Obama Isn’t Trying To Start ‘Class Warfare’ — He Wants To End The Republican War On The Middle Class
History will record that on September 19, 2011, the Republicans made a huge political miscalculation — a miscalculation that could potentially doom their chances for victory next year.
If I were a Republican, the last thing I’d want to talk about is “class warfare.”
For 30 years — whenever they have been in power — Republicans and their Wall Street/CEO allies have conducted a sustained, effective war on the American middle class.
Much of the success of their war has resulted from their insistence that it didn’t exist. They have talked instead about how the economy needs to reward all those “job creators” whose beneficence will rain down economic prosperity on the rest of us.
They fund right-wing organizations that divert our attention by whipping up worry that gay marriage will somehow undermine heterosexual relationships. They start wars that help pad the bottom lines of defense contractors but do nothing to make us safer.
And all the while they quietly rig the economic game so that all of the growth in the Gross Domestic Product goes into the hands of the top two percent of the population — while they cut our pay, destroy our unions and do their level best to cut our Social Security and Medicare.
There has been a “class war” all right — a war on the middle class. And the middle class has been on the losing end.
Today the truly rich control a higher percent of our wealth and income than at any other time in generations. Income inequality is higher than at any time since 1928 — right before the Great Depression.
According to the Economic Policy Institute, “the richest five percent of households obtained roughly 82 percent of all the nation’s gains in wealth between 1983 and 2009. The bottom 60 percent of households actually had less wealth in 2009 than in 1983… ”
Today, 400 families control more wealth than 150 million Americans — almost half of our population.
American workers have become more and more productive — but they haven’t shared in the income generated by that increased productivity, so now they can’t afford to buy the products and services they produce.
The success of the Wall Street/CEO/Republican war on the middle class rests, in part, in the old frog in boiling water story. If you put a frog in a pot of boiling water, they say, the frog will jump right out. But if you put a frog in a pot and gradually turn up the heat until it boils you end up with a cooked frog.
Republican policies have gradually shifted wealth, income and power from the middle class — and those who aspire to be middle class — into their own hands and for obvious reasons they haven’t wanted to focus too much attention on “class warfare.”
So now if the Republicans want to talk about “class warfare” — in the words of George Bush — “bring ’em on.”
In fact, President Obama isn’t proposing to start a “class war” — he wants to end the war on the middle class.
Among other things, he has proposed that America live by the “Buffett Rule” — by Warren Buffett’s suggestion that he and his fellow billionaires should have to pay effective tax rates at least as high as their own secretary’s.
Obama pointed out yesterday that requiring hedge fund managers to pay effective tax rates as high as plumbers and teachers was not “class warfare.” The choice is clear: either you increase taxes on the wealthy — or dramatically cut Medicare, Medicaid and Social Security benefits. It is, as the President said, “simple math.”
Whereas Republican proposals to rein in the deficit by cutting Social Security, Medicare and Medicaid benefits are intended to continue this war on the middle class, the President’s plan — in stark contrast — addresses the three factors that actually caused the deficit in the first place.
From 1993 until 2000, Bill Clinton had successfully pushed back much of the Republican anti-middle class agenda. When he left office, America had a prosperous, growing economy, increasing middle class incomes, and budget surpluses as far as the eye could see.
Bush changed all that. The anti-middle class warriors were back in power, and they took the offensive. They passed massive new tax breaks for the rich, and set out to break unions.
Three Bush/Republican policies led directly to today’s deficit:
• Giant tax cuts for the wealthy;
• Two unpaid-for wars that will ultimately cost trillions;
• Trickle-down economic policies that did not create one net private sector job and ultimately caused the financial collapse that led to the Great Recession.
The Obama deficit proposal reduces the deficit by directly addressing these three factors — that actually caused the deficit — rather than demanding that the budget be balanced by taking even more out of the pockets of ordinary Americans.
