Robert Reich-Why the Obama Tax Deal Confirms the Republican Worldview

[kpete]

Robert Reich
Posted: December 8, 2010 09:12 PM

Why the Obama Tax Deal Confirms the Republican Worldview
"In other words, the problem isn't big government. It's power and privilege at the top"
..........

Here's the real story. For three decades, an increasing share of the benefits of economic growth have gone to the top 1 percent. Thirty years ago, the top got 9 percent of total income. Now they take in almost a quarter. Meanwhile, the earnings of the typical worker have barely budged.

.........................

It's the same power and privilege that got the Bush tax cuts in the first place, and claimed the lion's share of its benefits. The same power and privilege that got the estate tax phased out.

Get it? By agreeing to another round of massive tax cuts for the wealthy, the president confirms the Republican story. Cutting taxes on the rich while freezing discretionary spending (which he's also agreed to do) affirms that the underlying problem is big government, and the solution is to shrink government and expect the extra wealth at the top to trickle down to everyone else.

Obama's new tax compromise is not only bad economics; it's also disastrous from the standpoint of educating the public about what has happened and what needs to happen in the future. It reinforces the Republican story and makes mincemeat out of the truthful one Democrats should be telling.

more:
http://www.huffingtonpost.com/robert-reich/post_1408_b_794177.html

[polichick]

1. That is probably the most awful thing about this - the reinforcement of...

...a narrative that's a lie.

[DirkGently]

5. Absolutely. Since Obama fretted publicly about being too "tax & spend," I've wondered whose

narrative Obama himself believes.

More and more troubling.

[ProSense]

2. Good grief. It does no such thing

It was a sucky situation and something needed to be done. Hit the Republicans for their bullshit and stop claiming that this means they're right. It doesn't, it means they're still assholes.

[hulka38]

6. You think that Reich is claiming that the Republicans are right?

That's your interpretation of what Reich wrote here?

[nckjm]

7. Ah, yea it does.

And it's getting tougher every week to tell who the assholes are.

[OHdem10]

3. How can you explain that Bush's Conservative Economic

Fundamentalism is the problem and created our disaster
while at the same time continuing his policies, I believe
is what Reich meant.

[ProSense]

4. That's what he's saying, but he misses a key point

the deficit and the current economic crisis are not one in the same. Dean Baker:

<...>

To be sure, the tax cuts were a bad use of public money. As we know, they disproportionately went to the wealthy. This money could have been much better used rebuilding infrastructure, promoting renewable energy and conservation, or even as tax cuts oriented more toward middle class and moderate income families.

However, the tax cuts were not the economic disaster portrayed in the Democrats' attacks. The deficits were not especially large in the Bush years. And, the economy needed deficit spending to get out of the recession caused by the collapse of the stock market bubble. Furthermore, the trade deficit caused by over-valued dollar inherited from the Clinton Administration, necessitated some alternative source of demand, like a budget deficit, to bring the economy anywhere near full employment.

Unfortunately, the political elites' fixation on the tax cuts and the deficits led them to ignore the economy's real problems.

The housing bubble grew to ever larger proportions, eventually reaching a point where its collapse would lead to the sort of recession that we are now experiencing.

<...>

Tax cuts for the rich are not good economic policy because they needlessly add to the deficit, but they did not contribute to the economic crisis.