Debate Continues on Obama Tax Deal

Below is a comment of mine on the December 17 Episode of "WakeUp AM" podcast (Episode 239). Brian of WakeUp AM had taken the position that Obama's tax deal with the Republicans was effectively the only pragmatic alternative. I, and others, took an alternative view:

Good discussion on the tax legislation. Brian made an argument worth noting; if the economy continues to do poorly in two years, then the Republicans would blame it on Obama for raising taxes on upper income earners.

Brian is right that the ultimate outcome was that the Republicans would get tax cuts for the rich; however, we could have done better, both in substance and in process (MLK would argue that process matters and I'll leave it at that for process).

On substance, he didn't drive a good bargain. For example, Obama could have sought to decouple the upper and lower income tax cuts by giving a three-year cut to lower earners and two-years for upper earners. Decoupling the two taxes would allow Democrats to vote separately on extending tax cuts for high-earners. This would avoid the potential for hostage-taking.

So, it might be true that tax cuts for the rich were inevitable, but Obama caved way too early. As you alluded, Obama might have been pissed at Congressional leaders for not using the tax cut legislation as a campaign issue; he might feel this was partly to blame for the bad mid-term election results. He might be unwilling to let it happen again. However, I think he erred in judgment on this one.

Obama's Long-View on Taxes a Huge Mistake?

"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." - Grover Norquist, President of Americans for Tax Reform

Obama talks a good line about taking the long-view in defending the ransom he's willing to pay to Republican hostage takers on tax legislation.

Unfortunately, Obama's long-view is probably a huge mistake. Many of us have that gut feeling. James Kwak (real name), blogging on Simon Johnson's baseline Scenario site, explains. First, he argues that the tax cuts for the wealthy are likely to become permanent:

If you think the tax cuts were bad policy, your chances of fixing that bad policy are much worse in two years than they are now. The administration’s best card would have been a threat to veto any bill that contained an extension of the tax cuts for the rich. The House is going to pass an across-the-board permanent extension in 2012. Are the Democrats going to block it in the Senate in an election year? Is Obama going to veto it in 2012? (And even if he leaves it for a lame-duck session, he’s going to have to make a commitment during the campaign.)

He then reminds us that this permanent tax policy is a permanent redistribution of wealth upwards:

This was the best chance to kill the tax cuts once and for all. Yes, it would have been worse in the short run for the economy. But this is a huge price to pay for a modest stimulus made up entirely out of tax cuts (largely tax cuts for the rich). Instead, we are stuck with a huge reduction in the tax burden of the rich and a small reduction in the tax burden of the middle class–which, on balance, helps the rich and hurts the middle class–forever.

Then he reminds us of the Republican long-view, toward which they've been marching for decades, and are nearing the final plunge of their stake, thanks in part to this tax deal from Obama:

... the old Republican “starve the beast” strategy: cut government revenues to the point where it is unable to do anything. ... Republicans have cut revenues and continued to spend on whatever they felt like spending on. But the core of the strategy is that if you cut taxes at every possible opportunity, eventually you will force the government into a crisis where something has to give (and probably it will be a Democratic administration that takes the political hit for cleaning up the mess). And unless American public opinion does an about-face, the thing that will give will be entitlements.

In other words, don't be fooled by excessive Republican government spending, thinking that it is a contradiction to their "less government" philosophy. Rather, they want to spend our government into hoc so that it has no alternative but to cut social programs. Kwak looks into the crystal ball at how this will likely play out:

So perhaps with the best intentions, the Obama administration, by making it more likely that the Bush tax cuts will become permanent... is probably hastening the day when push will come to shove and Medicare will be gutted. The bigger the projected national debt, the more seemingly reasonable people in the middle of the ideological spectrum shake their heads sadly and say something has to be done about Medicare, as if it’s a fact of nature and not a fact of politics.

Obama's unwillingness to at least try to draw the line now makes one wonder whether he is blind to this scenario or whether he also believes in a version of the "starve the beast" strategy.

• Contact the US Senate
• Contact the House of Representatives

Sources:

Baseline Scenario Blog, "More on the Tax Deal," by James Kwak, December 8, 2010.

Obama Acted too Soon on Tax Framework

I've listened to a variety of commentary on Obama's Tax Cut ransom "Framework" with the hostage takers (AKA Republicans).

