Obama signs bill to raise debt limit, reopen government
http://www.washingtonpost.com/politics/house-effort-to-end-fiscal-crisis-collapses-leaving-senate-to-forge-last-minute-solution/2013/10/16/1e8bb150-364d-11e3-be86-6aeaa439845b_story.html
Video:
Here are the key moments from the last day before the financial default
deadline, when the Senate and House came together to pass a deal to
reopen the government.
An agreement struck by Senate Majority Leader Harry M. Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) ended a stalemate created last month, when hard-line conservatives pushed GOP leaders to use the threat of shutdown to block a landmark expansion of federally funded health coverage.
House conservatives face up to defeat
For the GOP’s hard-core right wing, at the end of it all there was nothing to do but wait. And then lose.
Boehner and his majority are in disarray
The speaker let conservatives run House strategy, and they got nothing in return.
Cautious optimism among federal workforce
Amid news of a Congressional deal, workers look forward to an end to their “unwanted vacation.”
Winners and losers of the shutdown
We pick the best and the worst from a memorable month in the nation’s capital.
Tea party activists: ‘We will keep fighting.’
Hardline conservatives call bipartisan deal a capitulation, say they are unbowed and will not go away
SHUTDOWN ENDS
Obama signs bill to raise the debt ceiling and reopen the government; federal employees should expect to work Thursday.
“We’ve been locked in a fight over here, trying to bring government down to size, trying to do our best to stop Obamacare,” House Speaker John A. Boehner (R-Ohio) told a Cincinnati radio station. “We fought the good fight. We just didn’t win.”
The Senate overwhelmingly ratified the deal Wednesday evening, 81 to 18, with more than half of Senate Republicans voting yes.
A few hours later, the House followed suit, approving the measure 285 to 144. Eighty-seven Republicans joined a united Democratic caucus in approving the measure, allowing Congress to meet a critical Treasury Department deadline with one day to spare.
Obama signed the measure into law shortly after midnight,, reopening parks and monuments across the nation, restoring government services and putting furloughed federal employees back on the job, many of them in the Washington region.
“Employees should expect to return to work in the morning,” Sylvia Mathews Burwell, the White House budget director, said in a statement.
The measure also would guarantee those workers back pay for time spent at home, aid flood-ravaged Colorado and provide extra cash for fighting wildfires out West. And it would grant the District government, which relies on Congress to approve its budget, authority to manage its own affairs through the 2014 fiscal year.
Enforcement of the debt limit would be suspended until Feb. 7, setting up another confrontation over the national debt sometime in March, independent analysts estimated. Meanwhile, federal agencies would be funded through Jan. 15, when they might shut down again unless lawmakers resolve a continuing dispute over deep automatic spending cuts known as the sequester.
Senate Budget Committee Chairman Patty Murray (D-Wash.) was to have breakfast Thursday morning with her House counterpart, Rep. Paul Ryan (R-Wis.), to start a new round of talks aimed at averting another crisis. Obama repeated his vow to work with Republicans to rein in a national debt that remains at historically high levels.
“With the shutdown behind us and budget committees forming, we now have an opportunity to focus on a sensible budget that is responsible, that is fair, and that helps hardworking people all across this country,” Obama said at the White House.
House conservatives face up to their defeat
John Miller/AP -
FILE - “We’re all pretty down,” said conservative Rep. Raul Labrador (R-Idaho)
On Wednesday, those two ugly facts began to sink in among the House’s hard-core conservatives. For nearly three years, they had effectively led the House itself — drawing their power from the intimidating sense that they were capable of anything. They often compared themselves to William Wallace, the Scottish rebel who (at least in the movies) succeeded because he refused to compromise.
Video
Senate leaders announced a budget compromise
Wednesday that will raise the debt ceiling and re-open the government.
In Play's Chris Cillizza breaks down which political players came out of
the deal on top and which ones did not.
SHUTDOWN ENDS
Obama signs bill to raise the debt ceiling and reopen the government; federal employees should expect to work Thursday.
On Wednesday, conservatives’ frontal attack on President Obama’s signature health-care law had ended after a government shutdown, a major decline in Republican popularity and a final compromise that gave them almost none of what they had wanted.
“We tried,” Rep. Mick Mulvaney (R-S.C.) said at a gathering of glum conservatives on Wednesday morning. “We lost.”
He continued. It got worse. After the first effort to defund the health-care law, Mulvaney noted, conservatives tried to take away health-care subsidies for members of Congress and their staffs. If Obamacare would survive, then at least the “political class” would not benefit from it, he said. But then — “We lost that one as w ell.”
“We’re all pretty down today,” said Rep. Raúl R. Labrador (R-Idaho), sitting on the same dais. Labrador’s only hope was that the polls were wrong and that the American people had somehow been impressed by all this. “Now they know we’re willing to fight,” he said.
For House conservatives, Wednesday was a day unlike many others in the giddy period since Republicans took the House in 2010. They had lost all control of the standoff after House Speaker John A. Boehner (R-Ohio) had failed to find a bill that all Republicans could support.
So the Senate — led by Democrats — was supposed to cut the deal instead. And did. The House was expected to pass it, with most Democrats and a few Republicans voting yes. And did.
