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How Debt Ceiling Crisis Reelects Obama

Tom Hall: The mainstream media has had little to say about Obama’s accomplishments. Why would they? The mainstream media is owned by, and serves, a handful of huge corporations in New York.
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Obamas watching World Cup finals. (Photo by Pete Souza)

Obamas watching World Cup finals. (Photo by Pete Souza)

What is it with Progressives and the debt ceiling debate? Back when Barack Obama was running for President, the progressive world was all about “change” – not accepting common “wisdom” about what we need to do and what we needed to accept. Progressives doubted that the corporate media was as reliable as it could be. Not just that Faux Noise was ridiculous, but that the New York Times and the Atlantic were too quick to be “understanding” of the need for preserving the status quo.

But now, it seems hard to find a progressive voice to doubt Larry Summers or Bill Clinton when they pontificate about the economic chaos that would inevitably occur with a debt ceiling default. When did we lose our skeptical eyes? When did we stop questioning the “wisdom” received from on high?

I have not been happy with a lot of Obama’s middle-of-the-road politics. I understand his need to hold the office. And I understand that he is laboring against an intransigent, disciplined opposition (which includes too many members of his own party). But the reason that I supported both John Edwards and Hillary Clinton ahead of Obama in the last primary campaign was his statement, early in the primaries, that he would work with the insurance industry to achieve medical care reform. I knew then that he was too inexperienced and too driven by dream-aspirations to be a forceful, progressive President.

Yet his presidency, even while increasingly derided by the left, delivered health care reform over extreme opposition. Mild, yes it is, but also real and cost effective over the long run. And he has had other legislative victories and has moved regulatory agencies back from the Brink to which Bush pushed them.

The mainstream media has had little to say about Obama’s accomplishments. Why would they? The mainstream media is owned by, and serves, a handful of huge corporations in New York.

Progressives used to complain about the rightist, corporatist slant of the mainstream media. But no longer. Now, if the Wall Street Journal, or the New York Times or the Sesame Street Gazette tells us that failure to raise the debt ceiling will cause Armageddon, we all believe it. Why?

These guys are the same people who told us that we should not go after Goldman Sachs, or regulate hedge funds, or prosecute the people who marketed fraudulent mortgage loans and then remarketed bundles of those loans to pension plans. Now they tell us that their world, their profits, their investments will collapse if the debt ceiling isn’t raised.

These same voices told us that if we gave them big bank bailouts, they would be able to invest in the nation, and restore jobs. We gave them bailouts and they paid themselves huge bonuses and invested in no jobs. (Alright, I lied. They bought Lamborginis and houses on Fire Island and then hired people to wash those cars and cut their lawns – wonderful new jobs.) And now we all line up to believe them when they tell us that civilization will fail if we fail to guarantee the payments on their tax free government bonds.

I actually believe in the financial markets. I think that they are mostly rational and are constantly driven by the sole goals of maximizing profit and (to a lesser extent) preserving their assets. I believe that Goldman Sachs and the other big banks and fund organizations are working to make sure that they will not be badly hurt when the TeaBag Republicans, that they created and fund, block a debt ceiling raise. Because I do not believe that the Wall St. leopard has changed its spots, I have trouble believing that we should accept at face value all the dire warnings that it gives us about the debt ceiling.

I say this as a man with an IRA that is invested entirely in stocks and mutual funds. I have no desire to see a market crash. (Maybe a little dip, so I can pick up some shares on the cheap!) But I have a hard time getting my head around the idea that the Wall St. owners of the TeaBag Republicans are going to order those minions to do something that is really bad for corporate investments.

I have an equally hard time understanding why the progressive community seems so intent on buying into the politics of fear that are driving the debt ceiling discussions. I actually read things from otherwise sane people saying that we have to cut social security and medicare and school budgets to stave off disaster. NO!

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Cutting social security would not avert disaster, it would BE disaster.

Cutting medicare or medicaid would not avert disaster, it would BE disaster.

We have already cut so much of our education system that we are really third world in the way we teach our children. This IS a disaster, and further cuts would only make it worse.

A parallel argument being made by Republicans, and bought into by progressives is that a debt ceiling default would be bad for Obama’s reelection effort. Republicans in Congress are openly saying that people will remember Obama’s name but forget Republican names during the 2012 campaign. I wonder.

Any sentient observer must have noticed the increasingly open appeal to race that Republicans are making. ALL of the announced Republican presidential candidates have pointedly refused to attend major Latino political organization events.

This despite Karl Rove’s efforts to get Republicans to reach out to Latinos. In the blogosphere, racist views that used to be the stuff of fringe writers are now being voiced by Republican regulars. The recent documentation of racial disparities in wealth as a result of the Bush depression will inevitably lead Republican commentators to argue that it is ‘proof’ of disparities in racial abilities.

Does this presage trouble for Obama’s reelection effort? It looks increasingly like Rick Perry may be the Republican presidential nominee. He was here in L.A. last week, raising money for his unannounced campaign. His most accurate campaign slogan might be: Perry, the Conservative Alternative to Bachmann’s Liberalism. Perry makes Bachmann appear to hog the middle of the road. I wonder how that’s going to play with any majority of voters.

While his own party derides Obama for his moderation, there is another view of the debt ceiling Kabuki theater. Obama has maneuvered the Republican ‘leadership’ into repeated contradictions. Financial proposals that Republicans were making this year have now become unacceptable to the people who first proposed them.

The Republicans were unanimous in their support the Ryan Budget, which proposed adding $5 trillion to the budget deficit, because it also ended social security and medicare. Now Republican presidential candidates who voted to end those programs are tripping over themselves to promise no such cuts.

Perhaps the most artful stroke has been Obama’s maneuvering Senator Mitch McConnell into organizing his own party’s opposition to a budget plan that McConnell originally drafted! McConnell ha stated that his only purpose was to get the black guy out of the White House, with no concern for what was good for the country, the economy, the world or his own constituents.

Tom Hall

With Republicans embracing overt racism, the loopy pseudo-Christianity of Bachmann and Perry, and a public posture of rejecting their own proposals simply for short-term political gain, I have a hard time believing that any majority of U.S. voters are going to embrace them. Rather, I think that the Republicans, who look back lovingly on past inglories, may be on the brink of reprising the success of the Goldwater campaign theme that “moderation is no virtue and extremism is no vice.” Against these opponents, Obama’s middle-of-the-road moderation looks like a campaign winner.

Tom Hall