People who assume that Barack Obama entered politics as a Democrat on account of his being progressive in his convictions assume something that could be false. There is an alternative explanation for that, and it is far likelier to be true. In fact, his record in the White House, thus far, suggests that he entered politics as a Democrat for this alternative reason.
On 26 October 2012, Peter Finocchiaro at huffingtonpost headlined "Lawrence Wilkerson, Former Colin Powell Aide, Blasts Sununu, GOP, as 'Full of Racists'," and he linked to video of that evening's MSNBC "The Ed Show," in which the Republican White, Col. Wilkerson, expressed outrage at Romney campaign spokesman John Sununu's saying that the Republican Black Colin Powell was endorsing Barack Obama because Obama was black. "Let me just be candid: My party is full of racists," said Wilkerson.
It is hard to say precisely when Obama entered politics, or if he had in mind at that time the aspiration to become America's President thereby, but whenever he did first think about the Presidency as his future career-objective, how smart would it have been for him to do it then as a "Republican," given Richard Nixon's infamous anti-Black "Southern Strategy," and the impossibility at that time for any Black - no matter how politically gifted - to be able to win from the nation's Republican voters (including the Southern states) the Republican Party's nomination to become the U.S. President?
A Republican black man entering politics at that time wouldn't have stood any chance at the White House, because he wouldn't have stood any reasonable chance to win his own Party's Presidential nomination.
This article will document that Obama is sufficiently conservative, as shown by his actions (though not by his liberal public rhetoric) while he has been in the White House, so that an intelligent question can be raised as to whether he entered politics as a "Democrat" only because this was the only way that a black man, when he entered politics, could at all reasonably have aspired to become the U.S. President.
Ultimately, a politician's beliefs are proven by his actions, not by his mere words; and so the evidence that will be cited here is Obama's actions while he has been President - the choices and decisions that he has actually made as the U.S. President.
This article will even seek to document that Obama is completing a plan that was started in 1978 when the University of Chicago's Republican economist Milton Friedman first said that government expenses should not be fully funded from taxes. Friedman's aim there was to encourage building up an enormous enough federal debt so as to produce what the public would come to believe to be the necessity of slashing what Friedman considered to be inappropriate and unnecessary programs of the Federal Government, such as Social Security, Medicare, and Medicaid, which he wanted to eliminate, or else privatize. (He was, of course, a libertarian: he favored eliminating many functions of government.) What will be shown here is that since Barack Obama first entered the White House, Obama has been brilliantly maneuvering himself into a position where he can claim that Republicans in Congress are forcing him to slash, though not to privatize (which he doesn't want to do), those programs. This is actually what he has been aiming to do, and been planning to do, all along, and he is now in the very closing months of finally achieving this long-held Republican goal, I shall attempt here to show.
The road to the present political impasse has been a long one, and so this will be a long story, describing, and documenting, Obama's plan, which I now believe explains his otherwise inscrutable Presidency.
Since it will be argued here that Obama is basically a believer in Republican economics, the concept of "Republican economics" will first need to be explained, in order to enable one to understand how Obama has planned, and is now executing the closing phase of, this objective, of a form of, actually, a massive Republican policy-victory. (People who refuse to consider even the possibility that Obama is aiming to load the costs of bailing out Wall Street onto the economic backs of coming generations of the broad American public might as well read no further here, because that's what this article will document.)
The basic difference between Democratic economics and Republican economics is the difference between Keynesianism and the economic theory that preceded it (and that Republican economists still cling to). So: Keynesianism must first be explained here:
Keynesianism holds that economic stimulus during a depression or recession - a time when government is inevitably running deficits because taxes to fund the government are inevitably down - will place money back into the hands of workers and consumers, who will then spend it, thus restarting consumer demand, and thus promoting industrial production; and Keynesianism further holds that this increased production and selling will turn the economy back again to growth, so that more taxes will then be coming into the government, which thereby becomes enabled to pay down the debt during this period while the economy is booming again. So: the correct time for economic austerity from the government - otherwise known as reducing government spending - is during economic booms, not during economic busts, according to Democratic (i.e., Keynesian) economists.
Republicans strongly disagree: They maintain that during economic downturns, government spending must be slashed. They basically believe that government expenditures are waste, which cannot be afforded during hard times. Their economics, founded upon pre-Keynesian thinkers, holds that the way to deal with the shortfall in taxes coming into the government during a recession or depression is to cut government spending, definitely not to increase it. Economic history, after economic history, after economic history, has proven that this approach repeatedly fails and merely makes the economy worse (though improves things for mega-banks). The bigs on Wall Street love it and have profited enormously from it, and so the Republican Party stands behind it, regardless of economic history, because Republican Party campaigns are funded by big business, which also funds the lobbyists who write legislation for them. The Republican Party has served big business ever since Abraham Lincoln was shot in 1865; and the biggest banks control big businesses, through interlocking directorates that have been gained as a result of making big loans and big stock-investments (which are crucial to the families who control corporations). "Wall Street" is, in that sense, where it all comes together - but it's not really a street at all. It's large corporations and their banks and insurers and all of the law and accounting and PR firms that are paid by them.
