Slate Agrees that Obama’s Vanity Drives the Grand Betrayal – and Praises the Betrayal

By William K. Black

Slate’s John Dickerson leads its (and CBS’) political reportage so his specialty is in examining what is actually driving politicians’ policies and their efforts to “spin” those policies.  Dickerson authored an article entitled “Why Obama’s Outreach to Republicans is All About Obama” (March 12, 2013).   

Dickerson’s theme is one I have long emphasized:  Obama is driven by concerns for his “legacy.”  In more human terms, he is intensely vain about how history will perceive him.  That is common, particularly in politicians’ final terms, and it can be a positive influence on policy.  Dickerson also agrees with my warnings that Obama sees inflicting the “Grand Bargain” on the Nation as his means of achieving his legacy.  Here is Dickerson’s introduction to his article.

“Is Obama Setting a Trap for Republicans?

Nah, he’s just trying to ensure his place in the history books. Like most days.”

Obama chose Bill Clinton, which is to say Bob Rubin, and Ronald Reagan as his models for the presidency rather than Franklin Delano Roosevelt.  The Wall Street wing of the Democratic Party and Reagan shared the same fawning attitude towards finance, and their typically bipartisan anti-regulatory policies proved so criminogenic that they produced the recurrent, intensifying epidemics of accounting control fraud that drive our rapidly escalating modern financial crises.  The remarkable fact is that none of this has discredited the policies or the policymakers.  Jacob Lew is the latest in a long line of failed protégés of Rubin that Obama has chosen as his principal financial advisors.

One of the repeatedly failed policies that the Wall Street wing of the Democratic Party and the Republican Party agree on is the virtue of austerity.  Austerity was the first, and paramount, pillar of the “Washington Consensus” – and both words in that term are revealing.  The consensus was inflicted primarily on Latin America.  It was a “consensus” – the amount of theoclassical group-think was and is chilling.  It was a product of Washington, a bipartisan consensus embracing austerity.  The Washington Consensus caused so much harm and rage that nearly a dozen leaders have won election in Latin America by running on a platform of opposing the consensus.

In the U.S. context there was always an important asterisk to the consensus because the Republican Party’s dominant leaders never believed in austerity when they held power.  They cheerfully ran large budget deficits, which the Fed typically supported with stimulative monetary policies.  The Republicans leaders went far beyond Keynes.  Their “supply-sider” claims (which always proved false) were that tax cuts were magic and would promptly cause deficits to disappear.

Unfortunately, the Wall Street wing of the Democratic Party actually believed in austerity, and because the Democrats were in power the Republicans gleefully supported Clinton’s cuts in social programs.  The budget surpluses quickly generated deficits in other sectors (see my colleagues Randy Wray’s and Stephanie Kelton’s explanation of sectorial balances in dozens of articles on our New Economic Perspectives blog) and helped drive our economy into recession.  Recessions inevitably cause budget deficits to grow rapidly.

The Democratic Party has an enormous electoral advantage born of being on the right side of the most important domestic issues.  The New Deal’s concept that the Nation should provide Social Security and health care to its people has produced a “safety net” that has transformed the Nation.  Before Social Security, old age meant misery for most Americans.  Before Medicare and Medicaid premature death due to lack of access to timely health care was common.  These three programs (and remember that Social Security’s survivor benefits support millions of children) and food stamps (SNAP) have made America far more humane and productive.  Americans love these programs.  Republicans love these programs.  Attacking these programs is political suicide for the Republican Party – unless a Democrat leads the unraveling of the safety net.  Only a Democratic President can make it politically safe to inflict the Grand Betrayal of the Nation’s most popular and desirable federal programs.

That brings us back to Dickerson’s apt description of Obama’s “ambition” (or vanity).  The specific context of his article is refuting the belief among Republican’s that Obama’s “charm offensive” on the Grand Betrayal is a “trap” by a clever politician.  I agree with Dickerson’s analysis of this point.  Obama’s effort is not a trap – he really does want to commit the Grand Betrayal.  He not only wants to begin to unravel the safety net programs, he wants to cut social spending substantially.  Only the Republicans can make it politically safe for Obama to commit the Grand Betrayal by giving him the fig leaf of moderate reductions in tax deductions.  The irony is that the Republicans have become so extreme that they were unwilling to accept Obama’s repeated offers of surrender through the Grand Betrayal.

My work has shown that Obama has, since the early stimulus bills, repeatedly sought to commit the Grand Betrayal and push austerity.  The U.S. has escaped the full brunt of disastrous austerity and the Grand Betrayal because the Tea Party Republicans in the House and Democratic progressives have interacted in a manner that has made Republican positions on taxes so extreme that it was politically impossible for Obama to agree on a Grand Betrayal that was so extreme that it would satisfy the Tea Party.  Obama has repeatedly offered to inflict through his proposals on the Grand Betrayal aggressive austerity similar to that which threw the Eurozone back into a gratuitous recession.

I have also explained how the Sequester is the fourth act of federal austerity since the 2011 Grand Betrayal negotiations began (plus severe austerity at the state and local government level) and that the cumulative effect is strangling the recovery.  (Dickerson differs with me on this last point.  He believes the February employment numbers demonstrate that the U.S. is in the midst of a strong recovery.  It is not prudent to take one month’s preliminary economic numbers and predict anything.  The U.S. recover is far less robust than it would have been had Obama and the Republicans not inflicted these austerity measures.)

Dickerson confirms what I have been arguing; Obama’s view is that his only hope for his legacy is reaching the Grand Betrayal.  Wednesday, the national news was full of Obama saying that he wants a deal that will not “gut” Social Security, Medicare, and Medicaid.  He is in openly in betrayal mode.  He’s making it clear that “moderate” cuts in the safety net are acceptable to him.  Indeed, he is proposing to begin to unravel the safety net and very large cuts to social programs even though that austerity is a terrible economic policy that will harm the Nation, betray the Nation’s and his Party’s promises on the safety net, and the most self-destructive political strategy the Democratic Party could take.  The American people hate the Ryan Budget and its cuts to the safety net.  The Democratic Party’s proudest accomplishments are the safety net and it will prosper politically if it follows the right policies and says “hell, no!” to any cuts to the safety net.

