Keep your eyes on the ball

The Triumph of the Right

Robert Reich

Tuesday, October 22, 2013

The Labor Department reported Tuesday that only 148,000 jobs were created in September – way down from the average of 207,000 new jobs a month in the first quarter of the year.

Many Americans have stopped looking for work. The official unemployment rate of 7.2 percent reflects only those who are still looking. If the same percentage of Americans were in the workforce today as when Barack Obama took office, today’s unemployment rate would be 10.8 percent.

Meanwhile, 95 percent of the economic gains since the recovery began in 2009 have gone to the top 1 percent. The real median household income continues to drop, and the number of Americans in poverty continues to rise.

The biggest debate in Washington over the next few months will be whether to whack the federal budget deficit by cutting future entitlement spending and closing some tax loopholes, or go back to the sequester. Some choice.

The real triumph of the right has come in shaping the national conversation around the size of government and the budget deficit – thereby diverting attention from what’s really going on:  the increasing concentration of the nation’s income and wealth at the very top, while most Americans fall further and further behind.

Continuing cuts in the budget deficit – through the sequester or a deficit agreement – will only worsen this by reducing total demand for goods and services and by eliminating programs that hard-pressed Americans depend on.

The President and Democrats should re-frame the national conversation around widening inequality.

The central issue of our time is the reality of widening inequality of income and wealth. Everything else – the government shutdown, the fight over the debt ceiling, the continuing negotiations over the budget deficit – is a dangerous distraction. The Right’s success in generating this distraction is its greatest, and most insidious, triumph.

What to Expect During the Cease-Fire

Robert Reich

Thursday, October 17, 2013

We know the parameters of the upcoming budget debate because we’ve been there before. The House already has its version – the budget Paul Ryan bequeathed to them. This includes major cuts in Medicare (turning it into a voucher) and Social Security (privatizing much of it), and substantial cuts in domestic programs ranging from education and infrastructure to help for poorer Americans. Republicans also have some bargaining leverage in the sequester, which continues to indiscriminately choke government spending.

Here, I fear, is where the President is likely to cave.

He’s already put on the table a way to reduce future Social Security payments by altering the way cost-of-living adjustments are made – using the so-called “chained” consumer price index, which assumes that when prices rise people economize by switching to cheaper alternatives. This makes no sense for seniors, who already spend a disproportionate share of their income on prescription drugs, home healthcare, and medical devices – the prices of which have been rising faster than inflation. Besides, Social Security isn’t responsible for our budget deficits. Quite the opposite: For years its surpluses have been used to fund everything else the government does.  

The President has also suggested “means-testing” Medicare – that is, providing less of it to higher-income seniors. This might be sensible. The danger is it becomes the start of a slippery slope that eventually turns Medicare into another type of Medicaid, a program perceived to be for the poor and therefore vulnerable to budget cuts.

More generally, the President has been too eager to accept the argument that the major economic problem facing the nation is large budget deficits – when, in point of fact, the deficit has been shrinking as a share of the national economy.

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  1. ek hornbeck

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