On 3 April 2009, Politico bannered innocuously (and deceptively, given the shocking core which was buried here - Obama's statement), "Inside Obama's Bank CEOs Meeting." Eamon Javers reported Obama telling Wall Street CEO's, inside the White House, "My administration ... is the only thing between you and the pitchforks." (This historic, essentially secret, meeting, and the comment itself, had occurred on 27 March 2009, but Javers failed to cite the date, which was indicated only under the accompanying AP wire photo of the CEOs coming out of the event.) Obama's remark was implicitly analogizing here: he implied that he was protecting them not from prosecutions for crimes (which he actually was: crimes of fraudulently originating and marketing mortgage-backed securities, etc.), but instead from angry mobs outside, who were driven by irrational hatred (like lynch mobs were in the Old South). Obama was metaphorically siding here with the plantation owners, not the slaves; with the KKK, not their victims, but he told them that it was the public that were like the KKK. He was going to protect banksters from the public (i.e., from the very people who had been looted by banksters, and by Bush, and now also by Obama). He wasn't going to protect the public - which he here analogized to such a hate-obsessed mob. And he followed through on this promise, by refusing even to prosecute - much less to imprison - any mega-bank executive (though a few low-level employees were sent to prison, while their bosses walked off with millions).
Obama executed his policy mainly through his Treasury Secretary, Timothy Geithner, and also through his Attorney General, Eric Holder. Holder's function was simply to carry out the non-prosecution of elite criminals. Geithner was much more actively involved, structuring and carrying out the taxpayer bailout of Wall Street firms, and of their bondholders, stockholders, and counterparties.
On 2 October 2012, Bloomberg News headlined "Top 1% Got 93% of Income Growth as Rich-Poor Gap Widened," and Peter Robison reported that, "The earnings gap between rich and poor Americans was the widest in more than four decades in 2011, Census data show, surpassing income inequality previously reported in Uganda and Kazakhstan," both of which countries are well recognized to be plutocracies. The reason for this yawning gap is that when Geithner structured the bailout of Wall Street, he insisted that future U.S. taxpayers would be obliged to bail out the then-current bondholders in those bailed-out firms at 100 cents on the dollar, as if there were no "toxic assets" at all being held by those firms. Shahien Nasiripour, at huffingtonpost, bannered, on 16 May 2011, "Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers," and he reported that the Inspector General of the U.S. Department of Housing and Urban Development had carried out audits of Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial, and found, in each case, that they had swindled the Federal Government. "The internal watchdog office at HUD referred its findings to the Department of Justice, which had to decide whether to file charges" under "the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government." All of "the audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes ... using defective and faulty documents." Obama's "Justice" Department refused even to prosecute, much less to pursue, any of these mega-crooks.
On 7 June 2011, Zachary Goldfarb in the Washington Post headlined "Geithner Finds His Footing," and provided a stunning report on Geithner, and on his extremely close working relationship with Obama. Goldfarb just in passing dropped (buried) the bombshell that, "Geithner, who was once a registered Republican," and Goldfarb provided no details as to how long ago that was - perhaps when Geithner was brought into the Clinton Administration? We don't know. Anyway, Geithner "has a faith in the marketplace that puts him at odds with many of Obama's traditional Democratic allies." This was reportorial code for: in a recession, when the federal government runs deficits, Geithner supported Republican economics - cutting government spending during hard economic times is more important than cutting unemployment. Also: Geithner outright rejected (and he even misunderstood) Keynesianism: "Stimulus, he told [the President's chief economist, Christina] Romer, was 'sugar,' and its effect was fleeting." Keynesian economics, which is confirmed by massive history, says otherwise: stimulus spending by the government during a recession is the way to get money into the hands of consumers who then spend it and restart consumer demand which restarts industrial production. Geithner didn't care that much about industrial production; he was from Wall Street and wanted the government to instead bail out his friends who ran the mega-banks and to protect the big investors in their stock. Christina Romer was one of the most famous academic economists and an expert on the economics of recessions and depressions, and Geithner had never even been an economist and was just a servant to the aristocracy, and had been surrounded by aristocrats throughout his entire life. But he possessed the nerve to diss Romer, and to dismiss Keynesian macroeconomics, and to hold only microeconomic-based views (the economic theory that the aristocracy's economists had fashioned and that had created depressions) - which had caused even the Great Depression that Keynes was famous for having solved. Romer was not impressed with Geithner: "'There was this move to exit fiscal stimulus a lot sooner than we should have, and we've been playing catch-up ever since,' Romer said in an interview."
