Obama “Will Not Take Yes For An Answer” On Debt Ceiling Debate

Huffington Post notes:

House Speaker John Boehner says … “Unfortunately, the president would not take yes for an answer,” he said. “Even when we thought we might be close on an agreement, the president’s demands changed.”

While it may be tempting for liberals to write this statement off as mere right-wing positioning, prominent liberal writers agree.

For example, Jeff Cohen writes:

Liberal groups are now mobilizing against the White House and reported deals that would cut Social Security, Medicare and Medicaid benefits. They accuse President Obama of being weak and willing to “cave” to corporate and conservative forces bent on cutting the social safety net while protecting the wealthy.Those accusations are wrong.

The accusations imply that Obama is on our side. Or was on our side. And that the right wing is pushing him around.

But the evidence is clear that Obama is an often-willing servant of corporate interests — not someone reluctantly doing their bidding, or serving their interests only because Republicans forced him to.

Since coming to Washington, Obama has allied himself with Wall Street Democrats who put corporate deregulation and greed ahead of the needs of most Americans:

  • In 2006, a relatively new Senator Obama was the only senator to speak at the inaugural gathering of the Alexander Hamilton Project launched by Wall Street Democrats like Robert Rubin and Roger Altman, Bill Clinton’s treasury secretary and deputy secretary. Obama praised them as “innovative, thoughtful policymakers.” (It was Rubin’s crusade to deregulate Wall Street in the late ‘90s that led directly to the economic meltdown of 2008 and our current crisis.)
  • In early 2007, way before he was a presidential frontrunner, candidate Obama was raising more money from Wall Street interests than all other candidates, including New York presidential candidates Hillary Clinton and Rudy Giuliani.
  • In June 2008, as soon as Hillary ended her campaign, Obama went on CNBC, shunned the “populist” label and announced: “Look: I am a pro-growth, free-market guy. I love the market.” He packed his economic team with Wall Street friends — choosing one of Bill Clinton’s Wall Street deregulators, Larry Summers, as his top economic advisor.
  • A year into his presidency, in a bizarre but revealing interview with Business Week, Obama was asked about huge bonuses just received by two CEOs of Wall Street firms bailed out by taxpayers. He responded that he didn’t “begrudge” the $17 million bonus to J.P. Mogan’s CEO or the $9 million to Goldman Sachs’ CEO: “I know both those guys, they are very savvy businessmen,” said Obama. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free-market system.”
  • After any review of Obama’s corporatist ties and positions, the kneejerk response is: “Yes, but Obama was a community organizer!”

    He WAS a community organizer. . .decades before he became president. Back when Nelson Mandela was in prison and the U.S. government declared him the leader of a “terrorist organization” while our government funded and armed Bin Laden and his allies to fight the Soviets in Afghanistan. That’s a long time ago.

    It’s worth remembering that decades before Reagan became president, the great communicator was a leftwing Democrat and advocate for the working class and big federal social programs.

    The sad truth, as shown by Glenn Greenwald, is that Obama had arrived at the White House looking to make cuts in benefits to the elderly. Two weeks before his inauguration, Obama echoed conservative scares about Social Security and Medicare by talking of “red ink as far as the eye can see.” He opened his doors to Social Security/Medicare cutters — first trying to get Republican Senator Judd Gregg (“a leading voice for reining in entitlement spending,” wrote Politico) into his cabinet, and later appointing entitlement-foe Alan Simpson to co-chair his “Deficit Commission.” Obama’s top economic advisor, Larry Summers, came to the White House publicly telling Time magazine of needed Social Security cuts.

Marshall Auerback argues:

The debt ceiling dispute is not forcing a compromise on this President, but is instead is viewed by him as a golden opportunity to do what he’s always wanted to do.

***

Unlike President Hoover, who inherited the foundations of a huge credit bubble from the 1920s and found himself overwhelmed by it, this President is worse.

***

The predictable result is of his current stance is that, even as he claims to recognize the interlocking nature of the problems facing us and vows to “solve the problem” once and for all via a “grand bargain”, Obama is in fact tearing apart most of the foundations which were tentatively initiated under Hoover, but which came to full fruition under FDR. If he continues down this ruinous path, $150 billion/month in spending will be cut. Such economic thinking isn’t worthy of Mellon, let alone Herbert Hoover.