What stands out for me is the Rachel Maddow show of 12/7/10 with Simon Johnson and Senator Sherrod Brown (D) OH. Three things stand out in particular: 1) People falling for Obama's rhetoric and concluding "he did the right thing under the circumstances", 2) Obama's list of what the Republicans supposedly "gave up" in this deal, like Childcare Tax Credits, College Tuition Tax Credits. But these were tax cuts added to Obama's earlier stimulus package to presumably attract Republican vote (in other words, the Reeps didn't "give these up") , and 3) Sherrod Brown's convincing scenario of the "fighting" path Democrats could have taken if the White House had coordinated a strategy with the Hill; a messaging campaign, taking the Reeps to the brink and making them blink at the 11th hour. He's convinced that the extension of unemployment benefits would have passed... without all of the other capitulations, like changes to inheritance taxes that will further polarize wealth in our Country.

I think Hugo Chavez was right: Obama is a prisoner. Even if Sherrod Brown's scenario didn't play out, at the 11.5th hour they could have caved... but they didn't really fight for it.

I know some say that the Reeps also held other legislation hostage until they ransomed the tax cuts for the rich, like "don't ask," but if the Dems want to frame and control the message, then they need to let the Reeps dangle in the breeze before paying the hostage ransom.

• Contact the US Senate
• Contact the House of Representatives

Sources:

Interpreting the 2010 Mid-Term Election

Following the recent election, the establishment narrative has been that Obama over-reached; his initiatives were too liberal and he needs to tack to the right. This view isn't based on analysis, rather it is more a matter of group-think among the punditocracy. To them it's obvious.

However, actual analyses suggest that the right-wing surge in the 2010 mid-term elections hinged on Obama not being progressive enough and thereby loosing the support of his base.

First, lets dismiss with the false common wisdom, promoted by the establishment, that presidents almost always suffer losses in the US House of Representatives during the mid-term elections. It's taken as unalterable fact. It's true that this occurred for George W. Bush and Bill Clinton, but during Franklin Roosevelt's first mid-term election, after he put forth radically progressive programs, the Democratic Party gained seats in the US House of Representatives.

Second, is the contradiction between the establishment narratives of the mid-term elections. On the one hand, losses in the US House were predicted on the basis of an "enthusiasm gap;" the narrative was that Democrats were disillusioned with Obama and thus less likely to work on the mid-term election campaign and come out to vote on election day. This narrative conflicts with the post-election interpretation that says Obama is being too liberal and needs to tack to the right.

Third, there are the numbers. Below is a comparison of exit poll information for US House vote results for 2008 and 2010, each with about 17,000 people surveyed. As a percentage, Democratic voters were a significantly smaller proportion in 2010 than in 2008.

Percentage of Turnout by Party for
US House Vote
2008 Vs 2010

Party Affiliation	2008 Percentage	2010 Percentage
Democratic	40%	35%
Republican	33%	35%
Independent	28%	29%

But percentages only tell part of the story. Did Democrats stay home, or did more Republicans come out in 2010 than 2008.

According to ABC News (Bold added),

[the] current estimate is that 90 million people voted [in 2010]. Exit poll says 45 percent were Obama voters in 2008. That’s 40.5 million voters.

In 2008, Obama won 69.5 million votes. So about 29 million Obama voters did not show up in 2010.

Exit poll also says 45 percent of people who voted yesterday were McCain voters in 2008, again 40.5 million. That, vs. his nearly 60 million in 2008, means about 19.5 million McCain voters did not show up.

So Obama had nearly 10 million more no-shows.

The following tables show that, of the Democrats that did come out to vote in 2010, they for the most part stayed with the Democratic party compared with 2008 (91-92%).

However, there were shifts in both Republican and Independent votes away from the Democrats to the Republicans. As a percentage, we see a big shift in Independents voting 51% Democratic in 2008 to only 37% Democratic in 2010.