It was Geithner on the one side, and Obama's National Economic Council and Council of Economic Advisers on the other; and Obama went with Geithner: "Obama stood by him. And they grew closer. ... Lawrence Summers, then the Director of the National Economic Council, and Christian Romer, then the chairwoman of the Council of Economic Advisers, argued that Obama should focus on bringing down the stubbornly high unemployment rate. This was not the time to concentrate on deficits, they said." They were Keynesian. Obama, like Geithner, basically was not. Obama sided with Geithner: "Geithner pushed Obama to 'lean forward' according to several participants, cutting the deficit as much as possible as fast as possible." That's the exact opposite of Keynesianism. FDR had been subject to similar advice from conservative economists in 1937, before Keynesianism had been clearly proven, and the results then, as usual, were horrible, so FDR quickly resumed Keynesianism, and the economy resumed rising from the Depression's ashes; but Obama rejected economic history, and he went with the aristocracy instead. Is it any wonder, then, that economic inequality has continued to soar under Obama? The aristocracy boomed, while everyone else plunged, under Obama and other Republicans.
This theme of Obama-Geithner Republicanism was confirmed in September 2011 when Ron Suskind's Confidence Men was published. On September 19th, the former Clinton-Administration economist, Brad DeLong, blogged "Obama Develops His Own View of the Jobless Recovery," and pasted in some excerpts from this just-published devastating take-down of the Obama Administration, Suskind's Confidence Men.
DeLong being a professional economist, he included the most revealing passage concerning Obama's view of the nation's economy as he had entered office and during his first years in office, the passage there that actually explained Obama's entire economic policy. This passage referred to the President's two leading economic advisors, Christina Romer and Lawrence Summers:
Both ... were concerned by something the president had said in a morning briefing: that he thought the high unemployment was due to productivity gains in the economy. Summers and Romer were startled.
'What was driving unemployment was clearly deficient demand,' Romer said. 'We wondered where this could have been coming from. We both tried to convince him otherwise. He wouldn't budge.'
Summers had been focused intently on how to spur demand, and on what might drive a meaningful recovery. Since the summer, in meeting after meeting, he'd ticked off the possible candidates, and then discussed them - 'it won't be construction, it won't be exports, it won't be the consumer.' But without a rise in demand, in Summers's view, nothing else would work. What's more, in such a sluggish, low-demand environment, Summers felt that banks probably shouldn't be lending. 'No one wants banks to offer credit to people who shouldn't be taking on more credit.'
But productivity? The implications were significant. If Obama felt that 10 percent unemployment was the product of sound, productivity-driven decisions by American businesses, then short-term government measures to spur hiring were not only futile but unwise.
The two economists strained their shared memory of dozens of meetings: had they said something he'd misconstrued? At one point, Summers had mentioned how Keynes once wrote in a 1938 letter that the labor movement depressed productivity, and maybe Obama saw that the disruptions in the economy from the Great Panic gave employers an opportunity - an excuse, essentially - to harvest latent productivity gains.
After a month, frustration turned to resignation. 'The president seems to have developed his own view,' Romer said.
In other words, as the first of the many reader-responses to this posting said - and DeLong's blog was regularly read by large numbers of Democratic economists, so these comments were mainly from professional economists who were on the liberal side of that very conservative profession: "Obama is now on record as to the right of Larry Summers on stimulus vs. deficit reduction. At that point, we are beyond 'Obama as Rubinite' or 'Obama as blue dog' and well into 'Obama as GOP mole' territory. This disgraceful shill for global capital has destroyed the Democratic party for a generation."
Another said: "And I was always joking about Obama as the 'Manchurian Candidate' from the U of Chicago [a notoriously right-wing faculty]. Productivity? Really?"
Another said: "Law and economics [the associated far-Right UC viewpoint in political theory] background. Depressing."
Another said: "I'm totally blown away. ... To read that he espouses crank nonsense like this is frightening."
Another said: "Omigod. Larry Summers [the discredited conservative Democratic economist] looks good [by comparison to the President he advised]."
The only economists who still thought that high unemployment was the result of increased economic productivity were Republicans like Glenn Hubbard, who had headed George W. Bush's Council of Economic Advisors. One of Harvard's prominent champions of aristocracy, the Republican Niall Ferguson, also publicly defended this view on 2 November 2011, when Yahoo News headlined an interview with him, "Poor Public School Education Not Wall St. to Blame For American Inequality." In other words: (democratic) government was to blame; what's needed was more private schools, fewer public schools; kleptocratic aristocrats who financed political commercials (and financed scholars like Glenn Hubbard's and Niall Ferguson's careers) were not to blame for the bad national economy (even though they'd walked off with the winnings from the taxpayer-funded bailouts).
From this point forward, the only people who supported Barack Obama were the uninformed and outright suckers - besides any conservative insiders who were in on this con-game. Suskind's title "Confidence Men" referred to an overwhelmingly dishonest group of conservative Democratic insiders (Geithner, Rahm Emanuel, Bill Daley, among others) who surrounded and advised this President. But could anyone have suspected that Obama himself was actually far more conservative than any of them, and was the worst of all of those "Confidence Men"?
