One compromise, Two Narratives.

[JoePhilly]

Now that the tax cut compromise has passed, what will the framing be?

I'll start by pointing out that the fight over these tax cuts needed to be fought before the mid-terms because it would have been a powerful election issue. The GOP would have been unable to defend their position. The House should have voted on a middle class tax cut around labor day, and the Senate bills (those raising the cap to 500k or 1M respectively) should have also been pushed BEFORE the elections. The democratic majorities had leverage then. They punted.

So we reach the "lame duck". Suddenly, the House and the Senate take up the tax cut issue. Very brave of them. The House passes a symbolic bill, and the Senate blocks ANY compromise.

The stage is set. Inaction will cause all of the tax cuts to expire. Taxes for the middle class and the rich will go up.

The narrative in the media, for the last 2 years has been DEFICIT, DEFICIT, DEFICIT!!! But now that these tax cuts are likely to expire, the narrative in the media changes.

When inaction looks likely, the media narrative drops deficits, and claims that Obama is going to break his promise to NOT raise taxes on those making under $250k. They do not say that the GOP has taken the middle class hostage, but that Obama, through inaction, will break his promise to 95% of all Americans. And he is going to kill the economy because people will have less money to spend. And look at that, the deficit is a non issue.

But then suddenly, Obama strikes a deal with the GOP. And the media narrative spins 180 again. Obama's promise to those making under 250k is no longer important. Screw that!!! Now, he is WEAK ... and he is willing to raise the deficit which is a bad thing to do in this economic climate.

Like any good mystery, the wheel turns again ... and the liberal house Dems may be able to kill the deal!!!! And the media framing spins 180 again ... if the liberal Dems succeed, Obama effectively breaks the promise to those making under $250k ... BASTARD!!! It would be his "read my lips" moment. The media salivates with glee at the idea of running old clips of GHW Bush saying "READ MY LIPS..." Awesome!!

But wait ... no ... the House's bluster is nothing but bluster (duh, they punted on having this fight back before the mid-terms), and the compromise passes.

Obama signs the bill, and talks about not wanting to raise taxes on the middle class, as he promised ... and on MSNBC, just minutes ago, I watched as the discussion narrative spun 180 again, back to the deficit being the "critical thing".

[leveymg]

1. Brilliant. Recced.

[JoePhilly]

2. The Media has one goal ... to get the left to fight itself.

[leveymg]

3. There is no Left to speak of. There are two Right-wing parties in the U.S., and some "whiners."

That's the narrative I see already emerging here today. Those who don't see this as a brilliant victory are "irrelevant." You know what? That may just be right.

[JoePhilly]

4. I agree with your first point completely.

There is no Left. Agree.

The two parties are "right wing" ... disagree.

I see the "right" as being made up of roughly 4 groups ...

1) Corpratists
2) Neocon war hawks
3) Fiscial conservatives
4) Social conservatives.

And my view is that you can take almost any Republican and plot where they are in these 4 areas. The stronger they are in each, the farther right wing they are.

You could argue that Democrats could be defined in a simmalr manner, but for us, those 4 groups divide up further ... so we end up being more diverse. DADT may pass this week, the GOP would never do that.

The media and the GOP use our diversity against us. We have so many sub-groups that no matter what Obama does, the GOP is going to be able to screw with it just enough to piss off a bunch of us.

While I understand the compromise, I don't see it as a brilliant victory ... on some levels, it sucks big time ... it also insulates Obama politically because the middle class only cares about their tax break anyway ... and it has some good things too. Brilliant, na.

The GOP would be HAPPY to block everything. They would love Obama to veto more bills. They want NOTHING TO PASS.

[leveymg]

5. I agree to a point. But, here's what I think just happened:

Both sets of party leaders, GOP and Dem, were agreed that the upper crust tax cuts had to continue. Both believe that if top-bracket taxes were raised, that would trigger capital flight, and a market crash as remaining global money moved offshore. Another part of this is to continue a flow of cheap money from the Fed to banks and corporations so they can continue buying back their shares, which keeps stock prices from plunging as companies move cash earnings abroad. Both parties understand that a crash is going to happen in any event, but both want the collapse to be controlled, in stages, so as not to plunge the markets too soon and stampede the herd.