The extent to which Obama’s policies are driven by vanity, by his desire for a “legacy,” is revealed by Obama’s obsession with inflicting the Grand Betrayal on our Nation (and his own Party).  It also reveals that Obama understands that by partnering with private health insurers and destroying the “public option” he created a health care reform that will never establish a “legacy.”  It also reveals that he realizes his Nobel Peace Prize will never establish a legacy.

Here is how Dickerson presents Obama’s vanity and quest for the Grand Betrayal as his signature legacy.

“But to stay intact this [Republican] theory [that Obama’s charm offensive was designed to trap them rather than to secure a Grand Bargain] must survive at least two challenges. It misunderstands President Obama’s ambition (he cares more about his legacy than he does Congressional Democrats) and it suggests Obama learned nothing from his first several years in office when he attempted the strategy Republicans are accusing him of, and failed.

We know this much about Barack Obama: He is ambitious. When advisers wanted to go for a more modest health care bill in his first term, he pushed for Obamacare, citing his desire to do big things. We also know presidents think about their legacies in the second term. Republicans have long argued that the president’s ego is as large as the national debt. If you map out his DNA, it reads: me, me, me. So, what is likely to win the president greater glory in the history books: a grand bargain that leads to a healthy economy or the return of a Democratic House majority?”

Dickerson goes off the rails only in the last sentence after the colon.  Dickerson asserts that inflicting austerity and beginning to unravel the safety net “leads to a healthy economy.”  It does the opposite.  Indeed, it is hard to conceive of a series of acts more damaging to the ongoing weak recovery or our future economy over the next decade than the Grand Betrayal.  It also harms our people.  Austerity is a horrific, economically illiterate policy.  One need only look at the Eurozone – forced into a gratuitous recession by austerity – to see the folly of what the Republicans and Obama are trying to inflict on America.  Italy, Greece, and Spain are not in recession – they are suffering from Great Depression levels of unemployment due to austerity.

A desire for a legacy can prompt a leader to struggle to secure the passage of the equivalent of Social Security, Medicare, Medicaid, or food stamps (SNAP).  Any president would be justly proud of such a successful effort that simultaneously improved the economy and made our Nation vastly more humane.  Obama is a Democrat who has been so deluded by Bob Rubin’s embrace of austerity and disdain for the safety net and social programs that Obama intends to build his legacy on the wreckage of our economy, the betrayal of those most in need, and beginning to tear down the foundations of his Party’s greatest domestic triumphs.

Dickerson employs the same leitmotif as the authors of the Washington Post article about the 2011 Grand Bargain negotiations that I discuss below.  He emphasizes Obama’s obsession with securing a place in history through “an accomplishment … [that would] light up the history books.”  He writes that what drives Obama is “ambition” and the desire to accomplish something grand that would “reflect direct glory on Obama.”

Dickerson misses something critical about Obama’s vainglorious pursuit for this legacy at our expense because he assumes that austerity and large cuts to social programs “leads to a healthy economy.”  Dickerson must believe that austerity and social spending cuts so obviously leads to a healthy economy that it isn’t worthwhile to explain how this miracle happens or explain to the readers that most economists think that Dickerson’s claim is false and the theoclassical economists who agree with Dickerson’s claims are primarily rabid Republicans who have been shown to be wrong about virtually every important economic issue and prediction.

Here is Dickerson’s explanation of the Obama administration’s supposed pro-austerity, pro-cuts to the safety net analysis.

“The president and his advisers believe that a grand budget deal would help an economy that is poised to take off. Recent economic data, including February’s strong jobs numbers, confirm their view that economic conditions are on the upswing. If the president can contribute to fixing the budget mess, consumers and companies will spend more and the economy will blossom. The president would be able to claim he revived the economy after the worst downturn since the Great Depression.”

It is dubious that Obama believes any such thing and it is near certainty that administration economists do not believe this claim.  Competent economists never put confidence in the – preliminary – numbers for a single month, particularly where that month followed a month of epic bad weather.  The U.S. is recovering because, unlike the Eurozone, we refused to inflict severe austerity on the Nation.  The stimulus, however, was far smaller than economists believed was needed and from 2011 to the present we have inflicted increasing austerity on the Nation through the 2011 budget deal, the re-imposition of the full payroll tax, the tax cuts on the wealthy, and the Sequestration.  This has strangled the recovery, making it unusually weak.

The “budget mess” we are suffering from is austerity.  Austerity means some combination of raising taxes and cutting federal spending.  Both of those measures reduce already inadequate public and private sector demand – reducing or reversing the recovery.  If we cut demadn and employment gains, consumers and companies will spend less.  As I explained, had Obama succeeded in inflicting the Grand Betrayal on the Nation in 2011 he would have thrown us back into a gratuitous recession.  Obama, and Obama’s aides, do not publicly claim that inflicting large cuts in social programs, including the safety net, and raising taxes substantially would mean that “the economy would blossom” because he would be ridiculed for his economic illiteracy if he said anything that dishonest.  If Obama’s aides are whispering their “blossom” claims on a not-for-attribution basis to reporters then they should know better than to believe the claims.

