In the Belly of the Beast: 7/14/11: Obama Doesn’t Want a Progressive Deficit Deal

[My editorial ramblings]
Who is Obama, politically? Friend or foe? As a famous Chinese revolutionary once said, that is THE fundamental question of politics.
When you read these news items, ask yourself: is Obama weak, dumb, confused, vacillating? Or is his ultimate goal very different from the platform he ran on?
I tend towards the second view:
  • he is very intelligent
  • he has been very consistent in his aims: consistently conciliatory towards Republicans, and hostile to his progressive base
  • According to Paul Krugman, Obama’s negotiating position on the deficit is the the RIGHT of the Republican Party’s base (according to polls)
If you Google on “Obama Reagan” you will get millions of hits, and some really appalling statements by Obama about Reagan.

Just remember: “It takes a Democrat”
  • to destroy Social Security
  • to start 3 more wars
  • to deport more people than Bush
  • to crack down harder on whistle blowers than Bush
  • to “end welfare as we know it”
  • to bring us NAFTA 
I remember in 1964 when the cold war liberal Democrats betrayed the Mississippi Freedom Democrat Party at the 1964 Democrat convention, and when Johnson ran against Goldwater as a peace candidate, and then decisively escalated the Vietnam war. I remember LBJ being greeted by chants of “Hey, hey, LBJ! How many kids did you kill today?!”.
These were very radicalizing events: illusions were shattered, and many young people began to understand “who are our friends and who are our enemies”.
Perhaps the Clinton/Obama betrayals may serve to radicalize a new generation?? One can only hope; my crystal ball is a bit cloudy, but I always like to look for the silver lining.
Rolling Stone

 

INDEX (full text of stories follow Democracy Now headlines)

“POLITICS”

Ezra Klein, Paul Krugman: WH wants a “farther to the right” deal, not the McConnell plan

Obama, Moderate Republican

from Paul Krugman by By PAUL KRUGMAN

The White House’s case for a big deficit deal

Matt Taibbi: “Obama doesn’t want a progressive deficit deal”

Ezra Klein: More on Obama’s “compromising”—Cut Social Security, cut Medicare, extend many of the Bush tax cuts

Debt Lock: Will Obama Make Cuts to Social Security and Medicare?

from Democracy Now! | Healthcare Reform by mail@democracynow.org (Democracy Now!)

Raul Grijalva’s office: “We categorically oppose any benefit or eligibility cuts” to Social Security, Medicare, Medicaid

Sam Stein: “Obama offered to raise Medicare eligibility age from 65 to 67 as part of the grand debt bargain”

Dems afraid Obama is giving away their electoral advantage on Medicare

Top Obama adviser says unemployment won’t matter to voters in 2012, as UE rises to 9.2%

RACISM, SEXISM, CIVIL LIBERTIES TODAY
“Fascism is the open terrorist dictatorship of the most reactionary sector of monopoly capital”
THE ECONOMY

     

Jobs follow-up: limits of monetary policy

from LBO News from Doug Henwood by Doug Henwood
 
THE ULTRA-RIGHT


      
ENVIRONMENT





NUCLEAR POWER


      

Headlines for July 14, 2011

from Democracy Now! | Healthcare Reform by mail@democracynow.org (Democracy Now!)

“POLITICS”

Ezra Klein, Paul Krugman: WH wants a “farther to the right” deal, not the McConnell plan

Well, that didn’t take long.

Less than 24 hours after Lawrence O’Donnell twice proclaimed Obama’s 11-dimensional genius for checkmating Mitch McConnell in a “clean bill” corner, we get a spate of news stories that confirms what I suspected — that the Dems may turn the McConnell window of opportunity into a door to Reagan dreams.

In plain words, Obama doesn’t want a clean bill after all; he wants his originalsafety-net-shredding offer.

Here’s Ezra Klein in the Wash Post (h/t Glenn Greenwald; my emphasis):

In my Bloomberg column today, I argue that the Obama administration is much more intent on reaching a deficit deal, and much less intent on making revenues a major part of it, than is commonly assumed. That’s led them to offer Republicans a deal that is not only much farther to the right than anyone had predicted, but also much farther to the right than most realize. In addition to the rise in the Medicare eligibility age and the cuts to Social Security and the minimal amount of revenues, it’d cut discretionary spending by $1.2 trillion, which is an absolutely massive attack on that category of spending.

This deal isn’t just a last-ditch effort to save the economy from the damage of a federal default. The White House would far prefer this deal to the McConnell plan, which would lift the debt ceiling without making any cuts at all.

That’s the fact, and Klein is good on the facts. The rest of the article deals with Klein’s view of their reasoning. Feel free to read; but agree or disagree with the reasoning, for Klein the facts above are not in dispute. This is what Obama wants.