A trillion dollars — 1.2 trillion with interest — is cut by ending the Wars in Iraq and Afghanistan. Those who argue that you shouldn’t count these reductions toward deficit reduction, because Obama already planned to end these wars, are ignoring the fact that they were a big reason why we have a deficit in the first place.
Second, Obama’s proposal eliminates the Bush tax cuts for the rich — and demands that millionaires, billionaires, oil companies, and CEO’s who fly around in corporate jets, pay their fair share.
Finally, the Obama plan includes a robust jobs package to jumpstart the economy and put America back to work. The Republicans have no jobs plan at all — none whatsoever. In fact, their plan is to simply let the Wall Street bankers and CEO’s continue to siphon as much as possible from the pockets of ordinary Americans.
The combination of Obama’s jobs and budget plans have set the stage for a clear, sharp battle for the soul of America. They have posed a stark contrast that is not framed as a battle over conflicting policies and programs — but as a struggle between right and wrong.
That battle will continue throughout this fall — and into next year’s elections.
These proposals, coupled with the President’s urgent, passionate advocacy, have transformed the political landscape.
The major iconic fights that will dominate American politics over the next 14 months will be the President’s jobs proposal, his call on millionaires and billionaires to pay their fair share, and the Democratic defense of Social Security, Medicare and Medicaid.
Democrats and Progressives have the high political ground on every one of these defining issues — and I don’t just mean slightly higher political ground — I mean political ground like Mount Everest.
By huge margins, Americans prefer to raise taxes on millionaires and billionaires rather than cut Social Security and Medicare. The choice is not even close — in most polls something like 8 to 1.
And who can possibly question that the number one priority of voters everywhere in America is jobs?
The Republican policies that led to the Great Recession did more damage than anyone knew. Many Republicans actually thought they would benefit politically by the long, slow economic slog that ensued in its aftermath. After all, no sitting President had won re-election in a century when the economy was not good or materially improving — except one.
Harry Truman won re-election in the midst of a bad economy in 1948 by running against the “Do-nothing Republican Congress.”
President Obama’s jobs and budget proposals have set the stage for just that kind of battle.
His proposals have simultaneously energized the progressive base and appealed to middle class swing voters — especially seniors — who agree entirely that the government should keep its hands off the Social Security and Medicare benefits they have earned, and turn instead to taxes on millionaires and billionaires to close the budget deficit that the Republican “class warfare” policies have created.
And it won’t hurt that these proposals have prompted the Republicans to turn the spotlight on the subject of “class warfare” itself. They should be careful what they wish for.
By: Robert Creamer, Strategist and Author, Published in HuffPost, September 20, 2011
The GOP’s Lies And ‘Monstrous’ Lies
In politics these days, there are lies, “monstrous lies,” and statistics. By lies I mean the mundane nonsense that dribbles out of politicians’ mouths when the facts don’t suit them or they just don’t know any better. By “monstrous lies,” if I can borrow the phrase of the moment, I refer to the grander deceptions swallowed by whole political movements, delusions and deceptions that infect larger issues of policy and worldview.
Statistics in this case, along with pesky facts, help expose and distinguish the two species of falsehood—both of which have been on dramatic display during the GOP presidential primary campaign.
Take, for example, Michele Bachmann, who is practically a walking, talking full-employment plan for journalistic fact-checkers. Appearing at last week’s Republican debate (sponsored by CNN and the Tea Party Express—does that mean that the Tea Party is now part of the lamestream media?), Bachmann repeated a favorite talking point, that the Constitution forbids states to mandate that their citizens buy health insurance, Romneycare-style. “If you believe that states can have it and that it’s constitutional, you’re not committed” to repealing the Affordable Care Act, she argued. But the conservative case against the healthcare law rests on the notion that because the Constitution does not explicitly authorize such a law, the federal government is barred from instituting one. Since the 10th Amendment reserves powers not delegated to the federal government back to the states, it is constitutional for, say, Massachusetts to require its citizens to purchase health insurance (or car insurance, for that matter). Bachmann’s stance, one blogger at the influential conservative blog Red State argued, is “either ignorance on display or dishonest pandering.”
