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Why Won’t Obama and Democrats Defend the Public Sector?

by Roger Bybee

“Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.” —President Obama's recent presidential address

For the moment, it appears the Republicans have tossed aside what conservative columnist David Brooks called the “deal of the century” on the debt ceiling. Under this deal, President Obama would have agreed to a package of spending cuts (83 precent of deal) and revenue increases (17 percent) from closing some of the tax code’s most outrageous loopholes, like tax breaks for corporate jets.

Republican divisions have blocked acceptance of the deal, but the fact remains that Republicans could drew a remarkably cynical (see Jane Hamsher's thought-provoking piece) President Obama into a set off cuts on Social Security, Medicare and Medicaid, three signature Democratic programs. Particularly devastating has been President Obama’s unwillingness to recognize the importance of public employment in sustaining the economic recovery, in providing a lifeline to a fast-sinking African-American population, and in providing a crucial bulwark against Corporate America’s efforts to drive down wages for all workers. (photo: Fibonacci Blue)

The fact that a Democratic president would place the three main safety-net programs on the chopping block should prompt a critical examination of how President Obama and the current crew of Democratic leaders put us here.

Particularly devastating has been President Obama’s unwillingness to recognize the importance of public employment in sustaining the economic recovery, in providing a lifeline to a fast-sinking African-American population, and in providing a crucial bulwark against Corporate America’s efforts to drive down wages for all workers. 

The failure of Obama and other top Democrats to defend public spending and the public sector—along with their incessant repetition of other key pieces of conservative economic dogma—has allowed Republicans to divert America’s attention away from its most pressing problem: the prolonged, agonizing jobs crisis.

Democrats utterly failed to use the worst economic crash in eight decades to thoroughly refute and bury the self-serving conservative theory of “trickle-down economics." As New York Times columnist Nicholas Kristof noted:

For all their flaws, Congressional Republicans have been stunningly successful in framing the national debate. Instead of discussing a jobs program to deal with the worst downturn in 70 years, we’re debating spending cuts…

This spectacular success in shaping the debate and impacting public priorities was actively enabled by Obama and other leading Dems (as suggested by the quote above from Obama which strongly reinforces major elements of the Republican narrative on the economy).  

OBAMA AND THE DEMS: TRICKLE-DOWN IN NEW GUISE

First, Obama and Democratic leaders utterly failed to drive a stake through the heart of trickle-down economics by continually linking the Wall Street meltdown to serve-the-rich policies that produced only the export of the U.S. productive base and the diversion of capital into financial speculation. 

Instead, Obama and the Democratic inner circle resuscitated trickle-down economics in a slicker, more cynical guise: “preserving Wall Street in order to save Main Street.” Wall Street and Corporate America have recovered in splendid shape, with record CEO pay, bonuses, profits, corporate savings of $2 trillion.

But while Obama and advisors like the centrist Gene Sperling constantly seek to enhance supposedly shaky “business confidence,” lower corporate tax burdens (already among the lowest in the advanced world), and make the U.S. a better place to “locate” jobs, corporate America displays its preference for offshoring jobs to low-wage, repressive nations every day.

Main Street USA has been left behind by a Corporate America that could seemingly care less, and has created 2.4 million jobs overseas and erased 2.9 million at home. Even with this vacuum in job creation by corporations, Obama and the Democratic leadership have failed to vigorously defend the crucial role public employment must play. Since Obama has stepped into office, the economic recovery has been undercut by the loss of 429,000 jobs in the public-sector, with more on the chopping block.

Last month’s job report is a vivid example of how important public-sector jobs remain without any hope of recory. Some 54,000 public-sector jobs were wiped out, negating 39,000 new private-sector jobs, resulting in a puny net gain of 18,000 jobs. Hammered especially hard are African Americans, as public-sector jobs provide almost one out of five jobs for black Americans fortunate enough to be employed.

Gov. Scott Walker’s Wisconsin leads the nation with a stunning 25 percent unemployment rate among African Americans.

Yet at the height of public workers’ battle in Wisconsin, Obama could not bring himself to provide more than the briefest statements of support. Not only did Obama fail to live up to his famous campaign promise to join labor on the picket lines, he tepidly expressed support for union rights in a narrow sense:

Some of what I've heard coming out of Wisconsin, where they're just making it harder for public employees to collectively bargain generally, seems like more of an assault on unions.

More importantly, he missed Wisconsin labor’s central message that successfully reached far beyond union members to amass public support: “Unions are the bedrock of the middle class.”

During his remarks about the debt ceiling, as with his timid comments on Wisconsin, Obama passed up the chance to defend the importance of public employment in supporting the recovery, in providing good jobs to people of color and maintaining middle-class living standards for people  inside and outside the labor movement.

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