Under cover of catfight, Republicans promote austerity

President Obama on Monday night appealed to the American people over the heads of Congress to help resolve the legislative impasse over the national debt. His call for “shared sacrifice” and reinstatement of the notion of the greater good clearly resonated with many voters, since the phone lines and email servers for the Capitol were jammed the next day as viewers followed Obama’s advice to contact their congressional representatives.

As E.J. Dionne wrote in the Washington Post, “Obama’s speech spoke more to middle-of-the-road Americans than Boehner’s did because Obama was clearly talking to them. Boehner has to prove over and over that he’s faithful to the folks at the right end of his caucus, and it’s starting to take a toll.”

However, the speech was too late to have any effect on what Congress will eventually pass. The rival plans of Republicans and Democrats each cut trillions of dollars from government spending with no increase in tax revenue. Obama supports the Senate Reid plan, but it consists entirely of cuts and asks for no sacrifices from the rich. There is so little difference between the plans now that the whole debt limit issue is clearly an excuse for a  political catfight.

The debate is taking place in a Washington bubble while the rest of the country worries about jobs. To put it more in context, the mentality in Congress today is the opposite of what prevailed at the time of the bank bailouts. Then, spending $13 trillion to rescue large financial institutions was no problem. Now the political class are saying that there’s nothing left in the Treasury, so the middle class and working poor will have to pay for the economic mess the banksters created. With no more stimulus and less government spending the economy will inevitably contract in a double-dip recession. Unemployment would then soar up from its present level.

Josh Marshall comments: “It is not partisan or spin to say that the Democrats have repeatedly offered compromises. The real driver of the debate is that the fact that Republican majority in the House can’t agree to win.” The GOP coalition has in fact splintered into open warfare over whether to pass any kind of increase at all on the debt limit. As TPM explains, “More traditional Republicans and big business types are desperate to avoid a recovery-crushing default. But their Tea Party colleagues are leading a rebellion of epic – perhaps even galactic – proportions.”

The New York Times reports further that “The U.S. Chamber of Commerce, which spent millions of dollars last year helping elect Republicans to Congressional seats, is struggling to convince the House it helped to build that the debt ceiling must be increased. … But as the government runs out of money, those efforts have not produced the desired result. The freshman class of House Republicans, along with longer-serving members, is balking at Mr. Boehner’s plan, let alone anything that Senate Democrats and the White House might be willing to accept. The tension highlights the distance between the pro-business stalwarts of the traditional Republican Party and the populism of its newer representatives, many of whom seem to view Wall Street and Washington with equal suspicion.”

While Cantor now supports Boehner’s plan, so far he has been unable to marshal these populist legislators behind it.  His influence with the Tea Party caucus depended on a coincidence of their ideological positions with the interests of the banking securities and investment sector, which contributed $1.85 million to Cantor’s election campaign in 2010. For the past four years, he has been fighting against changes in the tax code affecting hedge fund managers, who pay only 15 per cent on commissions from their investors’ profits, instead of the 35 per cent for ordinary income. “[Hedge fund] lobbyists said in interviews that it has been highly beneficial to have Cantor as a lead negotiator. And it didn’t hurt that Cantor’s opposition to the specific proposals had blended into the Tea Party’s overall anti-tax stance, said one lobbyist, speaking on the condition of anonymity.”

The problem is that Obama and the Democrats have not challenged the Republicans’ frame for the debate. As Dionne points out in WaPo, “Because the president and many Democrats have been complicit in making the deficit the centerpiece of theWashington conversation, they have left unanswered the Republican claim that cutting spending would help create jobs. That’s a view rejected even by economists who favor long-term deficit reduction. Yet Republicans and conservatives have clearly moved [public] opinion toward the idea that spending cuts equal more jobs.”

Economist James Crotty of UMass Amherst explains in a RealNews TV interview how Obama’s acceptance of the need for austerity policies brings him into line with the EEU’s ratcheting down of the economies of Greece and Ireland. The push for austerity internationally is coming from the major investment banks who want the value of the loans they make to governments safeguarded even if it cripples the economy. Having accepted trillions in bailout money and walked away with huge payouts, the banks now say they will only lend money to governments so long as the governments follow the policies they dictate.

Moreover, the devastating crisis created by financial institutions has empowered neoconservatives and really hardcore rightwingers like the Koch brothers who want to roll back the gains people have made since the Second World War.  “This is an opportunity for them to defeat the forces that created the social welfare system,” said Crotty.