US House Vote by Party Affiliation - 2010

Party and % of Turnout	% of Vote Dem	% of Vote Rep	% of Vote Other
Democratic 35%	91	7	2
Republican 35%	5	94	1
Independent 29%	37	56	7

US House Vote by Party Affiliation - 2008

Party and % of Turnout	% of Vote Dem	% of Vote Rep	% of Vote Other
Democratic 40%	92	7	1
Republican 33%	9	89	2
Independent 28%	51	42	6

But it's wrong to conclude that Independents simply jumped ship from Democrats to Republicans. About 48.5 million Independents voted in 2008, but only about 34 million voted in 2010, nearly a 15 million voter difference. If the "enthusiasm gap" story is correct, leading to progressive Democrats and Independents staying home, then concluding that voters seek a more "centrist" or conservative policy agenda, based on 2010 exit polls in which many "unenthused" progressive voices were absent, is in error.

Sources:

Re-posted from Challenge the Establishment Blog.

2010 Exit Polls for House voting - CNN

2008 Exit Polls for House voting - CNN

Thanks to GLH Blog for the ABC News information.

Opportunities to Miss

Not sure it's kosher, but I'm going to re-print a Paul Krugman blog post in it's entirety:

In today’s [New York Times] report on the foreclosure mess, a revealing sentence:

As the foreclosure abuses have come to light, the Obama administration has resisted calls for a more forceful response, worried that added pressure might spook the banks and hobble the broader economy.

Surely this can serve as a generic statement:

As NAME ISSUE HERE has come to light, the Obama administration has resisted calls for a more forceful response, worried that added pressure might spook the banks and hobble the broader economy.

Stimulus, bank rescue, China, foreclosure; it applies all along. At each point there were arguments for not acting; but the cumulative effect has been drift, and a looming catastrophe in the midterms.

Or to put it another way, the administration has never missed an opportunity to miss an opportunity. And soon there won’t be any more opportunities to miss.

===== End ====

Ouch!

Sources:

Challenge the Establishment Blog

Tea Baggers Say "No Federal Role in Education"

It's true. I heard a Tea Party activist say the feds have no role in education; should be a state function only.

OK, in that case, I'd like to see the elected Teabagger turn back the money that Obama is proposing to direct to the states.

President Barack Obama will offer $900 million in grants to states and school districts to turn around low-performing schools ...

When you consider that the $900 million would go very far in helping state and local governments, help maintain jobs prevent further economic stagnation, and only equates to maybe a week of the cost of the wars in Iraq and Afghanistan, it gives a little perspective to the often simplistic views of the Tea Party hierarchy.

For Your Convenience:

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

Speak Out on Health Care

My message to the White House on the GOP (McCain's) call to "start over":

If you are forced to "start over with a clean slate" on health care, the administration's initial position should be "medicare for all" or some other single payer system. Then, your compromise can be the inclusion of a public option. The GOP needs to be careful of what it wishes for.

We all know, having watched "the process," Mr. McCain, that the GOP did not operate in good faith as the healthcare legislation was developed. Republicans used stalling tactics, including disruption of town hall meetings, to try to derail any progress.

Let your voice be known at the White House on single-payer approach now.

For Your Convenience:

• Contact the White House
  

Cornell West to Obama: Don't be a Wimp

Cornell West to Obama: Take a Stand. Have the courage to Challenge the Establishment.

Cornel West's note to Obama - January 20, 2010
Uploaded by Ladypolitik. - Watch the latest news videos.

Sources:

Thanks to Anderson @ Shockfront and Ladypolitik for this tid bit.

Cross-posted at Challenge the Establishment blog

Is it Too Late for Obama to Become a Populist?

We watched feeling helpless as Obama appointed Geithner and let the investment banks off the hook instead of extracting real reform of the financial gambling scheme that Geithner helped create while Chairman of the New York Federal Reserve Bank. I know that's a long sentence, but but the things we've witnessed leave us in shock and awe; in such a state long sentences are symptomatic.

So, now that TIME Magazine says Obama is turning a new leaf, "signal[ing] a new approach" with tough talk toward the banks on financial reform, are we to believe it? Is this just another case of a politician using cheap words?

MORE


Sources:

Night Before Christmas Debacle

'Twas the night before Christmas and all through the Senate
Evidence was mounting of democracy's limit.

The People dismayed by what they were seeing
Sixty votes it takes to do just about anything.

The Constitution took care to protect the minority
A wealthy elite exploiting the majority.

Obama a prisoner of establishment power
Claims "victory" with words that surely taste sour.

As the healthcare battle appears to be done
the people are told, "Go to sleep now, you've won!"

