Anger, Deceit and a Billionaires' Coup

By George Monbiot, Guardian UK

02 August 11

Anger and deceit has led the US into a billionaires' coup. The debt deal will hurt the poorest Americans, convinced by Fox and the Tea Party to act against their own welfare.

here are two ways of cutting a deficit: raising taxes or reducing spending. Raising taxes means taking money from the rich. Cutting spending means taking money from the poor. Not in all cases of course: some taxation is regressive; some state spending takes money from ordinary citizens and gives it to banks, arms companies, oil barons and farmers. But in most cases the state transfers wealth from rich to poor, while tax cuts shift it from poor to rich.

So the rich, in a nominal democracy, have a struggle on their hands. Somehow they must persuade the other 99% to vote against their own interests: to shrink the state, supporting spending cuts rather than tax rises. In the US they appear to be succeeding.

Partly as a result of the Bush tax cuts of 2001, 2003 and 2005 (shamefully extended by Barack Obama), taxation of the wealthy, in Obama's words, "is at its lowest level in half a century." The consequence of such regressive policies is a level of inequality unknown in other developed nations. As the Nobel laureate Joseph Stiglitz points out, in the past 10 years the income of the top 1% has risen by 18%, while that of blue-collar male workers has fallen by 12%.

The deal being thrashed out in Congress as this article goes to press seeks only to cut state spending. As the former Republican senator Alan Simpson says: "The little guy is going to be cremated." That means more economic decline, which means a bigger deficit. It's insane. But how did it happen?

The immediate reason is that Republican members of Congress supported by the Tea Party movement won't budge. But this explains nothing. The Tea Party movement mostly consists of people who have been harmed by tax cuts for the rich and spending cuts for the poor and middle. Why would they mobilise against their own welfare? You can understand what is happening in Washington only if you remember what everyone seems to have forgotten: how this movement began.

On Sunday the Observer claimed that "the Tea Party rose out of anger over the scale of federal spending, and in particular in bailing out the banks." This is what its members claim. It's nonsense.

The movement started with Rick Santelli's call on CNBC for a tea party of city traders to dump securities in Lake Michigan, in protest at Obama's plan to "subsidise the losers." In other words, it was a demand for a financiers' mobilisation against the bailout of their victims: people losing their homes. On the same day, a group called Americans for Prosperity (AFP) set up a Tea Party Facebook page and started organising Tea Party events. The movement, whose programme is still lavishly supported by AFP, took off from there.

So who or what is Americans for Prosperity? It was founded and is funded by Charles and David Koch. They run what they call "the biggest company you've never heard of", and between them they are worth $43 billion. Koch Industries is a massive oil, gas, minerals, timber and chemicals company. In the past 15 years the brothers have poured at least $85 million into lobby groups arguing for lower taxes for the rich and weaker regulations for industry. The groups and politicians the Kochs fund also lobby to destroy collective bargaining, to stop laws reducing carbon emissions, to stymie healthcare reform and to hobble attempts to control the banks. During the 2010 election cycle, AFP spent $45m supporting its favoured candidates.

But the Kochs' greatest political triumph is the creation of the Tea Party movement. Taki Oldham's film (Astro)Turf Wars shows Tea Party organisers reporting back to David Koch at their 2009 Defending the Dream summit, explaining the events and protests they've started with AFP help. "Five years ago," he tells them, "my brother Charles and I provided the funds to start Americans for Prosperity. It's beyond my wildest dreams how AFP has grown into this enormous organisation."

AFP mobilised the anger of people who found their conditions of life declining, and channelled it into a campaign to make them worse. Tea Party campaigners take to the streets to demand less tax for billionaires and worse health, education and social insurance for themselves.

Are they stupid? No. They have been misled by another instrument of corporate power: the media. The movement has been relentlessly promoted by Fox News, which belongs to a more familiar billionaire. Like the Kochs, Rupert Murdoch aims to misrepresent the democratic choices we face, in order to persuade us to vote against our own interests and in favour of his.

What's taking place in Congress right now is a kind of political coup. A handful of billionaires have shoved a spanner into the legislative process. Through the candidates they have bought and the movement that supports them, they are now breaking and reshaping the system to serve their interests. We knew this once, but now we've forgotten. What hope do we have of resisting a force we won't even see?

The Goons of August

By Robert Kuttner, The American Prospect

02 July 11

et us face the momentous truth: The United States has been rendered ungovernable except on the extortionate terms of the far-right.

For the first time in modern history, one of the two major parties is in the hands of a faction so extreme that it is willing to destroy the economy if it doesn't get its way.

And the Tea Party Republicans have a perfect foil in President Barack Obama. The budget deal is the logical conclusion of Obama's premise that the way to make governing partners of the far right is to keep appeasing them. He is the perfect punching bag. He can be blasted both as a far-left liberal and as a weakling.

