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Robert Reich

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Ransom Paid

Posted: 08/01/11 10:04 AM ET

Anyone who characterizes the deal between the president, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics.

The deal does not raise taxes on America's wealthy and most fortunate -- who are now taking home a larger share of total income and wealth, and whose tax rates are already lower than they have been in eighty years. Yet it puts the nation's most important safety nets and public investments on the chopping block.

It also hobbles the capacity of the government to respond to the jobs and growth crisis. Added to the cuts already underway by state and local governments, the deal's spending cuts increase the odds of a double-dip recession. And the deal strengthens the political hand of the radical right.

Yes, the deal is preferable to the unfolding economic catastrophe of a default on the debt of the U.S. government. The outrage and the shame is it has come to this choice.

More than a year ago, the president could have conditioned his agreement to extend the Bush tax cuts beyond 2010 on Republicans' agreement not to link a vote on the debt ceiling to the budget deficit. But he did not.

Many months ago, when Republicans first demanded spending cuts and no tax increases as a condition for raising the debt ceiling, the president could have blown their cover. He could have shown the American people why this demand had nothing to do with deficit reduction but everything to do with the GOP's ideological fixation on shrinking the size of the government -- thereby imperiling Medicare, Social Security, education, infrastructure, and everything else Americans depend on. But he did not.

And through it all the president could have explained to Americans that the biggest economic challenge we face is restoring jobs and wages and economic growth, that spending cuts in the next few years will slow the economy even further, and therefore that the Republicans' demands threaten us all. Again, he did not.

The radical right has now won a huge tactical and strategic victory. Democrats and the White House have proven they have little by way of tactics or strategy.

By putting Medicare and Social Security on the block, they have made it more difficult for Democrats in the upcoming 2012 election cycle to blame Republicans for doing so.

By embracing deficit reduction as their apparent goal -- claiming only that they'd seek to do it differently than the GOP -- Democrats and the White House now seemingly agree with the GOP that the budget deficit is the biggest obstacle to the nation's future prosperity.

The budget deficit is not the biggest obstacle to our prosperity. Lack of jobs and growth is. And the largest threat to our democracy is the emergence of a radical right capable of getting most of the ransom it demands.

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

 
 
 

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Anyone who characterizes the deal between the president, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics. The deal...
Anyone who characterizes the deal between the president, Democratic, and Republican leaders as a victory for the American people over partisanship understands neither economics nor politics. The deal...
 
 
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HUFFPOST SUPER USER
v98max
Businesses create jobs like DJs create records.
02:50 AM on 08/04/2011
The simplest read of the deal is that President Obama sincerely believes he did the right thing. Like most other Democrats, he's a thoughtful, sensible, non crazy, non racist conservative.
10:53 PM on 08/03/2011
I am looking at the US from the outside and have to say that I found the whole debate about the debt ceiling unworthy of such a great nation. It was more about gaining political traction than dealing with any issue and correcting our current path in order to actually be able to move forward in a structured way. Not only at this instance I am amazed at how little leadership was provided throughout the process and how those who shouted the loudest were allowed to get the most attention. I know it's naive to expect a "West Wing" style president that bangs the table when it's needed - that's (unfortunately) not how politics go in the real world - but from the outside, I find this lack of leadership astonishing.
07:50 PM on 08/03/2011
Hello people, let's get some perspective here. President Obama got exactly what he wanted: the debt ceiling was raised and it was raised enough that it shouldn't be an issue for another couple years. That was what the whole debate was about. The republicans were successful in creating a lot of media hoopla & getting people upset, but what else have they actually achieved? Everything is still on the table as far as the budget is concerned.
07:28 PM on 08/03/2011
During the campaign Biden opined that O would be tested in a big way within six months of entering the WH. This must be the test he was referring to, only it came a year late. Did our President rise to the occasion?
Linda from Deerfield
Paying attention
02:21 PM on 08/02/2011
Where are the Republican commenters? I've never seen them miss a chance to tell Robert Reich how wrong he is. Come on, gloat about how this strangling of the nation is going to help us and you're so relieved. Why so silent? Are you actually the ones masquerading as royally upset Democrats, blaming Obama for Republicans destruction?
HUFFPOST SUPER USER
RDWidner
A Libertarian by nature. A free man by act of God.
03:22 PM on 08/02/2011
Blaming the republicans for getting their way is like blaming Kobe Bryant for scoring too many points.
HUFFPOST SUPER USER
devildog21
"War is a Racket" -Smedley D. Butler MajGen USMC
01:25 PM on 08/02/2011
Obama has clearly allowed the republicans, aided and abetted by corporate media, to dictate our political dialogue at every turn. He is constantly reacting to them rather than being proactive. He has shown that he does not have the temperment to deal with the current makeup of the republican party (e.g. teapartiers) and refuses to start fighting them on their own terms.