For House conservatives, at last, there was nothing to do but wait. And then lose.
“He said, ‘Y’all need to get some rest. Go home. Sleep. We’re going to live to fight another day,’ ” said Rep. Aaron Schock (R-Ill.), relaying the message Boehner gave House Republicans in a private meeting Wednesday afternoon.
But before they could go home, there was a vote. And it wasn’t supposed to come until the evening. In the meantime, some conservatives filled the empty hours giving tours of the Capitol (since the regular tour guides had been furloughed by the shutdown).
“It actually looks like a jellyfish,” said Rep. Joe Wilson (R-S.C.), who was in a basement tunnel, showing a group the display of artwork from students who had won a congressional art competition. The winner from Wilson’s district sent in an abstract composition. Apparently some kind of marine life.
“You see a lot of teen angst as you walk down here,” said Rep. Blake Farenthold (R-Tex.), doing the same thing, in the same tunnel, a few feet behind Wilson.
Inside a House hearing room, several members attended a lunch meeting called “Conversations with Conservatives.” Over lunch from Chick-fil-A, they pondered what could have gone wrong.
Do Americans Finally Realize the American Dream Is Dead?
A homeless man sleeps under
an American Flag blanket on a park bench on September 10, 2013 in the
Brooklyn borough of New York City.
October 7, 2013
|
The final chapter of America's Promise,
a high-school textbook on American history, ends with a rallying cry to
national mythology.
"The history of the United States is one of
challenges faced, problems resolved, and crises overcome," it states.
"Throughout their history Americans have remained an optimistic people,
carrying this optimism into the new century. The full promise of America
has yet to be realised. This is the real promise of America; the
ability to dream of a better world to come."
Such are the assumptions beamed from the torch of Lady Liberty,
coursing through the veins of the nation's political culture and imbibed
with mothers' milk. Their nation, many will tell you, is not just a
land mass but an ideal – a shining city on the hill beckoning a bright
new tomorrow and a dazzling dawn for all those who want it badly enough.
Such devout optimism, even (and at times particularly) in the midst of
adversity makes America, in equal parts, both exciting and delusional.
According to Gallup,
since 1977 people have consistently believed their financial situation
will improve next year even when previous years have consistently been
worse.
But when President Barack Obama was planning his run for a second
term his pollsters noticed a profound shift in the national mood. The
optimism was largely gone – and with it both the excitement and the
delusion. The time-honoured rhetorical appeals to a life of relentless
progress, upward mobility and personal reinvention didn't work the way
they used to.
"The language around the American dream wasn't carrying the same
resonance," Joel Benenson, one of Obama's key pollsters, told the
Washington Post. "Some of the symbols of achieving the American dream
were becoming burdens – owning that house with the big mortgage was
expensive, owning two cars and more debts; having your kid go to
college. The cost and burden of taking out those loans was making a lot
of Americans ambivalent. They weren't sure a college education was worth
it."
This wasn't just about the recession – though of course that didn't
help – but a far more protracted, profound and painful descent in
expectations and aspirations that has been taking place for several
decades. For underpinning that faith in a better tomorrow was an
understanding that inequality in wealth would be tolerated so long as it
was coupled with a guarantee of equality of opportunity. In recent
years they have seen both heading in the wrong direction – the gap
between rich and poor has grown even as possibilities for economic and
social advancement have stalled.
Between 2007 and 2010 the median American family lost a generation of wealth, putting them on a par with where they were in 1992. Last week the census revealed that median household income is roughly the same as it was in 1988 and that the poverty rate had actually increased since 1973. Meanwhile, median male earnings in 2010 were on a par with 1964. This is not for want of effort. American workers continue to make gains in productivity and American companies continue to reap the benefits. Last year corporate profits, as a share of the economy, were the highest since the second world war. The trouble is, none of the benefits went back to them.
And while wages have stagnated and wealth has dissipated, costs have
shot up. A family's health insurance contributions have increased 90%
over the past decade. Over the past five years tuition costs have leapt 27% at state universities and 13% at private institutions above inflation. A nation that has long prided itself on being forward-thinking is reconciling itself to going backwards.
The American Dream Is Dead; Long Live the New Dream
Friday, 10 May 2013 00:00 By Cliff DuRand, Truthout | News Analysishttp://www.truth-out.org/news/item/16291-the-american-dream-is-dead-long-live-the-new-dream
(Photo: get directly down / Flickr)The
American Dream of upward mobility is dead, thanks to the neoliberal
ministrations of capital and government. But a new dream could rise from
the mess left by globalization, off-shoring and austerity.
The continuation of the economic crisis of 2008 up to the present has
driven home a social trend that has been evident since the late 1970s,
the decline of what is usually called "the middle class" and the
accompanying American Dream.
The American Dream is the belief that if you work hard, if you are
blessed with at least a modicum of ability and have a little luck, you
can succeed. That is, you can rise in society no matter how humble your
origin to something better in the way of material well-being, economic
security, a settled life and social prestige. It is the dream of upward
mobility for oneself, or at least for one's children.