What Dickerson and the Obama administration mean when they refer to the “budgetary mess” they mean the repeated Republican extortion through threats to refuse to extend the debt limit.  The Republican efforts have created a budgetary mess, but the answer is not to give in to that extortion by inflicting the Grand Betrayal that gives the Republicans what they wanted to achieve by through their extortion.  Obama had the correct answer to this extortion.  He repeatedly proclaimed that he guaranteed that the Republicans’ extortion would not succeed.  He guaranteed that he would not cut a penny of spending in response to the extortion.  The Republicans cannot cause the U.S. to default on its debt and survive as a national political party.  In prior columns I have also explained two means Obama could use to remove the Republican’s ability to use the debt limit as a weapon of extortion.  Obama, however, gratuitously renounced both of the means to disarm the Republican’s ability to use the debt limit to extort.  His brave promises that he would make zero concessions in response to extortion – that he would call the Republicans’ bluffs – have obviously become inoperative.  (Obama could give lessons on how not to negotiate.  He is remarkably bad at it.)

What Dickerson misses because of his belief in austerity and cuts in the safety net is that Obama has always explained his quest for his legacy from the Grand Betrayal on the grounds that it will cause the Nation’s most needy to suffer, betray the Nation’s and his Party’s promises to safeguard the safety net, and harm his Party by distressing its progressive base.  Obama sees his claim to historical greatness arising from his “courage” in being willing to betray.

Everyone should read a detailed Washington Post article discussing, on the basis of insider interviews with White House and Republican leadership sources, the Grand Bargain negotiations in 2011.  “Obama’s evolution: Behind the failed ‘grand bargain’ on the debt” (March 17, 2012).

The article is particularly useful for examining Obama’s motivations because his staff were open about Obama being driven by his obsession with his place in history.  The article was written at a time when the Parties were not yet locked fully in their “blame” mode.  The Obama administration did not attempt to refute or even criticize the article.  The article is also useful for my purposes because the Washington Post is infamous for its devotion to austerity and its desire to unravel the safety net.  The article assumes, implicitly, that austerity and huge cuts to the safety net and social spending are obviously essential.  The article was not written by critics eager to block Obama’s effort to inflict those cuts on the Nation or to criticize Obama’s pursuit of his legacy.

Here is how the article describes Obama’s motivations.

“Against the vehement advice of many Democrats, including some of his own advisers, Obama was pursuing a compromise with his ideological opponents, a “grand bargain” that would move into unmarked territory, beyond partisan divides, pushing both parties to places they did not want to go.

From the White House point of view, those few days show a politically selfless president willing to rise above the partisan fray and make difficult choices for the good of the country.”

“Politically selfless” policies that would push Democrats “to places they did not want to go” meant that Obama in 2011 proposed making significant cuts to the safety net and enormous cuts to social programs.  Obama’s legacy, from his perspective, rested on betraying the Party’s base by betraying the Party’s most successful programs that were supported even by a majority of Republicans.  The authors were certain of Obama’s central goal and his central dilemma:  “He was caught between his own aspirations for historical significance and his inherent political caution.”

The next passage in the article, which the authors accepted as if it were revealed truth instead of economic illiteracy, is the administration’s ode to austerity and significant cuts to the safety net.

Dan Pfeiffer, the White House communications director, recalled that the president and his team felt the weight of the global economy “on our shoulders.”

“Is there political benefit to coming to a big budget deal with John Boehner? Sure,” Pfeiffer said. “But every other political and message imperative was thrown out the door to prevent a disaster and do the right thing for the country. That’s why we were willing to do things we wouldn’t normally do.”

Austerity, in response to the Great Recession, causes a “disaster” – it does not prevent it.  Had Obama and the Republican leadership have succeeded in inflicting austerity on the Nation through their proposed Grand Betrayal in mid-2011 they would have thrown the Nation back into recession.  Unemployment would have risen above 10% and Obama would have been crushed in the 2012 election.  But for purposes of this column, the point I wish to document is that the authors of the Washington Post column were not out to criticize the cynical betrayal.  The authors treated the negotiations as attempting to achieve a “Grand Bargain” and at all points the authors assumed (without analysis) that the Grand Bargain was not only desirable but also essential.  The tone of the article was that the failure to reach the Grand Bargain was tragic for our Nation.  The reality is that when the Grand Betrayal was not adopted in 2011, the Nation barely dodged an artillery round that would have blown up the entire recovery.

The authors, and the Obama administration officials, treat the fact that most Democrats would view the deal as the Grand Betrayal, as proving Obama’s “politically selfless” bravery.  The more Democrats and anyone needing to draw on the safety net criticizes Obama’s deal as the Grand Betrayal, the more Obama claims that his actions prove his courage and validate his “aspirations for historical significance.”   The Washington Post article repeatedly returns to variations on Dickerson’s leitmotif of Obama’s vain obsession with his place in history.  It refers to his “grand ambitions” and his goal of “making history.”

The unusual problem progressive Democrats have in preventing Obama from inflicting the Grand Betrayal is that the more they oppose the deal the more Obama interprets his own actions as courageous and “politically selfless.”  It is nearly impossible to penetrate a narcissist’s obsession that others recognize and praise his greatness.

42 Responses to Slate Agrees that Obama’s Vanity Drives the Grand Betrayal – and Praises the Betrayal

  1. Great to see you’re sticking to your guns and holding Obama accountable.

    It’s amazing how much the right-wing demonizes Obama as a radical leftist, when he’s got an agenda that’s easily identified as center-right MINIMUM in any sane drawing of the political spectrum.

    I’m forced to agree with you at this point that Obama is far more interested in his legacy than using his influence to adequately set policy to maximize the public good. He’s demonstrated a willingness to cave to many right-wing interests in order to set up some kind of measurable historical change in the system, all the while flaunting a neo-conservative foreign policy and a continuation of neo-liberal regulatory economic policies.

    You were generous in this article by not mentioning the more recent news coming out of Eric Holder at Obama’s Department of InJustice cementing what we already heard from Breuer, Geithner, Khuzami at SEC and Treasury: there’s outright immunity for the Too Big To Fail banks and they profit handsomely from their unprosecuted crimes. These are points that did not even need to be mentioned to help support your thesis of Obama’s incompetence (as you make an iron-clad case for his true motives), but are worth mentioning as an addendum to the main take-away that this is not the progressive enlightened humanist that we were told we would get. One can only blame GOP obstruction so much before the true picture begins to emerge that before now he has not been as active as he should have been in engaging congress and doing the horsetrading and such has defined our political progress for centuries.

