The next president of austerity

November 1, 2012

We know from history that the "lesser evil" is no guarantee against the "greater evil."

THE PRESIDENTIAL election between Barack Obama and Mitt Romney is incredibly close.

It's close in the way you read about every day in the media: Opinion polls show the two candidates are neck and neck, with just days to go. But it's also close in ways you never hear about--not from the press, nor the candidates, nor their supporters. On important political questions, Obama and Romney stand so close to each other that their similarities outweigh their differences.

This isn't what most people are talking about with less than a week to go before the election. But it's what activists and people on the left have to consider as the call to vote for Obama in order to stop Romney reaches full volume.

The dynamic of the presidential race changed fundamentally with the first debate at the start of October, when the combination of Obama's dismal performance and Romney's image of seeming competence after a summer of missteps gave a burst of momentum to Republicans. Ever since, it has been a dead-even contest--according to the aggregation of opinion polls tracked at, Romney is barely ahead in the popular vote, while Obama has a slight advantage in the Electoral College.

Mitt Romney and Barack Obama meet at their second debate
Mitt Romney and Barack Obama meet at their second debate

But the broader dynamic of Election 2012 is mostly unchanged. The defining issue of American politics in the last four years has been the drive to impose austerity measures that make working people pay for the crisis, and on this question, Obama and Romney are closer to each other than their rhetoric suggests.

There are other issues, like abortion rights, where the differences between the candidates and especially their parties are clearer--though the hard truth is they aren't as stark as they are usually portrayed. Moreover, the prospect of emboldened right-wingers gaining confidence from a Romney victory--and gloating over the defeat of the first African American president, who they have been heaping abuse on since day one--is stomach-turning.

But anyone who wants to vote for Obama as the lesser evil has to confront questions that have gone unasked during the campaign.

When it comes to "reforming" popular programs like Social Security and Medicare, to maintaining historically low tax rates on business, to continuing the teacher-bashing and the charterization of public schools, to cutting government programs that help the poor and vulnerable--on all these questions, Barack Obama and Mitt Romney are fundamentally on the same side, though they may differ on the details.

It follows that anyone who wants to build a resistance to all this needs to stand on the other side. One step to take on November 6 will be to not support either Obama or Romney or the two mainstream parties.

WHAT WILL the agenda of the next president of the United States look like?

If it's Romney, we know what to expect: a budget massacre. Romney has embraced, with almost no exceptions, the congressional Republican budget put together by his running mate Paul Ryan.

It's a wish list of class-war proposals: cut income tax rates and corporate taxes, and eliminate the capital gains tax; turn Medicare into a voucher system that would subsidize the purchase of private health insurance; increase defense spending; repeal the Obama health care law; and cut other domestic spending, especially for programs like Medicaid and food stamps that help the poor.

Ryan and Romney sell this program with rhetoric about getting the deficit under control, but their real aim is different. As the New Yorker's Jonathan Chait pointed out, "[T]he parts of the plan with specified policy changes contain far more in the way of deficit increases (tax cuts, defense-spending hikes) than in deficit reduction (generalized intentions to eliminate tax deductions and reduce domestic spending)."

It's a recipe for a rerun of the Bush years--a bonanza for the rich, while the federal government is starved of revenue, which provides the justification for the next round of cuts.

So what about Barack Obama? His campaign and his supporters portray him as utterly opposed to everything Romney stands for. Only if you listen to Obama's own words, you hear similar themes and proposals.

In an interview with the Des Moines Register--where Obama spoke more candidly than usual because he thought it wouldn't be published verbatim--the president laid out his plans for a second term, and top on the list was achieving the so-called "grand bargain" with Republicans to reduce the federal deficit by $4 trillion over 10 years.

What's the "grand bargain"? Back in the summer of 2011, during the Washington debate over lifting the debt ceiling, Obama met with House Speaker John Boehner to come up with a comprehensive agreement to reach the $4 trillion deficit-reduction goal.

The candidate who today promises to keep Social Security and Medicare safe from the Republican maniacs proposed more than $1 trillion in Medicare cuts over 20 years, a $360 billion reduction in Medicaid over the same period, and a substantial reduction in Social Security benefits. All told, Obama offered four times as much in spending cuts as additional revenue raised from higher taxes--a significantly worse deal than even the "deficit hawks" of the Simpson-Bowles commission suggested in 2010.

Some bargain, huh? Incredibly, Boehner walked away from it--and the prospect of a Democratic president putting his seal of approval on unprecedented cuts in the federal government's two most popular programs. But Obama told the Register he thinks he can deliver if he gets a second term--within the first six months of 2013.

And he might not even wait that long to try again. On January 1, the Bush-era tax cuts at all levels are due to expire, and $110 billion worth of automatic spending cuts--a consequence of the messy outcome of the debt-ceiling debate--will also go into effect. Together, these two actions are being referred to as the "fiscal cliff."

Though few in the media noticed, Obama said in the final presidential debate that he wouldn't allow the automatic cuts, which will largely hit the Defense Department, to happen. Behind the scenes, administration officials have been floating this scenario if Obama wins: During the lame-duck session of Congress after the November election, the Republicans agree to some tax increases as part of the "grand bargain," in return for preventing the "fiscal cliff."

If that sounds impossibly stupid--the victorious Democrats demanding that the vanquished Republicans "agree" to pass some of their most cherished proposals, like "reform" of Social Security and Medicare--the Democrats' most loyal supporters seem to fear exactly this outcome.

