The Corrupt, Unhelpful "Center"

Washington Elites Push for a Consensus that Ignores Reality

"Why can't we all get along?" The iconic question has become the fixation of much of Washington's chattering class. David Brooks and Thomas Friedman censure President Obama for blowing the "Grand Bargain" or not embracing the recommendations of Alan Simpson and Erskine Bowles, co-chairs of the deficit reduction commission. Self-proclaimed bipartisan efforts -- No Labels, Americans Elect -- call for putting aside partisan squabbles and electing moderates who can get things done.

All this chatter leaves out one thing -- any sense of reality. The old bipartisanship, such as it was, was built on the postwar economy that worked for everyone. Top-end taxes were at 90 percent, providing the resources to invest in essential programs such as the interstate highways, the Marshall Plan that rebuilt Europe, the G.I. bill and housing subsidies that educated a generation and built the suburbs.

In those days, U.S. companies exported goods rather than jobs, and a decent argument could be made that what was good for General Motors was in fact good for America. It wasn't perfect. The "other America" lived lives of quiet desperation. Segregation still was brutally enforced. But the bipartisan consensus reflected an economy that was working for many, not just the few.

That is no longer true, and hasn't been for years. Multinationals ship jobs abroad and park profits overseas to avoid taxes. Wall Street blew up the economy but got bailed out, with the bankers continuing to pocket the big bucks. Three-fourths of the country thinks the recession hasn't ended. And no wonder: Wages are still falling and mass unemployment inflicts grinding misery. In 2010, the top 1 percent captured an obscene 93 percent of the rewards of "recovery."

Not surprisingly, more and more Americans at both ends of the spectrum think Washington is corrupted by big money and big business. And when the parties do come together -- as they recently did to pass the corporate-championed, falsely named JOBS Act that declares open season for fraudulent corporate stock offerings -- they simply prove the case.

Also ignored in the plea for cooperation is the simple reality that the Republican Party has been captured by an extreme-right wrecking crew, who have not the slightest interest in compromise. Rather they are intent on gutting modern government, outside of the bloated military. Grover Norquist was delivering his normal incendiary rant in 2001 when he said he aimed to shrink government "to the size where I can drag it into the bathroom and drown it in the bathtub." At the time, I doubt even he expected that this year's Republican House budget -- devised by the Beltway favorite Paul Ryan -- would actually aspire to that standard, reducing discretionary spending by 2050 to levels that can be met only by dismantling all of government outside of the military, Social Security, Medicare and other health programs.

Obama, a mediator by instinct and experience, paid a deep price by trying to pursue bipartisan cooperation. He wasted months on health care as Sen. Max Baucus (D-Mont.) engaged in phantom negotiations with supposed Republican moderates. The president turned prematurely to deficit reduction, and then to seeking a grand bargain with John Boehner, impervious to the reality that Boehner could not produce his caucus for any kind of tax hikes. Now, for the election, the president has begun to clarify the stark differences between the parties, to the benefit of his reelection and the public's understanding.

But what makes the elite consensus so dangerous is that we're headed into a train wreck after the election that will require some kind of a deal. By the end of the year, if nothing is done, the Bush tax cuts, the payroll tax cut and extended unemployment benefits will expire, and the automatic sequester will cut another $110 billion out of discretionary spending for the remainder of the fiscal year. This would surely cripple the weak recovery we have, and very likely drive the economy into recession.

But the terms of the "grand bargain" represented by the Obama-Boehner negotiations or the Simpson-Bowles recommendations are skewed dramatically to the right. The basic outline exchanges cuts in Social Security and Medicare for "tax reform," promising to lower tax rates while closing enough loopholes to raise revenues. That requires erasing the mortgage deduction for middle-class homeowners or ending the employer deduction for providing health care to employees. This notion of "shared sacrifice" is unconscionable, given that working Americans have been sacrificing for years and weren't even invited to the Wall Street bacchanalia that created the mess.

Worse, the entire frame of the discussion -- driven by Washington elites -- is perverse. We should be focused on how to put people to work. How much should we take advantage of record-low interest rates and borrow to rebuild America and put construction workers back to work? How much should we raise taxes on Wall Street and multinationals to pay for rehiring teachers, and direct employment of young people?

Instead, guided once more by a misbegotten elite consensus, we're going to argue about how much of a hit a barely growing economy should take. That's a consensus the country can't afford.

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