street roots
Nov. 23, 2012
Fiscal cliff debate is about political priorities, not economics
he empowered eltte are framing the financial discussion and preventing a socially responsible recovery
BY ROBIN HAHNEL
C O N T R IB U T IN G C O L U M N IS T
'e just had an election which
repudiated the Republican
economic agenda for America. So
what begins the morning after? The
economic subject talked about is “the fiscal
cliff” — the Republican economic agenda!
The fiscal cliff is the latest version of the
same trap the wealthy, the military
industrial complex, and the Republican
Party have been setting over and over again
since Ronald Reagan was elected in 1980.
The interesting question is why anyone still
falls for it.
I f the federal government cuts taxes for
the wealthy, and i f the federal government
insists on growing a military industrial
complex even after the cold war has ended,
then, eventually, there is no alternative in
the long run but to either cut federal
spending on domestic programs that
actually help people and make the economy
more productive or to increase taxes on the
middle class or to let the national debt
continue to grow. That is simple arithmetic.
But to claim that in an economy that is
two times more productive than it was in
1980, that we can no longer afford to give
our children as good a public education as
we had; that we can no longer afford to pay
social security retirees as much as we
promised them we would; that we cannot
afford to launch a Green New Deal to put
people back to work and prevent
cataclysmic climate change, etc., etc., is
pure poppycock! Any economy that is twice
as productive as it used to be can afford
twice as much as it used to be able to afford.
That is more important simple arithmetic.
Because that simple arithmetic means
the “fiscal cliff” is entirely about priorities:
Will the economic priorities of the one
percent and the military industrial complex
continue to be served? Or will the priorities
of the rest of us get more attention? There
is no reason we must embrace austerity for
the 99 percent — raise taxes on the middle
class and cut socially useful spending -
because we face a fiscal cliff that is imposed
by some nonexistent “iron law” of
economics. The only reason we face a fiscal
cliff is that the one percent and the military
industrial complex insist that their priorities
continue to be paramount. In other words,
there is no economic cliff, there is only a
political cliff of competing priorities.
Moreover, this is not the time to
prioritize putting the federal government’s
fiscal house back in order. We do need to
re-order our priorities. We need to stop
W
Robin Hahnel
Robin Hahnel is a
political activist and
visiting professor of
economics at
Portland State
University. He is a
co-creator o f the post
capitalist economic
model known as
participatory
economics, along with
Z Magazine editor
Michael Albert. He is
also Professor
Em eritus at
American University
in Washington, D.C.
pandering to the wealthy hoping to gather
crumbs we are forever promised will fall
from their feasting tables. We need to stop
feeding the unlimited appetite of the
military industrial complex. Instead, we
only
need to fix our broken health and education
systems and provide public goods of great
value to the vast majority.
Yes, eventually we should strive to balance
the federal budget over the long term -
which means running deficits when the
economy is in recession, and surpluses
when it is not. But now is the worst
possible time to prioritize reducing deficits
since this will kill any economic recovery —
unless, of course, you are part of the one
percent and you are searching for a new
excuse to convince the 99 percent that we
have no choice but to tighten our belts even
further.
Why hasn’t the media pointed out that
their beloved bond markets see no fiscal
cliff? As of Nov. 15 the “all knowing” bond
markets were willing to let the U .S.
government borrow at 2.72 percent (30-year
treasury bonds), 1.58 percent (10-year
treasury bonds), or 0.17 percent (one-year
treasury bonds). That is an incredible
bargain! The bond markets are telling us
that the U .S. government could finance a
much needed fiscal stimulus cheaper than
ever before — if only we would stop
obsessing over some mythical fiscal cliff.
Thank you global bond markets. We should
stop looking this gift horse in the mouth
and take it instead of embracing recovery
killing austerity.
Instead, the media tells us that the
politicians who “rise above partisan
interest” to support a “grand fiscal
compromise” — which the pountry neglects
at its peril - are the “true statesmen and
women.” But their grand fiscal compromise
is nothing more than a huge giveaway of the
remaining parts of our social safety net in
exchange for miniscule concessions from
the rich and the military. And make no
mistake about it, that is what President
Obama is now attempting to orchestrate.
What the 99 percent need right now is
the exact opposite of fiscal austerity. What
the 99 percent need is a strong fiscal
stimulus to prevent a relapse into recession
and further increases in unemployment.
What the 99 percent need are politicians
who steadfastly refuse to be stampeded by
the major media into marching to the beat
of the Republican agenda. Politicians who
recognize the fiscal cliff as nothing more
than the latest attempt by the socially
irresponsible one percent to prey on the
sense of responsibility of the 99 percent,
and who “just say no” to more futile
concessions at our expense, are the true
statesmen and women.
Any who want to further debate the
economic subject the one percent want us
to discuss; any who want to ignore the real
economic problems we face and continue
only to consider how to respond to an
artificial fiscal cliff, can be my guest. But I,
for one, will not further enable this
campaign of diversion the one percent has
launched after an election they just lost,
with help from a media they literally own,
enabled by a newly re-elected president who
once again chooses to champion the
interests of those who tried their mightiest
to defeat him and betray those who, against
great odds, have put him in office twice.
Instead, in future columns I will focus on
our real problems and real solutions. I will
focus on intolerable unemployment that
persists five years after the financial crisis
with no end in sight. I will focus on financial
reform, without which further financial
crises will occur. I will focus on our housing,
education and health care crises. And I will
focus on the greatest ecological crisis
humanity has ever faced - which went
entirely unmentioned by either candidate
for president despite the billions each spent
to tell us why we should vote for him.
None of these real problems will be
solved by trying to do something about an
artificial fiscal cliff. As a matter of fact, all
these real problems will all be aggravated by
needless and futile attempts to do so.
I will also focus on the need for a new
kind of economy that does not create false
traps. I will talk about why an economy of
equitable cooperation can be far superior to
an economy where a greedy minority and a
fearful majority are driven by ruthless
competition. I will write about how an
economy of equitable cooperation can
continue to grow our productive potentials
but allow us to use them to meet the basic
needs of all, increase our leisure, protect
the environment, and distribute
consumption rights over non-necessities
based on sacrifices people make.
I will write about how it is possible for
workers, consumers, and citizens to run our
own economy ourselves, without abdicating
power to any self-serving economic elite,
and without the destructive forces of market
competition. I will write about why only an
economy of and by the people will forever
be an economy for the people.
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good, local, food.
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Robin Hahnel is
the author of“Of
the People, By the
People: The Case
for a Participatory
Economy.”
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