In late October, AFL-CIO President Richard Trumka lashed out in an op-ed article for Politico against the "grand bargain...It boils down to lower tax rates for rich people--paid for by benefit cuts for Social Security, Medicare and Medicaid...because this is the only way Republicans will agree to more tax revenue." Unions are planning protests on November 8, two days after Election Day, to demand that lawmakers reject a deficit-reduction deal that cuts Medicare and Social Security.

Trumka's article tactfully avoided mentioning the Obama administration, but Roger Hickey, co-chair of the Campaign for America's Future, which is working with labor on the November 8 initiative, was less subtle. As he told The Hill:

There's going to be a major effort by lots of groups to make sure the people we vote for don't sell us down the river. People, groups, organizations and networks are working very hard to get Obama and the Democrats elected, and yet we are worried that it is possible that we could be betrayed almost immediately.

Of course, neither organized labor nor liberal groups like Hickey's would consider even threatening to withdraw support from the Democrats. But it speaks volumes that they think the man they will spend millions to reelect on November 6 could betray them on November 7.

THOSE SUSPICIONS about Obama and his administration are well-founded given the record of the last four years.

The Republicans' relentless complaints that Obama has been hostile to business and therefore bad for the economy are easily disproven. In fact, during Obama's four years, Corporate America has done better than under any president since the start of the 20th century--for example, real corporate profits have grown on average by an incredible 77.9 percent per year since January 2009.

Of course, it's cheating a little to calculate it that way--corporate profits were at their lowest point of the Great Recession just as Obama took office, so there was nowhere to go but up. But there's no avoiding the contrast that Matt Stoller focuses on in his excellent article "The progressive case against Obama."

Stoller, a contributing editor to the Naked Capitalism blog, presents a chart showing how corporate profits plunged and then rebounded, reaching historic new highs that are comfortably above pre-recession levels. Meanwhile, the total value of household real estate--the main store of savings for ordinary people who have savings in the U.S.--plunged and plunged some more, before stabilizing and remaining stagnant since. As Stoller writes:

That $5-7 trillion of lost savings did not come back, whereas financial assets and corporate profits did...[T]his is unprecedented in postwar history. Home equity levels and corporate profits have simply never diverged in this way; what was good for GM had always, until recently, been good, if not for America, than for the balance sheet of homeowners. Obama's policies severed this link, completely.

Stoller's final sentence isn't a cheap shot either--it is Obama's policies that are directly responsible for the incredible disconnect between the new good times for big business and continuing hard times for working people.

To take one example among many, the new administration adopted almost without alternation the Bush administration bailout of Wall Street, committing trillions of dollars to ensuring the health of the banks--at the very moment when the new administration, with overwhelming popular support and big majorities in both houses of Congress, could have dictated terms to the financial elite.

As for the millions of homeowners who faced foreclosure as a consequence of predatory loans and Wall Street's casino capitalism, they got a fraction of the same financial resources for an assistance program that didn't help more than a small minority of those who needed it.

The Republicans are notorious as craven servants of Wall Street, but as left-wing economic analyst Nomi Prins pointed out, the bankers won't lose no matter which party wins the White House:

[W]hen it comes to banking, finance and the ongoing subsidization of Wall Street, both presidential candidates and their parties' attitudes toward the banking sector is similar--i.e., it must be preserved, as is, at all costs, rhetoric to the contrary aside.

Obama hasn't brought "sweeping reform" upon the establishment banks, nor does Romney need to exude deregulatory babble, because nothing structurally substantive has been done to harness the biggest banks of the financial sector, enabled, as they are, by entities from the SEC to the Fed to the Treasury Department to the White House.

GIVEN THIS, it's no surprise that sections of the U.S. ruling class have rallied to Obama's side in Election 2012.

To be sure, there's the "smash and grab" faction of American business that despises Obama for wanting to tax them to death, all evidence to the contrary--people like billionaire Stephen Schwarzman, who once compared a Democratic proposal to close an obscure tax loophole benefitting financial firms to "when Hitler invaded Poland in 1939."

But along with the Stephen Schwarzmans, there are the Warren Buffets--the multibillionaire investor who not only endorses Obama, but supports higher taxes on the rich, not because he's a socialist sympathizer, but because he thinks capitalism will function more efficiently that way.

It's noteworthy in this regard that major newspaper endorsements for Obama include not only likely suspects such as the New York Times and Washington Post, but the Chicago Tribune--a conservative bastion that has endorsed a Democratic presidential candidate exactly twice in 165 years.

The Tribune's reasoning returns us to the question of the "grand bargain" to achieve deficit reduction. "This nation faces no existential threat greater than the enormous federal indebtedness that imperils today's America and, far more important, our children's America," the Tribune wrote. "Which of these two candidates, then, is likelier to reach a Go Big debt deal with Congress?"

The Tribune's answer: Barack Obama.

So one of the most reliably Republican voices among the corporate media establishment is endorsing Obama specifically because they think he is more likely than Romney to carry out the program of the U.S. ruling class--of driving down working-class living standards still further, while Corporate America expands its power and profits.

Millions of people understandably fear the prospect of a Republican victory on November 6. Romney and Ryan stand for a scorched-earth offensive of more austerity, more cuts and more scapegoating. As has continued to point out, the frightening racism and bigotry at the heart of the Republican Party is rising to the surface more and more as the election approaches.

But history shows that voting for the "lesser evil" is no guarantee against the "greater evil." On the contrary, evil sometimes has a better shot if the "lesser" paves the way and provides the façade.

The struggle against austerity and neoliberalism will have to continue after November 6, no matter who wins the White House. But one step in that struggle is to draw a political line now--against providing support and votes for a political party and a president that stand on the other side.

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