Paul Krugman sees this as well (emphasis in original):

What Obama has offered — and Republicans have refused to accept — is a deal in which less than 20 percent of the deficit reduction comes from new revenues. This puts him slightly to the right of the average Republican voter.

So we learn two things. First, Obama is extraordinarily eager to make concessions. Second, Republicans are incredibly unwilling to take yes for an answer — something for which progressives should be grateful.

The chart in that short post is especially telling. It shows how Republicans, Indies, and Dems would balance Tax Increases and Spending Cuts. The most conservative group (Repubs, natch) want 26% tax increases. Obama wants 20%.

About that chess game — if you look behind you and the 11-dimensional genius isn’t back there, whispering great strategy into your shell-like ear, he’s the guy across the board taking your pieces.

Occam’s Switchblade: He’s not weak, but strong; his apparent goals are his real goals; he’s usually successful; and he does what he does because he wants to.

UPDATE: Digby piles on:

So basically they really are still counting on Morning in America to magically appear in time and think that massively cutting government will ruin the Republicans’ plans to complain. (Maybe that explains the Reagan comment yesterday.)

Indeed.    

Obama, Moderate Republican

from Paul Krugman by By PAUL KRUGMAN

OK, not exactly. But Nate Silver’s analysis of the budget proposals is a must-read. Nate looks at polling, and extracts the following implied preferences for the mix between tax increases and spending cuts in a debt deal:

What Obama has offered — and Republicans have refused to accept — is a deal in which less than 20 percent of the deficit reduction comes from new revenues. This puts him slightly to the right of the average Republican voter.

So we learn two things. First, Obama is extraordinarily eager to make concessions. Second, Republicans are incredibly unwilling to take yes for an answer — something for which progressives should be grateful.

Posted at 10:54 AM ET, 07/14/2011

The White House’s case for a big deficit deal


(Andrew Harrer – BLOOMBERG)A lot of Democrats took one look at the McConnell plan, which would raise the debt ceiling without substantive fiscal concessions, and saw their way out of this mess. But not the White House. What’s come clear in recent weeks is that the Obama administration is much more intent on reaching a major deficit deal, and much less intent on making revenues a major part of it, than most observers assumed.

That’s led them to offer Republicans a deal that is not only much farther to the right than anyone had predicted, but also much farther to the right than most realize. In addition to the rise in the Medicare eligibility age and the cuts to Social Security and the minimal amount of revenues, it’d cut discretionary spending by $1.2 trillion, which is an absolutely massive attack on that category of spending.

This deal isn’t just a last-ditch effort to save the economy from the damage of a federal default. The White House would far prefer this deal to the McConnell plan, or to the $2 trillion deal that was under consideration during the Biden negotiations. So why are administration officials so committed to striking a deal composed of policies they’ve mostly opposed? Here’s their thinking:

You can’t spend till you cut: The deficit is sucking the oxygen out of everything else in Washington. It isn’t just powerful as an issue in and of itself, but as a response to any significant investments the administration might propose. If you believe we need to do more on jobs, or more on anything, you need finish the deficit conversation. And as an added bonus, if you finish the deficit conversation in a way that convinces the American people you’ve made sacrifices and forced government to live within its means, you have, at least in theory, more credibility when proposing new initiatives that would expand the size of government again.

It’s your only shot at stimulus: A big deficit deal could include mild stimulative measures such as unemployment insurance and an extension of the payroll tax cut. That’s not much, but it’s better than nothing. A small deficit deal, or no deficit deal, won’t include any extensions of stimulus.

It’s a way to control the timing: If you strike a deal that lasts 10 years, you can backload the savings to protect the recovery over the next three or four years. If you don’t strike a deal, Republicans are likely to take out their frustrations on the 2012 appropriations, which is to say we won’t have much long-term deficit reduction, which most economists think we need, but we’ll have a lot of immediate austerity, which most economists think would be poison for the recovery. It’s the worst of both worlds.

Getting Obama reelected is important: The White House believes striking a major deficit deal would be good for Obama’s reelection chances. They also believe that getting Obama reelected would be good for the priorities that Democrats care about. President Mitt Romney’s spending cuts would be worse than theirs, his hostility to taxes would be more implacable than theirs, and he’d repeal or hollow out both the health-care law and financial regulation.

Deficit reduction is good economic policy, both now and later:There’s something close to a consensus view that we need deficit reduction within the next five to 10 years or the odds of the market turning on us rise to unacceptable levels. But many in the White House also believe that a credible commitment to deficit reduction in the long and medium term could help the economy in the short term. In his July 2 radio address, for instance, Obama said, “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

To put all this slightly differently, White House officials believe a big deficit reduction deal would do them enough good, both politically and economically, that it’s worth making very significant compromises on the details of that deal. If you thought getting to $4 trillion in deficit reduction was a Republican goal, you’re wrong. It’s the White House’s goal, and the only reason it might not happen is Republicans won’t let them do it.

