We don’t need a balanced budget, we need jobs.


So the drama is still not over. House Speaker Boehner’s plan, which now includes a balanced budget provision to appease the Tea Party legislators, was voted through Congress and killed within hours by the Senate, as expected. What does it all prove? Just that as far as the Tea Partiers are concerned, their ideological interests are more important than that of the country. The nation for them only includes older, more prosperous, white citizens. African-Americans, Hispanic-Americans, unemployed Americans, and any other Americans who don’t fit the Tea Party profile just don’t exist for them.

As the clock ticks down to Tuesday, a compromise resolution has to be devised that can get enough votes in the Senate and Congress to pass. Reid and McConnell in the Senate are concocting another plan that would cut more than $2 trillion and put the onus on Obama to raise the debt ceiling. What do Democrats get out of it? Absolutely nothing! The Republicans have effectively staged a fake fiscal crisis to force through cuts they want and have the Obama administration enforce them.

How did we get to this point? The historical context is that Obama abandoned the economic stimulus in 2009 when his Wall Street advisers declared inflation to be a greater problem than recession, but when (as government figures now show) the economy was in far worse state than he realized. Democrats missed their moment in 2009 to let the Bush tax cuts expire and paid a huge political price when Obama agreed to extend them.

David Kurtz in TPM notes that: “by the fall of 2009, the Obama Administration had already decided the recession was so yesterday that it was time to shift into deficit-reduction mode. … You can draw a straight line from the President’s decision in the fall of 2009 to the current default crisis. I don’t want to downplay the impact of the Republican Party taking over control of the House in the 2010 elections — obviously that was a pivotal moment — but the 2010 elections were contested on a battlefield of the GOP’s choosing: that spending was wildly out of control, deficits were threatening the stability of the economy, and long-term debt would strangle the country. The President basically agreed, ceding vast acreage of political, rhetorical and policy ground to the Republicans.”

For all his rhetoric in 2008, Obama has never seen the social movement that elected him as an independent force for change. As a Harvard-trained lawyer, he sees social power as residing in the institutions of the political elite. He sees real change as something to be negotiated at the top. That’s why he has always held aloof from clear political stands so as to be the central mediator.

Paul Krugman points out Obama’s conservative inclinations: “Bruce Bartlett, who served as a policy analyst in the Reagan administration, argues that Mr. Obama is in practice a moderate conservative. Mr. Bartlett has a point. The president, as we’ve seen, was willing, even eager, to strike a budget deal that strongly favored conservative priorities. His health reform was very similar to the reform Mitt Romney installed in Massachusetts. Romneycare, in turn, closely followed the outlines of a plan originally proposed by the right-wing Heritage Foundation. And returning tax rates on high-income Americans to their level during the Roaring Nineties is hardly a socialist proposal.”

Obama is fond of quoting Jefferson on the need to compromise. As he said in his speech last Monday: “America, after all, has always been a grand experiment in compromise. … We have engaged in fierce and passionate debates about the issues of the day, but from slavery to war, from civil liberties to questions of economic justice, we have tried to live by the words that Jefferson once wrote: ‘Every man cannot have his way in all things…Without this mutual disposition, we are disjointed individuals, but not a society’.”

But his view of US history as a record of compromises ignores the violent clashes (against the British) that made possible the compromise in the constitution between the northern wealthy and southern slaveholders like Jefferson. The constitutional compromise didn’t prevent the Civil War from happening 80 years later; after the Northern victory, another compromise was reached which undermined Reconstruction and let the southern states retain disproportionate leverage within the US political system.

The victory of the civil rights movement – a culmination of generations of struggle against Jim Crow — brought an end to the compromise of northern liberals with the racist southern Democrats, who decamped to the present-day Republicans. What would have happened if Martin Luther King had decided the movement could only achieve the politically possible?

Through the Republicans, the super-rich and Wall Street financiers have made a declaration of class war. Economist Michael Hudson, talking about the Greek debt crisis, comments that “Like military conquest, [the aim of finance] is to gain control of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentrating social as well as economic planning in centralized hands. This is what now is being done by financial means, without the cost to the aggressor of fielding an army. But the economies under attack may be devastated as deeply by financial stringency as by military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight. …

“Like any monopoly or vested interest, the financial strategy seeks to block government power to regulate or tax it. From the financial vantage point, the ideal function of government is to enhance and protect finance capital and ‘the miracle of compound interest’ that keeps fortunes multiplying exponentially, faster than the economy can grow, until they eat into the economic substance and do to the economy what predatory creditors and rentiers did to the Roman Empire.”

Obama doesn’t even recognize that this is war, and desperately seeks to achieve some sort of agreement. We need a different plan. Instead of setting their political compass by extremist Republican zealots, Democrats have to stand for something. The Blue Dog Democrats who agree with the Republicans have to go, and progressives voted in. What should they stand for? Eugene Robinson of WaPo has a suggestion: “In the midst of a profound economic slump, with unemployment at crisis levels, we’ve just had a long and bitter budget debate that wasn’t about how government might try to create jobs. It was about budget cuts that will eliminate jobs. … Obama talks about ‘winning the future,’ but that’s too nebulous. I’d suggest something pithier: jobs, jobs, jobs.”

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One response to “We don’t need a balanced budget, we need jobs.

  1. Not Yet a Sansculotte

    The picture the Colonel paints is breathtaking in its historical breadth and accuracy–he marshals the evidence to show that in renewing the Bush tax cuts, Obama capitulated to the Republican party and showed his colors as
    the conservative moderate he is. It has always struck me as bizarre to see Republican voters claim Obama is a socialist, when he has enacted policies that Bush himself would not dare, such as the dismantling of Social Security and Medicaid, and directed the Democrats to embrace a vision of austerity for the middle and working classes that is at odds with the progressive vision of FDR, which sought to equalize opportunities in the country.

    Under Obama’s leadership, we are about to inherit a dystopia of reduced possibilities and a cheapening of the word “hope,” which he sold like snake oil in his past campaign. But if Obama fits the description of a Wild West huckster, the Republicans–not to be outdone–are behaving like cult leaders directing their leaders and followers to swallow the kool-aid without asking questions before the massacre follows. Their behavior is reckless, irresponsible, and obscene. They are playing Russian roulette with millions of lives, as a good friend of mine said.

    Any modest-income American–and by that I mean anyone who makes anything less than 50,000–who believes that he or she will somehow benefit from the Republican plan and the policies that are being implemented in the name of “compromise” has missed the tremendously important point the colonel makes. The current “crisis” is a war of a certain segment of the rich against the middle class and the poor, which as Despard suggests, carries more than the whiff of an economic exclusionism that will translate into a system of economic apartheid in the next fifteen to twenty years, should financiers, Republicans and Blue Dog democrats get away with it. That this system is being implemented by the country’s first African American president is a tragic irony that I am glad Martin Luther King did not live to see.

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