The dejected masses comply and act tame
While Obama unabashedly calls out some names

Now Geithner, Now Orszag, Emanual, and Baucus
On DePearle, On Lieberman, Nelson and Sebelius

A man with a smile audaciously says, "hope"
surrounded by insiders who think I'm a dope.

"We stood up to special interests," he says as he winks
But his words are cheap, this deal really stinks.

The man with a smile says "The struggle is on"
More people look askance as they detect a con.

And when the dust settles the people will see
No healthcare reform from the powers that be.

Though believers continue to heap on their praise
Their numbers dwindle with the passing of days.

The media, corporate owned, just plays along
while the people say, "something's terribly wrong."

The Empire teeters, the establishment takes fright
But with happy faces say, 'To all a good night."

Sources:

GDAEman

Is Obama a Prisoner?

Is Obama a prisoner of the establishment elite?

MORE

GDAE Podcast - Episode 21

Episode 21 Afghanistan

• Afghanistan Escalation in the Balance: Voices of Rickback Bookboch, Stephen Walt, General Petraeus, WakeUp AM, Obama, Richard Engel.
  
• MUSIC: Dana Lyons' "Cows with Guns".
• Prosecute Bush: Guantanamo Detainee Attorney Michael Rapkin calls for Bush & Cheney prosecutions for torture.
• Afghanistan II: Rory Stewart on US Poised to Drive off Cliff in Afghanistan
• The Answer: How we know "We are All One"

Play GDAE Podcast Episode 21.

Previous Episodes & 60-Sec Promo:

GDAE Podcast 60-Second Promo

GDAE Podcast Episode 20 October 9, 2009
GDAE Podcast Episode 19 September 27, 2009
GDAE Podcast Episode 18 September 16, 2009
GDAE Podcast Episode 17 August 31, 2009
GDAE Podcast Episode 16 July 30, 2009
GDAE Podcast Episode 15 June 17, 2009
GDAE Podcast Episode 14 June 10, 2009
GDAE Podcast Episode 13 May 22, 2009
GDAE Podcast Episode 12May 5, 2009
GDAE Podcast Episode 11 April 24, 2009
GDAE Podcast Episode 10 April 9, 2009
GDAE Podcast Episode 9March 28, 2009
GDAE Podcast Episode 8 March 15, 2009
GDAE Podcast Episode 7 March 1, 2009
GDAE Podcast Episode 6 February 17, 2009
GDAE Podcast Episode 5 February 6, 2009
GDAE Podcast Episode 4 January 24, 2009

Sources:

Obama and Torture Photos

I'm hoping that Obama is being advised to withhold the torture photos to preserve evidence for prosecutions. E.g., a low ranking person is implicated, who has not yet been exposed publicly. The Gov't says, "Turn states evidence and we'll go lighter on you AND spare you the public humiliation."

Emanuel and Obama Shockers

On Sunday: Rahm Emanuel says Obama will not prosecute Bush attorneys.

On Tuesday: President Obama says prosecution possible.

My heart sank after reading about Emanuel's statement. My heart lifted when hearing President Obama's statement.

Our best hope of preventing similar crimes in the future is to hold Bush administration criminals accountable in full public view.

• Contact Obama
  Comment Line: (202)456-1111.

• Contact Attorney General Eric Holder
  

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

How Can We Stop the Gang-Rape?

One way to stop a gang rape is to say something rather than standing around dumbfounded. Simply raising one's voice can have a profound effect.

I just sent the following message to Obama at WhiteHouse.gov

Matt Taibbi Writes:

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream.

I feel like we're being gang-raped in the bailout process. Can you stop it?

Psssst... Do Something

• Contact Obamaa>
  
• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

Rolling Stone, The Big Takeover: The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution, Matt Taibbi, March 19, 2009.

Medicare For All

It's a simple concept. Even conservative seniors like their Medicare. But, we've been told by the Republicrat aristocracy that a single-payer system is "off the table."

Well, if the majority of the public thinks non-profit Medicare For All is affordable and makes sense, and we live in a democracy, then, shouldn't it become the law of the land? And if it doesn't become the law of the land, do we live in a democracy?

Lets put that question to a test. Lets call for a national referendum on Medicare for all as part of Obama's. But, since that will take two years to organize....

You can Act Now to voice your vote. Sign this petition supporting HR 676, non-profit Medicare for All sponsored by Rep. John Conyers.