As I write in my Bloomberg column today, the Republican Party has taken the exact opposite position as the administration: A deal won’t help them politically, and they don’t actually care about the deficit all that much, and so they’re much more interested in resisting compromises on the details than passing a big debt-reduction package. Put those two positions together and it’s pretty easy to see how the deal has moved so far to the right, and also why it’ll be very hard to close.

By   |  10:54 AM ET, 07/14/2011


Matt Taibbi: “Obama doesn’t want a progressive deficit deal”

I’m not posting this because it’s Taibbi (though there’s that added great-prose benefit). I’m posting this because he’s right — and everything in Obama’s behavior points to it.

Matt Taibbi, writing in Rolling Stone (h/t David Sirota; my emphases):

That Republicans are holding up what should be a routine, if unpleasant, decision to raise the debt ceiling in order to portray themselves as the uncompromising defenders of the budget-balancing faith (a howling idiocy in itself, given what went on during the Bush years) is obvious to most rational observers. It’s the obvious play for the lame-duck party entering an election year, and they’re playing it, with the requisite hysteria.

But what is becoming equally obvious, to both sides, is that the Obama White House is using this same artificial calamity to pitch its own increasingly rightward tilt to voters in advance of the 2012 elections.

It has been extremely interesting in the last weeks to see observers on both sides of the aisle make this point. Just yesterday, the inimitable New York Times conservative Ross Douthat listed Obama’s not-so-secret rightward push as a the first in a list of reasons why the Republicans should dig in even more, instead of making a sensible deal[.]

And what is Mr. Douthat saying? Stuff like this:

Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground.

The not-so-secret secret is that the White House has given ground on purpose. … Obama’s political team wants to use the leverage provided by those cra-a-a-zy Tea Partiers to make Democrats live with bigger spending cuts than they normally would support.

That’s Ross Douthat speaking, not Taibbi.

Matt thinks Douthat thinks that the Right should hold out for an even-more-rightward deal than Obama wants, in a game that could be called “Are you more Conservative than this? How about this? Now how about this?” (my formulation), with each side upping than ante until (Douthat presumes) Obama is dragged too far right for evenhis political team, or election chances.

In the meantime, Taibbi notes that Paul Krugman is saying much the same thing, but from the left:

Some of what we’re hearing is presumably coming from the political team, whose members seem to believe that a move toward Republican positions, reminiscent of former President Bill Clinton’s “triangulation” in the 1990s, is the key to Mr. Obama’s re-election.

(Our post on that article will be up shortly.)

In other words, Obama’s mask is slipping, and the scales are falling rapidly from increasingly perceptive eyes. After an excellent mulling of these thoughts, Taibbi concludes the obvious, by saying what’s finally obvious:

The blindness of the DLC-era “Third Way” Democratic Party continues to be an astounding thing. For more than a decade now they have been clinging to the idea that the path to electoral success is social liberalism plus laissez-faire economics – in other words, get Wall Street and corporate America to fund your campaigns, and get minorities, pro-choice and gay marriage activists (who will always frightened into loyalty by the Tea Party/Christian loonies on the other side) to march at your rallies and vote every November. They’ve abandoned the unions-and-jobs platform … That [Democrats] won’t do these things [support unions, wages, fair taxes, and the health & safety net] because they’re afraid of public criticism, and “responding to pressure,” is an increasingly transparent lie. This “Please, Br’er Fox, don’t throw me into dat dere briar patch” deal isn’t going to work for much longer. Just about everybody knows now that they want to go into that briar patch.

That’s Taibbi — color him unconfused and fully de-scaled (ocularly speaking).

But wait, maybe Team Smarter Than You is onto something. Maybe that Third Way, get-the-undecideds thing will work like it did with Clinton. What do you think?

Sorry, that answer’s too easy. (1) Clinton rode a bubble; Obama’s riding a bust.

(2) These are your discerning undecideds, courtesy of Chris Hayes, writing about his experience canvassing for voters in Wisconsin in 2004:

Undecided voters aren’t as rational as you think. Members of the political class may disparage undecided voters, but we at least tend to impute to them a basic rationality. We’re giving them too much credit. I met voters who told me they were voting for Bush, but who named their most important issue as the environment. One man told me he voted for Bush in 2000 because he thought that with Cheney, an oilman, on the ticket, the administration would finally be able to make us independent from foreign oil. A colleague spoke to a voter who had been a big Howard Dean fan, but had switched to supporting Bush after Dean lost the nomination. After half an hour in the man’s house, she still couldn’t make sense of his decision. Then there was the woman who called our office a few weeks before the election to tell us that though she had signed up to volunteer for Kerry she had now decided to back Bush. Why? Because the president supported stem cell research. The office became quiet as we all stopped what we were doing to listen to one of our fellow organizers try, nobly, to disabuse her of this notion. Despite having the facts on her side, the organizer didn’t have much luck.

