Friday, November 30, 2012

Obama's "fiscal cliff" road-show: Friday 11/30

President Obama spoke in Hatfield PA Friday, Remarks by the President in Visit to Rodon Group Manufacturing Facility 11/30/2012. He's promoting his current plan to avoid the fake "fiscal cliff".

The first thing to note is that this speech contains no defense at all of Social Security, Medicare and Medicaid.

Here's what it does contain:

Now, on this last point, you’ve probably heard a lot of talk in Washington and in the media about the deadlines that we’re facing on jobs and taxes and investments. This is not some run-of-the-mill debate. This isn't about which political party can come out on top in negotiations. We've got important decisions to make that are going to have a real impact on businesses and families all across the country.

Our ultimate goal, our long-term goal is to get our long-term deficit under control in a way that is balanced and is fair. That would be good for businesses, for our economy, for future generations. And I believe both parties can -- and will -- work together in the coming weeks to get that done. We know how that gets done. We’re going to have to raise a little more revenue. We've got to cut out spending we don't need, building on the trillion dollars of spending cuts we've already made. And if we combine those two things, we can create a path where America is paying its bills while still being able to make investments in the things we need to grow like education and infrastructure. So we know how to do that.

But in Washington, nothing is easy, so there is going to be some prolonged negotiations. And all of us are going to have to get out of our comfort zones to make that happen. I’m willing to do that, and I’m hopeful that enough members of Congress in both parties are willing to do that as well. We can solve these problems. But where the clock is really ticking right now is on middle-class taxes. At the end of the year, middle-class taxes that are currently in place are set to expire -- middle-class tax cuts that are currently in place are set to expire. [my emphasis]
Here there are several reasons for concern in what he says there:

"This isn't about which political party can come out on top in negotiations." Actually, yes, it is. The President and his Democratic Party just won a national election decisively. They should "come out on top" with a victory that reflects the program on which they ran successfully in the election.
"a little more revenue": Whenever we're talking about the wealthiest people in the country, the ones who are getting the greatest material benefit from what the US has to offer in terms of opportunity, Obama consistently talks about it needing to be "a little bit more" or some similar term. If he asks for "a little more", he may get a little more. But it doesn't really have the feel of aiming high, does it?
"We've got to cut out spending we don't need": more of Obama preaching austerity economics during this depression
"all of us are going to have to get out of our comfort zones to make that happen. I'm willing to do that": Obama has made it clear in past years that he expects supporters of Social Security, Medicare and Medicaid to "get out of our comfort zones" and not complain when he pushes completely unnecessary and highly destructive cuts in benefits to Social Security, Medicare and Medicaid. When he says, "I'm willing to do that," that's presumably what he means. But Obama is actually in his comfort zone pushing such cuts. A full-on defense of benefits on Social Security, Medicare and Medicaid would be him getting out of his comfort zone.
"the clock is really ticking right now": maybe in David Brooks' head. But there is no actual "fiscal cliff" from which the economy will fall on January 1. Obama is promoting a sense of urgency which is likely to facilitate only the promotion of bad policy ideas.
"investments in the things we need to grow like education and infrastructure": this has become such a stock phrase, "education and infrastructure," that one hardly notices it any more. But this is a favorite part of "left" neoliberal ideology of deregulation and de-unionization and civilian government austerity. Health care and income support for old people are a waste of public money in the neoliberal view. But the promise to the public is that we're going to spend some of that money instead on "education and infrastructure" and that will bring pie in the sky by and by for everyone!

I want to reward manufacturers like this one and small businesses that create jobs here in the United States, not overseas. (Applause.) And by the way this is a company -- one of the few companies in the toy industry that have aggressively moved jobs back here. (Applause.) That's a great story to tell because we've got the best workers in the world and the most productive workers in the world, and so we need champions for American industry creating jobs here in the United States.
As long as he's pushing the incentives for corporations to export jobs overseas that he's been supporting in the Trans Pacific Parnership (TPP) negotiations so far, I'm not able to take talk like this seriously from Obama.

So that's one path: Congress does nothing, we don't deal with this looming tax hike on middle-class families, and starting in January, everybody gets hit with this big tax hike and businesses suddenly see fewer customers, less demand. The economy, which we've been fighting for four years to get out of this incredible economic crisis that we have, it starts stalling again. So that's one path.
Fearmongering. If Obama is serious about ending the Bush tax cuts and getting prolonged middle-class tax reductions, he can just let the Bush tax cuts expire at the end of the year and then propose the ones he wants. The idea that calamity will set in January 1 as a result of the end of the Bush tax cuts and the start of the spending reduction triggers is not credible.

This is bad:

The sooner Congress gets this done, the sooner our economy will get a boost. And it would then give us in Washington more time to work together on that long-range plan to bring down deficits in a balanced way: Tax reform, working on entitlements, and asking the wealthiest Americans to pay a little bit more so we can keep investing in things like education and research that make us strong. [my emphasis]
Given Obama's history of pushing to cut benefits on Social Security, Medicare and Medicaid, every time Obama says the word "entitlements" - which in any case is a propaganda term to diminish the value of Social Security, Medicare and Medicaid in people's minds - I assume he means he intends to keep pushing to cut benefits on those programs.

We've got some disagreements about the high-end tax cuts, right? Republicans don't want to raise taxes on folks like me; I think I can pay a little bit more to make sure that kids can go to college and we can build roads and invest in NIH so that we're finding cures for Alzheimer's. And that's a disagreement that we're going to have and we've got to sort out.
It always bothers me when Obama refers to the wealthy as "folks like me." It always sounds to me as though he's emphasizing his identification with the wealthiest.

The bottom line is that the Democratic President should be defending immediate stimulus spending, and defending benefits on Social Security, Medicare and Medicaid instead of promoting phony scares about The Deficit and trying to out-Republican the Republicans talking about tax cuts. And he shouldn't be pushing austerity economics at all.

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