As Richard Wolff has pointed out in Capitalism Hits the Fan: The Global Economic Meltdown and What to do About it, this
upward mobility was a reality for most citizens of the United States
for several generations, from 1820 to 1970. For 150 years, real wages
rose. In the quarter century from 1947 to 1973, average real wages rose
an astounding 75 percent. But that shared prosperity came to a halt in
the mid '70s. In the next 25 years, from 1979 to 2005, wages and
benefits rose less than 4 percent. The sustained rise in standards of
living had been made possible by a conjunction of historical
circumstances, circumstances that began to reach exhaustion by the mid
1970s.
Post WWII prosperity was based on 1. the global economic dominance of
the United States; 2. pent up consumer demand from the depression and
war years; 3. supportive social programs; 4. some political clout due to
a strong union movement that could demand a share of the prosperity;
and 5. Keynesian stimulus (military spending, infrastructure development
like the interstate highway system, etc.).
Fixing an Overaccumulation Crisis
By the mid 1970s, an overaccumulation crisis emerged, reflected in
stagflation, which is simultaneous inflation and lack of economic
growth. There were insufficient places to profitably invest all the
surplus capital that had accumulated during the years of prosperity. The
situation was set forth with unusual candor by former IMF Director
Jacques de Larosière. In a 1984 policy address, he said:
Over the last four years the rate of return on capital investment in manufacturing in the six largest industrial countries averaged only half the rate earned during the late 1960s. . . . Even allowing for cyclical factors, a clear pattern emerges of a substantial and progressive long-term decline in rates of return on capital. There may be many reasons for this. But there is no doubt that an important contributing factor is to be found in the significant increase over the past 20 years or so in the share of income being absorbed by compensation of employees . . . This points to the need for a gradual reduction in the rate increase in real wages over the medium term if we are to it restore adequate investment incentives. - Quoted by William I. Robinson in "A Theory of Global Capitalism: Production, Class, and State in a Transnational World"
In other words, in order to ensure "adequate" profits to capital, workers' incomes had to be curtailed.
The policies that made this suppression of incomes possible came to
be called neoliberalism, a public ideology represented by President
Ronald Reagan in the United States and Margaret Thatcher in England. It
involved a withdrawal of government from directing the economy, leaving
it instead to market forces. This meant deregulation, privatization of
the commons and free trade. And that required weakening the collective
hand of workers by an assault on unions and social benefits so as to
strengthen the hand of capital.
"Free trade" policies of our political elite were a key part of the
neoliberal offensive against labor. Trade agreements like NAFTA promoted
the export of entry-level jobs to low-wage countries of the global
South. With globalization, beginning in the 1980s, those entry-level
industrial jobs that had made mobility into middle-income levels
possible were the first jobs to be sent offshore, where they could be
performed by low-wage workers in the Third World. For instance, hourly
compensation costs in manufacturing (wages plus benefits) amount to
$1.50 or less in China, compared with $33.50 in the United States. The
Economic Policy Institute has recently calculated that in the last decade alone, US trade with China has cost us 2.7 million jobs.
Globalization was "the fix"
The globalization of capital was the fix that was found for the
crisis of overaccumulation. Investment was sent abroad to low-wage areas
of the global South where goods could be produced cheaply and then sold
to higher-income consumers in the North. By 2008, 48 percent of all
sales by the top 500 US corporations were items produced abroad, as can
be readily verified by looking at the "Made in . . ." labels on
clothing, electronics, automobiles and myriad other consumer goods. Even
more ominously, opportunities for investment were opened up by
free-trade agreements like NAFTA and later the World Trade Organization
(WTO). At the same time, the bargaining power of US labor was curtailed
by capital's threat to move production abroad along with a
government-endorsed campaign against unions. This restored corporate
profits, but stagnated working Americans' wages. The Organisation for
Economic Co-operation and Development (OECD) now reports that the United
States has the lowest rate of upward mobility of all industrialized
countries. It is even seeing downward mobility.
Witness the decline in entry level wages. From 2001 to 2008,
entry-level pay for high school graduates declined by 4 percent. For
college graduates, the decline was 7 percent. For example, when my son
graduated in computer networking from a community college in 1997, his
first job was with Sylvan learning Center. Fifteen years later, his son
graduated from a university, and a classmate got the very same job - at
exactly the same salary of $37,000! Allowing for inflation, Sylvan now
gets a university graduate for less than it used to pay for a graduate
of a two-year program.
In recent decades, the economy has grown, and there was a gain in
total wealth. But where did it go? From 1983 to 2008, total GDP grew
from $6.1 trillion to $13.2 trillion in constant 2005 dollars. The
unequal distribution of the total wealth gain during this period is
revealing. The wealthiest 5 percent of American households captured 81.7
percent of the gain. The bottom 60 percent of households not only
failed to share in the overall increase, they suffered a 7.5 percent
loss. Some of what the top 1 percent gained came directly from that
bottom 60 percent.
Downward Mobility
Between 2001 and 2008, entry level wages declined 7 percent for
college graduates and 4 percent for high school graduates. Entry into
middle-level incomes is becoming more difficult.