Bachmann was even more egregious after the debate, when she went on Fox News Channel, and later the Today show, and asserted that Gardasil, the vaccine that Texas Gov. Rick Perry had tried to mandate for Texas schoolgirls, caused “mental retardation.” It’s such whole-cloth twaddle that even the likes of Rush Limbaugh (“she might have jumped the shark”) and the Weekly Standard (“Bachmann seemed to go off the deep end”) blasted her for it.
But Bachmann is literally and figuratively small potatoes, Perry’s arrival having returned her to the lower tier of GOP contenders. And she is minor league compared to Perry in the “monstrous lie” department.
The phrase of course comes from his memorable description of Social Security. “It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’ve paid into a program that’s going to be there,” Perry said at his first presidential debate. “Anybody that’s for the status quo with Social Security today is involved with a monstrous lie to our kids, and that’s not right.” Elsewhere he has called the program “by any measure … a failure” and cited it as “by far the best example” of an extra-constitutional program “violently tossing aside any respect for our founding principles.”
It’s a catchy turn of argument, but one monstrously divorced from reality. His “failure” kept nearly 14 million seniors and 1.1 million children out of poverty last year, according to Census Bureau data. Here are the facts about Social Security: Without any modification, it will pay out full benefits for the next 24 years. Starting in 2035, its trust fund will no longer be able to pay full benefits. Instead it will pay roughly three quarters benefits through 2084, which is as foreseeable a future as anyone can peer into in these matters—a problematic future, but hardly a monstrous one and certainly not an impossible one.
Indeed, the Congressional Budget Office has produced 30 policy recommendations, some combination of which could fix the Social Security shortfall. Here’s one: Remove the payroll tax cap so that more wages are subject to the payroll tax. That would make the program solvent for the 75-year window—again, hardly a monstrous situation. (To put it another way, the Social Security shortfall figures to be roughly 0.8 percent of GDP—roughly the same as the cost of extending the Bush tax cuts over the same period.)
Social Security wasn’t the only topic this week of Texas-size Perry misinformation. Obama “had $800 billion worth of stimulus in the first round of stimulus,” Perry said. “It created zero jobs.”
This gem—a staple of GOP talking points—earned a “Pants on Fire” rating from PolitiFact, which pointed to several independent analyses that came to quite different conclusions. The Congressional Budget Office has estimated that the first round of stimulus created or saved between 1.3 million and 3.6 million jobs; HIS/Global Insight put the number at 2.45 million, Macroeconomic Advisers at 2.3 million, and Moody’s Economy.com at 2.5 million. The GOP may disdain jobs that come from public spending (recall Speaker John Boehner’s “so be it” comment when asked about budget cuts leading to fewer jobs), but they cannot seriously argue that the economy would be better off if the ranks of the unemployed were 2.5 million persons more swollen. So instead forgo the inconvenient truth in favor of the monstrous lie.
These lies are monstrous because they are not one-offs, but are central to the GOP case—that Social Security (except, they are quick to add, for those currently on it) and the stimulus plan don’t work. So they have real-world policy consequences—see the emerging conservative line of attack against Obama’s American Jobs Act, that it is a stimulus retread. “Four hundred-plus billion dollars in this package,” Perry concluded at the debate. “And I can do the math on that one. Half of zero jobs is going to be zero jobs.”
He may be able to do math, but his grasp on the facts is tenuous at best.
By: Robert Schlesinger, U. S. News and World Report, September 22, 2011
John Boehner In GOP Fantasyland
One wonders why Congress convened its budget-reforming “supercommittee” at all; House Speaker John Boehner (R) on Thursday announced that he’d done all its members’ work for them.
At a speech to the Economic Club of Washington, Boehner articulated a hard-right line on taxes that even the most moderate of Democrats could never accept. Remove loopholes from the tax code, he argued, but “not for the purpose of bringing more money into the government.” Tax increases? Not a chance — they “are off the table,” Boehner said, repeating the dubious argument that planning to raise revenue many years down the road would hurt job creation now. If you’re looking for deficit reduction, Boehner barked, “the joint committee only has one option — spending cuts and entitlement reform.”
