The Big Lie

death panelsThe truth is our economic problems stem from the biggest concentration of income and wealth at the top since 1928, combined with stagnant incomes for most of the rest of us. The result: Americans no longer have the purchasing power to keep the economy going at full capacity. Since the debt bubble burst, most Americans have had to reduce their spending; they need to repay their debts, can’t borrow as before, and must save for retirement.

The short-term solution is for government to counteract this shortfall by spending more, not less. The long-term solution is to spread the benefits of economic growth more widely (for example, through a more progressive income tax, a larger EITC, an exemption on the first $20K of income from payroll taxes and application of payroll taxes to incomes over $250K, stronger unions, and more and better investments in education and infrastructure.)

But instead of telling the truth, Obama has legitimized the Big Lie by freezing non-defense discretionary spending, freezing federal pay, touting his deficit commission co-chairs’ recommended $3 of spending cuts for every dollar of tax increase, and agreeing to extending the Bush tax cuts for the wealthy.

Will Obama stand up to the Big Lie? Will he use his State of the Union address to rebut it and tell the truth? Maybe, but so far there’s no evidence.

In his weekly address this weekend, the President restated his “commitment” for 2011 “to do everything I can to make sure our economy is growing, creating jobs, and strengthening our middle class.” He added that it’s important “to look ahead – not just to this year, but to the next 10 years, and the next 20 years” to find ways to stimulate the economy through innovation. And that it is critical that the U.S. discover ways to “out-compete other countries around the world.”

Become more innovative? Out-compete? Who or what is he talking about? Big American corporations are innovating like mad all over the world, with research and development centers in China and India. And their profits are soaring. They’re sitting on almost $1 trillion of cash. But they won’t create jobs in America because there’s not enough demand here to justify them.

In the Republican address in response, U.S. Senator-elect Kelly Ayotte (R-N.H.) restated the Big Lie. “The American people sent us to Congress with clear instructions: make government smaller, not bigger,” she said. Deficit reduction “isn’t a Republican problem or a Democrat problem — it’s an American problem that will require tough decision-making from both parties.” And the way to shrink the deficit is to cut government. The extension of the 2001 and 2003 tax cuts over the next two years, she said, was an “important first step” to jump-start the economy.

Starting Wednesday, when the 112th Congress convenes with a Republican majority in the House, we’ll be hearing far more of the Big Lie.

Robert ReichGeorge Orwell once explained that when a public is stressed and confused, a Big Lie told repeatedly can become the accepted truth. Adolph Hitler wrote in Mein Kampf that “the size of the lie is a definite factor in causing it to be believed” and that members of the public are “more easily prey to a big lie than a small one, for they themselves often tell little lies but would be ashamed to tell big ones.”

Only the President has the bully pulpit. But will he use it to tell the Big Truth?

Robert Reich

Republished with permission from Robert Reich’s Blog.

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Comments

  1. says

    Much has been said ,written and talked about 9/11 which indeed changed the globe.Arrogant Americans would do well to stop to belittle others and force its ideas,system and way of life on others through use of gun.”Superiority” does not entitle any person or country to crush others without any reason.Whatever is being faced by the US is the result of miscalculations and shortsightedness in terms of achieving wild goals,losing site of what it faced in Vietnam.Avarice was never preached by the Jesus.Americans would well to learn in peace only if they treat others as humans.

  2. dr. o says

    The Big Lie, Mr. Reich, is people like you claiming that the solution is to confiscate more of the income from high performing taxpayers…

    The solution is to cut up your credit cards, let the bank take back that big car and the big screen 3D TV, cancel your internet and Dish Network and start living like your grandparents did after the crash of 1929… If necessary declare bankruptcy… Substitute a walk in the park after supper followed by Scrabble as family entertainment; in place of driving a $40K car to the mall to put even more debt on your credit card…
    Do this and YOU will be solvent within 6 months…

    Then Mr. Reich will be on here hyperventilating with hot air that you must start living on credit again, else folks like him will have to go get a real job for the first time in their lives… He horror, the horror…

  3. Barak says

    Robert Reich is now officially clueless.

    Not a single administration has reduced government’s burden on the economy since after WWII. Harry Truman was the last to do so, and the economy boomed.

    Since then, both parties have bandied their political footballs, all while growing government to the point that the economy is in shambles.

    Reich, of all people, should know why: the true measure of the burden of government on economic growth is not what it collects in income tax, but what it spends. For that spending is extracted not only in income tax, but also in other taxes and fees, rising prices for goods and services, and reduced purchasing power of a devalued currency.

    The big lie is that government is the solution to anything. Both parties are lying.

  4. Pope Paul says

    I agree that a concentration of wealth at the top has lead to a decline in living standards for the rest. I disagree that the present bloated size of all levels of government are not also part of the problem. Out of control spending (especially on the military) contributes to a lack of flexibility on budgets and an ever increasing tax take. Its largely a myth that Americans pay lower taxes than the rest of the developed world. Combine this with the fact that most Americans must cover their medical insurance out of their own pocket (most of the rest of the civilized world has tax supported medicare for all) and I’m not surprised that living standards are dropping. At the rate things are deteriorating, it wouldn’t surprise me to see a massive expansion of the poverty stricken in the coming years.

    • Ryder says

      Actually, you are very mistaken.

      Military spending is at all time lows as %GDP and is dwarfed… totally dwarfed, by out of control social spending.

      Military spending is under control… it goes up when we need it to, and it goes down when we need it to. You can’t say that about social spending.

      Military spending is Constitutionally mandated, whereas essentially NONE of the social spending is, and in large part it is questionable as to if it is authorized at all.