Undecided voters do care about politics; they just don’t enjoy politics. Political junkies tend to assume that undecided voters are undecided because they don’t care enough to make up their minds. But while I found that most undecided voters are, as one Kerry aide put it to The New York Times, “relatively low-information, relatively disengaged,” the lack of engagement wasn’t a sign that they didn’t care. After all, if they truly didn’t care, they wouldn’t have been planning to vote. The undecided voters I talked to did care about politics, or at least judged it to be important; they just didn’t enjoy politics. …

Most undecided voters … seem to view politics the way I view laundry. While I understand that to be a functioning member of society I have to do my laundry, and I always eventually get it done, I’ll never do it before every last piece of clean clothing is dirty, as I find the entire business to be a chore. A significant number of undecided voters, I think, view politics in exactly this way: as a chore, a duty, something that must be done but is altogether unpleasant, and therefore something best put off for as long as possible.

Not the brightest, most discerning beasts in the forest.

Obama’s gearing up his $1 billion ad campaign (sorry, “2012 Democratic Presidential Reelection effort”), all aimed at these attentive, distinguishing minds. And, sorry to say, like most Democrats, he’s aiming at theirminds.

Reread that Hayes piece. Would you aim at their minds? The Republicans, should they acquire a real candidate, will aim a touch lower down.

Ezra Klein: More on Obama’s “compromising”—Cut Social Security, cut Medicare, extend many of the Bush tax cuts

Reporters have started digging into what Obama put on the table as part of his $4 trillion “Grand Bargain” offer to Republicans. First, we heard from Sam Stein at Huffington Post that Medicare was on the table and the knife was poised to cut it. All Boehner needed to do was say Yes.

Now there’s more from Ezra Klein. Stunning what Obama tried to give away (h/t Digby and Matt Stoller; my emphasis):

I knew the White House wanted a compromise on the debt ceiling. I just didn’t expect them to do quite so much, well, compromising.

Here’s what appears to have been in the $4 trillion deal they offered the Republicans: A two-year increase in the Medicare eligibility age. Chained-CPI, which amounts to a $200 billion cut to Social Security benefits. A tax-reform component that would raise $800 billion and preempt the expiration of the Bush tax cuts — which would mean, for those following along at home, that the deal would only include half as much revenue as the fiscal commission recommended, and when you add the effect of making the Bush tax cuts a permanent part of the code, would net out to atax cut of more than $3 trillion when compared to current law.

That last bit apparently killed the deal. But it was actually the biggest concession on the table. … The deal Obama offered Boehner would’ve traded away the option to force much more in revenues later in order to get slightly more in revenues now. And it would have thrown in a slew of entitlement cuts and spending cuts as a sweetener.

Note the word “sweetener.” Never thought of catfood as a sweetener, but maybe I don’t shop at those dollar stores enough.

Klein’s piece is titled “Why Liberals Should Thank Eric Cantor”. Indeed. As I tweeted yesterday, “Are we counting on Repubs to defeat O for us?” Seems Klein is on board with that.

About those Bush tax cuts, Digby adds:

Ezra mentions in passing that the administration has no intention of letting all the Bush tax cuts expire, which seems to set off alarms. But I’m fairly sure he’s talking about the middle class tax cuts. The problem in 2012, as it was last winter when they faced this last time, is that the cuts needed to be decoupled when the Democrats held congress and had some juice during the early days of the economic crisis. Had they been smart enough to permanently extend the middle class cuts at the time and leave only the tax cuts for the wealthy n a temporary basis, the Republicans would be in a much weaker position. As it is, they’ll hold the middle class tax cuts hostage in the next lame duck just as they did before.

I’ll take issue only with the bolded phrase. I’m becoming cynical enough to think that they were smart enough — to fool us into thinking they were dumb enough to do it wrong.

I think the failure to de-couple the two chunks of Bush tax cuts was deliberate. After all, Occam’s Switchbladesays he’s doing it because he wants to. Paul Krugman agrees.

Raul Grijalva’s office: “We categorically oppose any benefit or eligibility cuts” to Social Security, Medicare, Medicaid

In response to our previous post that progressives in Congress are looking a little “wobbly,” Adam Sarvana, Communications Director for Rep. Raul Grijalva, co-chair of the Congressional Progressive Caucus, states the following by email:

We categorically oppose any benefit or eligibility cuts to any of those programs. Each Member has to speak for him- or herself, but as for [Rep. Grijalva] — and this is his understanding for those others signing the letter — he will not vote for any plan that includes any such cuts.

In clarification, Mr. Sarvana said that “we” in the first sentence meant the dozen [CORR: actually two dozen] caucus “signers of the letter” to Obama, the strongly worded one referred to in our first post.

This seems unequivocal to me, at least from Rep. Grijalva. Thanks to him for that.

Let’s hope the entire caucus follows his lead. We need a firm stand from each of them, one that will not be bargained away. We’ve been “bargained” enough, thank you very much.

