The Republican strategy is to split the vast middle and working class - pitting unionized workers against non-unionized, public-sector workers against non-public, older workers within sight of Medicare and Social Security against younger workers who don't believe these programs will be there for them, and the poor against the working middle class.
Peter Orszag, now a new vice-chairman of global banking at Citigroup and former US Office of Management and Budget under Barack Obama, has written a provocative and (with all due respect Peter) wrong-headed Financial Times oped proposing that the way to promote savings among America's low-income workers is to attach the prospect of winning millions to them scurrying away a few dollars here and there -- sort of a lottery ticket that goes into their savings rather than into state coffers to help subsidize education or to the profits of the local milk and cigarette stand.
At the New America Foundation, I have colleagues who are most likely the world's leading experts on generating savings among the underclass, or "banking the unbanked" as New America's Reid Cramer or Ray Boshara would say. But suggesting that America's savings problem be solved by establishing an Eva Peron style lottery incentivizing those with little to save doesn't understand the dynamics at play in the American economy today.
The Obama administration is clearly desperate to avoid vetoing the United Nations Security Council Resolution condemning illegal Israel settlements. And it's not hard to see why.
Given the turbulence in the Middle East, and the universal and strong opposition in the Arab and Muslim world to U.S. shilly-shallying on settlements, the last thing the administration wants to do is veto a resolution condemning them. That is especially true with this resolution, sponsored by 122 nations, and which embodies long-stated U.S. policies.
But the administration has rejected that course.
The reason is obvious. AIPAC would go ballistic, along with its House and Senate (mostly House) cutouts. Then the calls would start coming in from AIPAC-connected donors who would warn that they will not support the President's re-election if he does not veto. And Prime Minister Netanyahu would do to President Obama what he did to former President Clinton - work with the Republicans (his favorite is former Speaker Newt Gingrich) to bring Obama down.
What's an administration to do? It doesn't want to veto but it is afraid not to.
U.S. GDP in March of 2008 was $14.546 Trillion and non farm employment was 137.841 million. Today, non-farm employment is 130.229 million and total GDP is $15.010 Trillion. So essentially we have $500 billion more output from almost 8 million fewer workers. For years analysts scoffed that the Digital Revolution wasn't really delivering the giant productivity gains the utopians had promised. But it occurs to me that the financial crisis of 2008 caused firms to make some very hard decisions to cut back the marginally productive workers in areas like sales, marketing and administration. What they obviously found was that one star salesman with the right digital tools could do the work of two average performers. As the New York Times noted last fall, this drastic downsizing was usually in the ranks of older workers.
Of the 14.9 million unemployed, more than 2.2 million are 55 or older. Nearly half of them have been unemployed six months or longer, according to the Labor Department. The unemployment rate in the group -- 7.3 percent -- is at a record, more than double what it was at the beginning of the latest recession.
My proposal to raise the marginal tax to 70 percent on incomes over $15 million, to 60 percent on incomes between $5 million and $15 million, and to 50 percent on incomes between $500,000 and $5 million, has generated considerable debate. Some progressives think it's pie-in-the-sky. Here, for example, is Andrew Leonard, a staff writer for Salon:
I'd like you to join me in a thought experiment. I'm going to pinpoint what I consider the central falacy of the ultra-conservative foreign policy argument / critique. See if you agree that this theme -- blind spot, I'd say -- runs through a big proportion of what the hard-right says about the stance the United States should take internationally.
As TPM's own David Kurtz and Greg Scoblete over at RealClearWorld Compass blog have both noted, the Obama-botched-Egypt meme rests on an inflated notion of US leverage. An impulse that always assumes an American president can make world events come out the way he wants. Actually David's post flags a comment President Obama made in his news conference, pushing back against that idea of American omnipotence.
My own hypothesis about administration critics adds one key element: moral clarity (aka 'resolve' or 'certitude'). Sound familiar? The critics love to talk about the president's supposed lack of principles, but let's talk about what self-absorbed self-righteousness gets you in the real world -- i.e. what can really be accomplished through moral clarity. In other words, I don't think the partisan foreign policy divide is about America's international objectives or our moral values; sensible Democrats and Republicans largely agree about those. I think it's really a debate about persuasion and pressure versus bluff and bluster.
Is President Obama stupid, or does he think you are stupid? That's what we have to ask when listening to the president and his minions promote his farkakte budget principles. In this case, the devil is not in the details, but in the background music. The principles used to support the president's proposals are concessions to reaction and to know-nothingism. They will empower future Republican efforts to destroy the welfare state.
The foremost example of the new liberal know-nothingism is the idea that the national government of the United State is like a family. A family has to balance its budget, so too must the USG. Of course, families do not balance their budgets. They borrow to finance home ownership, automobiles, and higher education.
I'd really really like to add a full-throated 'go for it' to the chorus calling on President Obama to offer his own framework for Israeli-Palestinian peace. Bernard's NYT Magazine piece yesterday was mighty convincing about the gap between the sides having narrowed. I certainly share the view that the festering conflict takes a real toll on US foreign policy and credibility. God knows, J Street is doing the Lord's work as advocates. And the melodrama in Cairo is further proof -- if we needed it -- that things that can't go on forever, don't. Even if they have persisted for decades.
