Compromise Coming Home to Roost: The Real Problem with Obama's Capitulation

The stock market's down. GDP is on life-support. Jobs numbers are cratering. The economy is tanking.

And you can bet Republicans will jump on this disaster to push their starve the beast strategy of making government even more ineffective so they can justify gutting it even more. Why? So they can give million dollar tax cuts to millionaires, cut regulations on industry and the financial sector, and eliminate Medicare, Medicaid, Social Security, student loans, unemployment and virtually anything else that benefits low and middle income Americans.

The stock market's down. GDP is on life-support. Jobs numbers are cratering. The economy is tanking.

And you can bet Republicans will jump on this disaster to push their starve the beast strategy of making government even more ineffective so they can justify gutting it even more. Why? So they can give million dollar tax cuts to millionaires, cut regulations on industry and the financial sector, and eliminate Medicare, Medicaid, Social Security, student loans, unemployment and virtually anything else that benefits low and middle income Americans.

You'll be hearing the words "job creators" a lot. And "debt" and "deficits" will be raised like a hoary headed monsters in a 3 year-old's nightmare.

Austerity and privatization will be chanted like magical incantations.

The press will dutifully report all this, without any critical analysis.

Mitt Romney's chances of getting elected will soar.

And inevitably, the United States will drift into a deep recession, if not a depression. Because the policies Romney, Ryan and Republicans are advocating as solutions, caused the economic crash in 2008.

And herein lies the problem with Obama's wishy washy compromising with Republicans and his sell-out to Wall Street and the Big Banks.

Because he refused to engage in a debate about what caused the problem in 2008, he will have no credibility if he tries to do it now.

There was a time when Americans would have listened to a reasoned argument about why the economy collapsed and what we needed to do about it.

In the end, the explanation for the Great Recession was really quite simple: it boiled down to two things.

First, when most of the money goes to the ultra rich, the rest of us don't have enough money to make a consumer economy go. That's precisely what brought on the Great Depression and the Depression in the 1890's. And that's what brought on the Great Recession of 2008. Thanks to 30 years of Republican policies the US has about the same income disparity as Uganda and Cameroon. As a result, 2008 was an economic time bomb waiting to happen.

Which brings us to the second fact. A barely regulated securities market, coupled with a nearly unregulated mortgage market was the trigger that set off the bomb.

Remember, both are a central part of what Romney et. al. are posing as the solution.

To make matters worse, they are pushing austerity - cutting government spending at a time when industry is sitting on their profits rather than investing them in job creating activity. To the extent they are investing in new infrastructure, it's overseas.

So get this - the middle class, which is vital to growing our economy -- doesn't have enough money to make the economy grow. They're either losing their jobs or afraid they might and their wages have been frozen for decades. Industry is not investing in job creating expansions because of this. And rightly so, by the way. Why should they expand, when existing capacity is underutilized and the prospect for increased consumer spending is grim?

So where is the only place job creation could come from? Government spending, of course. And there are lots of worthwhile things to spend on that would have a positive return - that is, they would move more money into the economy than we spend. Physical infrastructure, green energy, human capital, are a few examples.

But that argument is lost in the cacophony of paid plutocratic economic pornography. The only thing capable of being heard above the self-serving siren song of the uber-rich and corporate America is the voice from the Bully pulpit.

But after failing to draw this distinction and engage in that debate for more than 3 years, any attempt by Obama to do so now will be dismissed by voters as a lame excuse offered by a lame executive. "Where was all this rhetoric when things were looking better?" they'll ask.

In short, selling out to Republicans and Corporatists wasn't simply bad policy, it was bad politics.

And immoral as hell.

So now our ship of state seems destined to maneuver through dangerous shoals using the broken compass that is the Republican playbook for a corporate take-over of America.

Naomi Klein called it - disaster capitalism. It's not a passive thing. No waiting around for a disaster to occur spontaneously. They create the disaster, and then capitalize on it. They cripple government and then say it can't work.

But the worst disaster for America is Mitt Romney as President. And Obama's cowardice or his complicity have just made that a whole lot more likely.

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