RACISM, SEXISM, 
 CIVIL LIBERTIES TODAY
“Fascism is the open terrorist dictatorship of the most reactionary sector of monopoly capital”

Marriage equality– are we fighting to get into a Norman Rockwell painting or for true liberation?

from Mondoweiss by Jessica Rechtschaffer

One couldn’t help but smile at the hundreds and thousands of people revelling in Pride and the legalization of gay marriage. The positive press about the LGBT community stood in stark contrast to the derogatory condemnations of “faggots and perverts” during the pre-Stonewall era 41 years ago. But there is more to marriage “equality” than meets the eye; and peel away the surface and you find politics, money and the limited expectations of the mainstream gay lobby at play.

Cuomo, Bloomberg and Quinn triumphantly marched down Fifth ave while the bands played and cheering crowds hailed Cuomo as the gay emancipator. What was ignored was that the same weekend that gay rights was beling celebrated, the NYPD raided a gay leather bar. What is also ignored was the police tried to shut down the revellers from the anti-assimilationist drag march from gathering outside the Stonewall Inn. While the press was cheering Bloomberg and his massive giveaway to Republican and Democrat legislators who supported the gay vote, not one reporter or mainstream gay rights activist asked publicly why Bloomberg had a sudden change of heart after using New York City tax dollars to fight gay marriage back in 2005. Cuomo was certainly crowned king of the day, he has secured the gay vote in New York and certainly in the nation. But, a week after the vote came through, Cuomo decided to allow fracking. What good is marriage equality when Cuomo has just given the green light to poison the water supply in New York State?

Lastly, there is the very meaning of marriage itself and the exclusionary nature of marriage legalization.

Like any subset of a population, gays are not a monolithic community.

But, over the past two decades, the largest and wealthiest, gay lobby, the Human Rights Campaign has been dominating gay rights by pushing a conservative, assimilationist and corporate driven agenda under the guise of “equality”. The HRC version of gay rights is a clean cut, well off white gay man and his partner. Well groomed (think Ellen) token Lesbians are included in their marketing. The HRC strives to portray the homosexual community as straight out of a Norman Rockwell painting or a Leave it to Beaver episode but with same sex couples who scream, “Don’t fear us, we want to be like you! Lobby groups like the HRC, and GLAAD are not about fighting for the rights for all members of the community but rather fighting for what is fundable for their organizations. Hence, the 60’s and 70’s cry of liberation has been the lobbyist agenda of equality and the emergence of the lowered expectations for queer rights. The three main goals of big gay are

1) Gay Marriage

2) Gays in the Military

3) Hate crimes.

These sound like laudable goals on the surface but they grossly limit our rights. For example. Gay marriage leaves out the rights of those who never want to get married and marriage equality opens doors for some, but shuts doors for others (this includes straight domestic partners). Domestic partners (straight and now gay) face even more pressure to get married in order to gain access to health plans, power of attorney etc. Already, those companies that do have a domestic partner access are now moving to terminate this option (already priced at a higher rate to consumers) now that marriage has been extended to the gay community.

The second issue, gays in the military, is another example of the politics of lowered expectations. In a time of war, why are so called progressive organizations fighting to allow gay cannon fodder for the military. Why aren’t these groups fighting to end all job descrimination?

The third issue is hate crimes. Again, it sounds good on the surface but we live in a society where 2 million people are incarcerated in the prison-industrial complex. Why not focus on education and prevention rather than after the fact, when a queer person has been brutalized and the perpetrator of that violence is then sent to prison where he can prey on imprisoned queers?

Real liberation, real rights for all queers is about working for not what’s low hanging fruit and what’s most fundable and advantageous for the most assimilated. Rather it is fighting for those in our community who are the most marginalized. It is fighting against continued police brutality and harrassment, it is fighting for the rights of queer homeless, queer prisoners and the transgendered community. It is fighting to for our acceptance with bias, both those who want to assimilate and those who refuse to follow the mainstream. This is sadly still all but ignored save by the radical pockets within the queer community who are still out there fighting hard for real liberation.

Jessica Rechtschaffer lives in New York.

Rolling Stone

Obama Doesn’t Want a Progressive Deficit Deal

Taibblog

by: Matt Taibbi

President Obama deficit progressive liberals Ross Douthat New York Times Republicans

President Obama meets with the Democratic House Caucus in the East Room of the White House.
Official White House Photo by Pete Souza

One expects the debt-ceiling mess to involve a lot of ostentatious chest-pounding on both sides, for despite the fact that this is a deadly serious issue – the fact that we’re even considering incurring an intentional catastrophe via a default is incredible, a testament to the bottomless stupidity inherent in our political climate – this whole debate is primarily an exercise in political posturing.

