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For Progressives, Debt Ceiling “Deal” Was a Real Downer

Joseph Palermo: The last-minute lobbying by the titans of industry and finance shows that President Obama might have had more leverage over the Republicans in the debt ceiling “negotiations” than he chose to exercise. We now breathlessly await the arrival of the “Super Committee,” the tragedy that follows the farce.

Largely lost in the media din in the closing 48 hours of the debt ceiling “debate” was the fact that the Chamber of Commerce and Wall Street high rollers were urging their servants in Congress not to throw the nation into default because it was going to hurt their bottom lines. The last-minute lobbying by the titans of industry and finance shows that President Obama might have had more leverage over the Republicans in the debt ceiling “negotiations” than he chose to exercise. We now breathlessly await the arrival of the “Super Committee,” the tragedy that follows the farce.

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Conventional interpretations of the polling data indicate that both Republicans and Democrats “lost” in the arena of public opinion during the debt ceiling extortion. I live in a state where a radical Republican minority has routinely held the budget hostage and practiced the same kind of brinkmanship to get laws passed that have nothing to do with the budget. Among Californians, the legislature has about a 9 percent “approval rating.” And has that dismal rating shamed the GOP politicians into changing their tactics? Hell no. Voters are so turned off they’ve tried to bypass the legislature through the initiative process, sometimes called “ballot box” budgeting. And in Washington, low approval ratings only help those who already have a stake in proving that government cannot do anything meaningful for ordinary people. It’s the “Californization” of our national political discourse brought to us, naturally, by the extreme Right. I guess the only surprising thing is that it didn’t happen earlier.

In the current context, public opinion polls like “approval ratings” are meaningless. Obama might remain “popular” among certain voters, but these quantitative yardsticks don’t reflect the real power relationships behind our politics and the ability of corporate elites to manufacture consent, construct narratives that serve their narrow class interests, and bend reality by expending what seems to be an infinite amount of campaign cash. “Government spending is bad!” “Job creators” need tax breaks and deregulation! Slash “entitlements” and our problems are solved! Etc. Like “WMD in Iraq,” this narrative is hype; but like WMD in Iraq, it’s hype that is working.

Obama’s attitude of “reaching across the aisle” no matter what the consequences has cost the nation (and especially progressives) dearly. The “corporate oligarchy” or the “plutocracy,” (or whatever you want to call the system of power personified by people like the Koch Brothers and their allies) is going for all the marbles. The financial collapse of 2008 was a moment of clarity, the time when these reactionary forces needed to be confronted and brushed back. Obama botched his historical moment even while giving us rhetorical flourishes about how he was seizing his historical moment. Remember all that talk about the “great urgency of now?”

Unemployment is destined to hover around 9 percent through November 2012 and, (in the modern era at least), the American people don’t reelect presidents when the jobless rate is that high. Austerity at the state and local levels — largely ignored by the national media — has been devastating as low-income women and children, the elderly, and disabled are getting hit hard with cuts to life-sustaining benefits. Now our “public servants” in the federal government appear determined to destroy Social Security and Medicare.

Shrill anti-statists on Fox News and elsewhere, who see Executive Branch “czars” as affronts to the U.S. Constitution, are now perfectly content to turn over the country to a “Supreme Soviet,” literally a “Super Committee,” to dictate national priorities. They willfully fail to understand that the policies they so ferociously advocate are making ordinary citizens more, not less, subservient to arbitrary power. Where’s all their “don’t tread on me” vim and vigor when it comes to corporate power? Millions of Americans have been snookered into a position of struggling to pay each month on mortgages that far exceed the value of their homes. The big banks seem to be “treading” on them.

(I also thought it was interesting that during the debt ceiling standoff the ratings agencies’ credibility was seen as sacrosanct. The oracles at Moody’s and Standard and Poor’s want to downgrade the United States’ credit worthiness unless Social Security and Medicare are gutted; I wondered why they couldn’t just pretend that U.S. Treasury bonds are CDOs and other junk mortgage-backed securities and slap a Triple-A rating on them like they did a few years back?)

