Debate Continues on Obama Tax Deal

Below is a comment of mine on the December 17 Episode of "WakeUp AM" podcast (Episode 239). Brian of WakeUp AM had taken the position that Obama's tax deal with the Republicans was effectively the only pragmatic alternative. I, and others, took an alternative view:

Good discussion on the tax legislation. Brian made an argument worth noting; if the economy continues to do poorly in two years, then the Republicans would blame it on Obama for raising taxes on upper income earners.

Brian is right that the ultimate outcome was that the Republicans would get tax cuts for the rich; however, we could have done better, both in substance and in process (MLK would argue that process matters and I'll leave it at that for process).

On substance, he didn't drive a good bargain. For example, Obama could have sought to decouple the upper and lower income tax cuts by giving a three-year cut to lower earners and two-years for upper earners. Decoupling the two taxes would allow Democrats to vote separately on extending tax cuts for high-earners. This would avoid the potential for hostage-taking.

So, it might be true that tax cuts for the rich were inevitable, but Obama caved way too early. As you alluded, Obama might have been pissed at Congressional leaders for not using the tax cut legislation as a campaign issue; he might feel this was partly to blame for the bad mid-term election results. He might be unwilling to let it happen again. However, I think he erred in judgment on this one.

Obama's Long-View on Taxes a Huge Mistake?

"I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." - Grover Norquist, President of Americans for Tax Reform

Obama talks a good line about taking the long-view in defending the ransom he's willing to pay to Republican hostage takers on tax legislation.

Unfortunately, Obama's long-view is probably a huge mistake. Many of us have that gut feeling. James Kwak (real name), blogging on Simon Johnson's baseline Scenario site, explains. First, he argues that the tax cuts for the wealthy are likely to become permanent:

If you think the tax cuts were bad policy, your chances of fixing that bad policy are much worse in two years than they are now. The administration’s best card would have been a threat to veto any bill that contained an extension of the tax cuts for the rich. The House is going to pass an across-the-board permanent extension in 2012. Are the Democrats going to block it in the Senate in an election year? Is Obama going to veto it in 2012? (And even if he leaves it for a lame-duck session, he’s going to have to make a commitment during the campaign.)

He then reminds us that this permanent tax policy is a permanent redistribution of wealth upwards:

This was the best chance to kill the tax cuts once and for all. Yes, it would have been worse in the short run for the economy. But this is a huge price to pay for a modest stimulus made up entirely out of tax cuts (largely tax cuts for the rich). Instead, we are stuck with a huge reduction in the tax burden of the rich and a small reduction in the tax burden of the middle class–which, on balance, helps the rich and hurts the middle class–forever.

Then he reminds us of the Republican long-view, toward which they've been marching for decades, and are nearing the final plunge of their stake, thanks in part to this tax deal from Obama:

... the old Republican “starve the beast” strategy: cut government revenues to the point where it is unable to do anything. ... Republicans have cut revenues and continued to spend on whatever they felt like spending on. But the core of the strategy is that if you cut taxes at every possible opportunity, eventually you will force the government into a crisis where something has to give (and probably it will be a Democratic administration that takes the political hit for cleaning up the mess). And unless American public opinion does an about-face, the thing that will give will be entitlements.

In other words, don't be fooled by excessive Republican government spending, thinking that it is a contradiction to their "less government" philosophy. Rather, they want to spend our government into hoc so that it has no alternative but to cut social programs. Kwak looks into the crystal ball at how this will likely play out:

So perhaps with the best intentions, the Obama administration, by making it more likely that the Bush tax cuts will become permanent... is probably hastening the day when push will come to shove and Medicare will be gutted. The bigger the projected national debt, the more seemingly reasonable people in the middle of the ideological spectrum shake their heads sadly and say something has to be done about Medicare, as if it’s a fact of nature and not a fact of politics.

Obama's unwillingness to at least try to draw the line now makes one wonder whether he is blind to this scenario or whether he also believes in a version of the "starve the beast" strategy.

• Contact the US Senate
• Contact the House of Representatives

Sources:

Baseline Scenario Blog, "More on the Tax Deal," by James Kwak, December 8, 2010.

First published on GDAEman Blog.

Missed Opportunities

Not sure it's kosher, but I'm going to re-print a Paul Krugman blog post in it's entirety:

In today’s [New York Times] report on the foreclosure mess, a revealing sentence:

As the foreclosure abuses have come to light, the Obama administration has resisted calls for a more forceful response, worried that added pressure might spook the banks and hobble the broader economy.

