America is in desperate times. While the corporate oligarchy tightens it’s grip over power using conservative politicians and Tea Party boots on the ground, the situation continues to spiral out of control in nearly every possible measure.
Every rational reform, from Wall St. to Health Care, has been weakened to the point where it is arguably doing more harm than good, and those with the political will to fight for the strong change the country needs are continually sidelined by the leadership of both parties and the corporate main stream media (MSM). The final blow to working with the center-right (compared to other Western nations) Democratic leadership died today when Obama announced that he was capitulating on extending the Bush tax cuts for the rich. This was the last straw for his strongest supporters, he has now lost progressives and likely the 2012 election as a consequence.
Politics aside, this is another disaster for the country. It spells a continuation of fiscal conservative policy that demands ever greater sacrifice from working Americans and swelling deficits to reward those who are most well off. The rich have reaped the vast majority of every economic expansion over the last 30 years, including the top 1% gaining two thirds of it in recent years. The top 0.1% have seen a 94% income growth since 2002. The richest of them all (the top 400) have seen an astounding 476% increase since 1992. The richest 74 people made as much as the 19 million lowest-paid people in America.
Have no doubt, class warfare is being waged in America, waged by the rich and their minions against the poor and middle class, and its a massacre. The top 1% get 23.5% of the national income, the greatest portion since the Great Depression in 1928 (23.8%).
The Republicans, fresh off of the most successful astroturfing campaign in the history of the country have been emboldened to seek even greater concessions, and dictated the MSM narrative with an immense degree of effectiveness during this first major showdown between progress and regress. They have called back to the rhetoric of their demi-god Reagan, saying that the only path that can possibly benefit the country is by helping the rich, but as shown below, Supply-Side (also known as Trickle-Down or Voodoo) Economics has failed miserably.
Worse yet, by caving into conservative pressure tactics, Obama will be allowing another further expansion of deficits, something that these very conservatives will turn around and attack him with in 2 years. The way it stands, keeping all the Bush tax cuts for another 2 years will add $340 billion to the national debt, $140 billion of that just for tax cuts for the rich.
This was a golden opportunity for Obama to take a stand against those who have caused so much economic damage to the country and stand for ordinary working Americans. 93% of the current national debt was created by fiscal conservatives like Reagan and Bush, and adding to this is not just an act of futile appeasement, but a direct betrayal of the will of the American people.
Not all Democrats have cowed so easily. The Democratic Party in the US House passed an extension of tax cuts for anyone with an income less than $250,000 per year by a vote of 234 to 188, but only by using a procedural maneuver that cut the ability of Republican obstructionists to insert an amendment that would have rendered the bill inert. This measure then moved onto the senate where the Democratic leadership failed by a vote of 53-37 (60 needed) to overcome yet another in a record number of filibusters by the conservatives. Why this bill was not designed to use the reconciliation process where a simple majority vote suffices, as was used in the passage of both Bush tax cut packages is unknown.
Considering the massive levels of wealth consolidation and increasing economic disparity in America, making a stand on ending the Bush tax cuts for the rich should have been an easy sell. The average top tax rate in the United States since 1917 is 61.4%. Currently the highest rate of income tax the rich have to pay is 34.5%, which is 26.9% below the average.
The Republican attack machine was on message during this whole debate, forcing President Obama to make a choice between allowing all the Bush tax cuts expire or temporarily extending them. Either way, it will give them further ammunition against the man, either by taking the position that “Obama raised taxes” or “Obama increased the deficit”. Further, they were holding unemployment benefits hostage, and trying to include not obstructing the new START Treaty in the process.
The final deal has a 24 month extension of all tax cuts, including to the rich for a 13 month extension of unemployment benefits for Americans unable to find jobs in this dismal economy. To add even more insult to this injury, the Obama-GOP tax scheme drops planned estate taxes from 55% to 35%, and only for houses estimated to be worth more than $5 million.
This plan now must be passed by both chambers of Congress, and the best hope to scuttle it comes from the House, who were shocked to learn of the estate tax concession. With some bold stands by members and a probable filibuster by Senator Bernie Sanders (I-VT), it might still be possible to allow the whole set of Bush tax cuts expire as scheduled, which would mean a restoration of tax rates for all working Americans on January 1st, 2011, and put the ball back in the court of the Republicans, who would then be forced to try to veto tax cuts on the poor and middle class, or try to force tax cuts for the rich in a bill of their own.
Regardless of the outcome of the Obama-GOP Tax Scheme, his surrender on this spells doom for strong support from the movement for change and reform that was instrumental in getting him elected by a landslide in 2008. Obama gave up on the ARRA, allowing 40% of it to be tax cuts when what was needed for job growth and economic stimulation was direct spending, particularly on green energy and infrastructure projects. Obama didn’t even try for a single-payer health care system, and eventually sold the public-option, the only balancing factor to corporate greed down the river. Obama caved on the most potent aspects of financial sector reform. Obama increased deportations of hispanics, failed to issue an executive order ending DADT, has 50,000 troops left in Iraq, gave up on the EFCA, has not closed Guantanamo or ended torture, continues domestic espionage, allowed the war on drugs that has caused the US to become the world’s leading jailer to go on, and limited access to abortion. Not that there haven’t been a host of minor things Obama has done, but on every single major battle he has surrendered to the corporations, rich, and conservatives. Every. Single. Battle.
What America needs are radical solutions and bold leadership, not the same policies that put our nation in the situation it is in today. Instead of FDR we got Herbert Hoover, and the country is paying the price. If Obama survives a primary challenge by Howard Dean, Russ Feingold, or Al Grayson, he will still not have the energized support needed to counter the Tea Party legions backed by lavish corporate front group funding and an ingenious conservative establishment, and will likely not be reelected in 2012. The corporate oligarchy keeps tightening it’s grip.