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Two-Party Economic Betrayal of the Working Class: The Need for a Grassroots Progressive Campaign

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Election year choices are increasingly reduced to the lowest common denominator, disconnected from most people's lives, controlled by the Democratic-Republican duopoly in thrall to corporate megabucks that buy off government, and covered by corporate media like a horse race.

There is a widespread sense that Washington is broken, purposefully derailed by big-money interests and a political right intent on subverting democracy and gaining power at all costs. Pitting birth control against religious liberty serves as one more distraction from Washington complicity with the 40-year wealth shift upward and the economic war waged against the U.S. majority (99 percent).

Political scientists Jacob S. Hacker and Paul Pierson in Winner Take All Politics link accelerating economic inequality with political exclusion of the masses. They conclude that political and economic rules have been rewritten to grow the wealth of the top 1 percent (even more so, the top 1/10 of 1 percent), and most voters have been organized out of politics.

The false campaign discourse has been foreshadowed by political posturing around a faux deficit crisis by Republicans and some Democrats. On the cusp of a downturn like the 1931 depression, President Obama's capitulation to a contractionary economic agenda has equated to foolish macroeconomics, assessed former Wall Street trader and Roosevelt Institute senior fellow Rob Johnson. Many economists (most often heard on The Real News Network or Democracy Now!, rarely in mainstream media) call the resulting austerity policy a guarantee of continued economic decline, stagnant wages and high unemployment.

With issues reduced to political sound bites, Newt Gingrich has repositioned himself as a born-again presidential candidate, decrying the ungodly money influence on behalf of his chief opponent. Nevertheless, as speaker of the House in the '90s he encouraged the sell-off of government to the highest bidder, and was named a leading practitioner of "the Washington influence money game," by former common cause president Fred Wertheimer.

Election-year rhetoric waxes elitist, classist and racist, as candidate Gingrich promotes the idea of replacing "one school janitor with 30 students," as well as reducing capital gains tax to 0 percent, thus eliminating candidate Romney's already low tax payment of less than 15 percent. Even as Mitt Romney accuses President Obama of desiring to turn us into "a European-style welfare state" -- an "entitlement society where government takes from some people to give to others" -- he shrugs off concern for the poor and invokes a safety net already shredded by policies that shift tax burdens onto the backs of working people, while he proposes cutting the top corporate tax rate from 35 percent to 25 percent, raising taxes on the middle class, scrapping the Medicare tax and slashing other vital programs like Social Security and Medicaid.

The continuing right-wing drumbeat for high-end tax cuts, deregulation, and more war serves the 40-year wealth shift upward that helped precipitate the U.S. economic tailspin. Inflated deficits resulting from Reagan and Bush-type tax cuts for the wealthy have become excuse to demand social program cuts while preserving expanded wealth and power for the elite. Such austerity policy undermines investment in economic growth and job creation, perpetuating high unemployment.

Captive of the Republican deficit narrative and surrounded by Wall Street elites, President Barack Obama has often compromised to the right: The net result has been refusal to veto extension of Bush tax cuts (preserving tax cuts for the 1 percent) and an effort to achieve the largest deficit reduction possible predominantly by spending cuts. Former top White House economic adviser Lawrence Summers reinforced on ABC This Week the implicit Washington agreement that "most of deficit reduction will come from spending cuts" including Social Security, Medicare, and Medicaid.

Corporate media propagates the "entitlements-caused-deficits" narrative. NBC's Meet the Press host David Gregory, called for more sacrifice of beleaguered American people, pressing David Axelrod for a pledge of cuts to "entitlement" programs -- "the big [cost] drivers of the day." Gregory repeated the frequent media call-to-action for passage of Simpson Bowles Debt Commission recommendations (code for cuts to Medicare and Social Security), despite the fact that no recommendations ever passed out of committee. Falsely naming Social Security a main debt driver (a $2.5 trillion Social Security surplus in 2010 preceded the payroll tax holiday and government borrowing from the fund), Gregory disregards the role of out-of-control military spending or Bush tax cuts for the wealthiest. Consistently ignored by media are progressive proposals like Rep. Jan Schakowsky's proposed alternative to Simpson-Bowles, a balanced plan to close the deficit "without forcing the middle class to pay the bill."

Observing that during the debt ceiling "crisis," President Obama offered $10 in spending cuts for every $1 in taxes proposed, economist Tom Ferguson notes that Washington ignores the will of the majority, including Republicans, who expressed support for increased taxation of the rich, and rejected cuts to Social Security and Medicare by four to one in a 2011 poll.