Glenn Greenwald writes:

Obama … has done more to subvert and weaken the left’s political agenda than a GOP president could have dreamed of achieving. So potent, so overarching, are tribal loyalties in American politics that partisans will support, or at least tolerate, any and all policies their party’s leader endorses – even if those policies are ones they long claimed to loathe.This dynamic has repeatedly emerged in numerous contexts. Obama has continued Bush/Cheney terrorism policies – once viciously denounced by Democrats – of indefinite detention, renditions, secret prisons by proxy, and sweeping secrecy doctrines.

He has gone further than his predecessor by waging an unprecedented war on whistleblowers, seizing the power to assassinate U.S. citizens without due process far from any battlefield, massively escalating drone attacks in multiple nations, and asserting the authority to unilaterally prosecute a war (in Libya) even in defiance of a Congressional vote against authorising the war.

And now he is devoting all of his presidential power to cutting the entitlement programmes that have been the defining hallmark of the Democratic party since Franklin Roosevelt’s New Deal. The silence from progressive partisans is defeaning – and depressing, though sadly predictable.

***

Obama is now on the verge of injecting what until recently was the politically toxic and unattainable dream of Wall Street and the American right – attacks on the nation’s social safety net – into the heart and soul of the Democratic party’s platform. Those progressives who are guided more by party loyalty than actual belief will seamlessly transform from virulent opponents of such cuts into their primary defenders.

Progressive economist Michael Hudson writes:

The most reasonable explanation for [Obama's] empty threat is that he is trying to panic the elderly into hoping that somehow the budget deal he seems to have up his sleeve can save them. The reality, of course, is that they are being led to economic slaughter. (And not a word of correction reminding the President of financial reality from Rubinomics Treasury Secretary Geithner, neoliberal Fed Chairman Bernanke or anyone else in the Wall Street Democrat administration, formerly known as the Democratic Leadership Council.)

It is a con. Mr. Obama has come to bury Social Security, Medicare and Medicaid, not to save them. This was clear from the outset of his administration when he appointed his Deficit Reduction Commission, headed by avowed enemies of Social Security Republican Senator Alan Simpson of Wyoming, and President Clinton’s Rubinomics chief of staff Erskine Bowles. Mr. Obama’s more recent choice of Republicans and Blue Dog Democrats be delegated by Congress to rewrite the tax code on a bipartisan manner – so that it cannot be challenged – is a ploy to pass a tax “reform” that democratically elected representatives never could be expected to do.

The devil is always in the details. And Wall Street lobbyists always have such details tucked away in their briefcases to put in the hands of their favored congressmen and dedicated senators. And in this case they have the President, who has taken their advice as to whom to appoint as his cabinet to act as factotums to capture the government on their behalf and create “socialism for the rich.”

***
Usually a crisis is needed to create a vacuum into which these toxic details are fed. Wall Street does not like real crises, of course – except to make quick computer-driven speculative gains on the usual fibrillation of today’s zigzagging markets. But when it comes to serious money, the illusion of a crisis is preferred, staged melodramatically to wring the greatest degree of emotion out of the audience much like a good film editor edits a montage sequence. Will the speeding train run over the girl strapped to the tracks? Will she escape in time?

The train is debt; the girl is supposed to be the American economy. But she turns out to be Wall Street in disguise. The exercise turns out to be a not-so-divine comedy. Mr. Obama offers a plan that looks very Republican. But the Republicans say no. There is an illusion of a real fight.

***

Just as the City of London backed Britain’s Labour Party in taking over when the Conservative Party could not take such radical steps as privatizing the railroads and London tube system, and just as Iceland’s Social Democrats sought to plunge the economy into debt peonage to Britain and Holland, and the Greek Socialist Party is leading the fight for privatization and bank bailouts, so in the United States the Democratic Party is to deliver its constituency – urban labor, especially the racial minorities and the poor who are most injured by Pres. Obama’s austerity plan – to Wall Street. So Mr. Obama is doing what any good demagogue does: delivering his constituency to his campaign contributors on Wall Street.

Hudson also states:

HUDSON: I think it’s evil working with evil…. If you have to choose between paying Social Security and Wall Street, pay our clients, Wall Street.

