Tag Archives: tea party

President Obama’s Tea Party Credentials

By Marc Seltzer; originally published at care2.com on November 14, 2010

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I wonder if the story of the midterm elections is what it seems:  Tea Party Rejection of President Obama’s policies ushers in a Republican agenda.

In that story, President Obama is either the same old Washington problem, out to use tax-payer money and gov’t power for his own out-of-touch interests or an out-of-control Democrat-Socialist on a wild spending spree.  The deficit and debt represent the proof of the irresponsibility of the incumbents, and the new Republicans are the populist heroes who will reign in spending and balance the budget.

But I keep remembering candidate Obama saying “I am not doing this so I can pass the buck on the hard decisions.”  Difficult decisions are the ones where you take things from powerful people or make them pay what they cost, rather than offer give-aways.

Leave the financial crisis aside for a moment.

The current President inherited both short-term deficit spending (war, tax cuts, excess gov’t spending, etc. — unpaid for) and long term structural debt (Medicare, Medicaid, Social Security going up unsustainably per existing law and future demographics).  There are sometimes reasons to borrow money, to spend now and pay off debts later, but the past decade was not WWII.  Congress simply spent more than it took in, and it gave gifts such as tax cuts and Medicare benefits by borrowing money.

Along comes Barack Obama, talking about “bending the cost curve.”  Significant in the health care reform was removing tax subsidies for generous employer-sponsored health plans. Most Americans get their insurance from employer-sponsored health plans, and this substantial reform, however unpopular, will reduce the costs and waste of excessive medical care.  Mr. Obama also approved taking funds out of Medicare.  That’s hurting doctors and potentially forcing more cost containment on publicly funded health care for seniors.

The President also talked about reducing earmarks (the first budget under Obama contained earmarks prepared before his inauguration).  That hurts corporate interests and the politicians so aligned.   Then, Mr. Obama sought to reduce defense spending, with his Secretary of Defense standing up to criticism by congressional and corporate defense interests.

This sure seems like the long-term path of fiscal discipline.

What I’m wondering is, could the Tea Party movement be going in the same direction as the President?  Could it be that in order to balance the budget a lot of sacrifices will have to be made?  The President started down that path. (The financial crisis brought some unexpected costs — Bush’s TARP and Obama’s Stimulus — but not a recurring give-away). Now, the Tea Party-rejuvenated Republicans are all about cutting spending.

Doesn’t that really put them in the President’s camp?  Everyone with an interest, special or otherwise, will argue for their piece of the pie.  Tea Party Republicans are proposing to reform earmarks, cut defense spending and balance the budget.  They come at the problem as if it was the government that was devouring all the money.  But if they stay in the game for long enough, they will see that it’s not that simple.

In that case, President Obama may again appear the reformer:  A leader with a clear understanding of what needs to change to create a more sustainable America, waiting for people with integrity and discipline, a willingness to sacrifice, and political courage to join the fight against a system of entrenched interests.

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Listen to Marc Seltzer’s weekly podcasts on the U.S. Supreme Court at SupremePodcast.com

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No Tea Party in Canada

By Marc Seltzer; originally published at care2.com on October 13, 2010
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Democrats seem bewildered by the strength of the Tea Party movement.  Powerful incumbent Senators such as Boxer (CA) and Reid (NV), and numerous House Reps in leadership positions find themselves in difficult contests. Republicans are poised to gain significant numbers in the legislative branch in November’s mid-terms election.

Fighting back, Democrats and their supporters have gone after Tea Party-Republican candidates, focusing on their oddities, inconsistencies, and lack of coherent policies.  Rachel Maddow, among others, has exposed the remarkably poor caliber of some candidates propelled by the Tea Party to victory in the Republican primaries.

Be that as it may, the legitimate complaint of the Tea Party movement has not been effectively dealt with by Democrats.  The root groundswell of anti-government energy comes from fear and anger about deficit spending and debt.

Deficits matter.

In Canada, governments of the past decade worked hard to erase the substantial deficits of the 1990s.  When the 2008 financial crisis arrived, Canada was able to face the recession with sound economic fundamentals.   Increased public spending in 2009 and 2010 again created deficits, but helped Canada recover nearly all the jobs lost in 2008.  Embarking on a new deficit spending program did not faze the public, and Canadian leaders are now talking about returning to surplus budgets in the next 7 years.

There is no tea party movement in Canada.  National health care, yes.  Major tax protests, no.

For all the things wrong with aspects of the Tea Party movement, from blaming the Obama administration for current ills to dredging up misguided social views, the truth is that the U.S. would have braved the recession far more effectively if it had had a budget surplus.

In not addressing this aspect of the financial health of the nation directly from the start, with a coherent long-term plan, the Democrats have allowed the opposition to bundle legitimate disapproval of the government’s budget outlook with generalized anger at banks, unemployment, the Bush administration, Congress, taxes, and government spending.

It’s working for Republicans so far, and if this election looks bleak, imagine Sarah Palin filling a stadium near you in 2012.

