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February 21, 2011

The New Normal: Deficit Debate Reigns Supreme Among Washington Establishment

Posted in: Uncategorized

I’m sure some chin-scratchers saw E.J. Dionne’s thesis today as controversial:

Take five steps back and consider the nature of the political conversation in our nation’s capital. You would never know that it’s taking place at a moment when unemployment is still at 9 percent, when wages for so many people are stagnating at best and when the United States faces unprecedented challenges to its economic dominance.

No, Washington is acting as if the only real problem the United States confronts is the budget deficit; the only test of leadership is whether the president is willing to make big cuts in programs that protect the elderly; and the largest threat to our prosperity comes from public employees.

Take five more steps back and you realize how successful the Tea Party has been. No matter how much liberals may poke fun at them, Tea Party partisans can claim victory in fundamentally altering the country’s dialogue.

I don’t know if you can attribute this to Tea Party partisans or their very partisan corporate funders. For the conversation in Washington is invariably tilted toward the latter. And this has been happening in global capitals around the world which have no Tea Party presence. Summing up how the Germans are falsely viewing the eurozone crisis, Paul Krugman writes, “deficits, which are overwhelmingly the result of the crisis, have been retroactively deemed its cause.” This frees governments from the responsibility to account for their own failings and to take on powerful interests at the root of the problem. So it makes things much easier for them. You can claim this as a victory for the Tea Party if you want, but really it’s a victory for the establishment. The Tea Party just happens to be a useful group of dupes for this project.

Consider that Meet the Press managed to get through an entire show yesterday on the economy while mentioning jobs and unemployment exactly once, and you can see what I mean. Washington concerns aren’t being driven by outside agitators so much as by their penchant to cover up the misdeeds of elites. If we don’t address the financial system and their role in the crisis, if we don’t address the jobs crisis, then there’s really nowhere else to go to but the budget. And so we have this warped conversation where deficits stand in for economic growth and opportunity, despite all evidence to the contrary.

That doesn’t mean the fire over good-paying jobs has been completely snuffed out. Far from it, as the protests in Wisconsin and elsewhere have shown. Even with a Tea Party majority, the House was unable to overturn Davis-Bacon prevailing wage protections in their FY2011 continuing resolution. Despite the inexorable moves toward a government shutdown, some Republicans are scared of it and see the clear risks to cutting too deeply or too quickly. There’s this residue in the political brain of the danger of a backlash.

And yet, we basically have two parties who are fighting over the same patch of turf, both trying to claim the mantle of deficit reduction. Both parties speak about tax increases as if they were talking about syphillis. Democrats at least talk about job creation, but they haven’t infused it with any passion or sense of urgency. Democrats don’t have to co-opt the Tea Party, but they’re giving it a shot – and mainly to please donors in the next election, in my view, signaling to them that their businesses will not be disrupted and their untold riches are safe. As Dionne notes:

Lori Montgomery reported in The Post last week that a bipartisan group of senators thinks a sensible deficit reduction package would involve lifting the Social Security retirement age to 69 and reforming taxes, purportedly to raise revenue, in a way that would cut the top income tax rate for the wealthy from 35 percent to 29 percent.

Only a body dominated by millionaires could define “shared sacrifice” as telling nurses’ aides and coal miners they have to work until age 69 while sharply cutting tax rates on wealthy people. I see why conservative Republicans like this. I honestly don’t get why Democrats – “the party of the people,” I’ve heard – would come near such an idea.

Maybe you’re putting an old slogan on a new party.


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