Obama should listen to Obama about avoiding Self-Inflicted Wounds

By William K. Black

On Friday, December 21, 2012, President Obama announced:

“‘As of today I am still ready and willing to get a comprehensive package done,’ Obama said, specifically urging lawmakers to craft a deal that would protect middle-class Americans from a tax hike set to be implemented if no deal is met.

Obama said he spoke with GOP House Speaker John Boehner and Senate Majority Leader Harry Reid (D-Nev.) Friday, asking the congressional leaders to come up with a smaller fiscal package in the next 10 days.

‘Now is not the time for more self-inflicted wounds, certainly not coming from Washington,’ Obama said.”

What is the “self-inflicted wound” that Obama warns us we must avoid?

“‘Everybody’s got to give a little bit in a sensible way’ to prevent the economy from pitching over a recession-threatening fiscal cliff, he said.”

Austerity is the weapon that is about to inflict the self-inflicted wounds on our nation.  The fiscal cliff is the ammunition about to be used to inflict austerity on the nation.  One of the wounds is a recession, which would increase unemployment and the federal budget deficit.  The other terrible wounds are cuts to social programs and the safety net that would add greatly to human misery.

Reporters need to ask Obama two series of questions.  Who insisted on creating the fiscal cliff, threatened Republicans in Fall 2011 when they wanted to eliminate or reduce it, and after the “failure” of the November 2011 “super committee” to reach a deal to inflict even greater austerity on the nation, made a veto threat to block a Republican proposal to eliminate or delay the fiscal cliff?  The answer is:  Obama.  “The White House wanted a ‘trigger’ that would automatically raise taxes on the wealthy and cut health spending, an idea the Republicans opposed.”  Obama’s “trigger” became the “fiscal cliff.”  I have explained how he then kept the “fiscal cliff” alive by blocking Republican efforts to eliminate or delay it.

Obama’s driving role in creating and maintaining the “fiscal cliff” makes his warning of the necessity of avoiding “self-inflicted wounds” (recession by austerity) imposed by the fiscal cliff another proof of our family rule that it is impossible to compete with unintentional self-parody.  We need to convince Obama to follow his own advice and eliminate the self-inflicted wound (recession) by eliminating, not delaying, the fiscal cliff and safeguarding the safety net.

The second question Obama should be asked is:  given your warning that the fiscal cliff’s austerity would cause a recession, why are you demanding a Grand Bargain (sic) (actually the Grand Betrayal) that would inflict austerity for a decade and likely cause multiple recessions and larger deficits?

Consider the incoherence of Obama’s statement:  “‘Everybody’s got to give a little bit in a sensible way’ to prevent the economy from pitching over a recession-threatening fiscal cliff, he said.”  That statement makes no sense.  Austerity is the problem.  Obama and the Republicans agree that it is a self-destructive policy that would cause a recession, just as it did in the Eurozone.  The solution is (1) not to raise overall taxes and (2) not to cut overall spending.

Obama, however, immediately after warning that it is essential to prevent the “fiscal cliff’s” austerity from causing the “self-inflicted wound” of a recession, calls for austerity.  He wants a Grand Betrayal that (net) raises taxes, cuts social spending, and cuts the safety net.  The Democrats are supposed to “give a little bit” by making roughly a trillion dollars in cuts in social programs and the safety net and the Republicans are supposed to “give a little bit” by allowing roughly a half trillion dollars in “revenue enhancements.”  Obama’s austerity policy is so incoherent that in the same sentence he says that austerity (in the form of the fiscal cliff) must be prevented because it would cause a recession – and that the nation must embrace austerity not only today but for at least a decade.  An austerity deal of that nature and length cannot be “sensible.”  It would force us back into a recession and could cause or deepen several recessions.  We need to stop Obama and the Republicans from causing the “self-inflicted wounds” of the “fiscal cliff” and the Grand Betrayal.