Today, the debate in Washington about the debt ceiling and budget deficits has been skewed beyond recognition, endangering the viability of government as an effective instrument of popular will. The intent to cut federal spending in the face of a crisis of demand in the private economy is currently shared by mainstream political actors of both Parties, even though many distinguished economists and enlightened businesspeople see a severe economic downturn ahead if government spending is cut dramatically. Those few who have an understanding of macroeconomics have been until now effectively shut out of the discussion. Fragments of real economic concerns are embedded in largely false narratives about the economy and trotted out for the political and economic benefit of established players or added to a chaotic whirl of words that benefits no one.
Official Washington’s alarm about rising public budget deficits is entirely mistimed from the point of view of the welfare of the American people and the stability of the economy; politicians are striving to appear as the most virtuous budget cutter at a time when households are struggling under past debts and can’t afford to buy new goods and services, shrinking the overall economy. Government spending is, for the economy as a whole, the only way out at this time, even if at a later date this spending will need to be curbed. On top of deficit mania, is the use of the threat of not raising the debt ceiling by Republicans to demand even more savage cuts to the economic role of government and to the already fragile social safety net. These deficit terrorists are trying to realize their quixotic, nostalgic dream of a “limited government” society that will start to look more and more like the world of Mad Max or 19th Century America with grinding depressions every decade or two, vast social inequality, and violent social unrest.
The debt ceiling crisis in Washington has exposed President Obama as an easily manipulated leader of the party that might have stood against the push to cut public spending and tank the economy, i.e. the Democrats. Obama has attempted to use the debt ceiling debate, in efforts to appear “serious” and “adult” to poorly informed parts of the electorate, to demand a package of both spending cuts and tax increases. He has wanted to “go big” particularly on spending cuts to show that he is willing to compromise while misrecognizing the intents and the tactics of his Republican opponents. He has been abdicating his role as a defender of the American public against the depredations of the increasingly deranged Tea Party Right by offering unnecessary concessions and cuts in social spending. His Administration seems also to be firmly in the pocket of Wall Street as is his Republican opposition, even though at this time Wall Streeters are probably most concerned about the debt ceiling being raised by any means necessary. Either out of entirely naive idealized notions about compromise or sly, corrupt collusion with the off-kilter goals of his adversaries, Obama has continued to strengthen his Republican opponents by not fighting with them.
There is a school of thought, typified by the ordinarily very acute political analyst Lawrence O’Donnell of MSNBC, which claims that Obama has a high level of control in terms of tactics and is getting the better of his Republican rivals. According to this view, Obama is engaged in a game of “rope-a-dope” with his GOP rivals which will expose them as insincere in their interest in deficit cutting and as simply handmaidens of the ultra-rich and corporations, pushing only for tax breaks for the wealthy without regard for deficit reduction. This will strengthen the perception of Obama as the “only adult in the room” which will help his re-election chances. In my view, this is a Pyrrhic victory for Obama in that deficit cutting is exactly the wrong thing to do at this time, especially when it involves large-scale cuts in social spending.
Obama, despite high hopes earlier on, has proven so far to be a disastrous drain on the progressive hopes and dreams that he had mobilized to get elected, as well as the wish for “Change” from the Bush Administration by broad swaths of the American public beyond progressives. His vision of government by consensus between established economic and political elites, including his crazed Republican adversaries, has worked against hopes for change, which have re-directed much popular anger so far to retrograde libertarian causes like the Tea Party.
While in superficial appearance, name, and biography a change from the usual Washington politician, Obama has worked to stifle or box-in social and economic change in the “veal pen” of diminished expectations. The White House is now broadcasting a video that is an attempt at a direct response to this disappointment in his Administration, within which Obama is shown counseling students to have “principles” but to compromise readily to avoid “disappointment”. This apparently is the President’s personal philosophy which diminishes the role of desire and hope that at another point was so political expedient for him to foster in others. While allowing his Republican opponents the privilege of acting upon and pushing for their “maximum program” with a utopian basis, Democrats and progressives are, in Obama’s world, asked to trim their expectations and hopes for the future.
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