The actual political agenda that drives this passion to slash government spending at precisely the time when the masses of people are economically hurting has been well expressed by a string of leading Republican thinkers since Milton Friedman first hinted at it in 1978. Here, we will now describe the origin of the Republican drive to slash "entitlements": Social Security, Medicare, and Medicaid:
Friedman, in a 15 January 2003 Wall Street Journal op-ed "What Every American Wants," gave his first clear expression of it: "I never met a tax cut I didn't like. ... The reason ... [is] the effect of tax cuts on government spending. ... How can we ever cut government down to size? I believe there is one and only one way: ... cutting taxes. Resulting deficits will be an effective - I would go so far as to say, the only effective - restraint on the spending. ... The public reaction will make that restraint effective." First, the debt soars, then the government shrinks. That's the strategy. Friedman first introduced it in 1978; candidate Ronald Reagan then adopted and defended it in 1980.
Here's how Reagan put it, in a Presidential debate, on 21 September 1980: "John tells us that, first, we've got to reduce spending before we can reduce taxes. Well, if you've got a kid that's extravagant, you can lecture him all you want to about his extravagance. Or you can cut his allowance and achieve the same end much quicker." They're still trying, even after having already exploded the federal debt fifteen-fold since then.
Late in 2002, Vice President Dick Cheney told Treasury Secretary Paul O'Neill, "You know, Paul, Reagan proved that deficits don't matter." President George W. Bush wanted huge tax cuts in 2002, but O'Neill wondered how they were going to be paid for, and so he asked questions about the deficits. He was soon fired and replaced, for that.
On 25 May 2001, the anti-tax radical (and Reagan protégé) Grover Norquist said on NPR's "Morning Edition": "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." He was referring only to taxes, not really to spending (which many naïfs interpreted him to mean). Virtually every Republican congressional candidate thus signed Norquist's "No New Taxes Pledge," in order to qualify for Norquist's massive campaign-funding from corporate America.
On 21 June 2012, the Wall Street Journal headlined "Norquist: No-Tax Pledge at New Peak," and reported that 534 Republican congressmen and challengers had signed his pledge, compared with just 449 in 2010 (when Republicans retook control of the House).
In fact, soon after President Bush II came into office, this Republican strategy was further explained in Nicholas LeMann's "Bush's Trillions: How to Buy the Republican Majority of Tomorrow," in the New Yorker on 19 February 2001, in which a leading Republican Congressman, soon-to-become Senator, South Carolina's Jim DeMint (and now the head of the far-right Heritage Foundation), was quoted as saying, "Today, fewer and fewer people pay taxes, and more and more are dependent on government. ... Every day, the Republican Party is losing constituents, because every day more people vote themselves more benefits without paying for it." (To the Republican Party's financial backers, the recipients of Social Security and Medicare and Medicaid are basically lazy-bum scammers who exploit these "job-creators" - who instead live off of capital gains and dividends and interest and executive bonuses and "golden parachutes." In other words: big Republican donors despise their own - and others' - salaried employees, so much as to begrudge them their meager hard-earned social-insurance "entitlements.")
Their goal, therefore, is to loosen the bond between voters and government, either by shrinking, or by privatizing, Social Security, Medicare, public schools, and other Democratic programs (programs from which the middle class and poor benefit). And the best way to force that to happen is to starve government of funds for such programs. It's called "Starve the Beast." (That phrase actually originated in the Reagan Administration.) If the public comes to hate government, for failing to provide these services well, that's good for the Republican Party: the public's disgust with government will cause more and more Republicans to replace Democrats in Congress, and the White House to become a virtually permanent Republican enclave, because the Republican Party favors "small government." As Ronald Reagan (who soared the debt) himself phrased it, in his first inaugural address, "Government is not the solution to our problem; government is the problem." So, his man, Norquist, wanted to "drown it in the bathtub."
The goal is thus to shrink government services to the public, and the key to doing it is to drive the government so deeply into debt that slashing government spending on Democratic programs - especially Social Security, Medicare, and Medicaid - will be "forced."
Deficits are thus an essential part of the Republican strategy, to win their ultimate one-party rule. That's what George W. Bush was trying to do (in addition to privatizing them, such as by Bush's own Medicare Part D program; but privatization makes them Republican, not Democratic).
What Milton Friedman was saying since 1978 has emerged to become the operative Republican strategy, and it's still working for them, especially under the "Democrat" Barack Obama.
Obama is trying to complete the program. Here is how he is doing it: via the current debt-limit "negotiations" with congressional Republicans.
In order to be able to understand the current debt-limit battle in Washington, this is its distinctive essential historical background:
Although the U.S. Constitution's 14th Amendment states very clearly that "the validity of the public debt of the United States, authorized by law, ... shall not be questioned," the so-called "debt limit," as it's currently known - which violates that Amendment boldly, by its raising serious questions about "the validity of the public debt of the United States, authorized by law" - was instituted only in recent times. It was nearly approached in late 1995, when the Republican-majority U.S. Congress, under Republican House Speaker Newt Gingrich, for the very first time in U.S. history, tried to coerce a U.S. President to slash federal spending - specifically, they tried to force Democratic President Bill Clinton to slash "entitlements": Social Security, Medicare, and Medicaid. Gingrich especially wanted to slash Medicare. The solid-Republican congressional votes against increasing the debt-limit in order to pay "the public debt of the United States, authorized by law" did actually shut down the Federal Government, for the first time in history, for an extended period of time, starting on 14 November 1995 for five days, and then yet again on 16 December 1995 for 21 days - a total of 26 days, unheard-of in previous U.S. history.