Neither group much cares about what happens to the long-term unemployed, who have been written off. Extension of UIC is only to prevent a perception of social crisis that can't be ignored. The Repubs played the Dems against themselves to extract further concessions for the wealthy in exchange for that.

In two or three years, they'll turn the lights off in America as the last global banker leaves.

DADT (and DREAM, possibly) are compensation prizes to keep the Democrats from rebelling and making trouble with the arrangement above.

[JoePhilly]

6. I follow you, but ...

I think many of the Dems do not want the tax cuts for the top to continue. But some do. I do not include Obama in that group because he's been outspoken on that.

I agree that there is an effort to keep the market afloat. I have a 401k, so in some respects, I don't want the markets to crash either. I'm hoping that aspects of the financial reform will help, but its not tight enough for me yet.

Having said that ... I think we have to face the reality of the global economy. When I was younger, I left PA for college and a career. Most of my family and friends have never left the 50-100 mile radius of their birth.

I suspect that my kids may have to move also. Not just out of NC where we live now, but out of the country. The corporations are already global, as are the ubber rich. They have homes across the globe.

A few years back, my wife had a chance to take a position in INDIA. The cost of living there is about zero. We decided not to go, but countries like India will continue to grow, and their workers will work for less than ours. I do not see a path around that fact.

So that seems dire. But ... I think the ubber rich and the MIC need the US to survive because they need the American flag, and the military. So the lights won't be turned off. But, Americans who have fallen for the GOP claim that they are more patriotic will find themselves competing for lower and lower wages.

[leveymg]

7. Sometimes the important distinctions get lost when covering a lot of ground in a paragraph or two

First, I don't believe that every elected Democrat has embraced that world view and reduced top tax rates. Deficit finance, and a growing trade imbalance, have been contributing greatly to unsustainable balance of payments crisis. But, I think a number of Democratic Senators and some of the House leadership believe there are no options but to continue Bush policies. Unlike the GOP, who view it as a matter of doctrine, most of this group of Dems see a reduced top tax rate as a matter of grim necessity. I am not sure what Obama really believes, but I think he ultimately falls into the latter category of grim pragmatists.

Second, having worked on the Floor of the NY Stock Exchange, I can tell you that values of assets markets have long had little relationship with economic conditions in the outside world, and increasingly stocks and bond prices are a game rigged by large institutional traders who trade in boxes among themselves and operate in concert as a "plunge patrol" to rescue share values. This is probably a good thing for society, but it isn't legal and it isn't market capitalism.

As for the mobility of human capital, I suspect that emigration will become increasingly difficult for Americans as more and more are forced to try to move abroad in search of jobs. There's probably some justice in that, given the barriers we've erected to the less fortunate who've tried to join the American Dream in recent years. I too may be on my way outbound, and it looks like I'll be traveling to India early next year -- and if that's what's needed to keep myself most useful to my boss -- may relocate there. A century ago, my Paternal Great-Grandfather made such a move to America, and it may just be my time to move on.

There will always be an American market, but I fully expect it and average wages will be much smaller compared to the rest of the world than they were just a few years ago.

Good luck to you and your family. I get the impression you'll make it work out okay for yourselves.

[JoePhilly]

8. Yes ..

There are many, many, layers to this.

And I do agree that many Dem leaders may be right where you say ... and I too, am not sure about Obama. But I have more trust in him that in most others. But I do not bank on it. Would be dumb to do so.

As for the market, no argument really, it continues to be manipulated by those who can do so. For my part, as long as I can, I track the ups and downs, capture gains, and ride out losses because I do not think that long term, the ubber rich will let the market die. They make money on the drops.

Agree about American wages. I do not see how to stop that. The GOP will play games on immigrants, driving wages down, and then support sending jobs over seas ... which does the same.

And good luck to you as well. We could all start hoarding canned goods, but I do not see that as a long term solution. And so while I will continue fight the good fight, one needs a plan B.