海角大神

Democrats need to fight Republican shakedown

Republicans say that an overreaching government is to blame for the bad economy. Democrats need to step up and counter that message.

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Photo illustration/Ron Nickel/Design Pics/Newscom
Are Republicans bullying Democrats into submission? Guest blogger Robert Reich writes that if Democrats don't speak up and fight Republicans' message, the Republican shakedown may work.

You can鈥檛 fight something with nothing. But as long as Democrats refuse to talk about the almost unprecedented buildup of income, wealth, and power at the top 鈥 and the refusal of the super-rich to pay their fair share of the nation鈥檚 bills 鈥 Republicans will convince people it鈥檚 all about government and unions.

Republicans claim to have a mandate from voters for the showdowns and shutdowns they鈥檙e launching. Governors say they鈥檙e not against unions but voters have told them to cut costs, and unions are in the way. House Republicans say they鈥檙e not seeking a government shutdown but standing on principle. 鈥Republicans鈥 goal is to cut spending and reduce the size of government,鈥 says House leader John Boehner, 鈥渘ot to shut it down.鈥 But if a shutdown is necessary to achieve the goal, so be it.

The Republican message is bloated government is responsible for the lousy economy that most people continue to experience. Cut the bloat and jobs and wages will return.

Nothing could be further from the truth, but for some reason Obama and the Democrats aren鈥檛 responding with the truth. Their response is: We agree but you鈥檙e going too far. Government employees should give up some more wages and benefits but don鈥檛 take away their bargaining rights. Private-sector unionized workers should make more concessions but don鈥檛 bust the unions. Non-defense discretionary spending should be cut but don鈥檛 cut so much.

In the face of showdowns and shutdowns, the 鈥測ou鈥檙e right but you鈥檙e going too far鈥 response doesn鈥檛 hack it. If Republicans are correct on principle, they鈥檙e more likely to be seen as taking a strong principled stand than as going 鈥渢oo far.鈥 If they鈥檙e basically correct that the problem is too much government spending why not go as far as possible to cut the bloat?

The truth that Obama and Democrats must tell is government spending has absolutely nothing to do with high unemployment, declining wages, falling home prices, and all the other horribles that continue to haunt most Americans.

Indeed, too little spending will prolong the horribles for years more because there鈥檚 not enough demand in the economy without it.

The truth is that while the proximate cause of America鈥檚 economic plunge was Wall Street鈥檚 excesses leading up to the crash of 2008, its underlying cause 鈥 and the reason the economy continues to be lousy for most Americans 鈥 is so much income and wealth have been going to the very top that the vast majority no longer has the purchasing power to lift the economy out of its doldrums. American鈥檚 aren鈥檛 buying cars (they bought 17 million new cars in 2005, just 12 million last year). They鈥檙e not buying homes (7.5 million in 2005, 4.6 million last year). They鈥檙e not going to the malls (high-end retailers are booming but Wal-Mart鈥檚 sales are down).

Only the richest 5 percent of Americans are back in the stores because their stock portfolios have soared. The Dow Jones Industrial Average has doubled from its crisis low. Wall Street pay is up to record levels. Total compensation and benefits at the 25 major Wall St firms had been $130 billion in 2007, before the crash; now it鈥檚 close to $140 billion.

But a strong recovery can鈥檛 be built on the purchases of the richest 5 percent.

The truth is if the super-rich paid their fair share of taxes, government wouldn鈥檛 be broke. If Governor Scott Walker hadn鈥檛 handed out tax breaks to corporations and the well-off, Wisconsin wouldn鈥檛 be in a budget crisis. If Washington hadn鈥檛 extended the Bush tax cuts for the rich, eviscerated the estate tax, and created loopholes for private-equity and hedge-fund managers, the federal budget wouldn鈥檛 look nearly as bad.

And if America had higher marginal tax rates and more tax brackets at the top 鈥 for those raking in $1 million, $5 million, $15 million a year 鈥 the budget would look even better. We wouldn鈥檛 be firing teachers or slashing Medicaid or hurting the most vulnerable members of our society. We wouldn鈥檛 be in a tizzy over Social Security. We鈥檇 slow the rise in healthcare costs but we wouldn鈥檛 cut Medicare. We鈥檇 cut defense spending and lop off subsidies to giant agribusinesses but we wouldn鈥檛 view the government as our national nemesis.

The final truth is as income and wealth have risen to the top, so has political power. The reason all of this is proving so difficult to get across is the super-rich, such as the Koch brothers, have been using their billions to corrupt politics, hoodwink the public, and enlarge and entrench their outsized fortunes. They鈥檙e bankrolling Republicans who are mounting showdowns and threatening shutdowns, and who want the public to believe government spending is the problem.

They are behind the Republican shakedown.

These are the truths that Democrats must start telling, and soon. Otherwise the Republican shakedown may well succeed.

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