS appointments; but would that be worth it? The best model for liberal action right now may be what’s taking place in WI. The Progressive movement won its first great victories on the streets of America in the early 20th Century. Maybe it’s time for us to take up the fight there once more.

  4. What Obama ‘could’ do, and what he actually does is the difference between talking a good game and actually playing one. It must be apparent by now that Obama has embraced the neocon agenda, both in foreign and domestic policy. The fantasy that Obama is either a ‘hopey-changey’ leftist or (as he proclaimed in the early days of his campaign, a ‘progressive’) has forever been shattered. Obama is a tool. His corporate masters and his silent partner, the GOP, run the show in DC. Let us not be deceived any longer about this man’s aims and ambitions, or should I say, the aims and ambitions of those who actually control our government.

    Let me recommend two articles that put Obama’s seeming ‘cave in’ to the GOP in perspective:
    in Counterpunch and Common Dreams.

  5. very good response.

    the deal will also result in the further demise of American democracy. congressional accountability to the public will be removed so that a “super committee” can further advance the social counterrevolution. this is a one-sided class war, supported by both parties.

  6. The president could have ended all wars and bring back the troops ( by far the major expenditure draining our economy) but the President did not. Americans have not yet seen come to light any of the “promises” of fighting these wars: not lower gas prices, not increased security, etc…the ones taking advantage of all this are the Chinese who already are building oil refineries and accessing the oil in Irak.

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