A new Bloomberg poll on Thursday reconfirmed voter anger at Washington’s inability to compromise — on budgets, on jobs policy, on long-term deficits. On the same day, the speaker gave a lesson by example of why it’s been so hard.
True, Boehner’s speech followed news that President Obama is scaling back the entitlement reforms he would favor in a long-term budget reform package, retreating from concessions he was willing to make over the summer to strike a debt deal. Both sides, then, are hardening their positions. But Obama’s remains politically braver than Boehner’s, since the president says he still wants to achieve some balance between raising revenue and cutting spending through reforms to Medicare, the protection of which Democrats are desperate to use as a campaign issue.
That is the key to deficit-cutting, drilled home in study after study: You can’t expect to fix America’s finances with tax increases alone or with spending cuts alone. Plans that lack this essential balance would fail either because their math doesn’t add up (the GOP’s Ryan plan) or because they would be reversed the second the other party took control of the government (the Congressional Progressive Caucus’s proposal…and the Ryan plan).
A deficit plan must also be balanced in another way — against premature budget austerity while the economy is sluggish, which Obama designed his latest jobs plan to avoid. Boehner said on Thursday there might be room for limited agreement with Obama. But not much, signalling disapproval of even the sorts of temporary tax cuts that would have been an obvious choice for Republicans for decades — until now.
Boehner might just be gearing up for further negotiations. But the speaker’s demonstration that he and his party are still in thrall to the ideological fantasies he described on Thursday aren’t going to enhance Americans’ confidence — in their leaders, or in their economic future.
By: Stephen Stromberg, The Washington Post, September 15, 2011
“Love Thy Neighbor As Thyself”: Where Are The Compassionate Conservatives?
We heard plenty of contradictions, distortions and untruths at the Republican candidates’ Tea Party debate, but we heard shockingly little compassion — and almost no acknowledgement that political and economic policy choices have a moral dimension.
The lowest point of the evening — and perhaps of the political season — came when moderator Wolf Blitzer asked Ron Paul a hypothetical question about a young man who elects not to purchase health insurance. The man has a medical crisis, goes into a coma and needs expensive care. “Who pays?” Blitzer asked.
“That’s what freedom is all about, taking your own risks,” Paul answered. “This whole idea that you have to prepare and take care of everybody. . . .”
Blitzer interrupted: “But Congressman, are you saying that society should just let him die?”
There were enthusiastic shouts of “Yeah!” from the crowd. You’d think one of the other candidates might jump in with a word about Christian kindness. Not a peep.
Paul, a physician, went on to say that, no, the hypothetical comatose man should not be allowed to die. But in Paul’s vision of America, “our neighbors, our friends, our churches” would choose to assume the man’s care — with government bearing no responsibility and playing no role.
Blitzer turned to Michele Bachmann, whose popularity with evangelical Christian voters stems, at least in part, from her own professed born-again faith. Asked what she would do about the man in the coma, Bachmann ignored the question and launched into a canned explanation of why she wants to repeal President Obama’s Affordable Care Act.
According to the Gospel of Matthew, Jesus told the Pharisees that God commands us to “love thy neighbor as thyself.” There is no asterisk making this obligation null and void if circumstances require its fulfillment via government.
Bachmann knows a lot about compassion. She makes much of the fact that she and her husband took in 23 foster children over the years. But what of the orphaned or troubled children who are not lucky enough to find a wealthy family to take them in? What of the boys and girls who have stable homes but do not regularly see a doctor because their parents lack health insurance?
Government can reach them. But according to today’s Republican dogma, it must not.
Rick Perry, Mitt Romney, Bachmann, Paul and the others onstage in Tampa all had the same prescription for the economy: Cut spending, cut taxes and let the wealth that results trickle down to the less fortunate.