The end result is the continued destruction of our government, our middle class and our democracy. The wrong man for the job. It seems that everything he does is oriented toward four more years in the White House while simultaneously ignoring the base that put him there. He won't lose any votes to republicans, but he is losing independents and progressives in droves who may well stay home in 2012.
12:54 PM on 08/02/2011
Republican strategy is crystal clear now. A refusal to increase ANY revenues means only one thing: they are determined to starve Social Security and medicare. They floated the Ryan plan too soon an had to back off after public reaction. They will be back. Time to recognize who we are dealing with: Reactionary True believers-they cannot compromise.
11:55 AM on 08/02/2011
If Obama was a real Democrat working 'For The People', this whole fiasco could have been easily avoided. When it became obvious that the Republicans were actually willing to destroy the economy if their demands were not met, Obama could have immediately called them out as extortionists and pointed out how Boehner gave his word that they would not use the debt ceiling as a hostage. He could have used his bully pulpit to take the people's side and tell them he would not cave in to Republican blackmail and allow them to gut SS, Medicare, and other vital programs. He could have explained how the jobs crisis is much more important than a deficit problem, and that a return to Herbert Hoover economics was not the answer. He could have taken control of the agenda with overwhelming support of the people.

But instead, Obama came out with his 'grand bargain' giveaway. This made it clear that he actually agreed with the Republican economic agenda and was eager to cut a deal to allow it to happen. He set this all in motion a year ago when, instead of establishing a 'jobs commission', he chose to establish a deficit reduction commission and appointed Alan Simpson to lead the charge.

The sad truth is that Obama is essentially just a Wall Street Republican. His entire election campaign pretending to be a 'hope and change' progressive was a fraud, but he managed to fool enough people to get elected President.
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HUFFPOST SUPER USER
davearnold007
The Talker They Lie, The Poorer I Get
11:43 AM on 08/02/2011
It is hard to conclude any differently than Reich did. To the extent that Obama did NOT use every public appearance during this manufactured crisis as an opportunity to demand tax increases and a national jobs proram rather than preach the gospel of compromise (like the GOP would ever compromise on taxes), then I one can only assume that HE AGREED WITH THE REPUBLICANS.

I can tell when I can't stand the lying anymore-every time Bush used to come on televsion I would hit the mute button.

Since a week ago Sunday, when Obama wasted a brilliant opportunity to lambast the GOP and demand revenue, he has been lying to us. He is a conservative democrat. He agrees with the outcome.

If you were a 'hopey changy' Obama person, just study the opposites-what was the opposite he could have done that would have sent a message that he truly DISAGREED with the GOP? He did not telescope any message other than he will compromise, as if compromise is an END UNTO ITSELF.