    You’re truly a man of principle, Dr. Black.

    You’re a valuable voice of reason that stands out from the cacophony of partisan bullshit that we are inundated with on a daily basis across all media.

    Keep up the great research, reporting, and writing.

    • “It’s amazing how much the right-wing demonizes Obama as a radical leftist”
      ___

      It’s about Presidentin’ While Black. “Radical Leftist” will have to serve as the proxy. That’s the furthest they can push the bigotry envelope.

      • You got that right, Tweeder. It’s all about Obama being Black. I despise that racist shit, and wish it would stop.

        OTOH, I campaigned for the guy and now all I see in him is a need to recreate his Harvard Crimson years of making nice with the opposition.

        The only solution is educating each other about how the monetary system works. It has to seep upward at some point.

  2. ” Obama’s obsession with securing a place in history through “an accomplishment … [that would] light up the history books.”
    This could be done without a betrayal.
    A Einstein agreement, just plain simple: Both can agree on “no increase on present taxes”
    and “no decrease in present spending” with the full knowledge that there could be a future decrease in federal income tax rates and a decrease in FICA while at the same time there could be an increase in non deficit spending in order to “form a more perfect union”.
    OBAMA has already stated what can be done to achieve this goal:
    (as stated on ” 60 minutes” (12/11/11)” President Obama said),”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.” ?
    YES, YES, YES. Lower taxes while at the same time raise more revenue; “SOMEWHERE ELSE.”
    A message to President Obama.
    Opportunity makes heroes and allows for greatness. We are at a time, now, that such an opportunity exists. As president, you already have the power to seize this opportunity.
    Mr. President , your Federal Reserve Chairman has proven there is have a method of spending money which is NOT deficit spending that at the same time RAISES revenue, even more that all present taxes.
    Bernanke (“Justaluckyfool, Prediction: 2013 Noble Prize in Economic Sciences-Bernanke”)
    has proven there is such a “silver bullet”. A magic way and means to “spend” trillions without any increase in “debt”. He is doing it every month, like it or not, with or without any additional approval.
    IT IS CALLED Quantitative Easing (QE).
    But QE is being used to make profits for the “Private For Profit Banks” (PFPB) as allowed by law, while “we the people” sit and nod our approval.
    Why not “QE 4 The People ” , Purchase assets for the benefit of the people, instead of PFPB and turn these “profits” (revenue) over to the US Treasury?
    *********************
    *WHAT IF THE …The Fed Reserve were to become the CENTRAL BANK WORKING FOR THE PEOPLE (CBWFTP) instead of working for the Private For Profit Banks (PFPB) .

    The government can not win against ‘compound interest’ on debt for that can be infinite in amount. IF ‘compound interest were eliminated then there would be no “systemic failure”. Or better yet; take that most powerful weapon, use it for the people .
    Let’s try this game: Substitute the words “Central Bank Working For The People” (CBWFTP) where ever” Private For Profit Banks” (PFPB) appears.

    ****PFPB (read CBWFTP) have $100 trillion in assets as mortgages on residential and commercial real property (RE) loans. The average compound interest rate is 4% for a term of 36 years. The PFPB (read CBWFTP) would have created that $100 trillion ‘out of thin air’ (Horizontal Money)(read Vertical Money) which would have an attachment that would require $400 trillion to be paid to the PFPB (read CBWFTP). YES, take away the smoke and mirrors, this is a fact-the Rule of 72. Now we must replace (reduce to zero ) the Horizontal Money by subtracting $100 trillion leaving a profit,income,taxation from ‘somewhere else’ of $300 trillion. This amount goes as profits to the PFPB.(read CBWFTP) Revenue they may use for their own selfish purposes. That’s not the bad news-what the bad news is :That $300 trillion is real money, real currency, sucked up by the PFPB, (CBWFTP) yes Vertical Money !!
    NOW READ IT AGAIN,
    Why would you not want prosperity for yourselves and your children? Why would you not want $300 trillion THAT MUST BE PLACED BACK INTO THE ECONOMY IN ORDER TO PREVENT DEFLATION !
    WHY WOULD YOU NOT SEIZE THIS OPPORTUNITY FOR GREATNESS?
    P.S. What would happen if the Fed were to mandate that all PFPB must be 100% capitalized in all money transactions, while at the same time make $200 trillion QE available for them to be solvent at a rate of 2% for 36 years? Would Congress have to budget spending of $11 trillion a year just to prevent deflation? (“QE 4 The People”)
    Challenge it. Improve it. ” ***** “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC), Hindu Prince, founder of Buddhism

  3. The only thing that we do know is that the right wing Republicans are wedged between their libertarian ideology and intense hatred of Obama. They have and will reject their own policies, individual mandate anyone?, because they “were not invented here.”

    Thus the Tea Party’s irrational fear of Obama’s cooties is all that is standing between us and social insurance oblivion, and that is truly scarier than the sum total of the absurd cavalcade known as American political economics.

  4. From my recent article on Opednews, I argue that Obama is not only acting stupidly and against American interest, but unconstitutionally as well: http://www.opednews.com/articles/Sequester-this-by-Scott-Baker-130307-13.html

    As Rep. Grayson discusses in the appeal below, there is an easy way to cancel the arbitrary and economically unsound sequester — just do it.

