Friday, February 17, 2012
Wednesday, February 15, 2012
President Barack Obama’s budget for 2013 will set off a vitriolic battle. Republicans will rail against the Democrats’ “class warfare” and Democrats will rail against the Republicans’ “coddling of the rich”. Yet it is mostly for show. The rich will win in their fund balances while probably losing at November’s presidential polls, and the poor and working class will probably re-elect Obama but suffer a continuing decline in relative and perhaps absolute incomes.
Consider the bottom line of the Obama budget. The policy is to cut total primary (non-interest) federal spending from about 22.6 to 19.3 per cent of gross domestic product from 2011 to 2020, while revenues would rise from recession lows of about 15.4 per cent of GDP in 2011 to some 19.7 by 2020. Compare that with Republican congressman Paul Ryan’s budget a year ago. Mr Ryan’s budget aimed for about 17 per cent of GDP in primary outlays by 2020, with revenues at about 18 per cent of GDP. The difference is modest, but the important fact is this. Both sides are committed to significant cuts in government programmes relative to GDP. These cuts will be especially swingeing in the discretionary programmes for education; environmental protection; child nutrition; job re-training; transition to low-carbon energy; and infrastructure. The entire civilian discretionary budget will amount to only 2 per cent of GDP, or less, as of 2020, in the budget plans of both Obama and the Republicans.
Sachs is right: The budget battles of the 21st Century have been narrowed down to paring away at the middle class.
Worse, this was a predictable situation. Indeed, it was predicted ahead of the first Clinton administration, that eventually, defense spending, Social Security and Medicare, and debt service on the cumulative budget deficits, the latter two mandatory figures, would choke the life out of any discretionary spending (except defense, which for some odd reason is not considered discretionary *koffkoffPORKkoffkoff*)
And then President Clinton took the then-bold (and now, radical) step of raising taxes on the wealthy while lowering them on the job-creating middle classes.
Yea, "job-creating middle class." That works in two ways, and please allow me this digression: First, 99% of jobs in this country are created by small businesses. 90% of small businesses are owned by people who make less than $50,000 from those businesses. You can't get much more "middle class" than $50K (use Google, the figures are out there.) Second, the middle class is the engine that keeps consumption going. Computers, cars, housing, iPads, food, clothing, shelter, all these sectors thrive on the middle class.
There are many more poor (Sachs and Olbermann both pointed out last night that one in two Americans now live in a low-income household, a staggering figure,) but they can only spend so much after they've paid rent. And let's face facts, it's the middle class that is caught up in keeping up with the Joneses.
But I digress....Clinton raised taxes on the wealthy, created 23 million jobs with his tax cuts on the middle class, and not only balanced the budget, but left a surplus.
Squandered immediately, I should point out, which brings us back to where we are now: the same boat as 20 years ago, deciding who should get hurt least.
In fairness to Obama's budget, he wants to raise taxes on the wealthy while maintaining Bush's middle class tax cuts, such as they were. And it is true that just cutting up the Bush era credit card of tax cuts would provide a neat little surplus in not-too-short order.
Here's the thing, tho: the argument over the budget, centered as it is around discretionary spending, mirrors the battle for re-election that Obama faces this year. There is so little left once you take defense, Social Security, and debt service off the table (in the election, staunch Republicans and Democrats) that the scraps are what will be left.
Similarly, the budget and the election link in this fashion: how those scraps are viewed and disposed of will determine if Obama wins, or whomever the Republicans set up to lose wins.
All Obama really needs to do is to change the dialogue and show that there's more meat than these burnt dry scraps. And that works in both arenas.
Tuesday, February 14, 2012
THE head of Israel's foreign intelligence service made a secret trip to Washington this month to gauge the likely US reaction to a unilateral Israeli strike on Iran's nuclear facilities.
The content of Mossad chief Tamir Pardo's discussion with his American counterparts has been revealed in a Newsweek article titled ''Obama's Dangerous Game With Iran''.
Unnamed US officials claim that Mr Pardo's line of questioning to David Petraeus, the CIA chief, ran: ''What is our [US] posture on Iran? Are we ready to bomb? Would we [do so later]? What does it mean if [Israel] does it anyway?''
That certainly sounds like the contemplation of an imminent attack to me.
Much of this alarm is centered on the International Atomic Energy Agency (IAEA) report last fall that suggested strongly that Iran was developing a weapons program. Iran has denied that, claiming any nuclear facility development was for peaceful purposes, like domestic energy requirements.
A clearer picture, however, is given by the reactions of both French and Chinese diplomats have been urging Iran to better cooperate with the IAEA inspectors, who may already have a report in the pipeline that paints a not-flattering picture of Iran.
Monday, February 13, 2012
Both Beijing and Moscow already protect dictators like Syria's Bashar al-Assad. If they gain greater relative influence in the future, we will see fewer democratic transitions and more autocrats hanging on to power. The balance in a new, multipolar world might be more favorable to democracy if some of the rising democracies—Brazil, India, Turkey, South Africa—picked up the slack from a declining U.S. Yet not all of them have the desire or the capacity to do it.
Even with the president’s approval rating showing signs of life and the Republicans busily bashing themselves over the head — “one is a practicing polygamist and he’s not even the Mormon,” retired Supreme Court Justice Sandra Day O’Connor recently quipped about her party’s two frontrunners — America continues to track right, according to polling data released by the Gallup Organization last week.
Polling on things like political bent is usually inaccurate, wildly so. It is unspecific, and subject to an awful lot of interpretations, particularly if the questions are designed to be clever.
Indeed, this is likely a lagging poll. As was made clear by the Komen debacle, America is starting to realize that the fruits of the progressive movement are in danger of being taken away, and are starting to fight back.
Indeed, all one has to do is to look at the bounce in support, so easily poo-poohed by Floriduh, that Barack Obama has received after starting to stand firm on his ground. And of course, the positive view most Americans have about the Occupy Wall Street movement and its goal of income equality (I'm sure some idiot will troll me with a Rasmussen poll showing high negatives. That happens when you take a poll at the local bierhallen.)
If anything, Americans are starting to wake up to the fact that for thirty years, they've let their lifestyles be dictated by a monster worse than Big Government: Big Business. Every year, the anti-spending protests on Black Friday grow larger. The local food movements increase volume. Local shopping, a way to make the community stronger, is a far more attractive option for people who see the big box stores, both bricks and mortar and in cyberspace, as a metaphor for isolationism.
This will continue, I think. It's an election year, and already the Occupy Movement has made splashes in DC at the CPAC convention, where Andrew Breitbart has his lunch stolen by protestors, similar to his drunken rant out a restaurant window in Santa Monica a few years back: incoherent and irrelevant.
They've followed the primary season around, making small splashes in states and getting on the local news, something they desperately needed in order to put a human face on the protest movement, which had been limited out of necessity to mostly large urban marches and camp-ins.
The conventions will be prime turf for them to make their very non-violent and polite message heard. Indeed, both sides of the aisle have begun to incorporate the OWS message into their rhetoric. When Newt Gingrich...Gingrich!...can attack Mitt Romney as an out-of-touch billionaire corporatist tool, you know you've had an impact!
So while to say America is a conservative country is not totally inaccurate, to say its becoming more conservative is idiotic. About the only "proof" Floriduh provides is a chart that shows America is getting stupider, and as we all know, stupid = conservative.
We smarten up real quick, though.