A TALE OF TWO AMERICAS

Are there two Americas today? Is there one America where the privileged minority lives in which structurally and institutionally things are just fine overall, but could be better with moderate adjustments in order to maintain the status quo? The 'other America' is where the majority of the population lives, including 44 million living below the poverty line, where 58.5% of the entire population lives at least one year in their lifetime below the poverty line, where home sales hit an astounding 47-year low in 2010, where official unemployment just under 10%, where income for workers and the middle class is continuing to decline, where social security benefits, wages and salaries continue declining, where the size of the once strong middle class continues to weaken and the prospects for resurgence in the middle class is highly unlikely.

Then there is the runaway the defense budget whose numbers make any rational mind dizzy. In 130 countries there are 700-1000 US military bases (depending on how one counts dependent territories).  Two decades after the end of the Cold War the US retains the highest defense budget in the world, a budget threatening the future of scientific research, vital social programs, and the very fabric of American democracy in the Jeffersonian sense. This is 'other America' where the majority lives, the America crying out for structural reforms now, the America tragically divided between the radical right - Tea Party etc., those who have dropped out of the two-party system, and those wondering if the Democrats are really any different in substance than their Republican opponents and those still hoping for another FDR messiah to save them from Tea Party Armageddon.

The question of which America is more 'real' is not existential, nor is it an issue of which America is more 'essential' to the national interest, for such concepts are ideologically and politically defined. This is a more elemental question of what kind of society American citizens want for themselves and for their children; it is a fundamental question of values on which institutions they believe need to be eliminated, reformed, or created anew to meet the needs of this century. 

 

Do the American people want a society like the one the Obama team and the GOP opposition described where sacrifices come from the middle class and labor, sacrifices that the GOP wants at an even greater lever in order to enrich defense contractors and corporate America; or do people want a a human-centered American society to replace the corporate-militaristic centered America currently in a long decline and increasingly less democratic?
  

After the November 2010 mid-term elections, I wrote on a few occasions that the Obama administration would move politically to the right in order to win the presidential election of 2012, while still employing politically trendy rhetoric in order to keep the centrist and left popular base that elected him in 2008. The state of the union address in 2011 provides further confirmation that the Obama team has decidedly moved to the right and it will most likely secure the next election, unless there is a major scandal or an unexpected problem in the economy. 

 

Another reason that the Obama administration will win is that Republicans are recklessly playing into Democrat hands by moving father to the right, even after the Giffords tragedy, overestimating the popularity of Tea Party conservatism. Meanwhile, Obama is safely bringing along Democrat voters to the center-right, as they have nowhere else to go, thereby co-opting and deradicalizing the left within the Democrat camp.
 

In the state of the union address, Obama did not say anything to cause unsettling concerns in the financial markets. On the contrary, he said everything to engender confidence and stability, judging by stock market reaction and financial analysts views. He said nothing to cause the defense or intelligence establishment worries; he appeased the fiscally-conservative Democrats by proposing cuts in domestic spending, and he stuck to the optimistic theme of a more creative/innovative, harder-working, and above all unified America striving to regain control of the future; but whose future, that of the America dominated by the elites enjoying institutional (economic, political and social) privileges, or the other America where the majority lives and hopes for a better tomorrow?

Obama's 'neo-corporatist' political strategy - as I labeled it more than a year ago, will most likely work to secure the White House for a second term, but that will only widen the gap between the 'two Americas'. That the IMF came out to raise world GDP growth for 2011, largely driven by larger than expected US growth, was a great coincidence politically beneficial to the administration.  Overall, the theme of optimism and national unity similar to the 'SPUTNIK'-driven American spirit was great populist rhetoric intended to inspire greater sense of optimism, competition and working together as a nation - great rhetoric but for the benefit of which America? While recognizing that the US has to spend more on infrastructural development and innovation, Obama keeps hammering the 'competitiveness' issue, as though it is possible for the US labor force to compete (in terms of wages and benefits) with the BRIC nations that have very low wages  and benefits.

When Obama speaks of 'competitiveness' and the 'Sputnik-driven spirit' that will generate jobs, it is hollow rhetoric for millions without jobs today; and jobs is the only thing that translates into policy effectiveness for a president who insists that he is working to rebuild 'middle class America'. It is hollow and hypocritical rhetoric behind which there is no jobs-growth and income growth policy to make the speech become reality, but instead more corporate welfare and tax breaks for the privileged Americans. 