Previously it had been possible for a young man just out of high
school to get a good-paying unskilled job in a unionized factory, buy a
house in the suburbs, with a federally-insured mortgage, and send his
kids to college with government-supported student loans. This was a
common road to the success promised in the American Dream. Millions
achieved that coveted upward mobility. Under the illusion they were no
longer working-class, they thought of themselves as a new class in the
middle, somewhere between the poor and the rich - a middle class. It is
neoliberal globalization that has now blocked that road for more and
more people. For the first time in generations, the next generation has a
lower standard of living than their parents.
Entry point to the middle class
With the offshoring of manufacturing, the industrial regions of the
northeast and the Great Lakes were transformed into a Rust Belt. United
States manufacturing employment peaked in 1979 at almost 20 million and
fell under neoliberalism to about 11.5 million in 2010. Today, 80
percent of the world's industrial workforce is now in the global South.
Most of it used to be in the United States. This is in no small measure
the result of corporate policies over the last 30 years - policies
encouraged by our political leaders - to offshore those low-skilled
industrial jobs that used to be the entry point to the middle "class"
for many. That may create the conditions for middle "classes" in Brazil
and China, and even in Mexico, but it shrinks the middle "class" in the
United States, pushing people's living standards downward. Basically,
capital is destroying the middle "class" at home and reconstituting it
in parts of the global South.
As less-skilled industrial jobs were offshored, at first, in the
'90s, we were told by Robert Reich, labor secretary in the first Clinton
administration, that to remain competitive in the global economy, US
workers needed to upgrade their skills. We were told the new economy
would be the new road to the American Dream. We are still being told
that. But offshoring of jobs has not been limited to low-skilled
assembly line work. Corporate capital has discovered that any job that
can be done by computers can be done anywhere in the world and
consequently will be done wherever the cheapest workers with the
requisite knowledge can be found. So the knowledge-economy jobs are now
also being offshored to countries like India. The knowledge workers
there will work for far less than in the United States. And many of our
college graduates today are saddled with heavy debt and unable to find
work.
As a result of public and corporate policies, there has been wage
stagnation for the past 30 years, even as worker productivity rose
sharply. This is shown clearly in the following graph.
Capital took the bulk of productivity gains (shown by the upper pink
line) over the 1993-2006 period by holding wages down (shown by the
lower blue line). But then with the 2008 financial crisis, median family
income declined further, by nearly 10 percent. Overall, as incomes have declined, corporate profits have soared.
For a while, wealth appeared to increase for average citizens because
of inflating real estate values. But the financial crisis of 2008 wiped
out that fictitious wealth. Median family wealth in 2010 was the same as it had been 20 years earlier.
It is important to understand that the undermining of the American
Dream came at the hands of capital and government working in collusion.
It is corporate capital's unquenchable thirst for profit and political
leaders' eagerness to assist them that is destroying that dream. It is
not blind economic forces operating with the inevitability of natural
law, but the conscious policies of CEOs and political leaders that
replace upward mobility with downward mobility. Political leaders,
Democrats and Republicans alike, embrace Charles Wilson's adage that
"what's good for General Motors is good for America." What truth might
once have been embraced by this identification of the national interest
with corporate interest has long since been invalidated by the
globalization of capital.
This is a central point in my book Recreating Democracy in a Globalized State.
Corporate-led neoliberal globalization has transformed nation-states
into what I call globalized states, that is, states that serve the
interests of transnational capital above the interests of national
populations. This tendency is strong in both states of the global North,
like the United States, and global South, including Mexico. This has
resulted in a limitation of sovereignty and of the possibility for
democratically-shaped national policies. Increasingly, the countries'
fates depend more on powerful transnational corporations rather than on
their own people.
Support for neoliberalism bipartisan
In the United States, there has long been bipartisan consensus behind
globalization and the neoliberal policies that promote it. Both parties
have long embraced basic public policies that undermine the economic
security of millions of working people. This is fully substantiated by
Jeff Faux in his new book The Servant Economy: Where America's Elite is Sending the Middle Class.
He argues that "the elites are unanimous: Lower everyone's wages and
standard of living - except they don't say it out loud." Both parties
favor no-strings Wall Street bailouts, expanded unregulated trade,
weakened unions and fiscal austerity as an economic priority, with its
concomitant shredding of social programs. There may be some difference
in degree on these issues, but both parties are in basic agreement. As
Faux points out, "The mantra of both candidates is 'Jobs, jobs, jobs.'
What they leave out is they are unwilling to confront the power of Wall
Street and the Pentagon; job growth in America now depends on driving
labor costs lower and lower to attract business investment."
One-third of all working families are now poor; their annual income,
for a family of four, is below the $45,622 poverty threshold - an income
insufficient to meet basic needs.
This bipartisan consensus is illustrated by Senate approval this last
year of free-trade agreements with Colombia, Panama and South Korea.
While all politicians were calling for more jobs, they approved a
free-trade agreement that they knew would destroy jobs. This was evident
in the fact that approval of the free-trade agreement was accompanied
by extended unemployment benefits for displaced workers. It's like they
just can't help themselves when an opportunity arises to favor
transnational corporations. And now the Obama administration is set to
expand this folly even further with the Trans-Pacific Partnership.