    What Grayson doesn’t say is that the sequester is possibly even unconstitutional in that it thwarts the will of Congress itself by underfunding those programs it has already approved. Under the 14th Amendment, Section 4, all debts incurred during the Civil War shall be unquestioned and paid. Many legal scholars (though not “constitutional scholar” Obama, it seems) argue that this establishes a precedent for the U.S. to ALWAYS pay its debts. The same is true from the constitution’s original Article 6, which promised to pay debts owed under our country’s Articles of Confederation (Constitution 1.0). The president could use either of these to pay for pre-approved government services, by directing Treasury – a department of the executive branch – to issue debt-free U.S. Notes in sufficient quantity to make up the difference. This is particularly true if, as seems likely, the debt ceiling once again becomes an issue.
    See this article: Government Sequestration Cuts Pale in Comparison to Rampant Fiscal Abuse, which uncovers many trillions in waste at the Pentagon – literally decades of sequester-sized abuses – with which the government could cover its deficit, which is shrinking anyway. I was in touch with the author of this piece, who runs a small business promoting organization, and who is also interested in my proposed solutions from: America is not Broke, here: http://www.huffingtonpost.com/scott-baker/america-is-not-broke_1_b_1904062.html. After reading my comment and my article he replied: “I think the real magnitude of waste, fraud and fiscal abuse in our government would shock even you and I. What is amazing to me is you don’t see these stories in the mainstream media. Most Americans don’t really understand how corrupt the federal government is because of that. I have read your blog and it’s exceptional. I want to learn more about your organization. There are so many simple solutions to our nation’s financial problems but they don’t make any money for the corporate giants and billionaire bankers that seem to call the shots in Washington so they are never even discussed in Congress…”

    The sequester is a distraction, designed to make us think Washington is “doing something” over a “hard problem” with “no easy solutions.” I don’t know how many politicians, including the president actually believe the federal budget is like the family budget, or that the government operates like the corner bodega, but it’s not and it doesn’t.

    Government can “coin Money” under article 1, section 8, as Lincoln did — the original “Greenbacks” — at any time, for any reason, in any quantity.
    Government can use that money to create massive public works projects to invest in the country and grow the value of it.

    Obviously, government can tax some parts it hasn’t – and even collect the economic rent, which it has mostly failed to do. See how Norway does that with an oil fund, and how it has one of the highest standards of living in the world vs. Alberta, which has more oil but undercharges for it, and is in perpetual debt.

    There are many, MANY, solutions to our economic imbalance, which has created the greatest wealth inequity in our country’s history. The sequester isn’t one of them.

    From: Rep. Alan Grayson
    Subject: How to Cancel the Sequester, In One Sentence

    To view this email as a web page, click here.

    “Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.”

    Scott,

    Last Friday, my friend Congressman John Conyers introduced a bill called the “Cancel the Sequester Act of 2013″ — a bill that, not surprisingly, cancels the sequester.

    In case you haven’t heard, the sequester is an endless series of irrational and cruel budget cuts. Fortunately, since Congress gave birth to the sequester, Congress can also kill it.

    Here’s the entire bill:

    “Section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.”

    That’s it. That’s the solution, in a single sentence. No loopholes. No self-imposed crises. Just one sentence.

    Join us by signing a petition in support of just-say-no to the sequester. 75,000 people already have.

    I thought you’d like to know that the end to our current crisis is at hand. And you can help. Join us.

    Courage,
    Rep. Alan Grayson

    • What Grayson doesn’t say is that the sequester is possibly even unconstitutional in that it thwarts the will of Congress itself by underfunding those programs it has already approved.

      This makes no sense. Congress itself voted for and passed the sequester. So the constitutional theory here is that the Congress cannot vote to modify spending authorizations it previously passed?

      Seems to me you might be confusing the sequester with the debt ceiling business.

      • You may be right, that’s why I said “may.” But I’m not sure if the sequester specifies specific cuts. If not, if it just cuts money arbitrarily for some programs – or even just “areas” of government, it could be said Congress was not specific in its intent, which means it did not fulfill its mission, and the president could say “hey, Congress didn’t tell me what to fund differently, and it is not up to me to decide that.” Then, he could just continue funding with U.S. Notes, or a Platinum coin, (or any newly created coin, really), pending clarification – which, I’m guessing, Congress will not have the backbone to specify. Congress is dropping the ball. Obama should not pick it up for them.

  5. Excellent article on the motivations of Obama….but what about the rest of the Democratic “leadership”??

    There is a a current of thought amongst some “progressives” (in particular, the “PUMA” crowd gathered around Hillary Clinton who were the first to claim foul and are now the loudest crows of “We told you so”) that all that is needed is to switch out Obama with some other more committed progressive leader (say, Hillary or Elizabeth Warren) and the Democrats would rediscover their “progressive” heritage and rightfully throw both the DLC and the TeaPublicans off the bus.

    What is totally ignored in all of this, though, is that Obama isn’t merely about claiming his “heritage” (as if being the first President of color isn’t heritage enough); he is clearly enforcing an economic agenda that reflects the full weight and power of the corporate/military/industrial complex and Wall Street.

    The only difference between the Dems and Republicans on this is that the GOP is in a better position due to their ideology of Social Darwinism and Puritanism to attract the right-wing social base (the Tea Party); while the Dems, due to their reliance on working class and poor people of color, more socially liberal youth, and sexual dissident groups (feminists, GLBT’s), have to be much more subtle and indirect in their corporatist agenda.

    Nevertheless, the idea has always been to use Prez Obama as a foil to generate the total liquidation of the New Deal/Great Society and ease the transition into an IMF-like regime of “shared austerity”….but do so in a way that doesn’t either tip off the Dem base. Thankfully for the Dems, the intrasigence and outright bigotry of the TeaPublicans and old-school Right has been enough thus far to distract the base from the creeping Reaganization of their party. But, all this will do is delay the inevitable revolt which will occur the minute after the “Grand Betrayal” deal is reached.

    Also…sure, there is profound hatred of Prez O from the Right because of his race….but there was profound hatred towards Bill and Hillary Clinton, too. Most of that hatred, though, stems as much from ideology (“They’re not our kind of right-wing, they’re evil “socialist Marxist radicalfeminist antiChristian gayloving God-hating COMMIES!!!”) than from any real personal hate.