During those two periods, "non-essential" government services were suspended, while the "public debt of the United States, authorized by law" continued to be honored. Gingrich didn't threaten that. The second federal shut-down ended on 6 January 1996, when the Republicans finally passed and the President signed "Public Law 104-94," a Joint Resolution to raise the debt-limit. This action - which until then had always been treated in Congress as routine - finally enabled the U.S. Government to resume and continue to function, and the federal debt to continue to be paid, which it had always been.
On 19 July 2011, NPR's Eyder Peralta blogged headlining "Bill Clinton Says He'd Raise The Debt Ceiling Using 14th Amendment," and Peralta quoted there from an obscure online news report that day, which was bannered "Exclusive Bill Clinton Interview: I Would Use Constitutional Option To Raise Debt Ceiling And 'Force The Courts To Stop Me.'" Peralta paraphrased Clinton's statement there: "He never considered invoking the Fourteenth Amendment ... because the Republicans led by then-Speaker Newt Gingrich didn't threaten to use the debt ceiling as a weapon in their budget struggles with him." So, what John Boehner and the Republicans were now doing was actually entirely unprecedented in prior U.S. history. These Republicans were even more vicious than the Clinton-era ones were.
And yet - shockingly - Obama has not challenged that right, which Republicans were (and had been) asserting throughout his Presidency. Obama has shown by his actions that he didn't want to use the force of Constitutional law to counter Republicans' force of this brand-new congressional precedent, of eliminating the previously rather routine nature of increasing the federal debt-limit, routinely raising it so as to enable the nation's existing debts to be paid. Obama has accepted Republicans' historically unprecedented option to violate the Constitution's provision that "the validity of the public debt of the United States, authorized by law, ... shall not be questioned."
During an early-December White House "Press Briefing by Press Secretary Jay Carney, 12/06/2012," the President's Press Secretary was asked specifically "whether the President would invoke executive power and the 14th Amendment," and Mr. Carney responded: "This administration does not believe that the 14th Amendment gives the President the power to ignore the debt ceiling - period." In other words: Barack Obama was now, for the very first time, officially on record as removing that weapon from the available arsenal in his "negotiations" with congressional Republicans about the debt limit. Removing the very option that Bill Clinton had said he would have been using throughout Obama's Presidency. Republicans could now quote Obama himself as agreeing with them on that, that the change in congressional custom that had taken place on this matter when Obama became President was simply Congress's assumption of a power that Congresses had always had - nothing violating the Constitution at all. Not only could "the validity of the public debt of the United States, authorized by law, ... be questioned," it could be outright denied by Congress. For Congress itself not to honor the previously contracted financial obligations of the U.S. Government to its existing creditors, which prior Congresses had contracted, would be unConstitutional in the extreme, but Obama apparently didn't even care about that; he quite obviously had other fish to fry. Liberals who continue to support him are idiots - he is making fools of any who do: they should instead be screaming bloody murder against him.
And it's not as if this were new behavior from him. Barack Obama had previously caved to the Republicans without fighting, concerning his elimination of the public option from his "Obamacare," and more recently breaking his long-made promise never to compromise on increasing taxes on the top 2%, $250,000+, and he had also chosen not to hold Republicans' feet to the fire on the fiscal cliff; in fact, the recent fiscal-cliff deal enabled Republicans now to "force" him to slash federal spending, so that the only thing protecting the American public from this disaster was the 14th Amendment, which Obama refused to use. (A weaker option would be the trillion-dollar platinum coin-trick, but more on that later.)
Workers whose incomes come from labor-based wages, instead of from investments, now know that their Social Security contributions are again being taxed, because Obama accepted the Republicans' desire not to continue that bottom-end tax-cut - the basic tax-cut on wages. Obama accepted this from Republicans, and he accepted also the Republicans' desire to give the wealthiest Americans a continuation of the Bush tax cuts on the incomes they earn all the way up to $450,000 (or $400,000 for single persons); and he didn't have to do it. He merely wanted to do it. And, in doing it, he also handed away to the Republicans his big weapon of the fiscal cliff itself.
The only thing that realistically remained in his arsenal of weaponry against Republicans' ultimately forcing slashes in Social Security, Medicare, Medicaid, regulatory enforcement, and many other vital government programs, had actually been handed away by him even earlier, on December 6th: the 14th-Amendment weapon. Clearly, therefore, Mr. Obama is determined to give Republicans much of what they want on these "entitlement" cuts. He evidently wants to find a way to allow that to happen. He wants House Republicans to be able to block the Federal Government from paying its previously contracted debts, so as to force him to cut "entitlements."