And yet something holds me back. Actually, this line from Bernard's Cafe post elaborating on the politics goes to the heart of my misgivings:
Obama needs to understand--and everyone with a pen should encourage him to--that he has the chance to face an election, not as the manager of a stalemated peace process, but rather as the author of a visionary policy. He would not be seen as a timid, failed mediator, like Dennis Ross, but as a bold architect, like George Marshall, universally identified with the only reasonable future the Middle East can expect.
Sounds great, can we have that guaranteed in writing?
Even by Washington standards, a trillion dollars is a lot of money. That's approximately the figure for the cumulative savings President Obama wants to extract from proposed federal budgets over the next ten years. While some of the money would come from closing tax loopholes and increasing the burden on individuals earning more than $250,000 per year, the bulk of it would come from domestic discretionary spending - everything from low income heating assistance to accelerated interest payments on college loans. In all, the Obama administration's freeze on non-security-related discretionary spending would result in $400 billion in reductions over the next five years. These cuts will be painful, and they will be felt in every middle- and lower-income household in America.
By contrast, the Pentagon will barely be touched. In fact, the $553 billion proposal for the agency's base budget announced by the Obama administration today is a 4% increase from current levels. And the highly touted $78 billion in Pentagon "cuts" Secretary of Defense Robert Gates has called for over the next five years are essentially a slowing in the rate of growth of Pentagon spending. As Christopher Preble of the Cato Institute has suggested, only in Washington, DC can a spending increase be described as a "cut."
Anyone who thought that the United States has learned anything from the various revolutions upturning the Arab world has another think coming. We didn't.
On Thursday, as the Egyptian revolution was culminating with the collapse of the Mubarak regime, the Obama administration announced that it intends to veto a United Nations Security Council resolution, sponsored by 122 nations, condemning Israeli settlement expansion.
This is from AFP's report on what Deputy Secretary of State James Steinberg told the House Foreign Affairs Committee.
"We have made very clear that we do not think the Security Council is the right place to engage on these issues," Deputy Secretary of State James Steinberg told the House of Representatives' Foreign Affairs Committee."We have had some success, at least for the moment, in not having that arise there. And we will continue to employ the tools that we have to make sure that continues to not happen," said Steinberg.
When big shifts occur in the world, like the successful revolution (thus far) in Egypt, Americans like to race toward ideological frames that fit the moment and which should be applied to every nation in a similar circumstance, perhaps to Algeria, Jordan, Morocco, Yemen, even Saudi Arabia.
Politico's Ben Smith has a good piece of analysis on what appears to him as an "Obama Freedom Agenda" that has been constructed from the themes of Obama's earlier calls for principle-driven global framework, as in his famous Cairo remarks, and made up on the fly. Others like National Public Radio's Ari Shapiro are working on stories about the administration surfing a "freedom wave." Helene Cooper and Mark Lander have put forward a thesis that Obama's progressive realist team -- particularly Denis McDonough and Ben Rhodes -- knocked back Hillary Clinton's "coercive diplomacy" team in a struggle over what the soul of US foreign policy should be, replaying their tensions during the Democratic Party primary race.
While I think that there is a solid realist track for having supported the protesters in the street against the Mubarak franchise (and I did support them), an uncomfortable hypothetical to consider is what US policy should be if Mubarak had cracked down and he and his son, Gamal Mubarak, had essentially prevailed.
President Obama has chosen to fight fire with gasoline.
Republicans want America to believe the economy is still lousy because government is too big, and the way to revive the economy is to cut federal spending. Today (Sunday) Republican Speaker John Boehner even refused to rule out a government shut-down if Republicans don't get the spending cuts they want.
Abbas's Palestinian Authority has just announced elections for the fall. If Obama has any hope that the leadership circle around Abbas, including Prime Minister Salam Fayyad, will make a strong showing in this vote, he had better come forth with a plan very soon. And the administration should quietly (but firmly) urge Israeli leaders to release Marwan Barghouti from prison and restart informal discussions with him about the outlines of a plan, using the Olmert-Abbas talks as a starting point. If we have learned anything from Egypt, it is that when people say "things cannot go on like this" things eventually don't.
A final (preemptive) word about my forthcoming article in Sunday's New York Times Magazine, appealing to President Obama to present an American plan based on the Olmert-Abbas talks.
Obama knows very well that when Abbas finally met Netanyahu last year, the Palestinian president proposed that he and Netanyahu begin where he (Abbas) and Olmert left off, and that Netanyahu rejected this out of hand. ("No way," Netanyahu said, or so Abbas told me.)
Why then should Obama present a plan that the Israeli government is bound to dismiss? Isn't this setting up the American administration for a diplomatic failure?
No way.
Amidst all the attention on Egypt's inspiring assertion of the democratic yearning, a little noticed article in the Guardian outlined the stark forces that may bring revolutionary change to autocratic regimes around the world.
The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels - nearly 40%.
According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then - possibly as early as 2012 - global oil production would have hit its highest point. This crunch point is known as "peak oil".Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.
Egypt and Tunisia are just the beginning. The communication revolution will quickly spread this contagious freedom agenda. The Glenn Beck's of the world that wanted us to stand with Mubarak are on the wrong side of history. We had better get ready for a "Year of Living Dangerously", because this revolutionary moment is just getting started.
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