An Economic Policy Institute study
shows that increasing wage inequality is the result of deliberate and
reversible policy decisions. "Ever since [around 1978], each
administration and Congress have made choices - expanding trade,
deregulating finance and weakening welfare - that helped the rich and
hurt everyone else. Inequality didn't just happen. . . .The government
created it," said Larry Michel, institute president.
As we have seen, the result of these policies is that wages have been
stagnant for the last 30 years and now are even declining. Faux
projects that "by the mid-2020s we can expect about a 20 percent drop in
the real wages of the average American who has to work for a low or
moderate standard of living." Corporations have put US workers into
competition with low-wage workers in China, Mexico and other areas of
the global South. And this has happened with the full support of our
political leaders. They all seem intent on realizing NYT columnist
Thomas Friedman's vision of a flat world, The World Is Flat: A Brief History of the Twenty-first Century,
i.e. a world where globally high-income earners are brought down to a
lower level and those at the bottom rise up some, resulting in
global-income averages far below what those in the global North once
found acceptable.
Meritocratic Individualism
The ironic thing about neoliberal policies is the extent to which
political support for them has come from those sectors of society that
have been harmed by them. This was most pronounced when in the mid-1990s
conservatives took control of the House of Representatives under the
leadership of Newt Gingrich. Their contract on America called for
dismantling the very social programs that had facilitated the upward
mobility achieved by the white suburban voters who had elected them to
office. How are we to understand this strange phenomenon - people voting
against the very programs that had enabled them to realize the American
Dream?
What exactly is this dream? It takes many forms for different groups
at different historical moments. As we have seen, underlying them all is
the dream of achieving the good life by individual upward mobility
through one's own effort. This dream is based on the perception that the
society offers the opportunity for such mobility so that it is up to
the initiative of the individual to seize these opportunities and make
something of himself. The idea that one can "make something of oneself"
is the mark of an achievement-oriented society. This is a society in
which social status and rewards are not ascribed by birth or membership
in a particular group, but are instead achieved by virtue of one's own
talent and efforts. Thus social success is seen as merited, something
that the individual has earned. It is a meritocratic individualist
dream. The key elements of the American Dream then are: 1.
meritocratically 2. achieved status through 3. individual 4. effort
where 5. opportunities are available. The formula for individual success
is then "talent + effort + luck = success."
However, one of the factors that the American Dream tends to overlook
is the importance of social institutions that support these efforts and
thereby make the success of individuals possible. These institutional
supports may be provided by the community, by a social group or class,
or by the state. But it is through them that the larger society nurtures
its members. Meritocratic individualism tends to blind us to these
social supports, enabling individuals to then give full credit to
themselves for their successes. It is precisely this blind spot that
leads many to disown the very social supports that enabled their
success. They don't think about the federally ensured mortgages that
made it possible for them to buy that house in the suburbs, the federal
highway program that made it feasible to live far from where they work,
the union that won better pay for their job so they could afford to move
out of the city, the student aid programs and the university itself
that provided an educational opportunity and prepared them for better
jobs. And I could go on and on with the list of social supports that
undergird the lifestyle of the middle classes: the health system that
keeps them alive, the food standards programs that protects against
unsafe food, the occupational safety and health agencies that protect
them against unsafe working conditions, the social security program that
lifts the burden of supporting elderly parents from the shoulders of
young families and offers them some financial security in their own old
age, etc., etc. Indeed, there are myriad ways that are not fully
appreciated in which society supports its members. So a more complete
formula would be "talent + effort + luck + social supports = success."
The fact that the importance of social institutions is downplayed in
the meritocratic individualist ideology has two effects. 1. Those who
have benefited from those supports tend to deny that benefit, thinking
that it will taint the merit of their accomplishments, and 2. It tends
to undermine political support for the very institutions we need to
support us. It leads to the self-congratulatory belief that "I built
this myself," to quote the Republican mantra in the recent campaign. The
once-comfortable suburbanites failed to realize that it is not only the
poor who benefit from social programs, but they themselves as well.
That they have been blind to this is due to their own meritocratic
individualistic ideology that can understand outcomes only in terms of
individual effort and talent. This opened the way for what has now been a
three-decade-long offensive by the right against social programs and
government itself, leaving our fate in the invisible hand of "the
market," resulting in the end of the American Dream.
The Usefulness of Middle Classes
It is generally accepted that large, prosperous middle classes or
middle strata are vital to the future of the United States. There are
both economic and political reasons for this. Economically, the health
of capitalism requires a large sector of consumers with sufficient
income to be able to buy what is produced. That is a reality that Henry
Ford taught a century ago when he raised the wages of his workers so
they could buy his automobiles. Without effective consumer demand,
capital cannot realize profits. That is a reality that has become
evident in today's long recession. Businesses are not investing, and
jobs are not being created because there is low consumer demand due to
high unemployment and high consumer debt. But that then results in
higher unemployment in a vicious downward spiral that is evident to all
those whose perceptions are reality-based. This has been pointed out
twice a week by Paul Krugman in his New York Times columns. And now the
point has been made by another Nobel economics prize winner, Joseph
Stiglitz in his new book on inequality. The Price of Inequality: How Today's Divided Society Endangers Our Future.