***

What’s inefficient? Paying for people on Medicaid. Got to cut it. What’s inefficient? Medicare. Got to cut it. What’s inefficient? Paying Social Security. What is efficient? Giving $13 trillion to Wall Street for a bailout. Now, how on earth can the administration say, in the last three years we have given $13 trillion to Wall Street, but then, in between 2040 and 2075, we may lose $1 trillion, no money for the people?

***

It’s not about the debt ceiling. It’s about making an agreement now under an emergency conditions. You remember what Obama’s staff aide Rahm Emanuel said. He said a crisis is too important to waste. They’re using this crisis as a chance to ram through a financial policy, an anti-Medicare, anti-Medicaid, anti—selling out Social Security that they could never do under the normal course of things.***

They’re not going to cut back the war in Libya.

***

They’re going to have to decide what to cut back. So they’re going to cut back the bone and they’re going to keep the fat, basically. They’re going to say–they’re going to try to panic the population into acquiescing in a Democratic Party sellout by cutting back payments to the people–Social Security, Medicare–while making sure that they pay the Pentagon, they pay the foreign aid, they pay Wall Street.

[Interviewer]: Yeah. But what–I hear you. But what I’m–I’m saying, what could be an alternative policy? For example, don’t raise the debt ceiling. Number two, raise taxes on the wealthy. Number three, cut back military spending. I mean, there are ways to do this without having to borrow more money, aren’t there?

HUDSON: Of course.

***

Of course they could cut back the fat. Of course what they should do is change the tax system. Of course they should get rid of the Bush tax cuts. And the one good thing in President Obama’s speech two days ago was he used the term spending on tax cuts. So that’s not the same thing as raising taxes. He said just cut spending by cutting spending on tax cuts for the financial sector, for the speculators who count all of their income that they get, billions of income, as capital gains, taxed at 15 percent instead of normal income at 35 percent. Let’s get rid of the tax loopholes that favor Wall Street.

***

Mr. Obama has always known who has been contributing primarily to his political campaigns. We know where his loyalties lie now. And, basically, he promised change because that’s what people would vote for, and he delivered the change constituency to the campaign contributors…

And see this interview with progressive expert and writer Yves Smith:

Indeed, it is obvious to both liberals and conservatives that the entire debt ceiling debate is a circus intended to create a big enough “crisis” to justify redistributing wealth upwards … again. See this, this and this.

Category: Credit, Politics, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “Obama “Will Not Take Yes For An Answer” On Debt Ceiling Debate”

  1. Snickers says:

    For a take on our dysfunctional political economy that avoids celebrity obsession, I recommend this 30-minute podcast from BBC Radio4 “Is America Doomed?” which aired June 27.

    http://downloads.bbc.co.uk/podcasts/radio4/analysis/analysis_20110628-1024a.mp3

  2. Permabear says:

    I appreciate Barry’s point of view. He doesn’t parrot the conservative party line so often seen in most financial commentary and analysis. As a moderate Democrat I understand why Obama has done much of what he has done. He’s not a left wing socialist extremist as he is painted by the right by any means. Obama is governing as a moderate. As noted above he has followed many of the foreign policy and economic policy of the Bush administration, to the consternation of liberals as expressed above.

    On the debt ceiling issue, Obama is caught between a rock and a hard place. He needs the House to cooperate in raising the debt ceiling. And yet the House is making all of these unrealistic demands that most any Democrat could never ever accept. So what is Obama expected to do? He can drive the car at the House Republican car and play chicken and see who blinks first, which is the game they are playing right now. He can capitulate to the House Republicans which would produce a rebellion by his Democratic Senate colleagues and the Democratic electorate. Or he can do as Bill Clinton recently advised him to do and use the 14th amendment to declare the debt ceiling to be unconstitutional and go ahead and issue debt regardless. I say he should do the latter and let it play out in the courts for the coming months. I sure wouldn’t capitulate to unreasonable Republican demands, unless the Democrats are really willing to let ALL the Bush tax cuts expire after 2012. If the Democrats had the guts and fortitude to just play passive aggressive, unite and refuse to extend those Bush tax cuts, much of the debt problem would be solved going forward. http://arthuride.files.wordpress.com/2011/06/5-10-11bud-f2-infocus-stopping-bush-taxcuts.jpg

  3. ilsm says:

    The extortion is: the guns’ 20% of outlays with tax cuts for the “interests” must be set in stone at the expense of the majority’s butter.