To the battle stations: Obama takes on the vested interests
By
Max J. Castro Read Spanish Version
majcastro@gmail.com
Change
is here.
Barack
Obama’s budget represents such a radical departure from the norm of
the last eight years — indeed from anything that an administration
has unveiled at least since Lyndon Johnson’s Great Society in the
1960s — that it promises to usher in a new progressive era in
American politics.
It
is sorely needed. The current crisis of the system, which offers
Obama a chance to overhaul the whole machine rather that just tinker
with some of the parts, has resulted from a frenzy of greed and
recklessness that did not begin with but found its maximum expression
in the presidency of George W. Bush.
Obama’s
budget reverses the perverse priorities of the Bush years. Within the
parameters of U.S. political reality, it could be called a
revolutionary budget.
Many
things went wrong to produce the current economic troubles but surely
one of them was the obscene level of inequality that the Bush
administration encouraged and exacerbated. The thinly shared
prosperity of recent decades could not support the economy’s need
for constantly rising consumption.
For
years, Americans consumed with a gargantuan appetite. Savings rates
were negative. But, with income decreasing for the all but the
richest 10 percent of the population over recent decades, much of the
consumption of the other 90 percent could only be financed by one
thing: borrowing. Credit cards were part of the story but the
refinancing of homes was big as well. Then the crunch came. As home
values declined refinancing was no longer an option and all other
forms of credit dried up as well. Consumer confidence and spending
dropped steeply. The consumption machine that drives the economy
ground to a halt. Mass layoffs ensued, further reducing consumption
and spurring more layoffs. A morally shabby policy, the preferential
option for the rich, turned out to be economically disastrous as
well.
Obama’s
budget restores some level of progressivity to the tax system
(although not as much as one might hope when you consider that the
tax system under Eisenhower was significantly more progressive than
what Obama is proposing) by raising taxes on those who make more than
$250,000 a year and lowering them for the middle and working class.
The estate tax and a higher level of taxation for hedge fund managers
also help to somewhat level a grotesquely uneven playing field.
Obama’s budget is more for people who work for their money and less
for people whose money works for them.
There
are many laudable aspects — money for clean energy, health care,
infrastructure, and education — in Obama’s budget. But its
keystone is its attack on inequality through broadly progressive
policies. As Obama has noted, he knows the lobbies for vested
interests are gearing up for a fight. He’s said that so is he.
Obama will need the willpower of a Lincoln and an FDR combined to
defeat the enormous forces of power and privilege arrayed against his
transformational project.