    The real problem, though, is that the Democratic Party “leadership” in the House and Senate (that means Nancy Pelosi/Steny Hoyer/Steve Israel and Harry Reid/Chuck Schumer/Dick Durbin) is as dedicated to a “Grand Betrayal” of social spending as Obama is, mostly because they are dependent on the same Wall Street/Pentagon/K Street largeese as that which elevated Obama to power. By contrast, those few liberals (Harkin, Sanders, the Congressional Progressive Caucus) that are attempting some form of opposition are neutered by their own dependency on party corporate funding, their feality to party discipline, and total ignorance or distortion of their cause by the corporate media.

    This is why I’ve been arguing that promoting MMT/HPCS through the Democratic Party is an exercise in futility. This current POTUS and his party is simply too dedicated to the Bernanke/Rubin/DLC corporate line to even care about their effects on the working class. Better to dump the Democrats and build a populist Left movement from below.

    • You can’t possibly be serious about promoting MMT in the Democratic Party.

      The public misunderstanding on this issue is bad enough, the GOP would jump on all the scholars associated with MMT and bleed the soundbites to scare people over hyperinflation.

      Just imagine how their appeals to “common sense” will stand up against the nuanced arguments about the monetary system that rationalize active fiscal policy.

      Regarding Obama’s heritage, and that of being the first black president. What a crying shame it would be if the first black president would have a mediocre record in history rather than a stellar one. I hope he reflects on these issues and thinks hard about the future of the country rather than being some “uniter” that is creating a grand bargain between right & left.

      • Actually, my point *was* that promoting MMT through the Democratic Party was a BAD idea..and that focusing solely on Prez Obama without equal focus on the Democratic Party congressional leadership’s role in their “Grand Betrayal” would paint an incomplete picture.

        Also…the GOTP would attack anything even remotely resembling MMT as “hyperinflation” anyway….but who cares about them?? It’s building a majority for alternatives to austerity that is most important, not appealing to everyone.

        • Auburn Parks

          Anthony
          While I agree with most of your nicely written column, I would offer up one observation.
          Even though Obama and the Dem leadership are hopelessly dependent on corporate funding, I disagree with your stated position of needing to forgo the political parties entirely. Political parties are easily moved when the popular demand is there. The problem is that the popular demand is not there. The tea party has definitively shown the power of populist movements on the political party establishment. We need a tea party for good and not for I won’t say evil….. only because most of the people are just ignorant and don’t fully appreciate the destruction their stated desires will produce.

          With that in mind, we need to focus on building a popular movement and part of that is to get the message out there. There is only so much the good folks that write on this blog and the rest of the modern money\post keynesian\post neo-classical folks can do. We need a detailed, comprehensive plan to build the movement at least to the point it reaches self-enforcing critical mass. And some parts of that should include (I believe):
          1. Get every progressive media outlet to discard their false understanding of the monetary system….NO MORE GOLD STANDARD THINKING. This includes blogs, radio, and tv shows.
          2. We need to get some already elected progressive politicians to either A. understand this system or B. talk about the system publicly seeing as I understand it, some of them already know some of this stuff they just don’t think they can say it out loud and get REELECTED
          3. As much as I can’t believe I’m saying this…….we need super-pacs. We need to find people who want to run for office who understand MMT etc.

          just some suggestions

      • “What a crying shame it would be if the first black president would have a mediocre record in history rather than a stellar one. ”

        It’s quite likely that our first black president will turn out to be one of our worst.

        • No one could be worse than George Bush Jr, surely ? Or was it Cheney who was really President.

          • No one is currently worse than Bush, but Obama is surely trying between his cowardly escalation of the former’s war /civil liberties crimes and his fealty to Wall St. economic interests.

            • Is that you, Tony ?

              • political economist

                It is wrong to compare in an absolute sense Obama and Bush.
                We need to see all events and all people in a historical context.
                If one looks at this comparison in an absolute sense, one might readily come to the conclusion that Bush is worse than Obama although Glenn Greenwald make a good case for the opposite conclusion.
                However, if one looks at every moment as part of the dynamic of history, then it is readily apparent that Obama by accepting all of the major retrograde principles of Bush, such as the principle of an authoritarian President, is worse than any other President. He could have reversed the movement towards fascism in the US but instead solidified this movement. It is to be more fair a matter of judgement and only time will tell but clearly those who think that Obama is much better than Bush have engaged in sloppy thinking.

  6. Brad Sandler

    Obama’s desire to do something big to create a legislative legacy has already pushed him into making some very bad decisions. This is most unfortunate, and there really is no good reason for it since Obama is as capable as anyone at understanding economic policy, as well as America’s role that we carved out for ourselves as the example of a law based, just society. One that was created with imperfections, but also that these imperfections are an opportunity to refine ourselves.
    It is sad in retrospect that the tremendous opportunity that the Great Reccession opened up has been squandered. Did the Preseident put together a small team of extremist Left Wing economists and social engineers and ask them for a plan to save the country? Then ask a Right Wing team to do the same from that perspective? The results of those proposals could have created a plan that contains the areas of agreement between the two groups. Instead he put together Clinton 2nd Term retreads that faced an already mostly solved economic situation and asked them to recreate the performance they never gave. The heavy lifting for that performance was already done by the more Left Wing Clinton 1st term team.
    So, we see that Obama’s failings are the inability to see the path through the forest that one must traverse to get to the road, instead he thinks he can just get on the road. Unfortunately, this is why most Republican economic policies fail, but sell well.
    The other failing of Obama is his almost steadfast refusal to exert creative executive influence and atttempting the new instead of favoring the large. Probably the same road instead of path issue.

    • I think we should assume that Obama is pursuing the ends that are in fact most important to him, and that he is just a fairly conservative guy at heart, with no overarching “progressive” vision of the future other than trying to shore up a red-blue, milquetoast consensus capitalism that doesn’t rock the boat, continues the neoliberal project of shrinking government, and that poses no threat to the plutocracy.

