The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise—with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.—Abraham Lincoln, 1862
If you find it surprising that the Obamans have the time, let alone the patience, to spend today in a fiscal responsibility loya jirga with the likes of Nixon Commerce Secretary and Wall Street billionaire Peter G. “Pete” Peterson, you have every right to be surprised and a little bit shocked.
You’ve seen the iceberg ads, right? Peterson’s well-heeled foundation has been running these full-pagers everywhere, at God knows what cost, to scare the bejeezus out of us and make us think that unless we slash Social Security and Medicare now, our children and grandchildren will be reduced to foraging nuts and berries in a deficit-cratered landscape.
As far as I can tell, Obama is accommodating the scaremongers today mainly because they have the inside muscle to force him to their table. He needs to make a show of engaging their concerns about a looming structural deficit. But Peterson’s insider muscle-flexing cannot fully account for Obama’s independent announcement that he will seek to halve the federal debt load (in relation to GDP) by 2013. Although the White House isn’t saying so, there is no way that can be achieved without “entitlement reform,” which is Peterson code for cutting Social Security.
Here lies madness. Here lies spare change you can’t believe in. Here lies a failure of nerve of colossal proportions.
The New York Times reported the Obama deficit-reduction plan on the same Sunday front page where it also reported how Japanese consumers remain so traumatized by the devastation of their 1990s “lost decade” that they still recycle their old bath water to do their laundry and ration their consumption of vegetables. Between 2001 and 2007 the Japanese increased their per-capita consumer spending by two-tenths of one percent, or basically not at all.
So here is the question of the day: Is it really a good idea, at a time when US consumers are already beginning to act in much the same way as those traumatized Japanese, for the White House to signal that we’d better start scrimping and saving a lot more, because Social Security & Medicare are now on the chopping block?
When Bush tried using his re-election capital to privatize Social Security we all rallied to beat him down on the basis of calm reality-based reasoning: we pointed out that Social Security has a pre-paid surplus of $2.5 trillion, that if modest fixes are needed to shore it up during the Baby Boom onslaught there are easy and relatively painless ways to do this, and that the Medicare cost crunch should be addressed as part of comprehensive health care reform—that Medicare really doesn’t belong in same policy basket as Social Security.
But what do we do when a Democrat invites Petersonian wolves in sheep’s clothing (e.g. Mitch McConnell [R-KY]) to come parley with him about cutting entitlements (a.k.a. having lamb for lunch)?
As I say, here lies madness. Yes, ultimately the US will need to control its structural deficits. No one disputes this. Mainly we will need a whole new look at how we tax, or rather how we don’t tax, wealthy individuals and corporations. But if the urgent and compelling need right now is to restore confidence at the grassroots, how incredibly wrongfooted and lunkheaded is it for the President to be adding to the public’s anxiety by having the Marine Band play “Nearer, My God, to Thee” in the face of Peterson’s mythical iceberg?
I sense a major failure of nerve here, aggravated by Obama’s starting-gate problem of having too many fiscal conservatives within his own inside circle.
You can see the same weak-kneed straddle hurting Obama and seriously hurting the country in relation to the banking crisis. If Nouriel Roubini is right and the banks are still hiding up to $2 trillion in losses, for God’s sake force them to come clean and nationalize the ones that are effectively bankrupt for the sake of letting in some cleansing light and air. But no! No sooner had Chris Dodd raised the inconvenient truth of nationalization than the White House strenuously denied that they would ever do something so drastic.
By now everyone knows that Mr. Obama reveres Mr. Lincoln. He should search his soul for some Lincoln-like steely resolve not to be all things to all people—and especially not to be conciliatory toward the ravening wolves, who (by the way) are not talking about giving up their entitlements.
Again, the 1862 Lincoln quote from above: “The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise—with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.”
Disenthrall yourself, Mr. President! Keep on straddling the way you have been doing—keep placating people who are your actual enemies, not your friendly rivals—and you will set yourself up to be history’s road kill, not the transformative leader we have all been waiting for.