The Bubble Trap

Republicans aren’t the only ones in a bubble, Democrats, too, are “getting high on their own supply.”

What are we cheering for?

by Matt Stoller

Don’t let the conventions distract you from the real lesson of 2012: America is becoming increasingly undemocratic

Ultimately, we’re seeing that both parties are rotten. This rot is rooted in economics. Despite the bitter rhetoric, Obama and Romney are basically in agreement about how the country should be governed. Both Romney and Obama want to see the same core economic trends continue. These are, most significantly, a transition to an energy system based on hydro-fracking of natural gas and oil deposits (and some renewable energy), a large national security state, the sale of public assets to private interests, globalized financial flows, a preservation of the capital structure of the large banks, free rein of white-collar behavior and austerity in public budgets. This policy agenda is a reflection of the quiet coup that IMF chief economist Simon Johnson wrote about in 2010. [..]

Whether Romney wins or Obama wins, both Social Security and Medicare are on the table for deep cuts. Romney is explicit about this, whereas Obama couches this in terms that liberals will not understand. When he talks about popping a blister of partisanship by winning an election, what he means is cutting a deal with the Republicans to restructure these programs. Sen. Dick Durbin has been telling reporters that the Obama administration is going to give the entitlement-gutting Simpson-Bowles budget framework another try if he wins, and close Obama advisers are looking for a grand bargain on taxes and entitlement reform. Obama already tried to raise the Medicare eligibility age and cut Social Security benefits during the debt ceiling negotiations. Meanwhile, corporate titans and Democratic elites like Andy Stern and Steny Hoyer are already gathering to put this framework into place in the post-election environment, regardless of who wins.

As David Dayen at FDL News Desk pointed out, the Democrats have become the Party of Austerity: Still Seeking that Grand Bargain

There’s a fault line between the parties on this – particularly on Medicaid, where there’s a legitimate difference – but overall the fault line is not at all worthy of being called a “great debate.” One side (Republicans) wants to transform safety net programs and would probably get no further than cutting them; the other side (Democrats) wants to cut them and will use its power to force their allies along. Democrats have become the party of austerity, and they see the question as, bizarrely, one of credibility. You don’t earn your stripes in Washington unless you hurt a poor person, I guess. [..]

But Democrats have truly embraced this policy of fiscal austerity. What saved us from this once is the total intransigence on the part of Republicans to accept a good deal and provide the cover in the form of a modest tax increase. If Democrats let the Bush tax cuts expire, however, they can get what they term a modest tax increase through a tax cut bill, and layer on their spending austerity changes, including social insurance. So even if there’s no warp-speed “deal” after the elections, you would have to look out for one shortly thereafter.

We have a vote, but not a voice.