      • Bradley Manning has more ethical considerations in his big toe that Obama will ever have. He is just a stooge of the corporate elite.

      • Brad Sandler

        Dan,

        I agree that Obama is a conservative guy, always has been. He is much probably closer to a George Romney type conservative than Mitt Romney. So the expectations/hopes of him going to true Progressive policies were only amplified by the disaster that Bush II left us. Instead Obama settled for the middle road, accepting a little from both philosophies and never generating a true synthesis that a change agent might create.
        The whole debate over the Platinum coin was just the opening he needed, but his reluctance to go away from his comfort zone is in my mind his real shortcoming. Fortunately, he does a poor job managing the debate, since more and more the public discussion is finally catching up to the critical issues.
        Those are Jobs, Income Inequality, and Lowering our Environmental Impact.

  7. political economist

    I have met t man in a small meeting. Yes, he is very much all about Obama. Yes, I have met Clinton and yes this is true of almost all politicians, I am sure. But, in Obama it may be pathological. The country may have to do a lot more suffering. Another problem is he is not nearly as smart as he thinks. This is obviously true on economic matters but is not restricted to these.

  8. His legacy is going to be simple in many minds. He was a traitor to progressives and along with an economically illiterate Congress, destroyed the humanitarian advances of the New Deal.

    • We can’t just blame Obama. Millions and millions of Democratic liberals either enthusiastically share his agenda or are slavish toadies willing to follow him anywhere. The reason there is no vigorous progressive response to the crisis of 2008 is that the formerly more progressive party in America has become quite conservative and has no progressive agenda.

      • Dan: THAT is the exact point I’m making….going after Obama alone as securing his “legacy” without acknowledging the role of the Democrativ Party as a whole in being the “good cop” side of corporatism and neoliberalism is to explain only half the story.

        I do think that there is a looming and increasingly angry Left opposition in the grassroots…but there is currently no institutional or political entity available to represent their interests, because the liberals/”progressives” are so tied up in either Obama worship or fear of the GOTP. One will simply have to be built from the bottom up, from outside the establishment and the Beltway.

        • I believe there is such an emerging movement too Anthony. But so far it is just angry, and has no coherent agenda for social change. It’s also weakened by infatuations with dozens of drop-out, quasi libertarian, crank ideas like “bitcoins” and the like.

          Eventually people will develop the sense and intestinal fortitude to create a movement that doesn’t shy away from mounting a serious, sustained political assault on the plutocratic order, and that puts forward a comprehensive social program for much greater equality, solidarity and shared prosperity, organized by a broad-based democratic government that is powerful enough to direct society’s resources toward these ends and to subdue and subordinate the corporate and financial oligarchies that control our society.

          Right now I think the fragmented left is still too daunted and horrified by the scale and difficulty of the political battle that it is ahead of them if they are serious about these changes. It remains to be seen if the left has the stomach for a fight to save the planet, dismantle the emerging ne0-feudal order, and secure human dignity.

  9. The “legacy” motif is overly charitable to Obama, and indeed this article shows its idiocy, if were true.
    The one thing we do know about Obama is he is not an idiot. The theory that fits more securely the facts we know is that Obama was recruited by Rubin and financed by Wall St. for the express purpose of destroying the safety net aspects of the New Deal. Just as Clinton destroyed the financial regulation aspects of the New Deal, and initiated safety net project with his Welfare Reform. The Obama “legacy” that will pay repeated dividends is solely the delivery of this outcome, for which like Clinton’s delivery on globalizing (NAFTA) and financialization (Glass-Steagle, etc.), will make him far more fabuously rich. Obama is punching his card, and his best years are ahead in a plutocratic world that he is helping to construct.
    What is even more galling is that this Grand Betrayer, like Clinton before him, will remain as a money-stream media-constructed spokesperson for those he betrayed.
    http://truth-out.org/news/item/14684-progressives-stop-obama-from-going-to-china-a-thought-experiment

    • Yes, I think this is pretty much on target. In the debates during the last campaign, Obama told us that he doesn’t think government creates jobs. I think Obama is just a conservative guy who dislikes social insurance programs and activist government, disdains the left-progressive legacy of the Democratic Party, looks up to the rich and well-educated whom he believes are better, more virtuous people than the disgusting and ignorant poor, and wants to continue the neoliberal project of gradually privatizing away the remaining parts of our economic system that are publicly and socially organized. If he thinks about his legacy, then he imagines it to be a legacy of a more conservative and abstemious Democratic Party based on the embrace of private enterprise, corporate leadership and “sound finance”.

  10. This article gives a very good explanation of the underlying motivations and mechanics of the project to advance the neoliberal agenda in the United States. The echoes of Naomi Klein’s “The Shock Doctrine” are unmistakable. To paraphrase Malcolm X, the Grand Betrayal is just the Washington Consensus coming home to roost.

  11. Obama is considering the flood of money that will accrue to him when he leaves office.
    Consider the fortunes made by Bill Clinton and Anthony Blair after leaving office. Legacies be damned.

  12. Forget advancing any policy in this corrupt government until money is outlawed from politics, which means also stripping the Supreme Court of jurisdiction to mandate it back in. Here is how: http://truth-out.org/news/item/14684-progressives-stop-obama-from-going-to-china-a-thought-experiment
    http://tinyurl.com/12ekeys

  13. Obama’s place in history will be that he dragged the reputation of American black political leadership through the mud. My generation are conditioned to think of blacks as brave and noble overall, because of the breathtaking heroics of Martin, Malcolm et. al. For the young of today, the memory of noble, magnificent black courage and leadership will become the mark of stupid old fools. For them, black politicians will be considered as venal and cheap as most of their white counterparts. Obama’s legacy will be to have disgraced his entire race in the arena of american politics. Obama is standing on the metaphorical shoulders of Martin King and pissing all over that great man’s legacy. What a guy.

