After the disaster that neoliberal deregulation created and that produced the financial crash of 2008, I'm definitely restraining my enthusiasm over the regulation cutting.
The payroll tax cutting business is a mixed bag politically. And probably mixed against the future of Social Security and Medicare. If Obama and the Republicans with whom he's determined to make a Grand Bargain to start phasing out both programs claim to worry that Social Security has insufficient funds, why would we want to reduce their funding source now?
Liberal economists like the idea of a temporary payroll tax cut because it's skewed toward the lower tax brackets and therefore is not only egalitarian in effect, but it means that the money not taken in taxes will mostly be spent right away on consumer goods of some kind. Although with the current loads of household debt and the anti-consumer bankruptcy law passed during the Cheney-Bush Administration and left in place by the current one, that immediate stimulative effect is likely to be mitigated compared to earlier circumstances during recessions.
The payroll tax reduction is also a direct and easy way to generate likely stimulus money. Compared to spending programs where the funds have to go through a longer process, with a tax reduction you can just change the rate and the money goes to the taxpayer in their next paycheck.
But in my mind, the assistance it gives to the anti-Social Security, anti-Medicare advocates - of which President Obama is unfortunately one - a further argument for attacking those programs. And it won't stop the Republicans from attacking Obama for proposing cuts in Social Security and Medicare. The Reps are making noises about opposing the extension of the payroll tax cuts, ramping up their plutocratic preferences yet another notch. But they could very well justify that stance as protected Social Security and Medicare from the cuts Obama is proposing.
It would be political snake oil of the worst kind for the Republicans to do that. But this is the Republican Party we're talking about.
Then there's this from Matt Taibbi, Obama Goes All Out For Dirty Banker DealRolling Stone 08/24/2011. I've mentioned before that I wonder if Taibbi isn't getting into "concern troll" territory with his dramatic cynicism. (Or I've at least mentioned something to that effect!) But I can't argue with his summary of the deal the Obama Administration is backing:
The idea behind this federally-guided "settlement" is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.
This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline.
Bad policy, bad politics for the Democrats. Neoliberalism at work. Obama may be really pushing the whole Democratic Party to the practical edge of the neoliberal game. In the neoliberal scheme, left parties are valuable if they can credible sell their constituencies on accepting the "free-market" deregulation schemes, the outsourcing of jobs and measures that weak unions.
But when Democratic constituencies get to the point that they greet every promising-sounding announcement from the Democratic President with a sigh because they figure he'll just bargain anything constructive away, what good does it do the plutocrats to have a "left" party involved? Why not just have "postpartisan" unity under the Republican Party and not waste good corporate money giving it to Democratic campaign funds?
Taibbi's unsentimental description of the Administration's heavy-handed pressure on New York Attorney General Eric Schneiderman to sign on to this ugly piece of Obama's Bad Deal also fits:
So this deal being cooked up is the ultimate Papal indulgence. By the time that $20 billion [in the Administration's absurdly bank-friendly deal] (if it even ends up being that high) gets divvied up between all the major players, the broadest and most destructive fraud scheme in American history, one that makes the S&L crisis look like a cheap liquor store holdup, will be safely reduced to a single painful but eminently survivable one-time line item for all the major perpetrators.
But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don't have a deal. They need the certainty of having all 50 states and the federal government on board, or else it’s not worth paying anybody off. To quote the immortal Tony Montana, "How do I know you’re the last cop I'm gonna have to grease?" They need all the dirty cops on board, or else the whole enterprise is FUBAR. [my emphasis in bold]
Taibbi may be overly fond of hyperbole. But his statement may well be literally accurate when he calls the mortgage mess "the longest and most orgiastic campaign of stealing in the history of money." Given that some of the bad mortgage paper was moved along via actual prostitution, "orgiastic" doesn't even count as hyperbole here. See Mara Der Hovanesian, Sex, Lies, and Subprime MortgagesBusiness Week 11/13/2008. Apparently "mortgage slut" became a term of art.