They betrayed no empathy for, or even curiosity about, the Americans who depend on the spending that would be cut. They had no kind words — in fact, no words at all — for teachers, firefighters and police officers who will lose their jobs unless cash-strapped state and local government receive federal aid. Public servants, the GOP candidates imply, don’t hold “real” jobs. I wonder: Do Republicans even consider them “real” people?
Government is more than a machine for collecting and spending money, more than an instrument of war, a book of laws or a shield to guarantee and protect individual rights. Government is also an expression of our collective values and aspirations. There’s a reason the Constitution begins “We the people . . .” rather than “We the unconnected individuals who couldn’t care less about one another . . . .”
I believe the Republican candidates’ pinched, crabby view of government’s nature and role is immoral. I believe the fact that poverty has risen sharply over the past decade — as shown by new census data — while the richest Americans have seen their incomes soar is unacceptable. I believe that writing off whole classes of citizens — the long-term unemployed whose skills are becoming out of date, thousands of former offenders who have paid their debt to society, millions of low-income youth ill-served by inadequate schools — is unconscionable.
Perry, who is leading in the polls, wants to make the federal government “inconsequential.” He thinks Social Security is a “Ponzi scheme” and a “monstrous lie.” He doesn’t much like Medicare, either.
But there was a fascinating moment in the debate when Perry defended Texas legislation that allows children of illegal immigrants to pay in-state tuition at state universities. “We were clearly sending a message to young people, regardless of what the sound of their last name is, that we believe in you,” Perry said.
The other candidates bashed him with anti-immigrant rhetoric until the evening’s only glimmer of moral responsibility was snuffed out.
By: Eugene Robinson, Opinion Writer, The Washington Post, September 15, 2011
The GOP Magical World Of Voodoo ‘Economists’: Repeal The 20th Century
If you came up with a bumper sticker that pulls together the platform of this year’s crop of Republican presidential candidates, it would have to be:
Repeal the 20th century. Vote GOP.
It’s not just the 21st century they want to turn the clock back on — health-care reform, global warming and the financial regulations passed in the wake of the recent financial crises and accounting scandals.
These folks are actually talking about repealing the Clean Air Act, the Clean Water Act and the Environmental Protection Agency, created in 1970s.
They’re talking about abolishing Medicare and Medicaid, which passed in the 1960s, and Social Security, created in the 1930s.
They reject as thoroughly discredited all of Keynesian economics, including the efficacy of fiscal stimulus, preferring the budget-balancing economic policies that turned the 1929 stock market crash into the Great Depression.
They also reject the efficacy of monetary stimulus to fight recession, and give the strong impression they wouldn’t mind abolishing the Federal Reserve and putting the country back on the gold standard.
They refuse to embrace Darwin’s theory of evolution, which has been widely accepted since the Scopes Trial of the 1920s.
One of them is even talking about repealing the 16th and 17th amendments to the Constitution, allowing for a federal income tax and the direct election of senators — landmarks of the Progressive Era.
What’s next — repeal of quantum physics?
Not every candidate embraces every one of these kooky ideas. But what’s striking is that when Rick Perry stands up and declares that “Keynesian policy and Keynesian theory is now done,” not one candidate is willing to speak up for the most important economic thinker of the 20th century. Or when Michele Bachmann declares that natural selection is just a theory, none of the other candidates is willing to risk the wrath of the religious right and call her on it. Leadership, it ain’t.
I realize economics isn’t a science the way biology and physics are sciences, but it’s close enough to one that there are ideas, principles and insights from experience that economists generally agree upon. Listening to the Republicans talk about the economy and economic policy, however, is like entering into an alternative reality.
Theirs is a magical world in which the gulf oil spill and the Japanese nuclear disaster never happened and there was never a problem with smog, polluted rivers or contaminated hamburger. It is a world where Enron and Worldcom did not collapse and shoddy underwriting by bankers did not bring the financial system to the brink of a meltdown. It is a world where the unemployed can always find a job if they really want one and businesses never, ever ship jobs overseas.