That Republicans are holding up what should be a routine, if unpleasant, decision to raise the debt ceiling in order to portray themselves as the uncompromising defenders of the budget-balancing faith (a howling idiocy in itself, given what went on during the Bush years) is obvious to most rational observers. It’s the obvious play for the lame-duck party entering an election year, and they’re playing it, with the requisite hysteria.

But what is becoming equally obvious, to both sides, is that the Obama White House is using this same artificial calamity to pitch its own increasingly rightward tilt to voters in advance of the 2012 elections.

It has been extremely interesting in the last weeks to see observers on both sides of the aisle make this point. Just yesterday, the inimitable New York Times conservative Ross Douthat listed Obama’s not-so-secret rightward push as a the first in a list of reasons why the Republicans should dig in even more, instead of making a sensible deal:

Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground.

The not-so-secret secret is that the White House has given ground on purpose. Just as Republicans want to use the debt ceiling to make the president live with bigger spending cuts than he would otherwise support, Obama’s political team wants to use the leverage provided by those cra-a-a-zy Tea Partiers to make Democrats live with bigger spending cuts than they normally would support.

Douthat makes this observation, then argues that the Republicans should recognize Obama’s hidden motive and hold out for an even better deal. It will then be a race to see which party can abandon employment in favor of deficit reduction faster. He writes:

Why? Because the more conservative-seeming the final deal, the better for the president’s re-election effort. In that environment, Republicans have every incentive to push and keep pushing. Since any deal they cut will be used as an election-year prop in 2012, they need to make sure the president actually earns his budget-cutting bona fides.

This is interesting because just last week, the liberal opposite of Douthat at the Times, Paul Krugman, came to the same conclusion:

It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.

One striking example of this rightward shift came in last weekend’s presidential address, in which Mr. Obama had this to say about the economics of the budget: “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

Krugman seems to believe that Obama has basically purged all of his real economic advisors and is doing what Bush did on foreign policy — engaging in complex and portentous policy initiatives at the behest not of experts, but political advisors. Just as Bush had Karl Rove telling him when and how to launch military invasions and drop bombs on unsuspecting foreign human beings in order to establish electoral credentials, Obama might be playing chicken with the budget for the benefit of undecideds in Florida and Ohio:

Some of what we’re hearing is presumably coming from the political team, whose members seem to believe that a move toward Republican positions, reminiscent of former President Bill Clinton’s “triangulation” in the 1990s, is the key to Mr. Obama’s re-election. And Mr. Clinton did, indeed, rebound from a big defeat in the 1994 midterms to win big two years later. But some of us think that the rebound had less to do with his rhetorical move to the center than with the five million jobs the economy added over those two years — an achievement not likely to be repeated this time, especially not in the face of harsh spending cuts.

The blindness of the DLC-era “Third Way” Democratic Party continues to be an astounding thing. For more than a decade now they have been clinging to the idea that the path to electoral success is social liberalism plus laissez-faire economics – in other words, get Wall Street and corporate America to fund your campaigns, and get minorities, pro-choice and gay marriage activists (who will always frightened into loyalty by the Tea Party/Christian loonies on the other side) to march at your rallies and vote every November. They’ve abandoned the unions-and-jobs platform that was the party’s anchor since Roosevelt, and the latest innovations all involve peeling back their own policy legacies from the 20th century. Obama’s new plan, for instance, might involve slashing Medicare and Social Security under “pressure” from the Republicans.

I simply don’t believe the Democrats would really be worse off with voters if they committed themselves to putting people back to work, policing Wall Street, throwing their weight behind a real public option in health care, making hedge fund managers pay the same tax rates as ordinary people, ending the pointless wars abroad, etc. That they won’t do these things because they’re afraid of public criticism, and “responding to pressure,” is an increasingly transparent lie. This “Please, Br’er Fox, don’t throw me into dat dere briar patch” deal isn’t going to work for much longer. Just about everybody knows now that they want to go into that briar patch.

Debt Lock: Will Obama Make Cuts to Social Security and Medicare?

from Democracy Now! | Healthcare Reform by mail@democracynow.org (Democracy Now!)

Obama_debt_buttonAs President Obama tries to broker a compromise budget deal that would allow Congress to raise the national debt ceiling before an August 2 deadline, he may appease Republicans by cutting funding for Medicare and Social Security. Congressional Democrats say they have ruled out any gutting of Social Security, but there are concerns the cuts could still be achieved through a backhanded approach. Retiree benefits are set by the Consumer Price Index, which is used to calculate cost-of-living benefits. Obama and top Democrats have left open the possibility of readjusting the CPI, which could effectively amount to a cut for Social Security recipients. For more on this debate, we speak with Rep. Raúl Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, which has sent President Obama a letter calling for the protection of Social Security and Medicare under any deficit deal. “It has nothing to do with a fiscal policy,” Grijalva says. “It has to do with ideological positions on social programs and domestic programs and how you dismantle and get rid of them. That’s the agenda. I think the American people see through this smoke and mirror.” [includes rush transcript]

Sam Stein: “Obama offered to raise Medicare eligibility age from 65 to 67 as part of the grand debt bargain”

The headline quotes the news from the Twitter. Here’s from Sam Stein’s Huffington Post article (my emphasis throughout):

In his press conference on Monday morning, President Barack Obama repeatedly insisted that he was willing to tackle some sacred cows as part of a larger package to raise the debt ceiling. Just how sacred, however, may surprise political observers.