It’s astonishing that our political leaders from both parties apparently believe that the United States can continue to bestride the world like an imperial colossus remaking entire societies in the image put forth by the Council of Foreign Relations or the American Enterprise Institute while at the same time becoming a pauper state that cannot even provide health care for its senior citizens.

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I think the Democrats are in much bigger trouble going into 2012 than the horse-race media coverage implies. The only chance for progressives to save what’s left of the social safety net and protect labor union rights is to out-hustle the right-wing, walk precincts, volunteer for phone banks, and do all the other unglamorous work that Obama and other Democratic politicians seem to take for granted. Like California (and now Wisconsin), rank-and-file Democrats are going to have to put initiatives on state ballots that do things like call for a raise in the minimum wage, guarantee worker rights, and ensure access to health care and retirement pensions. If those propositions are on the ballot in some key states maybe enough Democrats will go to the polls to blunt what I think is going to be a Republican juggernaut.

The South, Southwest, and Midwest are “redder” than ever now, and Indiana, Ohio, Florida, Michigan, Wisconsin, New Jersey, and Virginia turned hard to the right in recent years. These states (save New Jersey) probably aren’t going to be flipping to “blue” in 2012. (The only reason many of the states George W. Bush had won in 2004 fell into the Obama column in 2008 was because the people were terrified by the financial collapse and believed — falsely — that Obama would do something about it that would make a difference in their lives.) Throw in the infinite amount of campaign cash available to Obama’s enemies from “independent” corporate groups unleashed by Citizens United, and even an incumbent president who is personally popular is going to have a tough climb.

But the real nail in the coffin for Obama’s reelection is the unemployment rate, which, after this debt ceiling “deal,” is guaranteed to be miserably high all the way through 2012. There’s also a capital strike of sorts going on where big banks (after vacuuming up all the taxpayer bailout money they could get away with and milking the middle class for as much of its accumulated wealth as possible) are sitting on about $1.4 trillion and not investing. They’re no doubt waiting for the next George W. Bush to be in office before they free up the capital (if they ever do so inside the United States).

Generally, historians like to focus on conventional notions of a president’s success and failure that are easy to measure, such as whether a president succeeded in getting his or her legislative package passed, whether he or she accomplished many of the pivotal goals of the campaign, and whether the president left his or her political party in better or worse shape at the end of the term. I kept telling colleagues, some of who were giving Obama hell right out of the gate, to “give him time.”

I thought the economic meltdown of 2008 — long in coming — that catapulted Obama to the presidency was a big enough crisis to allow the new leader to rewrite the contract between the American people and their government, put a tourniquet around the mortgage bleeding, and even break up the big banks and hold the perpetrators accountable. After years of people like John Ashcroft, Alberto Gonzales, and Michael Mukasey running the Department of Justice, I thought Attorney General Eric Holder might do something against the widespread corruption and criminality of the Bush years. (I didn’t realize that political corruption in this country has a statute of limitations that is linked to political elections.)

The Bush Administration and the Republicans who controlled Congress from 2003 to 2007 were so reckless and irresponsible they brought on the worst economic collapse since the Great Depression and I therefore thought a real progressive alternative might be possible. Since the Democrats had also won control of both chambers of Congress, I foolishly believed there’d be serious reform — a new health care system perhaps or at least the shoring up of public institutions in the face of the utter failure of the private sector. I supported Obama in the Democratic primaries over Hillary Clinton because I didn’t want another centrist, spineless, pseudo-liberal who might triangulate against the progressive base (when not capitulating outright to the Republicans). But that is what we got anyway.

We didn’t elect Obama in 2008 because he promised to gut Social Security and Medicare (as the “Super Committee” is sure to do), and we certainly didn’t vote for Obama in 2008 to escalate the miserable and fruitless war in Afghanistan. We didn’t vote for him to continue Bush’s No Child Left Behind attack on public education. We didn’t walk precincts for him because he promised to let the big banks that tanked the economy off Scot Free.

joseph palermo

I ask a simple question: What U.S. president in recent history has lifted the rhetoric of progressivism to such lofty heights only to throw a wet blanket over the grassroots energy that responded to his vision and got him elected? Today, Obama appears to measure his success as president by the level of anger, betrayal, and demoralization of his progressive base. Good luck bridging that “enthusiasm gap.”

Joseph Palermo