We did not have to reach this pass. At any of several points in the past two years, a Democratic president could have called out the Republicans on the sheer perversity of the policies they are demanding. Most voters do not want cuts in Social Security, Medicare, or Medicaid. The Paul Ryan "Roadmap for America's Future" alone, in the hands of a politically competent Democratic president, should have been enough to destroy Republican credibility.

If you want to see what an eloquent, and politically persuasive Democratic leader looks like, listen to Nancy Pelosi's floor speech from Saturday.

Had Obama spoken with this clarity, the Republican program and politics could have been exposed and quarantined.

But this week it was Pelosi who was isolated by the game the White House was playing. Tactically, House Democrats were opposing the Boehner bill and supporting Sen. Harry Reid's plan to get a debt extension without sacrificing Medicare, Medicaid, or Social Security. But as the weekend wore on, the Reid Plan came to look more and more like the Boehner plan.

Democrats, from Obama on down, never should have accepted the premise that economic policy in 2011 was about deficit reduction. Once that became the game, Republicans were able to play chicken with the national debt.

For the most part, the mainstream media - with the exception of much of the New York Times coverage and its intelligent editorials - have been in the role of enablers, treating the debt ceiling as if it were the main story. Assuming the deal is finalized, the headlines and talking-head commentary will trumpet the narrow avoidance of a default, missing the point entirely.

The politics of default were always an artificial creation by Republicans. The real story is that Republicans played President Obama like a violin; and that the deal is terrible economics.

Economically, the budget deal will further weaken a fragile economy. Politically, the deal is a time bomb. It locks in a path to deeper cuts in programs that Democrats should be defending. Under the deal, the same scenario of default versus massive budget cutting that worked so well for the Republicans this time will be repeated next year.

The United States is now reminiscent of countries that at various periods of their history have been either been paralyzed by minority extremist groups; or worse, have elected them to office.

The rise of the Tea Party right is a classic case of how a small, extremist faction seizes control when the political mainstream fails to solve deep national problems. It is an amalgam of a far-right that has always hovered around one-fifth of the electorate, swollen by the frustrations of previously apolitical people.

In much of Europe today, far-right populist parties now typically get 20 or 25 percent of the vote. With Europe's parliamentary and multiparty system, however, they don't get to govern, but in several countries they are now the second of third most popular party.

These parties represent about the same share of public opinion as the Tea Party in the US. But in America, with our two-party system and our constitutional machinery of blockage, if a determined minority gains control of one party it can bring responsible government to a halt. That is what has now occurred, and it will color our politics between now and the 2012 election, and quite possibly beyond.

As political scientist Andrew Hacker points out in an important piece in the current New York Review of Books, current House Republicans received a total of 30,799,391 votes in the 2010 midterm election. Barack Obama received more than twice that many, 69,498,215, in the 2008 presidential.

The falloff between 2008 and 2010 was only slightly worse than usual. However in 2010 the people who turned out most intensely were Obama's rightwing opposition. Many of the young and working class voters who came out to cast ballots for Obama in 2008 didn't see any reason to vote in the 2010 mid-term. So Republicans are behaving as if they have a radical mandate that far outstrips the actual support for their tactics and policies - and Obama is failing to contest them.

How do you invite the radical right to take power? Start with thirty years of stagnant of declining living standards for most people. Then add a financial crisis made on Wall Street. Next, elect a Democratic president who raises hopes, but who turns out to be a close ally of the same forces that caused the collapse. Give that president a temperament that refuses to blame the right, and is mainly about seeking accommodation. The right then gets to put Washington and Wall Street in the same bucket, and blame the Democrats.

So you end up with a weak center unable to deliver recovery or reform, an angry, passionate right, and an enfeebled left reluctant to challenge their president until it is too late.

It is a fearsome time in the history of our Republic. And the politics of extortion by the Tea Party Republicans will not end with this deal. On the contrary, the deal will encourage more of the same.

What are the choices now for progressives?

Progressives in the House should vote to kill this deal. They were sold out by the White House. The President might then be forced to invoke the 14th Amendment, which he should have done along.

Progressives need to build a mass movement of their own. The pocketbook frustrations that animated the Tea Party will not be remedied by the Republican program. There needs to be a left alternative. And the Democratic Party base needs to make it clear that Obama cannot take their support for granted, and that deals such as this one will lead activists to work to elect House and Senate progressives.

Until this happens, the Republican right, with a majority of seats in one legislative house and speaking for the views of a small minority, will continue to rule.

Robert Kuttner is co-editor of The American Prospect and a Senior Fellow at Demos. His latest book is "A Presidency in Peril."