On all prior occasions in which Obama has caved on vital details before even negotiating with Republicans about them, he had the public on his side but caved by his own choice. Polls showed about a 2-to-1 support for the availability of a public option; polls showed about a 2-to-1 support for the $250,000 benchmark for increasing tax-rates. But Obama caved on those matters because he had lied to Democrats - and even to many moderate Republicans - about those claimed goals of his, and his actions showed that he actually agreed more with the goals of congressional Republicans on these issues than he did with Democrats and others who, in poll-after-poll on them, showed that they agreed with his stated (and even promised) positions on them.
Now he is repeating this same behavior, regarding cuts to "entitlements." Yet again, polls show that the public rejects raising the retirement age, reducing the inflation-measure in calculating SS benefits, and the other Republican-pushed measures; but Obama is doing all he can to help congressional Republicans get what they want on these issues.
Barack Obama had, even earlier, driven Nancy Pelosi and Harry Reid to fits with his back-door efforts to gut such "entitlements," as when he had appointed the conservative Democrat Erskine Bowles to serve opposite the extremely conservative Republican Alan Simpson as being the two co-chairs on the White House's "bi-partisan" federal debt commission concerning entitlement "reform." (The Commission produced recommendations that congressional Democrats roundly repudiated for slashing entitlements, and that Republicans condemned for increasing taxes.) Obama had set this Commission up to deal with the soaring federal deficits that had been caused by Bush's 2008 economic collapse, by their using those federal deficits as an excuse to slash entitlements and thus produce even more suffering for the poor, at the same time as Wall Street was being bailed out. (Bowles was supported by the very Wall Street banks that were being bailed out by taxpayers. Simpson was a born conservative who followed in his father's footsteps as Wyoming's Republican U.S. Senator. His father had been quite extreme: "one of six Republican senators who voted against the Civil Rights Act of 1964.") So, this was a wolf-in-charge-of-chicken-coop type of operation, which congressional Democrats opposed. Republicans opposed it because it would have meant increasing taxes - it wasn't conservative enough for them. Thus, on the very same day, 28 March 2012, when Bowles-Simpson was finally dashed in the House, the House passed instead the Paul Ryan budget, which Mitt Romney ended up running on, against Obama. The 2012 "election" was thus between two conservatives, one of whom pretended not to be.
Yet again, Pelosi and Reid are tearing their hair out about Obama's deceits and his preemptory caves on vital issues. Right after Obama betrayed the Democrats by caving to the Republicans on the January 1st fiscal cliff, Pelosi was asked in her weekly press briefing on January 4th, about the only realistic remaining defense against the Republican assault on the spending side, which is for the President to use the 14th Amendment to annihilate the Republicans' threats to violate the 14th Amendment by their causing a U.S. default; and Pelosi said, "I've made my view very clear on that subject. But I'm not the president of the United States." On the same day, Ryan Grim at huffingtonpost bannered "Harry Reid Would Back Obama If He Bucks GOP On Debt Ceiling: Source." Reid "has privately told other Democrats, including President Obama, that if the administration used its constitutional and executive authority to continue paying its debts in the face of House Republican opposition, he would support the approach."
The way this would work is: Republicans will bring the U.S. to the brink of default, and President Obama would then cite the 14th Amendment, and possibly also the trillion-dollar-coin tactic, to continue paying the U.S. Government's debts; and the matter would then go to the Supreme Court to be adjudicated. Obama would almost certainly win on the 14th Amendment there. But Obama has already, through his Press spokesperson on December 6th, said that he won't use the 14th Amendment. That would leave only the coin-tactic, which is less likely to succeed. (See the immediately following parenthetical paragraph if you want to know why.) Obama had already publicly trashed his biggest weapon: the 14th Amendment. He has done this - disarmed himself - because he wants the Republicans to win. There's no other reason for it.
(Regarding the coin-trick: The legal basis for the coin-trick is USC Sec 5112, which starts with sub-section "(a) The Secretary of the Treasury may mint and issue only the following coins" - and that word "only" is key here, so I emphasize it - and it then describes sub-sub-sections 1 through 12, none of which allow for what is subsequently said in the coin-trick's sub-section within Sec 5112, which is "(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, quantities, denominations, and inscriptions as the Secretary, in the Secretary's discretion, may prescribe." Consequently, if the Treasury Secretary actually were to try using sub-section (k), which is the coin-trick clause, the Republicans could file suit to charge illegality. The Supreme Court would then make the final decision, but the case for the coin-trick is very weak, at best, and would hinge on the intent of the Republican congressman who had added sub-section (k).)
On January 12th, Ezra Klein blogged at the Washington Post, "Treasury: We won't mint a platinum coin to sidestep the debt ceiling," and he reported that Treasury had told him directly that, as Klein put it: "The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it." Klein also interviewed the Republican congressman, Mike Castle, who had written the law that was the basis for the coin proposal. Castle explained why "That was never the intent of anything that I drafted or that anyone working with me drafted." So: the coin-trick would almost certainly fail in the Supreme Court, if it were to be tried.