Psssst... Do Something Else too!
Please take a little more time to Contact President Obama and urge him to support HR 676 non-profit Medicare for All.

• Contact the Broadcast Media
  
• Contact the Newspapers under development
  
• Contact the US Senate
  
• Contact the House of Representatives

Obama Talk'n Like a Populist

Under the headline "Obama challenges lobbyists to legislative duel" we hear some words form Obama that are supposed to comfort the angry masses:

The system we have now might work for the powerful and well-connected interests that have run Washington for far too long... But I don't. I work for the American people. [1]

We have reason to doubt that statement. In the context of setting the direction of the financial industry bailout, Obama sided with the Wall-streeters in his administration rather than the internal administration faction that urged taking a harder line. According to a February 10, 2009 New York Times article,

“The Obama administration’s new plan to bail out the nation’s banks was fashioned after a spirited internal debate that pitted the Treasury secretary, Timothy Geithner, against some of the president’s top political hands.

“In the end, Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, senior adviser to the president.” [2]

As featured in the upcoming Episode 7 of GDAE Podcast, even if the Obama administration takes the right technical steps, there are many subjective decisions yet to be made. These policy decisions will be subject to intense pressure from the powerful and now-desperate banking elite. Obama knows this and is talking tough:

I know these steps won't sit well with the special interests and lobbyists who are invested in the old way of doing business, and I know they're gearing up for a fight... My message to them is this: So am I. [1]

We are at a historical juncture that demands a historical level of public pressure on Obama, and other officials, to ensure they make decisions consistent with his populist rhetoric. This is a once-in-a-generation moment when our collective voices could change the course of the people's history. Let's make noise!

Psssst... Do Something

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

1. Associated Press, Obama challenges lobbyists to legislative duel, February 28, 2009.

2. New York Times, Geithner Said to Have Prevailed on the Bailout, February 10, 2009.

Dennis Blair: Withdraw Nomination

My latest note to Team Obama via "comments" at Change.gov:

State Department documents show that Dennis Blair, nominee for the top intelligence post, ignored his formal instructions to tell the military leader of Indonesia to stop using militias to kill civilians in East Timore. (This occurred during the Clinton Administration).

His nomination should be withdrawn, otherwise there will be a very embarrassing fight in the Senate confirmation process.

MORE from DemocracyNow!

Psssst... Do Something

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

Economic Stimulus Message to Obama

Below is a message I just sent to "Comments" at www.Change.gov (will anyone read it? Probably a young staff person, who will be slightly more educated as he or she engages others in Washington, DC.)

A bit wonkish, but...

You don't have to pay Paul Krugman, but you should heed his advice. Too much tax cut, as a stimulus, won't be effective.
1. Some of it goes into savings.
2. Much of it goes to cheap goods from WalMart/Chnia
3. It is merely consumption, not investment, e.g., in infrastructure.

As a State government manager, I urge you to a) fund local government jobs, b) fund design work, not just "shovels in the ground." Designer jobs are jobs too and we can expect to need well over a year of stimulus, so today's designs will be tomorrows "shovels in the ground."

Psssst... Do Something

Click on the Change.gov link above and leave a message for Obama's young staffer. You'll feel better for it.

Sources:

Thanks to Paul Krugman for the motivation on this one.

Prosecute Bush: Change.gov

I've tried to beat the drum on the reasons Bush should be prosecuted. You probably agree, so now lets create the pressure. Here's an important drum to beat:

1. Go to Obama's Transition Team web site, Change.gov
2. Go to the "Open for Questions" page
3. Sign In to your Change.gov account or register if you don't have one (it's easy)
4. Search for the questions using the keywords: special prosecutor
5. Vote in favor by clicking the check mark (NOT the X)

Note: Many people have asked the same question (over 500). You can vote on as many of them as you like, just beware of the "truth commission" cop out questions mixed in... you might not want to vote for them.

As of today, the most popular "Additional Issue" under "Pick a Topic" is the following:

"Will you appoint a Special Prosecutor - ideally Patrick Fitzgerald - to independently investigate the gravest crimes of the Bush Administration, including torture and warrantless wiretapping?"

14,350 votes "yes" as of today. Lets go viral and get that number to 500,000 million before the January 20 inauguration.

Psssst... Do Something

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

Thanks to the Godless Liberal Homo for the instructions on Obama's site.