      What you, and most other people don’t understand is that the rich have almost no money… some horde a bit of it, but for the most part, they loan out their money to be used by others…

      So to believe that others have less $ because the wealthy have it is nonsensical.

      If anything, the poor have too much money. Why do I say that? Because they are given TRILLIONS of dollars… which they proceed to waste… failing to invest.

      If you give 100 billion to the poor in, say, California, about 50 million plasma TV’s will be purchased, yay for China! But that same 100 Billion in Bill Gate’s hands… won’t buy 50 million plasma TVs He can at best use maybe a dozen is his cozy cottage. No… that 100 B will be INVESTED (meaning given to OTHERS) as payment for their efforts, and for the tools and work spaces needed to invent and create and grow the economy HERE in the US.

      Economies exist and grow ONLY through investment… NEVER consumptiv3e spending. EVER. (it is literally impossible)

  5. Frank Amon says

    I believe that it is true that American’s are slowly but steadily paying down their credit card debt. If so, then does it follow that the whole country is living slightly below it’s income? And if that is true, does it follow that there is high unemployment? And, will high unemployment continue until sufficient re-payment has occurred so that people spend all of their income?

  6. Harry Canary says

    Three changes are necessary to the tax code. 1. Tax financial speculation. It will make the banksters pay for their own bailout and discourage useless, counterprodutive activity like high speed trading. 2. Tax capital gains and hedge fund mangers income at the ame rate as people who work for their income. They are not investing and creating jobs like they were supposed to so use it to reduce the deficit. 3. Tax estates at 100 percent. People should prosper by their own efforts not who their grandmother had sex with.

  7. Chukar says

    The GOP is very skilled in using the Big Lie, but they also adhere to the other prime principles of propaganda which not only support the big lie, but have independent uses of their own.

    Here they are, gleaned from Hitler’s Mein Kampf, 6th Chapter.

    1. BIG LIE – Always choose the big lie over the small; the masses will believe it more readily. Everyone tells small lies, so we easily disbelieve them. Few people tell enormous baseless lies, so we typically think “It must be true or they wouldn’t dare to say it.” But they do dare and we are continually fooled.

    2. FOCUS – Use only one or at most two selling points. The famous “talking points” repeated en masse on the news, or “sticking to the message” for which G.W. Bush was so rightly famous.

    3. REPEAT – Use them over and over until even your enemies know them by heart. The enemy will likely make the mistake of using your terminology to argue against your point (i.e. they don’t “re-frame” the debate).

    4. BLAME – Never waver, acknowledge no doubt, always blame – never credit – the other side.

    5. PROVOKE – First attract attention, then appeal to emotions.

    6. CRISIS – Shades of gray don’t work: issues must be love/hate, good/evil, life/death.

    7. EMOTIONAL SYMBOLS – Good slogans have no literal meaning, only a strong emotional appeal. “Family Values” for example: Has there ever been a family anywhere which had no values? “Death Panel” is another baseless slogan which was successful in inspiring widespread fear.

    8. PANDER – Ignore intellectuals and reasonable arguments; target the unthinking masses with powerful emotional pitches. The corollary is that if the pitch seems too stupid to utter, it’s not directed at you, but at the hoard of others who will buy it. The Democrats consistently lose the war of words because they attempt to appeal to reason.

    9. NO LIMITS – Ignore all moral limits when you believe stakes are high.

    In the five years since I happened upon these principles, every significant Republican statement I have heard or read uses at least one, normally two or three, and sometimes all of them. The longer the statement, the greater the number of principles used.

    When you make a list of them and compare the political statements you hear or read (primarily GOP; Dem. to a much lesser extent) you will see these principles at work.

  8. George A. Crackuh says

    Time and time again, the American public has proven to be wiser than the politicians, and their message to Congress shows that they are wiser than Robert Reich, too.

    Yes, Mr. Reich, there’s a large concentration of wealth at the top – could it be possible that corrupt big government policies, always in bed with big business and big banks, have had just a little to do with that?

    Adjust government policies to unburden our millions of SMALL businesses, Mr. Reich. That’s where almost ALL the job growth, and most of the innovation, always comes from. Don’t you even know that much ?

    Big businesses operate on economies of scale, and protecting their markets. They are never going to be the source of large job gains and dynamic economic growth. Instead, they are the beneficiaries.

    As far as your repeated urgings for government to spend more of what it doesn’t have, and what never belonged to it in the first place: you just witnessed a colossal year-long Keynesian experiment – which was a complete failure! Your boys threw out more than two trillion dollars, and drew back a bloody nub.

    So tell us, O Smart One – how much longer do we need to keep pumping out the fake money, corrupting our currency, and debasing our purchasing power? Until we get Jimmy Carter’s stagflation again? Until we start seeing Billion-dollar notes in circulation, like Zimbabwe? Maybe you never knew they had hyperinflation in the Weimar Republic, either.

    The fact is, our common-sensical, hardworking, taxpaying, regulation-suffering, American small-businessmen and women, are wiser than you are. Cut government spending. Shrink burdensome government. Abolish the IRS, the EPA, the DOE, and more.

    Institute market reforms in healthcare and insurance, instead of deforming the markets further with stacks of government regs. Do the same across the business landscape.

    Quit favoring the big guys in a thousand different ways, quit raising barriers for the small guys, and watch millions of energetic people in small businesses figure out their own solutions to help each other. That’s what’s made this country the economic engine of the world, and the wealthiest nation on earth – not government.

  9. Mogden says

    You are quite right. What the government should do is confiscate all wealth, and then distribute it according to the counsel of experts. Then society will finally be just!

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