Thus, by renouncing the 14th-Amendment weapon, Obama has clearly indicated, by his behavior, that he wants to complete the gutting of Democratic social-insurance programs (Social Security, Medicare, and Medicaid) that previous Democratic Presidents had mightily struggled to produce and then protect. He is using the current debt-limit "negotiations" (subsequently non-negotiations) with the Republicans, so as to enable them to "force" him to allow these cutbacks, as being the supposed way for the nation to restore, to the Federal Government, the assets that the Government had spent in order to bail out the bondholders and the stockholders in AIG and the mega-banks, which bailouts to the elite (in addition to the inevitable shortfalls in federal tax-receipts that had resulted from the economic crash that had resulted from Wall Street's frauds), have created the soaring federal debt since the 2008 crash, and the soaring economic inequality during Obama's Presidency. Obama's protection of the banksters who had caused the 2008 crash is by now obvious to anyone who has eyes to see and a brain to understand.
Obama apparently considers liberals to be merely fools. For example, in order to convince the liberal Paul Krugman that Obama was really trying to avoid caving to the Republicans (as was reported by the disappointed coin-trick proponent Krugman on his blog on January 13th), "The White House insists that it is absolutely, positively not going to cave or indeed even negotiate over the debt ceiling - that it rejected the coin option as a gesture of strength, as a way to put the onus for avoiding default entirely on the GOP." So: first, Obama threw away his powerful weapon of the 14th Amendment, and then his powerful threat of the fiscal cliff; and, then, he discarded his weak (if not non-existent) weapon of the coin-trick; and, now, he was telling liberals that this discarding of his weaponry constituted "a gesture of strength."
Obama was consistently acting as if he wanted liberals to view him in historical hindsight as having been merely stupid, not evil - not a Manchurian Candidate, a Trojan-Horse secret Republican in Democratic garb, all along. Not a traitor to the Democratic Party, and to the entire bottom 99.9% of the American people. However, only a fool would think that Barack Obama was a fool. Obama was, instead, brilliant, whatever else one might be able intelligently to say of him. His plan here was, indeed, brilliant - first the give-away on December 6th of the 14th Amendment; then the give-away of the fiscal cliff on January 1st, which freed the Republicans to hold hostage now the nation's credit-rating - and, like Obama's entire life since he had first decided as a conservative Black to enter politics with his secret ultimate aim being to become the nation's first black President, his political skills dwarfed any competitor's: that's why he had become President, in the first place, and it's how he had stayed President now.
Obama was signaling to Krugman that the Republicans were merely bluffing. Obama hasn't even been doing that (bluff). His standard negotiation-tactic has instead been to start out by discarding the progressives' weapons - never by threatening to use them. Not only he doesn't bluff; he doesn't threaten at all. Without even the availability of threats, there can be no negotiation; there's nothing to negotiate about. Things just get dragged out, after Obama has already handed away his big weapons, even before the January 1st fiscal cliff - the time when he should have held firm, but chose instead to "buckle" and give the Republicans a needless top-end-tax-cut (and bottom-end-tax-hike) gift.
On January 17th, the Wall Street Journal bannered "GOP Weighs Short-Term Debt-Limit Increase," and reported that, "Republicans are discussing whether to support a short-term increase." The very next day came the announcement that they were actually doing it: the Washington Post headlined "House Republicans Agree to Vote on Bill to Raise Debt Limit for 3 Months." Then, on the evening of January 20th, House Republicans officially introduced their bill to extend until May 19th a "Temporary Extension of Debt Ceiling," in order to permit the U.S. Treasury to continue paying its previously contracted obligations, while they propagandize about "the need to get federal spending under control" - on the backs of everyone except the financial elite, whose bailout was the second-largest cause of the fiscal problem, after the plunge in tax-receipts that had been itself caused by the elite's own rampant financial frauds destroying the U.S. and global economies.
This could turn out to be a long end-game, but if Obama were instead to have used the 14th-Amendment weapon that remains at his disposal, none of this would now be happening at all - the Republicans could have been forced to capitulate as soon as the fiscal cliff came. Obama, thus, without the availability of that threat, and with the extension of the debt-limit threat, and having already renounced any other threat, is willing to drag the country down, if need be, in order to culminate Milton Friedman's strategy for ultimate Republican victory.
On January 14th, Rosalind S. Helderman of the Washington Post bannered "House GOP Freshmen Present New Challenges for Boehner," and reported that House Republicans were even refusing to okay disaster relief for victims of Hurricane Sandy in NY and NJ unless the money was deducted from other federal spending. This type of fiscal extremism had never before happened in U.S. history: these far-right fanatics were holding flood-victims hostage to Milton Friedman's "libertarian" "fiscally conservative" ideological monstrosity. Meanwhile, the aristocracy booms like never before, based upon federal bailouts, which resulted from the Obama-Republican refusal to allow accountability to Wall Street crooks, and to their crony investors.