Surely this can serve as a generic statement:

As NAME ISSUE HERE has come to light, the Obama administration has resisted calls for a more forceful response, worried that added pressure might spook the banks and hobble the broader economy.

Stimulus, bank rescue, China, foreclosure; it applies all along. At each point there were arguments for not acting; but the cumulative effect has been drift, and a looming catastrophe in the midterms.

Or to put it another way, the administration has never missed an opportunity to miss an opportunity. And soon there won’t be any more opportunities to miss.

===== End ====

Ouch!

Ah Yes, Healthcare "Reform"

OK, I'm not a total idiot. I know Rahm Emanuel's healthcare "reform" has some benefits, like allowing young adults to stay on their parents' plan longer, making it illegal to deny insurance on the basis of a pre-existing condition, etc. But it this healthcare "reform" is of, by and for the corporate wing of the Democratic Party. Thus I echo another take on the "sell out" that we call Obama's Healthcare Reform of 2010.

Walled-In Pond Blog itemizes the TOP 10 Ways The Parasites Will Game The Law:
(call them loop holes)

1. Raising premiums

2. Kicking people out for pre-existing conditions

3. Changing your insurance plan

4. Making life more difficult for doctors

5. Tightening up internal practices

6. Marketing only to healthy people

7. Re-label current overhead expenses as health care

8. Taking full advantage of the unhealthy behavior premium

9. Charging old people as much as they can

10. Lobbying to make the most of the loopholes that exist and create others

See Expanded Post on each of Above.

Sources:

Via Kos, and from Froomkin (HuffPost) and Meg Carpentier (WashInde)

The Downsides of Obama Healthcare "Reform"

The GLH Blog has tallied the many down-sides of the recently adopted health care law, under the banner Obama Sprinkled His Iowa Wealthcare Speech With Lies.

For example, Lie #1: "If people like their plan, they will keep their plan."

First, "Medicare Advantage" (the HMO version of Medicare) will face dramatic reductions in services because of funding cuts.

Second, "People With Mediocre Plans, which the corporate media call "Cadillac Care" (they must really, really hate Cadillacs) will face cutbacks in care, higher premiums, and higher copays when the excise taxes on those plans go into effect in 2018.

Then there is Lie #2: "The days of the insurance industry running roughshod over the American people are over."

First, The insurance companies and HMOs wrote this bill. It's filled with their loopholes.

Second, ever try to sue a health care company... while you're sick? Do you think government regulators are going to do the job for you? Think again.

And there are more:

Lie #3: "And so if you already have insurance, this reform will make it more secure and more affordable."

Lie #4: "And costs will come down for families, businesses, and the federal government, reducing our deficit by more than $1 trillion over the next two decades."

Deception #5: "And I want seniors to know: despite what some have said, these reforms will not cut your guaranteed benefits."

Lies #6 & #7 in One Sentence:
"Once this reform is implemented, health insurance exchanges will be created, a competitive marketplace where uninsured people and small businesses will finally be able to purchase affordable, quality insurance."

Given the risk of the Palin wing of the Republican Party lurking in the shadows, seeking to overthrow Obama, some might bristle at a strategy of hammering on Obama's healthcare "reform." The GLH bogger sums up his view this way:

Politics isn't team sports. Policies have very real impacts on peoples' lives, and that has to be taken a lot more seriously than many blogs on the left are doing so far. We need to stop cheering on the donkeys vs. the elephants and pay attention to what's actually going on.

FULL POST

Source:

Godless Liberal Homo Blog, April 4, 2010.

Cornell West to Obama

Cornell West to Obama: Take a Stand. Have the courage to Challenge the Establishment.

Cornel West's note to Obama - January 20, 2010
Uploaded by Ladypolitik. - Watch the latest news videos.

Thanks to Anderson @ Shockfront and Ladypolitik for this tid bit.

Obama's Cheap Words Signal Nothing

TIME Magazine reports that Obama is "signal[ing] a somewhat new approach to financial reform." The article sites the Obama administration's "plan for $117 billion worth of bank taxes to recoup the costs of bailouts."

Given that the Federal Reserve has given banks at least a trillion, and backed up bad gambles to the tune of several more trillion dollars, some of us are rolling our eyes at this pittance of $177 billion. We think we should effectively "own" these banks, receiving a cut of their profits for as long as it takes to offset the cost of the bailouts; it shouldn't be negotiable, no law should need to be passed.