  14. This assumes that anti-austerity and the consequent cheap money and inflation has worked.

    Where? I am an empiricist, need facts to reason with. So far as I know, there are no such countries. All who have followed Keynesian policies are in debt with economies falling into the World-wide Greater Depression, unbalanced ages of work forces, declining native populations and rising civil strife.

    Japan has followed ‘anti-austerity’ measures for 30 years, is falling into the world-wide Greater Depression, …

    Examples, please.

    • Keynes policy was to run government surpluses when there was full employment and incur deficits, when unemployment was high. The Eurozone’s problem is that they lost control of their own money supply.

      “Give me control of a nations money supply, and I care not who makes it’s laws.”

      Meyer Amschel Rothschild

  15. President Obama, yes it is possible to be placed in history as a president who ranks along side Lincoln.
    REVIVE LINCOLN’S MONETARY POLICY:
    AN OPEN LETTER TO PRESIDENT OBAMA
    by Ellen Brown, April 8th, 2009
    Dear President Obama:
    The world was transfixed on that remarkable day in January when, to poetry, song, and dance, you gazed upon Abraham Lincoln’s likeness at the Lincoln Memorial and searched for wisdom to navigate these difficult times. Indeed, you have so many things in common with that venerable President that one might imagine you were his reincarnation in different dress. You are both thin and wiry, brilliant speakers, appearing on the national stage at pivotal times. Fertile imaginations could envision you coming back dressed in that African heritage you freed, to help heal the great scar of slavery and prove once and for all the proposition that all men are created equal and can achieve great things if given a fighting chance.

    As Wordsworth said, however, our birth is but a sleep and a forgetting; and if that is true, you may have forgotten a more subtle form of slavery from which Lincoln tried less successfully to free his countrymen. You may have forgotten it because it has been omitted from our popular history books, leaving Americans ill-equipped to interpret the lessons of our own past. This letter is therefore meant to remind you.

    President Obama, we are now met on another battlefield of that same economic war that visited Lincoln and the Founding Fathers before him. For you to finish the work Lincoln started would be a poetic triumph no American could miss. The fate of our economy and the nation itself may depend on how well you understand Lincoln’s monetary breakthrough, the most far-reaching “economic stimulus plan” ever implemented by a U.S. President. You can solve our economic crisis quickly and permanently, by implementing the same economic solution that allowed Lincoln to win the Civil War and thus save the Union from foreign economic masters.
    Lincoln’s Monetary Breakthrough

    The bankers had Lincoln’s government over a barrel, just as Wall Street has Congress in its vice-like grip today….Read More:
    Ellen Brown, April 8th, 2009
    http://www.webofdebt.com/articles/lincoln_obama.php

    Add the “justaluckyfool” comment: A Einstein agreement, just plain simple: Both can agree on “no increase on present taxes”
    and “no decrease in present spending” with the full knowledge that there could be a future decrease in federal income tax rates and a decrease in FICA while at the same time there could be an increase in non deficit spending in order to “form a more perfect union”.
    OBAMA has already stated what can be done to achieve this goal:
    (as stated on ” 60 minutes” (12/11/11)” President Obama said),”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.” ?
    YES, YES, YES. Lower taxes while at the same time raise more revenue; “SOMEWHERE ELSE.”
    A message to President Obama.
    Opportunity makes heroes and allows for greatness. We are at a time, now, that such an opportunity exists. As president, you already have the power to seize this opportunity.
    Mr. President , your Federal Reserve Chairman has proven there is have a method of spending money which is NOT deficit spending that at the same time RAISES revenue, even more that all present taxes.
    Bernanke (“Justaluckyfool, Prediction: 2013 Noble Prize in Economic Sciences-Bernanke”)
    has proven there is such a “silver bullet”. A magic way and means to “spend” trillions without any increase in “debt”. He is doing it every month, like it or not, with or without any additional approval.
    IT IS CALLED Quantitative Easing (QE).
    But QE is being used to make profits for the “Private For Profit Banks” (PFPB) as allowed by law, while “we the people” sit and nod our approval.
    Why not “QE 4 The People ” , Purchase assets for the benefit of the people, instead of PFPB and turn these “profits” (revenue) over to the US Treasury?
    *********************
    *WHAT IF THE …The Fed Reserve were to become the CENTRAL BANK WORKING FOR THE PEOPLE (CBWFTP) instead of working for the Private For Profit Banks (PFPB) .

    The government can not win against ‘compound interest’ on debt for that can be infinite in amount. IF ‘compound interest were eliminated then there would be no “systemic failure”. Or better yet; take that most powerful weapon, use it for the people .
    Let’s try this game: Substitute the words “Central Bank Working For The People” (CBWFTP) where ever” Private For Profit Banks” (PFPB) appears.

  16. It is heart warming to see libs such as yourselves feel “betrayed” by the Narcissist Barry O. You are also correct that his personal attributes have been roadblocks for the Progressive Agenda. But you are all wrong in assuming that he has veered towards the center. He is a child of Alinsky, and is hoping to tear the country apart from within. Let’s just hope that he never learns to subjugate his ego, otherwise he could wreak some real damage by implementing his socialist agenda.

    • Yes, you can really tell that Obama is a closet Socialist from all the ultra left wing people he has appointed to his economic team, like Tim Geithner and Jacob Lew.

  17. Pingback: Links 3/22/13 | Mike the Mad Biologist

  18. Obama s a liar
    Obama is a fraud
    He sold us to the bankers
    and then betrayed us all

    I will never vote for any democrats until they find their inner FDR and stick Obama/Clinton socio-economics in the hazardous waste site. But I will be attacking, undermining, ridiculing them and draining their vote totals until they get a WPA-jobs program and pay reparations to the homeowners they sold out to the bankers. Third Way economics is a banker-boy con.