Wednesday, July 13, 2011

The grim debt-ceiling negotiations farce and the drowning of American democracy

David Dayen gives a savvy evaluation of the current state of the debt-limit negotiations in And for His Next Trick The American Prospect Online 07/13/2011. And Digby expands on it in Rooting For Mitch Hullabaloo 07/13/2011.

This is not the first time, to put it mildly, that the progressive blogosphere has provided more solid commentary than the run of the pundits. But with this farcical debt-ceiling negotiation, that has been particularly so. Because having a negotiation over it at all was a farce from the start, political Kabuki. The Republican leaders in both the House and Senate said months ago that they would have to raise the debt ceiling. Wall Street was always going to insist on it, and the Republicans are there to serve their Wall Street masters first and foremost.

The Republicans were always going to have to put up enough House votes to enact the debt-ceiling increase. The negotiations theater played out only because the White House wanted to have such a pageant to put through elements of the drastic, Herbert Hoover-style austerity program that they are apparently actually convinced is both good policy and good politics. This negotiation never had to happen, and the White House knew it.

But our Pod Pundits couldn't and mostly didn't say that. Because they love Washington Kabuki theater, with its back and forth about who is up and who is down in the game, who is clever and who's been had, and so forth. The important thing for the voters and citizens is that the whole negotiation was a political pageant that never had to take place. Obama, for whatever (bad) reason has hoped for a Grand Bargain that would mean the Democrats cutting Social Security and Medicare. What exactly he expected from the Republican side of the so-called "bargain" is entirely unclear.

Digby has been deconstructing this process for months now, as have David Dayen and others at Firedoglake. And because blogs, Facebook and Twitter allow for a much wider, quicker interchange of news and ideas about such events than was possible when print and TV news media were the near-exclusive gatekeepers for such commentary, it makes it harder for Obama to pass off his opposition to Social Security, Medicare and Medicaid as something forced on him by Republicans. Republicans did propose to cut Medicare - eliminate it, actually. But they managed to maneuver the Democratic President into proposed his own cuts to Medicare and to Social Security. Even the Ryan Plan doesn't go after the latter. And Obama has virtually unilaterally disarmed the Democratic Party from being able to use those two potent issues against the Republicans in 2012.

David in his article explains the point on which the pundit conventional wisdom of Tuesday was correct, the fact that Mitch McConnell's proposal Tuesday was an attempt to give the Republicans an "out" from an insupportable problem:

Washington is always a strange place, but this gambit from McConnell represents a complete inversion of the debate in the space of a few days. Once the hostage-takers, now the Republicans are the ones looking for an escape hatch. McConnell reportedly feels at the mercy of the White House Office of Management and Budget. Given that the fast-moving negotiations will generate a deal with so many discrete elements, OMB would have a lot of control over the final numbers. McConnell said yesterday there were only three options available to the GOP - "smoke and mirrors, tax hikes, or default." He obviously feels that any deal written in the White House will be tilted against his party.
And he notes, "for the first time in a while, you heard the words 'Republicans' and 'spineless capitulation' in the same sentence."

Yet if this is what winning looks like, Democrats can only cringe at the thought of what losing might be:

But if Republicans believe themselves to be without leverage, the Democratic President in the White House is in the opposite role. He's now the one using the debt limit to force a deal, one bigger than even his own party favors, with major cuts to cherished programs like Medicare and Social Security. White House Press Secretary Jay Carney said in response to McConnell's plan that President Obama still wanted to "seize this unique opportunity to come to agreement on significant, balanced deficit reduction."

Given the righteous conservative anger at McConnell and Obama's preoccupation with a bipartisan deal, this doesn't mean we can close the book on this debt limit increase just yet. But even if McConnell?s plan passes, the legacy of what Obama put on the table for cuts in these talks will haunt Democrats for many years, and we'll see those proposals again — with lines like "Even Barack Obama supported ..." attached to them. It was a damaging strategy. [my emphasis; punctuation corrected]
Digby expands the thought:

Indeed it was. And any "pivot" to jobs has been severely hamstrung by the President's endless rhetoric about "belt tightening" and spending cuts. But at least they won't be cutting spending with over 9% unemployment at the same time, so if they do manage to get some infrastructure on the table they won't have already robbed Peter to pay Paul and destroyed any stimulative effects.
Of course, the negotiations aren't over yet. For the Democrats, it's been bad so far. And it could still go south from here.

And the truth is that US politics is at a particularly nasty point right now. As William Pfaff puts it in Robin Hood in Reverse Truthdig 07/12/2011:

By far the strangest thing about the American debate concerning national economic policy, currently concentrated on whether a law lifting the present limit on the deficit will or will not be passed, is that it has been conducted without discussion of the largest item in the budget. This is the aggregate cost of running military interventions of one or another kind in Afghanistan, Pakistan, Iraq, Libya, Somalia and sundry other unhappy and unlucky sites in the non-Western world, and that includes the global program of illegal individual assassinations by drones or dedicated military or civilian killer teams—all in democracy’s name. Cut that, even merely its blatant excesses, and the budget problem would disappear.

Instead the congressional debate is ideological: superficially about national economic policy, but actually all but totally committed to the issue of what level of taxation the smallest and most wealthy segment in the American population — its corporate leaders, heads of banks and private financial institutions, its hereditary rich and beneficiaries of market windfall gains — should be required to pay.

The second most passionate subject of debate is how much the government will reduce the country’s existing Social Security pension programs, for those individual Americans who throughout their lives have contributed to what they considered irrevocable contracts with their government, and the modest popular medical care programs that now exist for the middle classes, the old and the indigent. These are Medicare and Medicaid, plus the new health care program passed (barely) by the Barack Obama administration. These have all become "Entitlements" — a hateful word in the modern American political vocabulary.

The internal American debate may be said to center around how much to rob the poor, and how much to enrich the rich.
The current radical maldistribution of wealth and income in the US is a pathological situation for our society. And it has created a toxic politics for a democracy. And ours is being drowned in corporate money.

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