Friday, November 12, 2010

Obama's Latest Economic Mistake

Here's Krugman's latest NY Times op-ed with his view of Obama, his economic mistake with his "fiscal commission", and the rightward drift in America. I've bolded the key bit:
Count me among those who always believed that President Obama made a big mistake when he created the National Commission on Fiscal Responsibility and Reform — a supposedly bipartisan panel charged with coming up with solutions to the nation’s long-run fiscal problems. It seemed obvious, as soon as the commission’s membership was announced, that “bipartisanship” would mean what it so often does in Washington: a compromise between the center-right and the hard-right.

My misgivings increased as we got a better feel for the views of the commission’s co-chairmen. It soon became clear that Erskine Bowles, the Democratic co-chairman, had a very Republican-sounding small-government agenda. Meanwhile, Alan Simpson, the Republican co-chairman, revealed the kind of honest broker he is by sending an abusive e-mail to the executive director of the National Older Women’s League in which he described Social Security as being “like a milk cow with 310 million tits.”

We’ve known for a long time, then, that nothing good would come from the commission. But on Wednesday, when the co-chairmen released a PowerPoint outlining their proposal, it was even worse than the cynics expected.

Start with the declaration of “Our Guiding Principles and Values.” Among them is, “Cap revenue at or below 21% of G.D.P.” This is a guiding principle? And why is a commission charged with finding every possible route to a balanced budget setting an upper (but not lower) limit on revenue?

Matters become clearer once you reach the section on tax reform. The goals of reform, as Mr. Bowles and Mr. Simpson see them, are presented in the form of seven bullet points. “Lower Rates” is the first point; “Reduce the Deficit” is the seventh.
Go read the whole article to get all the details. You can see the "proposals" of the fiscal commission's co-chairs here.

Krugman makes it clear that these are both right wing hatchet men with an agenda to reduce taxes for the rich while "lowering the deficit" by dismantling all the social programs put in place since FDR.

The pretense is about "deficits" but if you are talking tax cuts you can't be serious. The tragedy is that Obama campaigned on a centre-left agenda but has rules with a centre-right agenda. His idea of "negotiating" with the Republicans is to give them what they asked for, then he sits down to "negotiate" only to find that they are the Party of No which when given what they asked for, demands even more concessions. That isn't "negotiation" that is capitulation, that is surrender. Obama has no backbone. He has no principles. He is yet another "wheeler dealer" willing to sell his soul to the devil to get his hands on the reins of power. Tragic.

Krugman points out the hidden right-wing social agenda of the commission:
...what the co-chairmen are proposing is a mixture of tax cuts and tax increases — tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans — the deductibility of health benefits and mortgage interest — and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.
This is the "Change you can believe in" that people voted for in 2008? Then why didn't Obama run in 2008 saying he would eliminate benefits for the middle class and hand over these monies to the ultra-rich? Why didn't he honestly campaign and tell people that if they elected him he would make sure they were properly screwed and that he would make sure that hundreds of billions would be lavished on the rich and big corporations? Why didn't he tell people that he would turn his back on unemployment while working overtime to figure out ways to save taxes for the rich?

People in France are rioting because their right-wing president Sarkozy is trying to raise the retirement age. Here's Obama's commission doing the same thing in America:
Let’s turn next to Social Security. There were rumors beforehand that the commission would recommend a rise in the retirement age, and sure enough, that’s what Mr. Bowles and Mr. Simpson do. They want the age at which Social Security becomes available to rise along with average life expectancy. Is that reasonable?

The answer is no, for a number of reasons — including the point that working until you’re 69, which may sound doable for people with desk jobs, is a lot harder for the many Americans who still do physical labor.

But beyond that, the proposal seemingly ignores a crucial point: while average life expectancy is indeed rising, it’s doing so mainly for high earners, precisely the people who need Social Security least. Life expectancy in the bottom half of the income distribution has barely inched up over the past three decades. So the Bowles-Simpson proposal is basically saying that janitors should be forced to work longer because these days corporate lawyers live to a ripe old age.
Unlike the French, Americans seem to be standing with cap in hand saying "Massa, how much mo money you want out of my pocket so's you can have 'nuff?" The ultra-rich will be happy only when they have turned the US into a banana republic in which there are two classes of people: the rich lounging by the pool or jetting about and everybody else dressed in livery serving every whim of their economic overlords.

I gag every time I hear Americans boast of being "the land of the free, home of the brave". It might have been 100 years ago, but today it is the land of the liveried servant bowing and scrapping, rushing about to answer to every whim of their Wall Street banker. What's "free" about this? Where's the "bravery" in kowtowing to the rich?

Here's Krugman's final analysis of this fiscal commission:
It’s no mystery what has happened on the deficit commission: as so often happens in modern Washington, a process meant to deal with real problems has been hijacked on behalf of an ideological agenda. Under the guise of facing our fiscal problems, Mr. Bowles and Mr. Simpson are trying to smuggle in the same old, same old — tax cuts for the rich and erosion of the social safety net.

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