[lbo-talk] Krugman: "The question then is why."

c b cb31450 at gmail.com
Wed Jul 13 08:40:57 PDT 2011


Marv Gandall

On 2011-07-12, at 3:50 PM, c b wrote:

Alas, Charles, I'm afraid your stance on the Obama administration is not only to the right of many US liberals sympathetic to unions and social movements but also to the right of a goodly number of conservative pundits, economists, and investors who could care less what the his chronic capitulation to congressional Republican demagogy means for the fortunes of the Democratic party, but who care much about its consequences for the system.

^^^ CB: Well Alas back at u Marv, no my position is not to the right of any of these people. It is correct in relation to them. I am describing objectively what is happening with Obama. I am not Obama, so _my_ position is not to the right of them. My position is Marxist and Leninist , which is hardly Obama's position. But I'm not , as an individual, an actual political "player" . I don't hold office or anything.

You sort of give it away when you claim I'm to the right of some "conservatives" worried about the system. In that I am not worried about the system in my assessment puts me to the left of them. To be more direct, the fact that the whole overall impact of Obama's presidency has created a political crisis for the bourgeoisie is a good thing from the standpoint of somebody on the Left.

Let me be clear. My position is to the Correct Left of yours on this issue for all the reasons I have given on this thread and in our ongoing discussion of this issue.

Finally, you are ignoring the results of the 2010 elections. They have put the whole spectrem way to the right in a way that Obama cannot ignore , despite all you phony left pundits' claims to the contrary. Obama must defer to some extent to that vote when you don't have to. All the Democrats who were reelected don't have to pay attention to it as much because their constitutencies were not part of . It was not the message from their constituencies. But it was directed at Obama because it was led by the Tea Party who focused on Obama specifically. The election was a direct repudiation of Obama by the majority no matter that it was insane and stupid . It is the insane and stupid reality of a moment of the dynamic equiiibrium of American voters in this period

^^^^

Financial Times columnist Clive Crook, for example, examined the budget negotiations more closely two days ago and did not conclude, as you do, that Obama needs to "compromise even further to the right".

^^^^^ CB: Surely you are not claiming that this Financial Times columnist is a working class partisan, a Communist or Marxist-Leninist, in thinking or motive here , Marv. Alas !

<<<<<<<

To the contrary:

"Until recently Treasury officials had believed that the big fiscal issues could not be resolved with the debt-ceiling clock running down.

"After standing aside for months, Mr Obama took the opposite approach: nothing short of a grand bargain would work. He even promised to veto a stopgap measure.

"Liberal Democrats were stunned, because savings of more than $4,000bn cannot be found without changing Social Security and Medicare, which the party wants to keep off-limits. Mr Obama was offering these programmes up for cuts.

"In return, he demanded movement from Republicans on revenues. This appeased few Democrats, much as they want to see taxes rise as part of a long-term budget solution, because the president was ready to settle for a ratio of three dollars of spending cuts for every dollar of extra revenue. These are proportions that a moderate Republican might prefer, if there were any such thing as a moderate Republican.

"Many Democrats concluded that Mr Obama was preparing to reward the enemy, yet again, for its obduracy. With no shred of intellectual justification, and controlling just one house of Congress, the Republicans say, 'No tax increases, ever' – and Mr Obama, instead of resisting, moves three-quarters of the way toward their position. Merely for the sake of appearing to take charge, he all but surrenders."

See: http://www.ft.com/intl/cms/s/0/6ce92636-ab1a-11e0-b4d8-00144feabdc0.html#axzz1Rq5RnvVx

^^^^^ CB: First of all , I'd still want Obama in as President rather than a current typical proto-fascist Republican. So, on the sort of bottomline poltiical issue. Even this right step by Obama does not put him as far right as the current Reps. As I say , it is taken in part because Obama can't utterly ignore the message of the 2010 election. In part he has to say, you voted for this America , so I am mandated to give some of what you voted for. The balancing of the budge, getting rid of the deficit, was a major plank of the Tea Party, no matter how economically stupid it is to cut federal spending in a depression. Obama must respond to the ignoramus economics of the American man in the street or woman in domestic economies.

Secondly, the current Republicans are so loony rightwing, that Obama seems to have isolated or closed on the issue of raising taxes on the rich. We'll see , but the Reps seem to be actually absolute or non-negotiable on raising taxes on the rich. That makes sense, in that these Republicans have no constituency except the rich or _the_ ruling class, (Yes the rich are Obama's constituency too, but Obama also has a gigantic working class constituency; he has irreconcilably antagonistic constituencies) who are quite agitated by what they lost in the financial crisis, and madly determined and monomanaically focused on getting it back from the working class. It looks like they even refused to move on raising taxes on the rich when Obama threw in cuts in Social Security ! Furthermore, can the Reps really allow a govt shutdown and or default ? A default would hit their exclusive Masters in the form of a US default creating another world financial crisis. So, it is interesting that they couldn't go for the Soc Security cut if the tax increase on the rich was still part of the deal....so far.

