WNYC's Bob Hennelly is an award-winning investigative journalist. While at WNYC he has reported on a wide gamut of major public policy questions ranging from immigration and homeland security to power outages and utility mergers.
Throughout his political career, President Obama has been a master of "real-time delivery" when it comes to leadership. No point in being out ahead and taking the heat. It will just make you sweat. Wait for everybody else to take a whack at it, see how that goes, clear your throat, and float in above the fray.
Later this week, more than halfway through his first term, President Obama is going to put forward his vision for how we handle the long-term debt test. Everybody else has turned in their exam, so the calibration should be a snap.
For the first part of his term, he sub-contracted out work on this national challenge to the U.S. Deficit Commission. They did their work and took the lumps for their findings.
This helped buy time for the president to celebrate his inner Republican. He did not have to put anything at risk AND appeared to be doing something at the same time.
Meanwhile, President Obama and the House Republicans were busy making the deficit deeper by carrying forward the Bush tax cuts for the nation's wealthiest households. That decision only continued to make America an increasingly Feudal New Age State where the concentration of wealth continues unabated.
Even before President Obama took office, he has been critical to helping the Republicans with the heaviest lifts they can't do alone. Back in the Fall of 2008, it was candidate Obama's support of Treasury Secretary Paulson multi-billion dollar bank bailout that made that huge wealth transfer possibile from the taxpayers to the banks.
And Wall Street donors responded accordingly. The genius of the president's Chicago Merchantlist wing of the Democratic Party is its ability to project social change, while at the same time not threatening the status quo that is producing growing economic inequality.
It is as easy as keeping the grassroots awestruck with rhetoric, while avoiding making the big donors nervous. He has to feign feeling your pain while pursuing policies that only make it worse.
A few years out we can now see the winners and losers from that TARP stage craft the President played a supporting role in. It saved the status quo, making the banks that were too big to fail bigger.
The banks and bonuses are back in full stride strong enough to push back on regulation. It appears increasingly less likely that there will be any meaningful prosecution of the robo-signing coast to coast scandal where agents of the banks invented documents that were than used to throw people out of their homes.
And meanwhile the promised relief for millions of families facing foreclosures just never seemed to materialize and the ranks of the long term unemployed continue to swell. Just think of all the opportunity from the crashing home prices!
Of course the nation's over reliance on debt can not be ignored just because the recovery has failed to materialize except on Wall Street. No doubt the costs of paying for just that Federal borrowing will squeeze out other vital priorities. This year servicing the debt is about $185 billion dollars. The real fun starts in 2015 when it hits $554 billion dollars, close to the Department of Defense budget for this year.
But so far, all of the debt-reduction scenarios, with the exception of one just released by Congress's Progressive caucus, seem to overly rely on rescinding, or seriously downsizing, the existing social contract with the poor and middle class. There's no doubt that Social Security and the other age-hinged health benefits should come to reflect the reality that we are on average living longer from when the original social security deal was struck in the 1930s.
But if we are going to factor in those kinds of demographic shifts we also need to account for some other major changes to the political economy's landscape since those New Deal days.
The mobility of capital and the ability of US multi-nationals to put their corporate wealth beyond the jurisdiction of US taxation and regulation has revolutionized global business. Any long term budget balancing has to factor that in going forward.
Right now, there is a trillion dollars in stranded U.S. multi-national profits sitting off-shore because the corporations don't want to pay the current 35 percent tax rate to bring that money home.
Meanwhile the cost of the United States making the world safe with its force projection for those multi-nationals to do business in continues to escalate. Finite militaty missions to places like Iraq have this way of becoming further notice operations. See Secretary Gates recent comments about the possible long term presence of US troops in Iraq. (Gitmo AND Iraq, why it is like a Bush third term!)
So when U.S. Corporations take an address in the Cayman Islands or some other tax haven what they are doing is transfering the cost of defending their interests abroad to the average American saps still so stupid as to only have one mailing address here in the U.S.
There is still time for the President to lead on this one. But it will be risky, out there all alone without his Republicans.