"It is the death of humanity to know the price of everything but the value of nothing." ~Unknown

Friday, November 12, 2010

How Washington Made the Rich Richer—And Turned Its Back on the Middle Class

Jacob S. Hacker and Paul Pierson: A Tale of Two Planets

Jacob S. Hacker and Paul Pierson

A Tale of Two Planets

The distance between Planet Washington and Planet Earth, or at least the American corner of it, has never been greater.

Today, on Planet Washington, two big news stories capture the cognoscenti. The first is that President Obama appears willing to cave on Republicans' insistence that all the Bush tax cuts, including the extraordinarily expensive cuts focused on the country's wealthiest, be extended in lockstep. Somehow, on Planet Washington, extending tax cuts for 98 percent of Americans while saving $700 billion for more pressing economic needs than further enrichment of the richest isn't a winning position.

The second story is the blueprint for fiscal reform floated by the co-chairs of the president's deficit commission, Republican Alan Simpson and Democrat Erskine Bowles. These folks are serious. The day of reckoning has arrived. It's time for middle America to tighten its belt big-time: huge cuts in Social Security, Medicare, and Medicaid, along with virtually every other significant government program.

For those at the top, however, the belts aren't so tight. The proposal includes a cap in federal revenues, which would essentially insure that all the fallout takes place on the spending side, hitting programs like Social Security and Medicare and an already-straitened discretionary budget. And even as the Simpson and Bowles bravely announce that we must take tough steps, their plan would sharply reduce -- again! -- the top income tax rate. Executives at Morgan Stanley, where Bowles is a very well-compensated member of the Board of Directors, must be smiling.

Meanwhile, back on Planet Earth, things don't look so happy. The job market is horrible and is projected to stay horrible for years -- even if no other shoes drop. Compared with previous recessions, the loss of jobs is far worse, and signs of recovery far more difficult to detect. Even the staggering unemployment rate fails to capture the pain. Not since the Depression have so many Americans been unemployed for so long. Millions don't show up in the statistics since they are either squeezed into part-time jobs or have given up looking for work in despair.

Apparently you can't really see any of this through the telescopes on Planet Washington. Yet it is wrenching and cumulative, measurable in thwarted careers, broken families, shortened life-spans, and roiling frustration.

To be sure, that frustration is useful as a prop for campaigns, not to mention a powerful weapon for targeting scapegoats, like poor immigrants or the nation's teachers and first responders -- whose pensions and health benefits are now supposed to be the great source of our problems. But serious action to create jobs? On Planet Washington, that's so 2009.

On Planet Washington, the new alpha species is Republicans, along with those cooperative Democrats whom we -- in our recent book, Winner-Take-All Politics -- call "Republicans for a Day." They're pushing the same all-purpose tonic they peddled when the unemployment rate was low: cuts in social programs for the middle class and poor, tax cuts for the wealthiest, removal of any restrictions on the activities of big business. Already, they're searching for ways to undercut the moderate financial reforms passed earlier this year. On Planet Washington, the Wall Street casino that got us into this mess should be open for business while Main Street is shuttered.

It's a tale of two planets. And it won't end until we can bring our democracy back to earth.

Jacob S. Hacker and Paul Pierson are the authors of Winner-Take-All Politics: How Washington Made the Rich Richer--And Turned Its Back on the Middle Class

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