Indeed, a serenely optimistic America is not exactly looking up austerity while pondering crossword puzzles at the beach. With 30 million unemployed, under-employed, and discouraged workers looking for five million existing jobs, 50 million people without health insurance, and over 1 million home foreclosures this year, an unsettled mood pervades the nation.
Worry, fear, and anger in the air would not necessarily be a bad thing, of course, if it were channeled into determined political action that targets the source of the people's economic plight. Unfortunately, the latter was glaringly missing from the recent midterm elections.
Ironically, it was only two years ago that Republicans were flailing about in the fetid swamp of their own discredited legacy. But their new House majority in the next session of Congress represents less a resurgence of conservatism than the abstention of many disappointed Democratic voters. It is also an object lesson in just how absurdly narrow is the swing of the pendulum of U.S. electoral politics.
The Debacle of Bipartisanship
Unfortunately, the worst economic crisis since the Great Depression has engendered only cautious restraint from President Obama, a man who appears determined to make "bipartisanship" his Word of the Year four years running. Accordingly, the bipartisan "change we can believe in" now comes as a projected $802 billion tax giveaway to wealthy individuals and U.S. corporations in just the next two years.
The next 10 years will see Congress' decision to maintain the Bush tax cuts translate into a projected $4 trillion in lost revenue. In light of the $3.4 trillion already lost over the last 10 years, the ongoing tax policy represents the difference between a disaster economy and one otherwise capable of reasonably funding vital federal programs.
The tax deal's long-term impact will also translate into more incentive to impose cuts to Social Security benefits and other future deep reductions in social spending. This, the President's deficit commission has already made clear, is a national priority, even without the pressure of ongoing tax cuts. Incredibly, the Republican hysteria over the President's original support for rescinding tax cuts for the wealthy, amounts to much ado about, if not nothing, then a mere 4.6 percent increase in the tax rate to a 39.6 percent maximum rate on upper-income Americans.
Ludicrously, the Tea Party right derides Obama as an unrepentant socialist for supporting the idea of restoring the upper income tax rate to 39.6 percent. What would the Looney Tunes of the right have to say about presidents Eisenhower and Reagan, who in the 1950s and 1980s presided over top income tax rates of 91 percent and 50 percent? Is it hyperbole to say that what is happening now is just the latest stage in a long-term class war that middle- and working-class Americans have been losing?
The long-term import of the tax debacle also makes a mockery of what CNN's David Gergen called "Obama's stunning turnaround" as a lame duck Congress pushed through repeal of the ban on gays in the military, a new arms treaty with Russia, and aid for the 9/11 first responders (CNN, Dec. 22.) But such hyperbole comes cheap and it won't last. In fact, the pace at which political credibility tends to evaporate these days reflects just how deep is the crisis of American capitalism.
After all, did anyone expect the Kennedy administration to dramatically change the country's landscape from 1960 to 1962, or face political ruin? But the America of 1962 was a nation riding on the jet streams of a post-war prosperity that had yet to run its course. The business and political elites saw relatively high wages, benefits, and working conditions (for whites, at least) as an affordable price to pay for social complacency. In those days, many working-class families could still live comfortably on one income.
No more. Gone are the halcyon days when old-line Democrats like Hubert Humphrey and others still under the sway of New Deal rhetoric routinely paid lip service to the vision of a "full employment economy." That America ran out of gas more than three decades ago. Starting in the 1970s wages began to stagnate and more families began to rely on two incomes. As the unionized sector of the economy shrank, work hours grew longer and personal debt larger. Meanwhile, the land of solid manufacturing slowly morphed into a fallow landscape of unregulated credit default swaps, housing bubbles, and a widening, toxic divide between the super wealthy and everyone else.
Who Will Take on Wall Street?
Gone also is the popular enthusiasm of Obama's 2008 election campaign. As news of the tax cut deal broke, MSNBC host Keith Olbermann compared Obama's pattern of compromise with the Republicans to British Prime Minister Chamberlain's appeasement of Nazi Germany on the eve of World War II. But Olbermann was not being entirely fair. Chamberlain at least did eventually declare war on the Nazis.
In a November 20 speech at the Harvard Kennedy School, economist James K. Galbraith, president of the liberal Americans for Democratic Action, told the group it was time for progressives to "draw a line and decide that we would be better off with an under-funded, fighting progressive minority party than a party marked by obvious duplicity and constant losses on every policy front as a result of the reversals in our leadership."
"I've not heard one good reason all day to believe that we are going to see from this White House the fight that we want, that he could win in two years, or any reason we should be backing him now," Galbraith concluded. "The Democratic Party has become too associated with Wall Street. This is a fact. It is a structural problem."
Galbraith is right that the problem is structural. Taking on the power and politics of Wall Street is a task for which Obama has proven incapable of mustering much more than the occasional verbal jab. Whatever the limits of his 2008 campaign platform, a common assumption among groups like Progressives for Obama and others was that Obama's election would create a better climate for grassroots organizing on social issues.
In fact, the opposite has happened. Ironically, Obama probably did a better job selling the sell-out on taxes than George W. Bush could have done. His presidency also brought an instant surge in new credibility to U.S. foreign policy, making it politically easier for the new president than his Republican predecessor to escalate the war in Afghanistan. Where was the grassroots protest in the face of this new escalation? For the most part, the liberal and progressive milieus were, until further notice, inclined to give the "peace candidate" a pass.
Ironically, Obama promises to fight the tax battle another day, in 2012. It's unclear if this means he plans to wage a vigorous campaign against his own record. It is perhaps not coincidental that repeal of "Don't Ask, Don't Tell," which the President has promised to end since 2008, has only now finally pushed through Congress. After two years of frustrating a once energized electorate, Democratic leaders know they are in sore need of political capital with the liberal base.
Yet how much grassroots political capital might be gained if he actually took on Capital. What a difference it would make if the people had a leader representing a political party capable of openly challenging Wall Street and its political cronies for the adversaries of social justice they are. Instead Obama conducts himself as if the Presidency is all about being some sort of government ombudsman, the congenial intermediary to a beltway power system that serves corporate power first and everyone else not much at all.
Go Where the Money Is
Yet real solutions exist. As University of Massachusetts economist Richard Wolff notes in a recent essay (ZNet, Dec. 8), a "steeply progressive taxation" that subjects the top 5 percent of both income earners and corporations to the highest tax rates, enough to equal federal spending, could put the nation on the path to wipe out the deficit. The burden to the majority of Americans and small business would be nil.
How about creating jobs by funding a new public works program to repair America's infrastructure, a $2.2 trillion rebuilding project of the country's roads, schools, and energy systems? There are other, older ideas around that have also never gotten a fair hearing, and deserve revival. The workday could be reduced to six-hours (without lowering pay). It's not as "pie-in-the-sky" as it sounds. The United Auto Workers and other unions once advocated the six-hour day as a practical solution to post-war unemployment. Of course, the inevitable backlash against even raising such ideas today only illustrates the narrowness of contemporary thinking, circumscribed as it is by a capitalist political culture that values money and business over community and people.
Obviously, it will take a new, mass political force to move this country in a direction that actually creates progressive social change. That's an arduous prospect, but one not nearly as daunting as staying on the broken path of our current two-party system, endlessly putting our faith and our fate as a people in the hands of leaders firmly in the toxic thrall of Wall Street. In France, Greece, and England, mass revolt was the year's response to austerity. Are we not capable of the same?
It would be a sure sign of progress were the new year to end with "revolt" as Merriam-Webster's Word of the Year for 2011.