According to five separate sources with knowledge of negotiations — including both Republicans and Democrats — the president offered an increase in the eligibility age for Medicare, from 65 to 67, in exchange for Republican movement on increasing tax revenues.

The proposal, as discussed, would not go into effect immediately, but rather would be implemented down the road (likely in 2013).

It’s getting ugly out there, even though there’s a touch of nuance in Stein’s report. For example:

Sources offered varied accounts regarding the seriousness with which the president had discussed raising the Medicare eligibility age. … “That is one of the things they put on the table as part of a big solution,” said one senior Republican Hill aide. … Obama’s willingness to embrace the idea, however, was seen as a major bargaining chip that could help win concessions from Republicans on revenues.

Stein adds:

A proposal to raise the eligibility age for Medicare — which was part of a budget plan put forth by Sens. Joseph Lieberman (I-Conn) and Tom Coburn (R-Okla.) — would face steep opposition from within the Democratic Party. The amount of money it would save is also relatively small[.]

About the first: In a perfect world, yes. We’re in the inverse-perfect world.

About the second, well … why would that stop Mr. Hope and Change from achieving his dream, becoming our century’s inverse–Franklin Roosevelt?

Is the offer still on the table? What else went on that table that we haven’t heard about yet?

(And thanks to Sam Stein for his excellent digging!)

Dems afraid Obama is giving away their electoral advantage on Medicare

from AMERICAblog: A great nation deserves the truth by John Aravosis (DC)

Top Senate and House Democrats are worried that the President is giving away their first big electoral issue advantage in years, preserving Medicare (and Social Security):

Senators Murray and Schumer, along with other Dems like Debbie Stabenow and Mark Begich, have warned against deep cuts in recent leadership meetings, a source familiar with the meetings says, another sign of the unrest that the possibility of serious entitlements cuts is creating among Congressional Democrats.

“We shouldn’t be giving away our advantage on Medicare,” said a source familiar with Murray’s thinking, in characterizing her objections in private meetings. “We should be very careful about giving away the biggest advantage we’ve had as Democrats in some time.”

“For the first time in the past two and a half years we have an unmitigated advantage on a single issue where our entire caucus is united,” the source continues. “This is a case where the whole morale of our party was lifted by the fact that we were taking the fight to Republicans.”

The President has always been a fan of bashing Democrats to his own policy and electoral advantage. Well, that would be mainstream Democrats in Congress and his base. The President doesn’t bash conservative Democrats because they’re an awful lot like Republicans, and he very much wants all of them to like him, so there’s very little bashing. But for the rest of Democrats, it’s bashapalooza.

Sometimes the bashing is overt (“professional left” comes to mind), and sometimes more subtle, such as when the President today equated Democratic concern about cutting Social Security and Medicaid to the pressure the Teabaggers are putting on Boehner (the President didn’t name any of them, he simply stated that both sides face pressure from people who don’t want change – thus creating his usual false equivalence in which he casts Democrats, and their constituents, as being just as bad as Teabaggers).

But consistent throughout the Obama campaign and administration has been the ease with which they cast friends and allies aside with nary a thought.  They expect you to be there for them, but they’re not big fans of being there for you – and will even demean you, and cast you aside, if it’s to their own perceived advantage.

Folks on the Hill seem to finally be waking up to the fact that the President’s electoral coattails aren’t meant to be ridden on, they’re meant to slap you in the face as he whizzes by to victory.

Top Obama adviser says unemployment won’t matter to voters in 2012, as UE rises to 9.2%

from AMERICAblog: A great nation deserves the truth by John Aravosis (DC)

Speechless.

“The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers,” Plouffe said, according to Bloomberg. “People won’t vote based on the unemployment rate, they’re going to vote based on: ‘How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?’ ” – White House senior adviser to the president David Plouffe

The article goes on to invoke the mythical “confidence fairy” who will magically create jobs once businesses have “confidence” that the deficit is under control. Because, you know, that’s how I make my hiring decisions – not based on how much money I have, and how consumer demand looks in the future, but rather, based on how the President is doing with the deficit negotiations.

Not to mention, it’s difficult to “believe the president makes decisions based on me and my family” when his top adviser is claiming that unemployment, which very much has affected me and my family, doesn’t matter.