Having stated the intent to cut Medicare and Social Security before he was inaugurated, President Obama has become the first Democratic president to offer to deal away Medicare and Social Security as bargaining chips of deficit reduction -- portending greater concessions in future negotiations. Some Democrats have followed his lead. Super Committee Democrats set a precedent last Fall when they offered $400 billion in cuts to Medicare, half each from benefits and provider reimbursements. Hundreds of billions of dollars of subsidies to insurance and pharmaceutical companies remain largely unquestioned in Washington. Nor is there discussion of raising the income cap for Social Security taxation.

Sen. Ron Wyden (D-OR) lowered the bar still more at the end of 2011 when he joined Rep. Paul Ryan (R-WI) to offer a proposal for a two-track program of privatized/voucherized Medicare that will compete with and gut traditional Medicare.

Both President Obama in his State of the Union and Gov. Mitch Daniels in his response, offered changes to Medicare cloaked in language of preserving it for the current generation of seniors.

The president's 2012 State of the Union seemed an attempt to walk the line between an ostensibly populist message while preserving corporate/Wall Street support. After the annual address, one Republican wondered aloud if the president had become a Republican; another remarked that he is "taking both sides." The White House communications director indicated that the speech was gauged to present Republican-favored policies, laying the ground for "bipartisan common ground," a signal of Obama's continued compromise to the right.

President Obama called for the end of billions in tax subsidies for oil companies, while celebrating health care reform that "depends on private markets," primarily taxpayer-subsidized private insurances. He offered private sector tax credits for job creation, not mentioning public sector jobs needed to begin to employ the 30 million under-and un-employed. His foreclosure measures seemed too little too late, with a reported 10 to 11 million home mortgages underwater and a paltry 900,000 homeowners having received loan modifications through 2011.

Some questioned why it took three years for the president to propose an investigative Task Force, and why Attorney General Eric Holder had not previously pursued mortgage abuses. The $25 billion settlement with the five biggest mortgage banks announced in February was seen by some as another bank bailout. The settlement preceded any investigation, and barely touched underwater U .S. mortgages totaling $700 billion. Financial commentator Yves Smith wrote that the settlement "revealed the mortgage market to be too big to fail" and "puts it on long term, perhaps permanent, government life support."

Federal Reserve chairman Ben Bernanke advised that the economy won't recover until the depressed housing market turns around. Robert Kuttner wrote that serious relief from the mortgage crisis won't happen without the break-up of too-big-to-fail banks. Despite the president's SOTU declaration of "no more bailouts, handouts or copouts," journalist Gretchen Morgenson (Reckless Endangerment) warns that the failure of the SEC to prosecute large mortgage companies or of Dodd-Frank to address too-big-to-fail banks, portends a repeat cycle of economic crisis and taxpayer bailout.

"Entitlement" as invoked by the political right and some Democrats denotes programs benefitting the working class. Health care, Social Security, Medicare and civil service pensions have become targeted "entitlements," though working people are financially invested in all of these.

"Entitlement" more aptly describes crony capitalists and banker/Wall Street gamblers who fraudulently accumulate wealth at the expense of the economy and the working class, and assume the right to be bailed out at taxpayers' expense when their house of cards tumbles. Former Colin Powell chief of staff Lawrence Wilkerson commented that the wealthy elite of the six biggest banks like the status quo of an Obama administration tight with Wall Street, knowing they can get another $6 trillion bailout when they crash again.

DavidStockman, Ronald Reagan's penitent former budget director (The Triumph of Crony Capitalism) observes, "We now have "an entitled class of Wall Street financiers and corporate CEOs who believe the government is there to do... whatever it takes in order to keep the game going and their stock price moving upward." Money dominates politics, distorts free markets and endangers democracy, says Stockman,"... we have neither capitalism nor democracy. We have crony capitalism."

Republicans promote a headlong rush toward 19th century economics, while too many Democrats fail to counter the right's false economic narrative, and instead compromise to the right. Many sense an urgent need for an alternative to the Democratic-Republican Party duopoly. Much as Occupy Wall Street has arisen to stand for the 99%, the working people, a grassroots movement that is built around principles like the People's Party Principles that originated in Wisconsin last winter would be welcomed by many as antidote to entrenched money-soaked Washington politics.

An earlier version of this piece was posted on Daily Kos.