House Republican leader says he is working on two-part plan to raise US debt limit, as deadline to avert crisis looms.
|Barack Obama has offered extensive concessions to John Boehner, the Speaker of the House of Representatives, on raising the US debt ceiling [GALLO/GETTY]|
During World War II, the Japanese deployed units of pilots who turned their planes into bombs, and sacrificed themselves in the name of their emperor in a holy war against US ships. They would aim for the deck of aircraft carriers and do as much damage as they could at the cost of their equipment – and their lives.
Guerilla armies refined the tactic and made it less pricey. Belts laden with explosives were and are used by individuals to terrorise their enemies without having to sacrifice weapons systems.
Now, US politics has spawned its own kamikazes: ultra-right-wing fanatics in suits who are ready to blow up the world’s financial system if they don’t get their way.
The use of the $14.3tn debt ceiling was carefully calculated as a political weapon to terrorise financial institutions and governments by re-enacting their own version of “Apocalypse Now“. Concede to our political demands to shrink government, no matter what the cost to the poor, elderly, and federal employees, or we will further destabilise the system.
“Our issues trump yours,” say these contemporary kamikaze. “Because we have the votes. We don’t care if the nation defaults on its financial obligations.” Take no prisoners is their approach; let it all fall apart is their threat.
In response, the administration has been offering what it calls a “grand bargain” which is now back on the table after they agreed to accept a short-term debt ceiling hike. This approach, however, ensures that this issue will stick around.
The new deal will allow for $4tn in budget cuts over the next decade. It will cut Medicare and Social Security in the name of “closing loopholes”.
The tension is overheating in a Washington drenched in the sweat of summer humidity. National Public Radio compares the discussions to a game of high-stakes poker:
“If you remove the politics, the talking points and the media from the debt-ceiling showdown, you end up with something that looks like a high-stakes, no-limit Texas hold ’em poker game. You’ve got posturing, risk taking, betting and, of course, bluffing. ‘It’s a war zone. You can’t be a top-notch poker player without bluffing,’ says Antonio Esfandiari, a champion poker player who has won millions at the tables.”
The Atlantic Wire reports: “As the deadline approaches, both parties will start flexing less and compromising more … According to The New York Times, the Republican hard-line stance on raising taxes is starting to splinter. Some have ‘appeared more willing to consider a deal locking in spending cuts that Mr Obama has said he would take if balanced by new revenues’.”
The relentless righteousness of the Tea Party-backed “caucus of the crazy” freaked out not just the president and the Democrats, but also many Republicans who, like them, depend on Wall Street money.
In a world of crashing currencies and defaults on the European horizon, they don’t want the same to happen in the US, as trigger-happy hardliners dictate to the country, and by extension to the world.
Their political coup threatens to turn into an economic coup.
Wall Street is doing some political bombing of its own to get the GOP leadership to try to rein in their renegade factions trying to please their base, which base is, in turn, funded by the billionaire Koch brothers and others with self-interested agendas of their own.
Schoolyard bullies have nothing on these guys. They have been holding the political debate hostage to their simplistic message points, which have been drilled into the nodding minds of their base over the years by the likes of the “Fox Views Network” and the right-wing radio brigade.
The politicians will keep dancing and prancing until the music stops.
Obama a weak negotiator
Our fearless president, who has rarely seen a compromise he won’t embrace, is playing his usual double game, telling his supporters how firm he will be, and telling his avowed enemies he is willing to play in their pigpen if they would just be more “reasonable”.
The whole point of their exercise is to posture at not being reasonable, to maintain the appearance of a united front to get as much as they can by way of concessions and goodies for their own districts, while lambasting all government spending.
The New York Times points out that many of the Tea Party boosters on Capitol Hill are not shy about seeking government pork while they are blasting government excess: “Freshman House Republicans who rode a wave of voter discontent into office last year vowed to stop out-of-control spending, but that has not stopped several of them from quietly trying to funnel millions of federal dollars into projects back home.”
At the same time, Obama is following in the footsteps of a previous Democrat president, according to former Secretary of Labour Robert Reich:
“After a bruising midterm election, the president moves to the political center. He distances himself from his Democratic base. He calls for cuts in Social Security and signs historic legislation ending a major entitlement program. He agrees to balance the budget with major cuts in domestic discretionary spending. He has a showdown with Republicans who threaten to bring government to its knees if their budget demands aren’t met. He wins the showdown, successfully painting them as radicals. He goes on to win re-election. Barack Obama in 2012? Maybe. But the president who actually did it was Bill Clinton.”
This debt issue has been calculated to focus attention on government as the fount of all evil, and distract attention away from out-of-control corporate enrichment, Wall Street crimes, and looting in form of higher and higher CEO bonuses and greed-driven compensation schemes.
A new poll shows public outrage at the government at its highest level ever – and some of this is fuelled by the stalemate on Capitol Hill.
This jihad on debt was hatched by right-wing think tanks, and the studies commissioned by billionaire Pete Peterson paint alarmist scenarios about the government going broke through a combination of reckless entitlement programs like Social Security and Medicare and runaway spending. There’s no mention of the amount wasted on wars, or the debt that finances programmes spawned by the Pentagon and the private sector that they believe can do no wrong.
Ordinary Americans ignored
It is in sharp contrast to the debt issue I explored in my 2006 film In Debt We Trust: America Before The Bubble Burst. I focused on mounting consumer debt and how it turned so many families into serfs, living to pay off high-interest credit cards, crushing student loans and fraudulent subprime mortgages.
Not only is this debt crisis, that so many in the US feel deeply and personally, not on the Republican agenda, but their kamikazes have even fought successfully to neuter proposed reforms to protect consumers. For example, they have managed to force the administration to abandon Harvard Professor Elizabeth Warren, who led the fight for a formation of a government agency to stop the abuses by banks and credit card companies.
These Republicans have no shame in weakening attempts to make the octopus of loan companies more transparent and less predatory.
Protecting people is not one of their priorities. Defending the privileged is.
While their narrative of negativity became dominant, progressives either became a cheering squad for corporate Democrats, or overfocused on the machinations of the flamboyant Michelle Bachmanns, Sarah Palins and Glenn Becks.
Instead of acting, they reacted.
They did not fight their narrative; they did not attack the economic powers in a crusade for justice. They watched as community organisations like ACORN were driven into the ground and only woke up when the governor of Wisconsin went after the collective bargaining rights of unions.
Instead of organising and uniting around programmes for substantive change, they went on the defensive, holding onto existing rights instead of also fighting for new ones for all Americans.
As a result, the left has left itself out of this polarised political war. The economy worsens while the media focuses on the clash of gladiators on the Hill. Reich reminds us that these are not Clinton’s times:
“When the Great Recession wiped out $7.8tn of home values, it crushed the nest eggs and eliminated the collateral of America’s middle class. As a result, consumer spending has been decimated. Households have been forced to reduce their debt to 115 per cent of disposable personal income from 130 per cent in 2007, and there’s more to come. Household debt averaged 75 per cent of personal income between 1975 and 2000.
We’re in a vicious cycle in which job and wage losses further reduce Americans’ willingness to spend, which further slows the economy. Job growth has effectively stopped. The fraction of the population now working (58.2 per cent) is near a 25-year low – lower than it was when recession officially ended in June 2009.”
Who is talking about this disaster?
Danny Schechter edits Mediachannel.org. His new film, Plunder: The Crime of Our Time, tells the story of the financial crisis as a criminal tale. He can be reached at: [email protected]
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.