Politically, prosperous middle strata are important for stability. As
the term middle "class" is usually used today, it involves an
expectation of upward mobility, rising income and a comfortable and
secure standard of living. It is this upward mobility that is of
particular political importance. Political stability is enhanced by
having a sizable sector of the population that believes it has an
opportunity to improve its condition in the existing system - or at
least its children do. That is why the existence of a middle "class" is
widely considered to be of crucial importance for a stable democracy of
the US type. It is at the heart of The American Dream.
The American Dream has been a key legitimating myth in our society.
Regardless of the inequalities that exist, the injustices suffered, the
sacrifices endured, the "American way of life" has been generally
accepted as good by most of the population because it has been believed
that it still offers the opportunity for upward mobility toward a better
future. Thus this ideology has been a force for social stability. It
has led many to accept the status quo, even to defend it, because of the
expectation, if not the hope, that life will get better for them if
they but work hard and play by the rules.
Legitimacy of systems questioned
With the growing downward mobility now being experienced, the social
contract is unraveling. The legitimacy of the dominant institutions is
being questioned. Public confidence in Congress as well as government is
at an all-time low; large banks are viewed (correctly) as criminal;
blind faith in market magic has been dispelled - and corporations are
even seen as having betrayed the nation. The legitimacy of the system of
capitalism is in crisis as sizable percentages now have a positive view
of socialism as an alternative, particularly among the young (who have
not known the rabid anticommunism of the Cold War era). As the national
elections in 2008 and 2012 have shown, the people of the United States
are asking for far-reaching changes, more change than the political
elite is willing or even able to deliver.
If we limit our optic to the United States, even if we expand it to
include the other advanced capitalist societies, the prospects for
resumption of significant endogenous economic growth are dim. That has
been the argument of Northwestern University economist Robert J. Gordon.
In his widely discussed National Bureau of Economic Research paper, "Is
U.S. Economic Growth Over?" Gordon predicts a dark future of "epochal
decline in growth from the US record of the last 150 years." The
greatest innovations, Gordon argues, are behind us, with little prospect
for transformative change along the lines of the three previous
industrial revolutions." It is summarized by Thomas B. Edsall, in "No More Industrial Revolutions?" in The New York Times.
Without new major innovations to offer opportunities for profitable
investment, where is all the accumulated capital to go? Here again we
have a classic over-accumulation crisis. One fix that has been deployed
by the corporate wealthy is to reduce their tax burden, shifting it to
the popular classes below. This has been the agenda of their sector of
the political elite for decades. That has been combined with the
neoliberal offensive against social programs, again at the expense of
the popular classes. In effect, the plutocracy has come to understand
that growth of their wealth will no longer come mainly from productive
investment, but must come out of the hides of those below them. That
requires imposing austerity on others so they can continue to prosper.
Thomas B. Edsall, author of The Age of Austerity: How Scarcity Will Remake American Politics, sums up the situation as follows:
Affluent Republicans - the donor and policy base of the conservative movement - are on red alert. They want to protect and enhance their position in a future of diminished resources. What really provokes the ferocity with which the right currently fights for regressive tax and spending policies is a deeply pessimistic vision premised on a future of hard times. This vision has prompted the Republican Party to adopt a preemptive strategy that anticipates the end of growth and the onset of sustained austerity - a strategy to make sure that the size of their slice of the pie doesn't get smaller as the pie shrinks.
It is in this light that we can understand the death march the
Republican Party has set out on. Its survival and that of its patrons is
at stake. It leads them to adopt scorched-earth policies that ought to
spell certain electoral defeat were it not for their gerrymandering,
voter suppression, election rigging and other antidemocratic measures
needed to maintain political power within the existing political
duopoly. What they are so desperate to protect is not only their own
political careers, but the insatiable hunger of capital.
For its part, the Democratic Party is also beholden to the interests
of transnational capital, as I pointed out earlier. As Jeff Faux has
documented, as early as the Carter administration, the Democratic Party
embraced the neoliberal ideology. New Democrat Bill Clinton extended the
Reagan-Bush I program of globalization with free trade and deregulation
of finance capital. The Obama administration has continued on the same
course. The political elite is united on its basic priorities. As Faux
remarks, the United States is no longer rich enough to continue to
finance America's three principal national dreams:
1. The dream of the business elite for subsidized, unregulated capitalism.
2. The dream of the political elite for global hegemony.
3. The dream of the people for a steadily rising standard of living.
We can certainly continue to have one out of three, and perhaps even two out of three. But three out of three? No.
It is the dream of the US people that will have to go. That is the
reality that no US politician dares to utter. If he did, it might spark
popular demands that dreams 1. and 2. be sacrificed instead.
The hard truth is that none of the three can be sustained
indefinitely. Capitalism is in crisis. The military costs of global
hegemony have become more than a debt-burdened state can sustain, as
well as more than much of the world will continue to tolerate.
As for rising living standards, even if the dreams of Wall Street and
Washington did not trump those of the people, are they really
sustainable? With only a small portion of the world's population, the
United States consumes an immensely disproportionate share of the
world's resources. The current rate of use of world resources globally
would be sustainable if we had one and one-half planet Earths. But guess
what? We have only one. And the rest of the world's peoples also have
dreams of rising standards of living. If all the people in the entire
world enjoyed US standards with the same per capita ecological footprint, five Earths would be needed.
