December 11, 2010
Obama's capitulation to Republicans on Bush era tax cuts and other lavish benefit extensions to wealthy Americans earning over $250,000 annually is the latest example of American Aristocracy's power over Congress, the courts, and president under both parties. Obama serves them loyally, sacrificing working class needs for society's rich while assuring unrestrained corporate profit-making.
Feigning concern for American workers, Obama spoke of "tough choices....to secure our future and our children's future and our grandchildren's future" by class warfare against middle and low income people he disdains.
Two earlier articles explained, accessed through the following links:
On December 9, House Democrats objected, at least rhetorically, its caucus casting a symbolic disapproval no vote, Rep. Peter DeFazio (D. OR) saying: "The vice president said 'take it or leave it. We left it."
In response, Speaker Pelosi said:
"House Democrats share the President's commitment to providing the middle class with a tax cut to grow the economy and create jobs (even though economists know they don't do it). The House passed a bill last week to provide tax cuts for all Americans (another symbolic vote) but not a bonus tax cut to millionaires and billionaires. The extra tax cut for the top 3 percent does not create jobs and increases the deficit. Unfortunately, Senate Republicans blocked the bill from being approved."
Democrats, however, were disingenuous proposing it.
Yet Pelosi insisted that "Democratic priorities remain clear: to provide a tax cut for working families, to create jobs and economic growth....and to do this in a fiscally sound way."
She also said if the Senate votes on Obama's proposal, she'll introduce it in the House, despite caucus opposition. It's no secret why.
She and her husband, Paul, a successful San Francisco financier/businessman, are among America's super-rich. In 2009, Open Secrets.org ranked her sixth among wealthiest House members with a net worth up to $124,229,990. Clearly, she and her husband want Bush era tax cuts extended, her rhetoric notwithstanding, saying she and House Democrats reject Obama's proposal as currently written (and will) continue discussions with the President and our Democratic and Republican colleagues....to improve (it) before it comes to the House floor for a vote."
As now written, Obama's deal extends $150 billion in income tax savings to America's wealthy over the next two years. In addition, many billions more in capital gains and estate tax savings, as well as hundreds of billions to corporations and private equity investors, including the little mentioned "carried interest," loophole.
It taxes private equity profits as capital gains, not ordinary income. In return, American workers get crumbs, the same unfair treatment since the economic crisis erupted in fall 2007. According to MF Global policy analysts, benefits from the deal are around $1 trillion, the lion's share to America's wealthy and business. They'll give up none of it and should prevail given the cowardice of Democrats to say no.
Another Perspective on Obama's Deal
On December 7, Washington Post writer Scott Wilson's article headlined, "Obama's tax cut extension part of strategy to show bipartarisanship," saying:
"The move is based on a political calculation, drawn from his party's midterm defeat, that places a premium on winning back independent voters (read conservative ones, Tea Party supporters, and America's aristocracy)."
In other words, shifting right, not left, is planned, not to placate his base but big-monied interests that funded his victory. Raising their taxes assures abandonment for Republicans in 2012. Watch for forthcoming policy to prevent it, ignoring popular need as a result.
A Wall Street Journal Editorial View
A December 10 Wall Street editorial headlined "Pelosi and the Hostage Fakers" threw down the gauntlet saying:
Democrats, not Republicans, are "political hostage takers....What a crew. Democrats....have had two years to avoid this day of tax reckoning, yet they kicked the tough vote into a lame duck session....Then when (Obama) seeks to spare the country a huge tax increase, (the midterm losers) try to bust up the economy and the Obama Presidency on their way out of town."
Moreover, "They want to punish the successful, no matter the economic damage." Whether or not Obama budges on his deal, "why should Republicans oblige? (If) the deal goes down and and taxes go up on January 1, no one will (blame) Republicans....Americans will rightly conclude that Mr. Obama is so incompetent he can't even deliver Members of his own party."
For their part, "Republicans would be fools to give Democrats a single new concession, even a token one. (If) Democrats defeat the current deal," Republicans in the 112th Congress can use their House majority to pass their own and dare Democrats and Obama to oppose them. "That's why we think the Pelosi Democrats are really hostage fakers and will fold if their bluster is called."
If Obama is "pounded into retreat, (he's) headed for" a "Cartersville" resting place, meaning, of course, one term, succeeded by a right wing Republican. Top priority is avoiding it, mindful that a November Pew Research Center poll found 59% of independents saying he should work with Republicans. Another 29% prefer sticking with tough opposition.
At the same time, other polls show most independent voters and Obama's base oppose tax cuts for the wealthy. Nonetheless, according to Adam Green, co-founder of the Progressive Change Campaign Committee:
"We've seen so much political malpractice and negotiating incompetence from this White House. They consistently cede ground they do not need to cede, and give up on fights they (shouldn't) lose."
Why, of course, is that rhetoric aside, Obama puts wealth and power interests above popular needs, what he'll do more of in 2011 and 2012, stiffing his base even more while trying to convince them he's loyal.
Following a stunning midterm defeat, historian Sean Wilentz said:
"You have to reinvent yourself to some (extent), and become intensely political in the day-to-day trench warfare that will be Washington politics over the next two years. But you must combine that with an appeal that recaptures some of the (2008 campaign) excitement....you have to do that now" not with 2012 in mind, "but for the good of the country." For whom he didn't say.
Obama himself acknowledged the need for a "midcourse correction," meaning a right shift to do even more for America's wealthy and corporate interests, to outdo Republicans at their own game. He admitted it, saying "we've got to find consensus," meaning capitulation to wealth and power while pretending he's populist at heart.
Hard Times Are Getting Harder
Extending Bush era tax cuts is just the beginning. Watch for vital social program reductions, Social Security, Medicare, and Medicaid especially targeted. In addition, implementing Obama's deficit cutting commission's proposals are prioritized to slash government payrolls, tax employer provided health insurance, impose a national sales tax, perhaps end home mortgage deductions, and more regressive harshness.
Yet selling those ideas may prove near impossibly challenging without deceitfully clever slights of hand, trying to convince people that less is more for greater prosperity. The economic equivalent of "war is peace, freedom is slavery, (and) ignorance is strength." Perhaps those ideas will follow.
Moreover, expect less help for the unemployed, none for 99ers (workers who've exhausted the maximum 99 weeks of benefits), and foreclosed homeowners, as well as little in the way of job creation to put people back to work and stimulate economic growth.
Economist David Rosenberg mentioned another red flag:
"One of the most pronounced macro risks is another leg down in US home prices," that's already underway but gets little attention. Along with high unemployment and weak job creation, the distressed housing market is a major economic achilles heel. He also calls the full Obama deal a "neutral economic force in 2011," offset in part by higher mortgage costs, gasoline and heating oil prices, plus whatever other bad news surprises during very unsettling times.
A Final Comment
For American workers, harder times are coming, austerity and deficit cutting taking precedence over job creation, stimulating economic growth, or addressing popular needs when the urgency to do so is vital.
Calling him hard-right, an elitist, a corporatist, pursuing anti-populist policies, an earlier article addressed the real Obama, not the myth too many still believe, accessed through the following link:
His sweetheart deal to America's aristocracy is the latest sellout - abandoning popular needs, disdaining ordinary workers, showing allegiance solely to big monied interests he hopes will reward him with another four years.
Whether voters catch on and say no we'll discover by following credible polls as human misery index numbers rise. Make no mistake. There's nothing planned to improve them, more takeaways than serious relief. If that doesn't provoke public anger, what will?
Stephen Lendman lives in Chicago and can be reached at email@example.com. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.