“If the Republicans can’t see their way to significant additional revenues targeted toward the people who are best off and targeted toward passive income and other things like that, then we’re better off going over the cliff and readdressing this with a better Congress in January,” Rep. Peter DeFazio (D-Ore.) said. “And we would have plenty of time to fix it.” [Politico]
THE SO-CALLED fiscal
cliff scheme is in the eye of the beholder. Conventional wisdom is being led by the business community, whose lobbying efforts are strong and loud. As a new CNN poll reveals, the full court press Wall Street has waged, seen daily on CNBC, the most watched financial cable network, is making a dent. This isn’t the first campaign waged on fear that shows signs of working, even if it’s built on pure math myth.
A big coalition of business groups says there must be give-and-take in the negotiations to avoid the “fiscal cliff” of massive tax increases and spending cuts. But raising tax rates – a White House priority – is out of the question, the group adds.
Wall Street’s 1% have self-imposed and manufactured the “fiscal-cliff” through their own angst, expecting everyone to buy what they say as economic gospel. But if we’ve learned anything from the financial crash of ’08 and the subsequent massive malfeasance exposed it’s that no one should trust what our Wall Street business community says at face value. The Wall Street community lost the right to have their word taken as anything but what’s good for their bottom line, with it proven they’ll do anything to protect themselves while everyone else suffers.
The reason the elite economic establishment’s marketing talking point phrase “fiscal cliff” freaks out Wall Street and the wider business community is because they’ve decided to weave this drama into the media narrative that our establishment press is sopping up, best represented by the infotainment morning shows across the cable channels.
But backed by powerful lobbying groups like the AARP, as well as unions, both of whom have drawn a cement line, especially on any fiscal scheme cooked up in the lame duck session, progressives in Congress seem to sense they can drive this one and it’s not over any cliff at all. More from Politico:
Bolstering the Democrats’ strategy is the belief that the “fiscal cliff” is actually shaped more like a “slope” where the economic effects will be felt gradually, not immediately. That theory gives Congress some time at the beginning of 2013 to set tax rates and configure budget cuts in a different political environment and with a new class of lawmakers.
But underlying the tough talk is also a sense of liberal angst – the left feels like it was burned by the last extension of the Bush tax rates and didn’t get much of what it wanted in the 2011 debt-limit deal.
If tax rates snap back to the higher levels from the 1990s and painful budget cuts start to hit the Pentagon, these Democrats – led by Washington Sen. Patty Murray – believe they would wield more leverage over the GOP to enact a budget compromise on their terms. And with a January deal, Republicans would technically avoid violating the no-new-taxes pledge that most of them have signed because they would then be voting to cut taxes.
President Obama is in the lead after the November election, with not only the demographics on his side, but the election having been fought and won on raising taxes on the wealthiest as part of an overall economic plan.
Then there’s the Pew Research polling on the subject, which shows 53% of Americans would blame Republicans if Congress falls off their self-imposed “fiscal cliff,” with only 29% saying Obama would be to blame.
“If the Republicans will not agree with that, we will reach a point at the end of this year where all the tax cuts expire, and we’ll start over next year,” Murray said. “And whatever we do will be a tax cut for whatever package we put together. That may be the way to get past this.”
Senator Murray is exactly correct, though the new CNN poll reveals that the business community’s outreach is starting to work, mainly because most Americans have no clue about economics and the other side isn’t being allowed an equal voice.
Murray and progressive allies need their message to reach far and wide and down into the local press, through Obama supporters and including people on the left who didn’t vote Obama, so that citizens understand the “fiscal cliff” is an economic scheme laid out by Wall Street, who has their own interests in mind. Whether it’s through Facebook and other social media platforms, progressive allies must start whipping the people to this cause so that the fiscal scheme business leaders are trying to gin up into a catastrophe is understood as being nothing but a simple delay until early 2013. A time when care can be taken to craft a progressive economic plan outside end of the year hysteria that is being used as leverage to scare people into believing America’s financial sky is falling when it’s not.
Wall Street’s cocked fiscal gun is doing what it’s intended, which is freaking out their allies at CNBC and Fox News Channel, as well as those at CNN, who are following the business leaders, because conventional wisdom and vested interest in this narrative always wins on cable over actual intelligence.
Without new media and the social media world business leaders might have already easily won; except now you have an avenue from which to raise the roof and push back on Wall Street’s fiscal
cliff scheme campaign. But you’re going to have to campaign to get it done, which includes contacting your senators and representatives.
This is a huge test for progressives, who can only win if their allies, including those amid Obama’s election coalition, get on board and whip up the American public to join the unions and AARP so that the business community and the American right, which represent a minority on this issue, don’t win this dangerous game that will hurt the middle class and working people the most.
What has changed? For one thing, the crisis they predicted keeps not happening. Far from fleeing U.S. debt, investors have continued to pile in, driving interest rates to historical lows. Beyond that, suddenly the clear and present danger to the American economy isn’t that we’ll fail to reduce the deficit enough; it is, instead, that we’ll reduce the deficit too much. [...] Now yet another organization, Fix the Debt, is campaigning for cuts to Social Security and Medicare, even while making lower tax rates a “core principle.” That last part makes no sense in terms of the group’s ostensible mission, but makes perfect sense if you look at the array of big corporations, from Goldman Sachs to the UnitedHealth Group, that are involved in the effort and would benefit from tax cuts. Hey, sacrifice is for the little people. So should we take this latest push seriously? No – and not just because these people, aside from exhibiting a lot of hypocrisy, have been wrong about everything so far. – Paul Krugman