(Marc Seltzer has been on paternity leave after the birth of his daughter in June.  Marc can also be heard reviewing U.S. Supreme Court cases at SupremePodcast.com)

To Protest or Reform — Who’s Messing with Our Minds?

(photo:  Greece’s P.M. Papandreou and France’s Sarkozy in Davos, Switzerland, recently, managing economic turbulence)
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By Marc Seltzer; originally published on March 19, 2010, at care2.com

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There is still a strong undercurrent of anger in the United States about bailouts and stimulus spending.  Republicans, and even Democrats and Progressives, have reacted angrily to President Obama and his financial team.  This is significant because President Obama lost political capital on the economic recovery plan, and has far less power now to push though health care, education and financial reforms than he would have absent these actions.

The common critique from the Right is that Mr. Obama is moving in a socialist direction, while from the Left it is that Geithner, Summers, Romer and Bernanke, the U.S. government’s economic chieftains, are corporatist and beholden to the bankers.

More puzzling than the conservative complaints about the administration’s stewardship of the economy, is the Left’s opposition to it.  A significant part of the Democratic party seems to believe that our current leadership is on the side of the wealthy in a new class struggle, and that the government bailouts have effected a transfer of wealth from the little guy to the fat cats.  To be fair, this antagonism towards saving the financial system is in part a more structural distaste for corporate political and legal power — unrelated to recent U.S. government actions.  None-the-less, Obama is now trying to enact reforms in this across-the-spectrum, anti-government political climate.

To challenge the idea that Obama’s actions were pro-bank, pro-corporate, or designed to bail out the fat cats at the expense of the public, I want to compare the European response to the financial crisis with U.S. actions.  European nations, often called “social democracies,” are respected by the American Left and cited as examples for their stronger safety net of worker protections, health care and liberal benefits.

Jean-Claude Trichet, the head of the European Central Bank, equivalent to our Federal Reserve Bank (Ben Bernanke), said recently about American and European government interventions:

“We had to put on the table on both sides of the Atlantic around 25% of taxpayer risk to avoid the Depression, a major Depression, which would have come had we not been that bold.  When I say we, I mean the governments.  Of course, the central banks also have been very bold, in engaging in non conventional measures — the Fed and us [European Central Bank].”  (Bloomberg on Demand, March 12, 2010, from interview with Tom Keene)

What is insightful here is that European governments and related institutions behaved much as the American government did.  As the New York Times reported in early 2009:

“So far, Europe’s largest economies, France, Germany and Britain, have been spared demonstrations. All three governments have introduced huge stimulus measures aimed at spurring employment and protecting banks.

Regardless of the outcome, the three countries will face large budget deficits and higher state borrowing, which economists say will be passed on to taxpayers. And in the case of France and Germany, the governments could find it more difficult to introduce bold reforms at a time of recession.” (New York Times, January 26, 2009.)

To be sure, European nations have faced public protests over the past year, including demonstrations in recent weeks against the Socialist government in Greece.  And modern European nations are a mix of strong state intervention in industry and free markets.  But despite their more left-leaning perspectives, European government actions to save banks and support their nations’ economies with emergency stimulus spending, resemble US approaches.

The underlying reason for this is plain: Healthy economies require healthy banking systems.  The only other option for lawmakers in 2009 would have been to nationalize, through government takeover, the major banks and investment companies.  This would not only have been too radical for a young American President in the first days of his Presidency, but was not favored by European nations, which, despite more Socialist political visions, prefer to keep most individual businesses in the hands of private owners.

It is as much of a stretch to believe that Barack Obama, community-organizer-turned-politician, attained the Presidency in order to embrace the rich and powerful over the little guy, as it is to draw the conclusion that the Socialist and left-leaning governments of Europe transformed in 2009 into standard bearers for corporate and special interests across the Continent.

Why the American Left should find itself so opposed to the positions of both European and American governments requires little guesswork.  The greed, irresponsibility and power in the financial system made the public angry.  The Republicans, with little post-election political power and prospects, turned anti-corporate anger into anti-government anger with some clever “grass roots” anti-Democrat marketing messages.

Now, instead of joining the administration and embracing reforms, many a Democrat flirts with anti-government energy, which is really just self-serving partisan manipulation pushed by the Republican party.

Democratic Congressman Dennis Kucinich, in discussing his last-minute decision to vote for the President’s health care reform, acknowledged the tension between pressing for progressive reform and falling into a trap laid by the opposition:

“With three years left in the Obama Presidency we have to continue to encourage him, but we’ve got to be careful that we don’t play into those who want to destroy his presidency and say, you know, the birthers and others who say he should never have been President to begin with.  There is a tension that exists. . . .  we have to be very careful about how much we attack this president even as we disagree with him because we may play into those who just want to destroy his presidency.”  (Democracy Now!, March 18, 2010 (radio interview with Amy Goodman))

Careful indeed!  It’s about time.