As politicians who are always quick to point out that it is only the private sector that creates economic growth, I found it rather comical to watch the governors at last week’s debate duke it out over who “created” the most jobs while in office. I know it must have just been an oversight, but I couldn’t help noticing that neither Mitt Romney nor Perry thought to exclude the thousands of government jobs included in their calculations — the kinds of jobs they and their fellow Republicans now view as economically illegitimate.
And how wonderfully precise they can be when it comes to job numbers. Romney is way out front when it comes to this kind of false precision. His new economic plan calculates that President Obama would “threaten” 7.3 million jobs with the ozone regulation that, in fact, the president had just canceled. By contrast, Romney claims his own plan will create 11 million jobs in his first term — not 10, not 12, but 11 million.
When you dig into such calculations, however, it turns out many are based on back-of-the-envelope extrapolations from industry data that totally ignore the dynamic quality of economic interactions.
One recent example comes from the cement industry, which now warns that new regulations limiting emissions of sulfur dioxide and nitrogen oxide could close as many as 18 of the 100 cement plants in the United States, resulting in the direct loss of 13,000 jobs.
Then again, where do you think all those customers of the 18 plants will get their cement? Do you think they might get some of it from the other 82 plants, which in turn might have to add a few workers to handle the additional volume? Or that a higher price for cement might induce somebody to build a modern plant to take advantage of the suddenly unmet demand? Or perhaps that higher prices for cement will lead some customers to use another building material produced by an industry that will have to add workers to increase its output? And what about the possibility that the regulation will encourage some innovative company to devise emissions-control equipment that will not only allow some of those plants to remain open but generate a few thousand extra jobs of its own as it exports to plants around the world.
Such possibilities are rarely, if ever, acknowledged in these “job-scare studies.” Also left out are any estimates of the benefits that might accrue in terms of longer, healthier lives. In the Republican alternative universe, it’s all costs, no benefits when it comes to government regulation. As they see it, government regulators wake up every morning with an uncontrollable urge to see how many jobs they can destroy.
If consistency is the hobgoblin of small minds, then these Republican presidential candidates are big thinkers, particularly on fiscal issues.
In the Republican alternative universe, allowing an income tax cut for rich people to expire will “devastate” the U.S. economy, while letting a payroll tax cut for working people to expire would hardly be noticed. Cutting defense spending is economic folly; cutting food stamps for poor children an economic imperative.
My favorite, though, is a proposal, backed by nearly all the candidates along with the U.S. Chamber of Commerce, to allow big corporations to bring home, at a greatly reduced tax rate, the more than $1 trillion in profits they have stashed away in foreign subsidiaries.
“Repatriation,” as it is called, was tried during the “jobless recovery” of the Bush years, with the promise that it would create 500,000 jobs over two years as corporations reinvested the cash in their U.S. operations. According to the most definitive studies of what happened, however, most of the repatriated profits weren’t used to hire workers or invest in new plants and equipment. Instead, they were used to pay down debt or buy back stock.
But fear not. In a new paper prepared for the chamber, Republican economist Douglas Holtz-Eakin argues that just because the money went to creditors and investors doesn’t mean it didn’t create jobs. After all, creditors and shareholders are people, too — people who will turn around and spend most of it, in the process increasing the overall demand for goods and services. As a result, Holtz-Eakin argues, a dollar of repatriated profit would have roughly the same impact on the economy as a dollar under the Obama stimulus plan, or in the case of $1 trillion in repatriated profit, about 3 million new jobs.
It’s a lovely economic argument, and it might even be right. But for Republican presidential candidates, it presents a little problem. You can’t argue, at one moment, that putting $1 trillion of money in the hands of households and business failed to create even a single job, and at the next moment argue that putting an extra $1 trillion in repatriated profit into their hands will magically generate jobs for millions.
It took a while, but even Richard Nixon came around to declaring himself a Keynesian. Maybe there is still hope for Perry and the gang.
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