 

The political rhetoric means that the middle class and workers (the neglected America that pays for the privileged minority) need to support Obama's version of trickle-down policies that benefit the top income earners, especially the top 2% whose pockets the Obama administration has lined not only with corporate welfare programs but also through tax cuts that are financed by the middle and lower income earners who are paying higher taxes.

The reality of a $14 trillion national debt and $1.5 trillion annual shortfall projected for 2011 is no easy thing to defend for any president, and it is not the fault of any individual, but a systemic problem that the political and financial elites caused over the long-term. Slashing the costs of Social Security (the average recipient gets $13,000 annually or below the poverty line) and Medicare in order to bring the US fiscal house in order is a policy that proves beyond any doubt that the government represents the minority of privileged Americans to the detriment of the majority. 

 

Most people know that public money by the trillions has gone to sustain a fraudulent and corrupt financial system and a wasteful defense sector - two wars in the Middle East costing taxpayers $1 trillion, while aerospace corporations are complaining that even modest defense cuts mean more job losses! Obama's willingness to close tax loopholes in order to offer tax cuts to corporations is indicative that this president wants to win the more conservative Democrat votes in 2012 and he is moving rapidly to the right of his party, regardless of the negative impact on the weak middle class and struggling workers.

The "one-nation" state of the union speech was a politically safe way to go for the Obama team; a speech that included all the elements of populism and no risk with progressive policy proposals that would give amunition to the mainstream media and to the Republicans. The speech was also a good one as it anticipated the Republican response that offered nothing but pessimism to the American people, and those who follow political campaigns know that no candidate wins with messages of pessimism. While Republicans recognized Obama had moved more to the center and away from some progressive positions he had embraced in 2008 as a candidate, they recklessly still opted for a doom and gloom strategy that will deprive them of the White House for another four years after the next election.

With all its flaws amid serious structural financial, economic, and social problems that are perpetually pushed under the rug with borrowed money from abroad, and intense global competition from the BRIC nations, Obama's optimistic rhetoric and his expedient political strategy is far better than what the Tea Party-inspired Republicans are offering, which is doom and gloom.  House of Representatives Speaker John Boehner stated that: "A partial freeze is inadequate at a time when we're borrowing 41 cents of every dollar we spend, and the administration is begging for another increase in the debt limit." 

 

In his GOP response, Rep. Paul Ryan made two basic mistakes: a) he blamed the Democrats for the nation's federal deficit, when all public opinion polls indicate the American people know that both parties are responsible for the situation; and b) he insisted the US was headed toward disaster owing to the health care plan, a proposition that only a minority on the far right accept as true. By arguing that the US is headed toward 'the day of reckoning' like Greece owing to health care spending, Ryan and the GOP have proved that their consultants these days come from the ranks of Tea Party fanatics who are completely out of touch with reality at home and abroad. America compared with Greece! Has the GOP lost all sense of reason and common sense?

That the Republicans chose House Budget Committee chairman Paul Ryan to deliver the response to Obama was a signal of where they intend to take their party. That they did not study past responses to state of the union addresses to see if offering doom and gloom to the American people 'sells' politically is a mistake that will cost them if this is all they bring to the table for the 2012 elections. Having nothing to offer to rebuild America, Republicans are offering Armageddon rhetoric best left to Christian fundamentalist ministers who are far more charismatic and know how to deliver their message and for what purpose.

Obama will be a two-term president, contrary to what many pundits - Gingrich, and even Obama himself -  were speculating even a year ago. The larger question is can 'the other America' that the two parties do not represent do better than Obama who will be a much more conservative president in the second term and will continue with short-term policies to strengthen finance capital at the expense of the middle class and labor? Obama’s policies have helped to sustain an otherwise crippled financial system, his administration’s policies have resulted in a dramatic rise of stock market averages combined with optimism about a more stable future, and a relatively stable dollar whose real value would be very low if it were not a reserve currency.

In the short term, Obama wins because the Republican alternative entails further socioeconomic and political polarization - a larger gap between the two Americas. Stemming from arrogance of power and perhaps intentional ignorance of deeper structural problems that are summarily dismissed as inconsequential (after all, we do live in the age of fast-food and disposable culture), political expediency always prevails. Does solving long-term structural problems and rebuilding a new anthropocentric democratic America really matter when presidents are elected once every four years thanks to generous contributions of privileged Americans? 

 

Presidents and politicians are only interested in election and reelection and have about the same focus as corporations placing emphasis on the next quarterly report. The only way that there can be structural economic and social reforms is to have structural political change first, otherwise, systemic stagnation will continue along the path of decline that is too slow to notice day by day.