He needs a primary challenger so we can challenge his true beliefs, not his slogans. He is a deficit hawk and allowed the GOP to do the dirty work. Disgusting.
Nm123
think twice...it's not alright
01:08 PM on 08/02/2011
No need to primary just vote Repub......and see what you get....disgusting will be minor
01:13 PM on 08/02/2011
I swore I'd never post on a blog again but I had to tell you that you echoed my thoughts to the letter.
I don't just mute the TV when Obama appears, I switch the channel, just as I used to do with Bush.
Gertrude Stein's comment on Oakland applies to Obama--"There's no there there".
Yes, disgusting and nauseating because I voted for the creep.What about Russ Feingold as a primary challenger?
HUFFPOST SUPER USER
j b f
11:34 AM on 08/02/2011
If the Tea Baggers reach all their goals, you can kiss the nation goodbye as it goes down the drain.
It won't resemble anything anyone has ever known.
I grew up in the fifties. I remember Kennedy .I felt good about being an American and looked forward to the future.
This country is losing its heart and its losing its soul.
01:48 PM on 08/02/2011
I agree; JFK's assanation was the beginning of the downward sprial. And we still do not know who was behind it.
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HUFFPOST SUPER USER
stevendedalus3
11:23 AM on 08/02/2011
"The budget deficit is not the biggest obstacle to our prosperity. Lack of jobs and growth is."

The Threat Party is already prosperous and the hell with those who aren't. And the Dems are stymied by and because the President's close advisors are from Wall Street--stocks rise when jobs are cut.
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HUFFPOST SUPER USER
builderman55
Featherless Biped
11:09 AM on 08/02/2011
How many opportunities has Obama squandered due to his almost complete failure of leadership in the past 3 years? And I thought I voted for a fighter. Going into negotiations with the implicit principle that nothing is worth fighting hard for, and everything is negotiable is not leadership--it is capitulation. These are depressing days...
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Nomccain
10:58 AM on 08/02/2011
I'm afraid for what's ahead for this nation. Sooner or later (and probably sooner) there's going to be a movement that far outnumbers the tea baggers, who are sick and tired of being ruled by the corporations and their puppets and by senators who are already bought and paid for by the time
they're elected and there's going to be a groundswell of public anger that's going to flow over the streets of Washington DC and DEMAND change. If that change doesn't come, then who knows what's next? All that's needed right now is a leader to step forward and challenge this insane process by which most all of us are losing.
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MikeCm
Occupy Reality
02:17 PM on 08/02/2011
The tea baggers really aren't that big at all in my opinion. At least not the ad hoc "debt ceiling tea party caucus" that managed to extort our government recently. They consisted of 51 congressmen (out of 535) that signed the suicide "pledge" as well as 275,000 private citizens (according to their website). That's only about 0.1% of Americans. Of course, they had financial backing and PR firms to create the appearance of a massive movement.

Also, corporations are part of the picture, but the reactionaries that genuinely hate government and want it dismantled (except for defense and security related stuff) are creating the biggest problem right now.

Anyway, I'm going on and on. But I disagree with needing a leader to step forward. A real movement is self organized anyway; in a sense leaderless. The way the Arab Spring ignited and spread; completely outside the confines of existing political institutions (BTW- those existing institutions won't like it). Sure, there will be individuals and groups that lead and organize. But the kind of leader I think you're talking about comes later, after the movement fires up.

IMHO :)
02:23 PM on 08/02/2011
The problem for the 20% of the population which owns 85% of the wealth (Pew report) is that while they have already bought off two parties, they would have to spend even more money buying off a third party. It could get very expensive.
10:22 AM on 08/02/2011
And what are they doing about jobs? Why there selling T-shirts which say "Buy American" all imported from El Salvador.
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TheDuke75
Of the People, For the People and By the People
09:42 AM on 08/02/2011
In the Constitution Center is a little piece of wood up near the ceiling with the words of Justice Louis Brandeis on it saying " There is no title higer than President of the United States except that of citizen." The President needs to remember that and start listening to we the people. As do all Congressional persons. If they don't listen to the polls, we need to take to the streets in protest. We need to protest in fronty of their offices, where they speak and send a loud and clear message to them that they work for us, no matter what the believe individually. Call write and make our voices heard.


We relied on the President and the Democrats to be our voice, they failed us. Now it is time for us to find our collective voices and be heard. And to do so we have only to look to Wisconsin and how they did it.