My favorite slogan from the Occupy movement was "Wake up from the
American Dream. Create a livable American reality." That is the
challenge We the People face in the 21st century. And we have to face it
with little help from our political elite and none from capital. We
have to do it ourselves. It will take social movements and prolonged
struggle. It will take courage and bold experimentation. And for
starters, it will take speaking the truth: The American Dream is over.
For good or ill, history will move on without it.
Postscript: Besides this dominant American Dream, there is an
alternative one in the background. It has its roots in the 18th century
Enlightenment and was expressed in the French Revolution with the slogan
"Liberty, Equality, Fraternity." That was the dream of a society in
which all could live in community, a society of mutual support among
equals, where each individual was free to develop his/her human
capacities supported by the community. The basic values of that vision
are deeply rooted in the American culture. It can be the basis of an
alternative - sustainable - American Dream.
Boehner Survives Speakership for Now, But Rep. Tom Price Rises
House Speaker John Boehner participates in a ceremonial swearing-in ceremony for Rep. Tom Price on Jan. 5, 2011.
Wednesday, 16 Oct 2013 12:44 PM
With John Boehner receiving low marks from both moderates and
conservatives over his handling of the now- resolved government shutdown
and debt-ceiling battles,discussion is rife over whether any fellow
House Republican will challenge him as speaker.
Though the conventional wisdom is that the wily Ohioan will survive, there is enough residual anger to make his continued hold on the position something less than a foregone conclusion.
The name being mentioned most as his potential successor is Georgia Rep. Tom Price, who resisted pressure to challenge Boehner at the start of the 113th Congress in January.
"At this juncture, Tom Price seems to get along with all factions among House Republicans," veteran conservative activist and public relations man Phil Kent told Newsmax. "And he is poised to be a successor if a full-blown rebellion takes off."
At 59, Price is five years younger than Boehner. The five-term congressman who represents a suburban Atlanta district is a past chairman of the conservative Republican Study Committee. He is now Paul Ryan's vice chairman on the House Budget Committee.
The most vocal criticism of Boehner's performance comes from those on the political right who feel the speaker did not go far enough in the battle with the White House.
Kent, a former editorial page editor of the Augusta (Ga.) Chronicle, believes there should be a challenge. "John Boehner is in serious trouble if he wants to be re-elected. Aside from divisions within the conference over tactics and strategy, he is simply not good with messaging and overall public relations."
Kent is not alone in his feelings. Stephen Hess, Brookings Institute fellow and centrist Republican, told Newsmax, "To put it frankly, he should be challenged. If you're in a position of leadership, you should never run the risk of the nation defaulting. He should be in serioustrouble."
But despite all the talk of revolt against Boehner, Newsmax found that neither the numbers nor the spirit are currently there among the speaker's 230 Republican House colleagues to try to depose him.
Even among the 12 Republicans who refused to vote for him for speaker in the full House in January, Newsmax found lawmakers who were satisfied with Boehner wielding the gavel.
"I'm inclined to vote for him," Republican Rep. Steve Stockman of Texas, who voted "present" on the January vote for speaker rather than for Boehner, told Newsmax on Tuesday. "Maybe he didn't go as far as some people wanted, but he did a lot in this fight that conservatives in the House wanted. And we held pretty strong on all of the votes [for continuing resolutions] and we're pretty united today."
Grover Norquist, head of Americans for Tax Reform, seconded this view and dismissed the critics of Boehner within the House Republican Conference as "20-to-30 people who insisted on extending all of the Bush tax cuts last December and wound up with a bill that will cost us $10 billion in additional taxes over the next decade."
"And now they're going to get a worse deal on extending the debt ceiling than they would have if they extended it in the first place," Norquist said.
"Twice, they have said, 'We can do it better' and twice this has resulted in a worse deal. So now we're supposed to follow them a third time and oppose Speaker Boehner? Fine — if you believe in Tinkerbell or that you can turn flax into gold like Rumpelstiltskin," Norquist said.
GOP Rep. Tim Huelskamp of Kansas said Boehner is most likely safe in his job despite the dissatisfaction of tea party Republicans.
"A lot of folks, again, are unwilling to challenge the status quo, especially if it's their own establishment," Huelskamp told "The Steve Malzberg Show" on Newsmax TV.
"I'll just say, the class of '94 seems to have a lot more guts and gusto than the class of 2010 because they were willing to take down Speaker [Newt] Gingrich. But I don't see that happening anytime soon in today's Congress."
Former colleagues who have been close to Boehner also dismissed the criticism and agreed that there are not enough votes to challenge him successfully.
"They won't challenge him if the conference is truly sane," said former Republican Rep. Melissa Hart of Pennsylvania, a strong conservative who was a key ally in Boehner's initial election as House GOP leader in 2006.
Though the conventional wisdom is that the wily Ohioan will survive, there is enough residual anger to make his continued hold on the position something less than a foregone conclusion.