Another example of how far House Republicans are willing to go in order to attack government spending that benefits the public instead of aristocrats, is documented in a report by thinkprograss.org on 22 January 2013, headlined "House Republican Leader Blames Gun Violence On 'Welfare Moms.'" Video was shown there of the 5th-ranking House Republican speaking before a 100% white audience at a town-hall event in his low-income Dixie district, answering a constituent's question, by saying that gun violence occurs "because welfare moms want to get additional benefits and if they can put them [their children] on SSI [Social Security Income payments] through maintenance drugs, they can also put them on Social Security disability and get a separate check," which, he claimed, was causing too many children to go crazy on "psychotropic drugs." The congressman said, "Not only is it fraudulent on the government, but it also tells a kid with great potential, 'don't try because you're disabled.'" Thus, a constituent's question about gun-violence sparked from this mini-Goebbels an answer that denigrated both Social Security and "welfare moms." That is how fascist these politicians are.
However, an Obama-defender might ask, doesn't this analysis ignore the "fact" that the Federal Government is actually making a profit on all of those "toxic assets" that it had purchased from these Wall Street institutions, and so this bailout wasn't really a handout to aristocrats, by the American public, after all? No. That, too, isn't true. Here is how and why:
Although the U.S. Treasury has been selling many of those assets, the purchasers of these toxic assets have been off-balance-sheet entities of the Federal Government: Fannie Mae, Freddie Mac, and, above all, the Federal Reserve itself, which is the nation's creator of money. Technically speaking, the Fed is owned by its member banks; but, in reality, the balance sheet of the Fed will ultimately determine the Government's obligations, because the full faith and credit of the U.S. Government backs the Fed, especially the Fed's TALF or "Term Asset-Backed Security Loan Facility," by which the mega-banks have sold to the Fed their "toxic assets." Those "toxic assets" thus become owned ultimately by future U.S. taxpayers. Furthermore, two-thirds of the $1.54 trillion "Total Outstanding" to the Federal Government, and 58% of the $13.87 trillion "At-Risk" to the Federal Government, on the "Total Wall Street Bailout Cost," is due to be repaid to future U.S. taxpayers from the Federal Reserve. In other words: the Fed, an off-balance-sheet entity for the U.S. Treasury, has bought these toxic assets, mainly from its biggest member banks; and future U.S. taxpayers will be left holding the bag for them. Moreover, the trashiest of these toxic assets are the stuff that hasn't yet been auctioned off and paid back to the U.S. Treasury; like wikipedia said about the "Term Asset-Backed Securities Loan Facility": "The Fed refuses to provide any information on how it priced individual securities bought with TALF funds." The Fed is owned by the banks; if they're ripping off the Federal Government, it's in their interest not to reveal to us now how bad the theft will turn out to have been. This money is being taken out of our future. Our Social Security, Medicare, and Medicaid will thus "need to be" slashed, though this will occur gradually (such as by reducing the inflation-adjustor on SS), just as the tax-hit upon Americans will occur only gradually, and so the idea here is that the public will grudgingly accept this slow-motion fleecing by the aristocracy. This is probably the biggest and most systematic theft in all of global history, but the details of it are still being hidden from us. Here is why:
There is an old aphorism, that if you boil a frog slowly, it'll never notice - it won't jump out of the pot. Well, today's children are those frogs. That is Obama's plan, not merely the plan of other Republicans - it is the fulfillment of his plan, in which he is being "forced" (supposedly by other Republicans) to do this.
Watch it happen, live! It's culminating right now. But the hell to pay will be paid by our children. We'll get to see only the start of it.
PS: Though "Starve the beast" is effective as a strategy to destroy the Democratic Party over the long term, it is no longer even in the running as any serious economic proposal. "Starve the Beast" is by now proven false as regards economics, and the only reason why it remains dominant in the Republican Party is as political strategy, for long-term power, to crush the Democratic Party.
Even William Niskanen in 2006, and Michael J. New in 2009, published empirical studies in the Koch brothers' own libertarian Cato Journal, titled respectively "Limiting Government: The Failure of Starve the Beast," and "Starve the Beast: A Further Examination," both of which studies found consistent and overwhelming economic evidence that, as New put it, "Low levels of federal revenues actually stimulate expenditure growth. This conclusion is in direct contrast to the predictions by proponents of starve the beast." Here is why this finding is exhibited in democracies: federal tax receipts go down during recessions and depressions, when the need for government programs soars and federal expenditures thus inevitably rise, so that instead of "starving the beast," the "beast" (which is democratic government itself) actually grows during economically stressed times. In a democracy, government must appeal to the masses in order for politicians to be able to be re-elected, and so government spending varies inversely with economic conditions. This is yet further confirmation of Keynesianism, but it applies only in democracies, and so it's not just Keynesianism. The Koch brothers were apparently not pleased with these findings, and so, in 2012, they fired and replaced the head of Cato, because he had let research like this be done with their money.
The only reason that Obama is seeking to be "forced" to cut Social Security, Medicare, Medicaid, and other Democratic programs, is in order to increase the power of the Republican Party. He still protects the banksters from the "pitchforks." As to why he is pursuing that goal, I have no idea. He certainly hasn't been helped by the banksters: They favored Romney.
Investigative historian Eric Zuesse is the author, most recently, of They're Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST'S VENTRILOQUISTS: The Event that Created Christianity.