We had these corrupting institutions over a barrel and could have extracted real reform. But Obama let them go, and now these institutions are back to their old ways of using their power and money to corrupt our legislative and executive branches... the US Supreme Court is no help with decisions that allow corporations to buy elections, and the fourth branch, the media, is owned by the corrupting corporate powers that be.

It's hard to believe the broader message TIME claims about Obama, citing this sound bite,

His uncharacteristically blunt message to financial giants and their political defenders said it all: "If these folks want a fight, it's a fight I'm ready to have." [1]

That's a nice story concept by TIME, but is it real? Does it really "say it all?" Or is it just another case of cheap words?

Are Obama's advisors, like David Axelrod, simply telling the President to ratchet up the populist rhetoric to stem the public angst towards the administration's economic policies emanating from the likes of Larry Summers and Tim Geithner? I can see Obama's advisors on the phone with the financial giants, "Don't worry. The President needs to say these things to quell public sentiments. Our basic understandings with you are not going to change." This isn't empty speculation; we have numerous memoirs from the past to draw on in which similar things are documented.

History is rife with examples of leaders saying one thing and doing another... take George W. Bush and his "Healthy Forest Initiative" or his "Clear Skies Act," which were, in great part, environmental roll-backs.

The Democrats under Obama continued Bush's bailout policies and are now giving lip service to so-called financial reform; $117 Billion over a decade is chump change to the powerful financial sector; the four largest firms—Goldman Sachs, Merrill Lynch, Morgan Stanley and JPMorgan Chase—took in $22.5 billion in profits through September [2]... that's profits for less than a year immediately after the "financial crisis."

Thinking people of both conservative and progressive leanings are reaching the same conclusion; the two major parties have been captured by a small powerful elite that use both parties to advance their interests, interests that reflect little allegiance to those of our Nation or the general well being of the average people.

Skeptical progressives are going to need a lot more than words before their hope in tangible outcomes translates into support of Obama and his policy initiatives. Obama's choice of Rahm Emanuel damaged his credibility, as did his choice of Summers and Geithner, and his decision to keep on Federal Reserve Chairman Ben Bernanke.

As I've said before, the elite is so powerful that Obama may be their prisoner. OK, so it might not be his fault, because he may be forced to push establishment-oriented policies. If that's the case, then we know his words are just that... words. We want to see Obama "signal" with deeds not just words.

Sources:
1. TIME Magazine,
Wall Street: Obama's Bank Crackdown Signals Policy Shift, January, 2010.

2. DemocracyNow! Headlines, November 18, 2009.

Night Before Christmas Debacle

'Twas the night before Christmas and all through the Senate
Evidence was mounting of democracy's limit.

The People dismayed by what they were seeing
Sixty votes it takes to do just about anything.

The Constitution took care to protect the minority
A wealthy elite exploiting the majority.

Obama a prisoner of establishment power
Claims "victory" with words that surely taste sour.

As the healthcare battle appears to be done
the people are told, "Go to sleep now, you've won!"

The dejected masses comply and act tame
While Obama unabashedly calls out some names

Now Geithner, Now Orszag, Emanual, and Baucus
On DePearle, On Lieberman, Nelson and Sebelius

A man with a smile audaciously says, "hope"
surrounded by insiders who think I'm a dope.

"We stood up to special interests," he says as he winks
But his words are cheap, this deal really stinks.

The man with a smile says "The struggle is on"
More people look askance as they detect a con.

And when the dust settles the people will see
No healthcare reform from the powers that be.

Though believers continue to heap on their praise
Their numbers dwindle with the passing of days.

The media, corporate owned, just plays along
while the people say, "something's terribly wrong."

The Empire teeters, the establishment takes fright
But with happy faces say, 'To all a good night."

Sources:

GDAEman

Obama's Healthcare Shadow

Remember the old Mad Magazine piece showing a series of cartoon frames in which people are doing one thing, but their shadow is doing something socially unacceptable that they really want to do? Like the example below:

I can't remove the image of Obama, with Rahm Emanuel standing there, saying

By standing up to the special interests who have prevented reform for decades and who are furiously lobbying against it now, the Senate has moved us closer to reform that makes a tremendous difference for families, for seniors, for businesses and for the country as a whole.

Meanwhile Obama's and Emanuel's shadows are high-fiving the health industry executives on sealing the deal. 30 million people forced to buy corporate health insurance, some subsidized by tax payer money, thereby strengthening the corporate power of an industry that is already controlling our governing system. WTF?

Obama's Exceptional View of America in Afghanistan

In his Afghanistan war escalation speech, President Obama drew on American Exceptionalism to claim US intentions are pure in Afghanistan. It's as if the US dirty wars in Central America, in support of United Fruit and other corporate interests, never happened.