The name being mentioned most as his potential successor is Georgia Rep. Tom Price, who resisted pressure to challenge Boehner at the start of the 113th Congress in January.
"At this juncture, Tom Price seems to get along with all factions among House Republicans," veteran conservative activist and public relations man Phil Kent told Newsmax. "And he is poised to be a successor if a full-blown rebellion takes off."
At 59, Price is five years younger than Boehner. The five-term congressman who represents a suburban Atlanta district is a past chairman of the conservative Republican Study Committee. He is now Paul Ryan's vice chairman on the House Budget Committee.
The most vocal criticism of Boehner's performance comes from those on the political right who feel the speaker did not go far enough in the battle with the White House.
Kent, a former editorial page editor of the Augusta (Ga.) Chronicle, believes there should be a challenge. "John Boehner is in serious trouble if he wants to be re-elected. Aside from divisions within the conference over tactics and strategy, he is simply not good with messaging and overall public relations."
Kent is not alone in his feelings. Stephen Hess, Brookings Institute fellow and centrist Republican, told Newsmax, "To put it frankly, he should be challenged. If you're in a position of leadership, you should never run the risk of the nation defaulting. He should be in serioustrouble."
But despite all the talk of revolt against Boehner, Newsmax found that neither the numbers nor the spirit are currently there among the speaker's 230 Republican House colleagues to try to depose him.
Even among the 12 Republicans who refused to vote for him for speaker in the full House in January, Newsmax found lawmakers who were satisfied with Boehner wielding the gavel.
"I'm inclined to vote for him," Republican Rep. Steve Stockman of Texas, who voted "present" on the January vote for speaker rather than for Boehner, told Newsmax on Tuesday. "Maybe he didn't go as far as some people wanted, but he did a lot in this fight that conservatives in the House wanted. And we held pretty strong on all of the votes [for continuing resolutions] and we're pretty united today."
Grover Norquist, head of Americans for Tax Reform, seconded this view and dismissed the critics of Boehner within the House Republican Conference as "20-to-30 people who insisted on extending all of the Bush tax cuts last December and wound up with a bill that will cost us $10 billion in additional taxes over the next decade."
"And now they're going to get a worse deal on extending the debt ceiling than they would have if they extended it in the first place," Norquist said.
"Twice, they have said, 'We can do it better' and twice this has resulted in a worse deal. So now we're supposed to follow them a third time and oppose Speaker Boehner? Fine — if you believe in Tinkerbell or that you can turn flax into gold like Rumpelstiltskin," Norquist said.
GOP Rep. Tim Huelskamp of Kansas said Boehner is most likely safe in his job despite the dissatisfaction of tea party Republicans.
"A lot of folks, again, are unwilling to challenge the status quo, especially if it's their own establishment," Huelskamp told "The Steve Malzberg Show" on Newsmax TV.
"I'll just say, the class of '94 seems to have a lot more guts and gusto than the class of 2010 because they were willing to take down Speaker [Newt] Gingrich. But I don't see that happening anytime soon in today's Congress."
Former colleagues who have been close to Boehner also dismissed the criticism and agreed that there are not enough votes to challenge him successfully.
"They won't challenge him if the conference is truly sane," said former Republican Rep. Melissa Hart of Pennsylvania, a strong conservative who was a key ally in Boehner's initial election as House GOP leader in 2006.
Urgent: Should GOP Stick to Its Guns on Obamacare? Vote Here.
"There are more than enough members who didn't want to follow [Texas
Sen.] Ted Cruz and go off the cliff and realize that John Boehner is a
better strategist. His opponents ought to realize that their last 'big
idea' had no chance of success," Hart said.
Perhaps the most interesting response to the question of whether Boehner should or might be replaced came from former Republican Rep. Pete Hoekstra of Michigan.
Recalling how he did not vote for Boehner either when he was defeated for re-election as GOP Conference chairman in 1998 or as GOP leader in 2006, Hoekstra told Newsman, "John never exacted a price from me — not ever. Knowing very well I had opposed him, he told me when I asked to be reappointed to the House Intelligence Committee: 'Sure. You're doing a great job.'"
"John may have opposition for the speakership but you can't beat someone with no-one. And when you look at what's happened in the last few weeks, I don't know how anyone could make the case that he or she could have done a better job," Hoekstra said.
Perhaps the most interesting response to the question of whether Boehner should or might be replaced came from former Republican Rep. Pete Hoekstra of Michigan.
Recalling how he did not vote for Boehner either when he was defeated for re-election as GOP Conference chairman in 1998 or as GOP leader in 2006, Hoekstra told Newsman, "John never exacted a price from me — not ever. Knowing very well I had opposed him, he told me when I asked to be reappointed to the House Intelligence Committee: 'Sure. You're doing a great job.'"
"John may have opposition for the speakership but you can't beat someone with no-one. And when you look at what's happened in the last few weeks, I don't know how anyone could make the case that he or she could have done a better job," Hoekstra said.
John Gizzi is chief political columnist and White House correspondent for Newsmax.
Related Articles:
Despite Boehner's Denial, Rumors Persist He'll Step Down
Rep. Tom Price: Quashing Obamacare Would be 'Bipartisan'
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