Obama is Scared

Dean Baker goes overboard. Well he suggests that Obama is failing to defend Social Security because of his fear of retribution from the policy elite.

Baker is right.

This is an issue that extends beyond Social Security. Many of us have been saying for a while that Obama is too beholden to an elite whose view of the world is vastly different from that of the average voter. As a result he fails to provide a narrative for the majority. Instead he constantly trims to avoid conflict with the elite.

In the rarified air of the elite – which includes the media, big business, and academia as well as Washington policy circles – it is commonly understood that our entitlement programs need fixing. For decades the Republicans have hammered away at the imminent ‘bankruptcy’ of those programs is a thinly veiled attempt to get rid of them. It is also common for them to conflate Social Security and Medicare, two programs that have very different problems.

Also inside the bubble the Federal deficit looms as a massive problem – the talk is constantly of a ‘need’ to cut spending and    thus reduce the debt. Inflation also seems to exert a terrible pull on elitist thought. Deficit hawks often cite imminent rampant inflation as a reason we have to rein in our debt and  raise interest rates. Oh, and according to these same folks we need to get the Fed to behave responsibly and end its support of the economy.

Outside the bubble none of these things matter.

Indeed shoring up entitlements matters much more than reducing them. Average folks have ben slammed by the steady erosion of their earning power. They are steadily sinking beneath debt taken on in a false attempt to keep living standards rising. Recent students are swamped by student loans and will have to postpone home ownership for years if not decades. Health care and education costs cripple most middle class families. And the relentless pursuit of profit has siphoned off most of our productivity gains for capitalists who pay a reduced rate of tax on their gains because of the privileges bestowed on them.

The simple fact is that outside of the elitist bubble America’s decline is a very real phenomenon. It is not an arcane topic for Sunday morning talk shows or for long and unnecessary academic discussion.

It is palpable. It is obvious. And it is painful.

Yet it is ignored.

The reasons seem clear.

Inside the bubble, which consists of our highest paid citizenry, wages have risen. The stock market has recovered. Employers give more generous benefits in order to attract ‘talent’. Savings are more substantial. And prospects are decent if not downright rosy. These are the folks who brought us the financial crisis. They are the ones who abolished defined benefit retirement plans and gave us the defined contribution plans that are hopelessly inadequate, much more risky and expensive. These are the people who bemoan the common folk who don’t save enough and who berate those poor savings habits as being self-destructive. Yet they are also the ones who squeeze wages at every opportunity in order to meet reckless stock market profit targets and to meet bonus thresholds that support their own conspicuous consumption. They are the ones who ship jobs abroad in search of lower costs and then who complain about the inadequacy of our worker’s skills.

The delusion inside the bubble is that those outside are somehow dependent, and lazy. They see a person not paying income tax and complain, not about the lack of income on which to pay that tax, but about the lack of tax. They fret about the lack of incentives for themselves were tax rates to be raised, but not about the block on opportunity that the oppression of poverty brings.

In short they have no idea about how America has been driven off the cliff by the policies from which they benefit. Why would they? They simply focus on the issues that affect them.

Like inflation and it corrosion of credit. Like taxes that intrude on their capital accumulation. Like entitlements that are merely afterthoughts to them as they plan for retirement. Like welfare that transfers cash from their pockets into those of the poor and the ‘underserving’. Like the low interest rates that prevent them earning a ‘healthy’ return on their many investments. Like the tax laws that ‘force’ them to ship their savings abroad to tax havens. Like the regulations that prevent them from selling products for profit that have no social value. Like laws that prevent them from dumping pollution into the environment where taxpayers not shareholders carry the cost for clean up. And like the Federal budget that looms over the credit markets as what they perceive as a threat to the allocation of capital.

It is this group that leeches not the rest of us. They profit from rigging the rules. They pervert our democracy by swamping our elections with money. They divert and suborn legislation for their own advantage. And they resist any attempt to push back as being an attack on the manifest – to them – benefits of capitalism. They laud the American Dream while they crush it. And then they have the temerity to pretend to be concerned.

This is what Dean Baker meant to say.

It is this that makes Obama a disappointment. Instead of leading the people he indulges the paranoia of the wealthy. He dances to their tune and addresses their issues. This is why he can agree with Romney – as he did – that Social Security needs ‘fixing’, and that unless we do something to ‘fix’ it  it will go bankrupt.

This is preposterous and untrue. Yet he perpetuates the Republican narrative.

Why?

I think it’s because he is scared of the power of the plutocracy. Or, perhaps, it’s just that he lives inside the bubble.

Which do you think?