However, what has not been visible in the media so far is the resistance of ordinary Americans to these plans. There is no reason to suppose they will be more docile than Greek workers if Social Security and Medicare is cut to pieces. The reaction of voters to Obama’s speech is one indication of their suppressed anger; another is the extent of support in Wisconsin for the recall of Republican legislators who voted for the ending of collective bargaining rights for state workers.

Greg Sargent of WaPo reports that the “[conservative group] Club for Growth Wisconsin has dumped at least $1.5 million into the recall races, according to the progressive group One Wisconsin Now, which tells me it got the information from its ad tracker. Even more tellingly, the Club has poured a surprising $400,000 into the battle to recall state senator Alberta Darling, who was once viewed as safe … If labor and Dems can knock off Darling, it would be a major coup: She is the co-chair of the legislative committee that passed Scott Walker’s union-busting proposals.”



Filed under Obama, political analysis, populism, Tea Party movement, Uncategorized, US policy, Wisconsin

3 responses to “Under cover of catfight, Republicans promote austerity

  1. Not Yet a Sansculotte

    The Colonel’s analysis elaborates how the financier and banking class have hijacked our political processes, corrupting and eviscerating our democracy one representative and senator at a time .The Supreme Court (shaped in turn by the executive), in removing all restraint in election spending, has ensured that our government will go to the highest bidder.

    The debate in Washington should really be called the Battle of the Billion-million-aires, since at this point what is being debated is not whether we, the 98% of Americans who are not filthy rich are going to suffer a reduced standard of living–it has been decided somewhere without our consent that we are–but rather how it’s going to be carried out. That as the Colonel points out, there was no problem using public moneys to bail the banks out, while now they are defaulting on their obligations to the state –and that’s the rest of us, people–by refusing to pay taxes and paying for irresponsible, intransigent bullies in Congress who care nothing about the average Jane, is nothing short of a coup d’etat being carried out before our very eyes.

    Whereas in South America such things happen violently with the help of the military and some kind of U.S. involvement, this one is being carried out in the velvet corridors of power, in rooms of unthinkable luxury, the board rooms of banks, and corporations. The MSM (mainstream media) has also played its part by not calling out this insane state of affairs.

    I applaud the Colonel for pointing out that the American people will not take this without a fight, as what is happening in Wisconsin shows. It’s interesting he brings up the efforts of the conservative business group in Wisconsin to defeat a Tea Party Republican, a sign that indicates that just as there are fractures within the Republican party, there are signs of a fracture in the wealthy class between day-to-day businesses and the financiers. I pin my hopes on this fracture, since plutocrats–today’s aristocrats–have traditionally had to fight it out with small business people–yesterday’s petit bourgeois–and the professional and working classes.

    What the Republicans are doing in the name of the rich and the corporations that house them is both unfair and un-American. As President Obama pointed out, shared sacrifice for the greater good is what must prevail in any country that values its civic and public institutions: and this idea, which has hitherto ensured that the United States succeeds as the great experiment of the enlightenment, is what is at stake here. The rich have certainly lost sight of this idea; the Republicans acting for them would laugh in my face for all their claims to patriotism, and the Democrats –with the exception of the Presiden’t address–have not really impressed on the American people the seriousness of the situation.

    As W.B. Yeats put it, “The best lack all conviction / and the worst are full of passionate intensity.” And what beast is making its way to America? We’re about to find out.

  2. tompainesghost

    I should just clarify that the conservatives in Wisconsin are trying to safeguard a Republican state senator’s seat against a recall effort mounted by the Democrats. The significance is that they are clearly worried Wisconsin voters will replace her with a Democrat.

  3. Pericles

    Colonel thanks for writing such an insightful comment regarding the debt ceiling debate. It seems that both parties cannot come to a compromise on how to raise the debt ceiling. Colonel you are quite correct in pointing out that the democrats in some way have failed to point out there agenda and clearly have in some parts been swayed by the Republican argument in not raising taxes for the rich. The debate now stands that the debt will be reduce by cuts instead of raising revenue. This is going to hurt more people since most Americans are dependent on this programs. For the nation to default on its debt will be a calamity for job creation in an economy that is struggling. The Republicans are not seeing this. They are so closed minded that they are risking the future of the nation for a trillion dollar cuts.

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