I suspect Plouffe is playing the same card that top Obama advisers played to convince the President not to support a real stimulus. The economy is going to get better soon, the argument went at the time, so no need for a stimulus the size of which Krugman, Stiglitz and Obama’s own economics adviser said we needed. They’re hoping the same failed argument works on unemployment. Or perhaps Plouffe reflects a different thinking inside the White House, that voters actually care about the deficit and will reward the President for reaching a “historic” deal to garotte Social Security and Medicare, just like George Bush wanted, even though far too many of their family members are still unemployed or underemployed.

Yes, can’t feed the kids, can’t pay the mortgage, but thank God the long-term deficit will be under control in 2024.

THE ECONOMY

Invest in America

from Robert Reich

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Jobs follow-up: limits of monetary policy

from LBO News from Doug Henwood by Doug Henwood

A follow-up to the previous, inspired by another question from Corey:

I should have said in there that the reason that quantitative easing hasn’t worked well is that monetary policy is ineffective when an economy is this sick. It’s the classic “pushing on a string” situation. Corps have lots of cash – they’re just not investing or hiring. The financial markets are flush. You need fiscal policy to mobilize all that festering cash. Inflation is now about 4% – all because of commodities, because “core” inflation (ex food and energy) is only around 2%. It’s also clear the Fed isn’t going to go crazy and tighten out of a fear of inflation anytime soon, thank God. Some yahoos would love that, but Bernanke’s too smart and historically informed to do it. I think I’ll do a blog post a little later about Bernanke and the rot among our ruling class that will approach this from a different angle.

SYNDICATED COLUMN: Toxic Assets

from Ted Rall’s Rallblog by Ted Rall

Many Foreclosed Houses Are Infested by Mold

The next time someone tells you that capitalism is efficient, remember the mold houses.

I used to be a banker. Some of my customers had trouble making their loan payments. We usually had recourse to some sort of collateral—often real estate. But my bank really didn’t want to foreclose.

“We’re bankers,” my boss told me the first time this issue came up. “Not landlords.”

Back in the 1980s most banks held this view. Bankers sat on their butts in air-conditioned offices. They didn’t want to manage vacated properties, much less try to sell them. They understood banking. Banking was a straightforward business: take deposits, issue loans, collect the difference in interest as profit.

It was boring. Just the way they liked it.

My bank did a lot to avoid declaring a default. We lowered interest rates. We allowed skipped payments. Sometimes we even reduced principal.

Banking became exciting during the 1990s. Glass-Steagall got repealed, allowing formerly staid bankers to compete with high-flying Wall Street financiers in the securities business. Bank consulting firms invented big new fees for services that used to be free, like using an ATM.

Banks issued millions of home loans to borrowers whom they knew couldn’t afford to pay them back. Crédit Suisse estimates that such “liars’ loans” accounted for 49 percent of originations by 2006. Why they’d do it? Like mobsters, bank executives were “busting out” their companies—generating false short-term profits in order to collect annual performance bonuses. By the time the toxic chickens came home to roost, as they did in the form of the September 2008 financial crisis, they and their paychecks had moved on.

As the global financial system was in the midst of total collapse, greedy bankers conjured up a way to profit from the very misery they had caused. Rather than work with distressed homeowners who faced foreclosure (for example, refinancing subprime and adjustable rate mortgages into old-fashioned 30-year fixed mortgages) they dragged out the process in order to collect more late fees.

Banks were eager to foreclose. They were merciless. They evicted homeowners while they were on active-duty serving in Iraq and Afghanistan, a violation of federal law. They even evicted people who didn’t owe them a cent.

Now banks are sitting on top of nearly a million homes. “All told, [banks] own more than 872,000 homes as a result of the groundswell in foreclosures, almost twice as many as when the financial crisis began in 2007, according to RealtyTrac, a real estate data provider,” reports The New York Times. “In addition, they are in the process of foreclosing on an additional one million homes and are poised to take possession of several million more in the years ahead.”

Which is where the wonderful tragic tale of the mold houses comes in.

“In most homes,” reported NPR recently, “as residents go in and out and the seasons change, natural ventilation sucks moisture up to the attic and out through the roof. It’s called the ‘stack effect.’ And in many parts of the country, it’s driven by air conditioning in the summer and heat in the winter. But no one is going in or out of most foreclosed homes—regardless of climate—and the effects can be devastating.”

Far from the profit center imagined by freshly-minted analysts with MBAs, empty houses depreciate faster than a new car driving off the lot. They fall apart quickly. Mildew and mold sets in, some of it toxic.

“In some states, it’s estimated that more than half of foreclosed homes have mold and mildew issues,” reported NPR. “Realtors across the country say they’re seeing the problem in everything from bungalows to mansions.”

Turns out those old-fashioned bankers were on to something. Bankers shouldn’t become landlords.

A minor mold problem starts at $5,000 and can easily run $20,000 or more. Considering that the average house in the Midwest is valued at $136,000, that’s not insignificant. Many houses with toxic mold have to be demolished.

Greed may be good. But it doesn’t always pay.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL

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