Finally, Obama has to be concerned that the insanely anti-Obama, white suprmacist rooted , insanely anti-Obama Tea Party upsurge that won the last election won't be successful in blaming a government shutdown and resultant economic disaster on Obama. He has a disadvantage in relation to Clinton because of the white supremacist element in the anti-O rightwing activists. Clinton was able to have most people blame Gingfrich and the Republican the last time we went down this gambit. Obama can't be sure of that because of the insane and irrational blaming of Obama for so much that has happened that really shouldn't even be considered bad from the standpoint of many of the Tea Party followers who are , again, insanely against their self-interest in being up in arms about extensions of health care, pay equity, stimulus etc. So, Obama is correct to negotiate in the media and "bend over backwards" to a point, i.e. the point of not giving up raising taxes on the rich, giving in on everything but that, isolates the critical class issue, the one on which the Republicans seem not willing to give up, the absolute non-negotiable element in the instructions from their principles, the ruling class.

At any rate , it is the voters in 2010 who put Obama in this position. It is not some personal conservatism of him. Focus on Obama's personality or political personality is not "cogent'. He was left out to dry by the American voters in 2010. The House in the hands of wingnut Republicans is an insuperable barrier to doing anything in the American system.So, he is correct to say, "this is what you voted for" . Or wrought by not voting for some Democrat because Obama didn't do enough left stuff.

Obama's move right also has the effect of forcing the Left to do get very active up off their asses in protesting against those right wing moves. Rather than sitting at computers writing articles, go out and organize a march on Washginton protesting. This is the penance of not organizing to fight the Tea Party in 2010. It is a sort of negative dialectical taunt or agitation, a lowdown version of FDR's "go out and make me do it"; "go out and stop me from making these concessions".

^^^^^

The same worry about Obama's failure to respond appropriately to current economic conditions is apparent also in an article in today's New York Times Economix blog by Bruce Bartlett entitled "Are We About to Repeat the Mistakes of 1937?", referring to New Deal fiscal and monetary tightening which plunged the shaky US recovery back into recession. Bartlett is also no liberal, having served in the Reagan administration and as an advisor to Jack Kemp and Ron Paul.

^^^^^ CB: Again, real left in worrying about the system, comrade. The American People have voted for balancing the budget as the number one economic action. Yes, the American people are quite ignorant of economic history and all history. They get the government they vote for. Again , by putting the whole negotiation in the mass media there is some hope of improving the mass education level on this, though not much. Only hardknocks is likely to drum dialectics into the heads of the Americans of the Know Nothing tradition.

These

See: http://economix.blogs.nytimes.com/2011/07/12/are-we-about-to-repeat-the-mistakes-of-1937/

Other conservative commentators like Martin Feldstein, also an old Reaganite, and Gregory Mankiw have struck similar notes.

As have well-known investors like Barton Biggs, Bill Gross, and George Soros.

On July 1, Biggs told the Wall Street Journal that the Obama administration promised but failed to deliver on a "massive public works program":

^^^^^^^ CB; The Wall Street Journal, now really Marv. Surely, you don't think they are to the Left of me (giggles). You seem to be missing the point that if the Wall Street journal says it, clearly it is the right wing position. The right wing is fomenting criticism of Obama. That should make it clear to you that it is not a left position to be making this criticism. But on the content, no Obama , as President , could not accomplish this. It takes Congress. A fact concerning the US system that three quarters of the criticisms of Obama in the last two years ignores amazingly. Congress, and with the filibuster , a tiny minority in the Senate can block Obama from most of the left parts of his campaign promises. I want to say "duh" everytime a Leftist asserts that "Obama failed to deliver this or that" as if he was Lyndon Johnson or somebody like that. No, getting elected President does not automatically give one control over Congress, who all have their own direct connections to the ruling class. Get real.

I would criticize in the same vein all the rest of what you post below.

^^^^^^^

"On the final day of the Federal Reserve's bond-buying program, Mr. Biggs dismissed a further round of the so-called quantitative easing as a possible solution. It was meant to lower borrowing costs and simulate investment.

"Instead, Mr. Biggs, former chief global strategist for U.S. investment banking powerhouse Morgan Stanley, demanded the U.S. government temporarily return to ideas used in the Great Depression as a way to get the country back to higher growth.

" 'What the U.S. really needs is a massive infrastructure program … similar to the WPA back in the 1930s,' he says.

"The plan would be to employ some of the many unemployed people, jump start the economy, as well as help catch up with Asia, which is building state-of-the-art infrastructure from new mechanized port facilities to high-speed trains."

See: http://online.wsj.com/article/SB10001424052702304584004576419783681867012.html

Back in January, bond investor Gross called for the same program:

"...the solution isn't to create paper. It is to create goods and services the rest of the world wants to have. The Obama administration has failed miserably in that regard...

"We need to focus on employment and investment in manufacturing goods and services. You don't do that by incenting businesses with tax breaks and accelerated depreciation, because they fail to observe the final demand for their products and the ability to earn an acceptable return. Cash sits on their balance sheets.

"You do it with massive infrastructure programs such as the construction of high-speed rail lines. China has several hundred. We need infrastructure repaired in the U.S., as well, but so far the administration doesn't seem to want to go there. It wants to placate business with tax advantages and higher after-tax profits."

See: http://online.barrons.com/article/SB50001424052970204555504576075983972474462.html?mod=BOL_twm_ls#articleTabs_panel_article=1



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