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A View From Washington: The President’s Quest for the Unholy Grail

An empire in decline is always for sale and this new social contract is another example that we live in a full-blown plutonomy.

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You are probably tired, angry or resigned to the evil that plutocrats do when you think about the Fiscal Cliff, the Grand Betrayal or, as I like to call it, the Unholy Grail.

Most people don’t understand what is actually happening, how we got here or what will happen in regards to these negotiations. I have spent lots of ink on this over at the Mayoral Tutorial: You should go there and get Dangerously Informed on the subject. What I hope you’ll get out of my little column today is that the “solution” being crafted to this artificial crisis does not solve the problem it’s supposed to address. Instead, it advances an agenda that should have us burning effigies of President Obama for the next thirty years.

The “Problem”

Strong words, sure, but let’s start with what the mutually agreed upon “common wisdom” has identified as the “problem” that President Obama and the GOP are desperately trying to address. The problem: supposedly we have a huge National Debt and Deficit that if not addressed will trigger a number of nightmarish economic scenarios, will rise up and destroy the country’s financial underpinnings.

One would think that the banks collapsing in 2008, their rampant lawlessness since 2000 with everything from Mafia-style bid-rigging to full-on fraud in everything from mortgages to LIBOR, to actual partnerships with drug-dealers and terrorists in the recent HSBC scandal would have already done that. But nope, apparently the debt and the deficit are the most dangerous things the country faces.

I am told the fundamentals of the economy are sound and that Dodd-Frank and the Consumer Protection Bureau fixed everything… I am unconvinced – call me a cynic. But that’s what we’re all supposed to be worried about: the national debt and deficit.

The “Solution”

The solution, commonly agreed to by everyone, is that we must control our spending and raise some more revenues. So if you are following along at home: We have a debt and deficit problem, and if we cut spending and raise revenues everything will be fine and these “negotiations” are to discover the best way to do exactly that.

So, what happens if Boehner and Obama get into a death tussle and go over the Reichenbach Falls of the Fiscal Cliff like Holmes and Moriarty in a partisan death hug? The Sequester – or, “government by meat cleaver wielded by people with more teeth than brain cells” – kicks in and cuts spending in drastic, almost random ways, shrinking government in ways that would make Ayn Rand dance a jig with Von Hayek. Revenues would also increase as taxes return to higher than our historically low rates.

Because you have the capacity to reason your way out of a chair, you may have realized that the common wisdom “solution” – cutting spending and raising taxes – is exactly what will happen if nothing happens. This is probably making your head spin or hurt.

What’s Really Going On

So now you know that whatever the hell our government is up to, it has nothing to do with the debt or deficits or the size of government. So what the hell are they doing? It’s not good news. This is about resetting the nation’s priorities to make somebody happier than they currently are with what the present arrangement or social contract is providing.

There are exactly two rules to live and die by when the government starts reshaping its priorities. One: If you are not at the table you are on it. Two: The best way to take something away from someone is for them to give you permission to do so for a greater, nobler good. If you are not at a table and people are talking about making the world better by making sacrifices, you are in what we policy wonks call “bad trouble.”

So on one side we have the Fix the Debt people saying we have to cut “entitlements” – Medicare, Medicaid and Social Security – or privatize them, or turn them into a straight up welfare program. In return for this, they are willing to pay as much as 4% higher taxes for the good of the country. Also on their side of the table is the GOP, which wants to do what they want but not raise any taxes on anybody because apparently that would not be good for the country.

On the other side we have the president and a number of Democrats saying that we have to control the costs of Medicare, Medicaid and Social Security, so that they will be secure for the long-term, by raising ages or “chaining” cost of living increases to the CPI, or means testing… but they want raise taxes on the super wealthy by 2% to 4%.

You are probably now duly alarmed that these positions sound eerily similar. It appears that you are not at the table. Now it dawns on you that you should be watching for what they are asking you to give up for some noble reason.

The noble reason springs from a logical framework not seen since Vietnam. We must destroy/weaken the infrastructure and rationale of Social Security, Medicare and Medicaid in order to “save” it. You sacrifice the already inadequate benefits you are getting now so that in the future there will even be more inadequate benefits and we will levy a temporary maximum 4% income tax increase on the wealthiest Americans so that all of us are sacrificing to “save” these programs… deal?

This is the first step toward destroying what remains of the New Deal. You heard it took Nixon to go to China: Well, it apparently will take Obama to seize the Unholy Grail of the wholesale privatization and elimination of the cornerstones of our social contract. An empire in decline is always for sale and this new social contract is another example that we live in a full-blown plutonomy. It means Barack Obama, the first Black President, was a transformational figure after all – and that’s too damn bad for all of us.

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