AMY GOODMAN: President Obama also praised the United States as a country that has not sought world domination or occupation.

PRESIDENT OBAMA: More than any other nation, the United States of America has underwritten global security for over six decades, a time that for all its problems has seen walls come down and markets opened, and billions lifted from poverty, unparalleled scientific progress in advancing frontiers of human liberty. For unlike the great powers of old, we have not sought world domination. Our union was founded in resistance to oppression. We do not seek to occupy other nations. We will not claim another nation’s resources or target other peoples because their faith or ethnicity is different from ours. What we have fought for, what we continue to fight for, is a better future for our children and grandchildren and we believe that their lives will be better if other people’s children and grandchildren can live in freedom and access opportunity.

AMY GOODMAN: Professor Bacevich, your book is called “The Limits of Power, The End of American Exceptionalism”, responding to... President Obama’s last point about why we are in Afghanistan.

ANDREW BACEVICH*: ... This is the preferred narrative of American history, the way we prefer to see ourselves and, therefore, the narrative that we use to justify all that we do in the world. It is really telling and extraordinary that this president, whose background is quite different from all those other presidents... and who came to office promising to bring about change, it is extraordinary that he himself would embrace that narrative so uncritically. I think that is indicative of the extent to which whether there is going to be any change in Washington, it is simply going to be changes on the margins and that the Washington consensus, the status quo, is firmly in place.


*Andrew Bacevich is a retired colonel and a Vietnam war veteran who spent twenty-three years in the US Army. Bacevich is a professor of history and international relations at Boston University and the author of “The Limits of Power: The End of American Exceptionalism.”

Source:

DemocracyNow! December 2, 2009.

Is Obama a Prisoner?

Context:

There is an elite within the establishment that are so influential, they often seem to call the shots. In Central American countries, like El Salvador, this oligarchy is more blatant than in the US and has been called "the 14 Families."

Blaze Bonpane, a former Jesuit priest, recounts an observation from his experience in Central America:

I’ve seen presidents who were prisoners in Guatemala, that were elected and then immediately told by the military, “You will do what we say, or you’re out of here.”

It was in this context that the question is raised with Obama, as recounted by Bonpane.

When Obama went to the meeting with the thirty-two countries, [in] Trinidad, Tobago, the parting shot from the ALBA nations was, quote, “Are you a prisoner?”

I think [the question] came directly from Hugo Chavez—“Are you a prisoner?”

If not a prisoner of the establishment elite, perhaps he's a prisoner of an economic system that is careening out of control, precariously close to collapse.

Obama's Agriculture Trade Rep = More of Same

President Obama’s nominee for the Chief Agricultural Negotiator in the office of the US Trade Representative, Islam Siddiqui is currently a vice president at CropLife America. CropLife is a major trade association for the pesticide industry, the members of which include Syngenta, Monsanto, Dow Chemical. He was previously a lobbyist for CropLife. [1]

We can expect Siddiqui to promote a corporate, establishment policy. This policy will consolidate wealth among a small number of ever larger companies that are able to navigate complex transnational trade policies. He will promote policies that undermines diversity in crops, leading to mono-culture crops that are at risk of catastrophic failure. We can predict the crash, but but the establishment stands to make huge profits in the short run, and thus don't care about the future crash.... does this ring a bell?

Obama believes in "compromise." Obama selected Tom Vilsack as head of USDA, who pretty much represents the establishment view of industrial farming. Then, as Deputy Agriculture Secretary Obama picks Kathleen Merrigan who supports organic farming.[1] So, Obama believes, if you put one foot in boiling water, and the other in ice water, on average, you're comfortable!

Sources:

DemocracyNow!,"Obama Nominates Pesticide Executive to Be Chief Agricultural Negotiator in the Office of the US Trade Representative," November 17, 2009.

Poster Credit: Drew Heles. See Results of FTAA Art Constest.

Establishment Position on Health Care

Obama took the establishment "middle of the road" position on health care reform, and look where it got him? He is capitulating on a public option. My message to President Obama:

By taking the middle of the road on health care, your "compromise" position is falling far short of meaningful reform. I'm urging my representatives to say "no" to any legislation that does not have a strong public option.

I am tired of the establishment controlling everything from the media, to the financial system, to the health care system, to our system of government. So, the message is, "fight for a public option or start over." The next time, take the far left position of which you're being accused, then compromise in the middle. This is negotiation 101.