fiscal cliff – Jeffrey C. Goldfarb's Deliberately Considered http://www.deliberatelyconsidered.com Informed reflection on the events of the day Sat, 14 Aug 2021 16:22:30 +0000 en-US hourly 1 https://wordpress.org/?v=4.4.23 Class Matters: The Not So Hidden Theme of the State of the Union http://www.deliberatelyconsidered.com/2013/02/class-matters-the-not-so-hidden-theme-of-the-state-of-the-union/ http://www.deliberatelyconsidered.com/2013/02/class-matters-the-not-so-hidden-theme-of-the-state-of-the-union/#respond Wed, 13 Feb 2013 23:28:56 +0000 http://www.deliberatelyconsidered.com/?p=17677

I anticipated the State of the Union Address, more or less, correctly, though I underestimated Obama’s forthrightness. He entered softly, calling for bi-partisanship, but he followed up with a pretty big stick, strongly arguing for his agenda, including, most spectacularly, the matter of class and class conflict, daring the Republicans to dissent, ending the speech on a high emotional note on gun violence and the need to have a vote on legislation addressing the problem. Before the speech, I wondered how President Obama would balance assertion of his program with reaching out to Republicans. This was an assertive speech.

The script was elegantly crafted, as usual, and beautifully performed, as well. He embodied his authority, with focused political purpose aimed at the middle class. This got me thinking. As a sociologist, I find public middle class talk confusing, though over the years I have worked to understand the politics. I think last night it became clear, both the politics and the sociology.

Obama is seeking to sustain his new governing coalition, with the Democratic majority in the Senate, and the bi-partisan coalition in the House, although he is working to form the coalition more aggressively than I had expected. He is addressing the House through “the people,” with their middle class identities, aspirations and fears.

In my last post, I observed and then suggested:

“Obama’s recent legislative victories included Republican votes on the fiscal cliff and the debt ceiling. I believe he will talk about the economy in such a way that he strengthens his capacity to draw upon this new governing coalition. He will do it in the name of the middle class and those aspiring to be in the middle class. This is the formulation of Obama for ordinary folk, the popular classes, the great bulk of the demos, the people. In this speech and in others, they are the subjects of change, echoing Lincoln’s Gettysburg Address: government of the middle . . .

Read more: Class Matters: The Not So Hidden Theme of the State of the Union

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I anticipated the State of the Union Address, more or less, correctly, though I underestimated Obama’s forthrightness. He entered softly, calling for bi-partisanship, but he followed up with a pretty big stick, strongly arguing for his agenda, including, most spectacularly, the matter of class and class conflict, daring the Republicans to dissent, ending the speech on a high emotional note on gun violence and the need to have a vote on legislation addressing the problem. Before the speech, I wondered how President Obama would balance assertion of his program with reaching out to Republicans. This was an assertive speech.

The script was elegantly crafted, as usual, and beautifully performed, as well. He embodied his authority, with focused political purpose aimed at the middle class. This got me thinking. As a sociologist, I find public middle class talk confusing, though over the years I have worked to understand the politics. I think last night it became clear, both the politics and the sociology.

Obama is seeking to sustain his new governing coalition, with the Democratic majority in the Senate, and the bi-partisan coalition in the House, although he is working to form the coalition more aggressively than I had expected. He is addressing the House through “the people,” with their middle class identities, aspirations and fears.

In my last post, I observed and then suggested:

“Obama’s recent legislative victories included Republican votes on the fiscal cliff and the debt ceiling. I believe he will talk about the economy in such a way that he strengthens his capacity to draw upon this new governing coalition. He will do it in the name of the middle class and those aspiring to be in the middle class. This is the formulation of Obama for ordinary folk, the popular classes, the great bulk of the demos, the people. In this speech and in others, they are the subjects of change, echoing Lincoln’s Gettysburg Address: government of the middle class and those aspiring to be in the middle class, by the middle class and those aspiring to be in the middle class, for the middle class and those aspiring to be in the middle class.”

Americans in large numbers think of themselves as being middle class, though this is hardly an identity that distinguishes much. The middle class, in the American imagination, ranges from people who barely sustain themselves to people who earn hundreds of thousands of dollars, own multiple homes and all the latest consumer trophies. The imagined middle class includes all the workers who earn a living wage in a factory, and the owners of the factory, and the managers and clerks in between. If Marx were alive, he would roll over in his grave. This American sociological imagination seems to be an illusion, a case of false consciousness if there ever was one. The puzzle: “What is the matter with Kansas?

Yet, I think it was quite clear last night that the way the middle class is imagined opens American politics. Both Obama and Marco Rubio (in his Republican response) delivered their messages in the name of the middle class. While Rubio used it to denounce Obama, big government, taxing of the wealthy and spending for the needy, Obama invoked the great middle class to defend and propose programs that clearly serve “the middle class” directly, especially Social Security and Medicare, but also aid to education, infrastructure investments and the development of jobs. The undeserving poor loomed behind Rubio’s middle class, (and made explicit in Rand Paul’s Tea Party response), while those who need some breaks and supports were the base of Obama’s middle class. Thus, the middle class and those aspiring to be in the middle class, as I anticipated, was Obama’s touchstone.

I, along with many progressive friends, have been impatient with all the talk about the middle class over the years. I wondered: where are the poor and the oppressed? In this State of the Union, the President made clear that they are central to his concern: an endangered middle class, both those who have been down so long that they haven’t been able to look up, and those who through recent experience know that they and their children are descending. Obama spoke to both groups, the frightened middle class, working people who have experienced rapid downward mobility, and those who have long been excluded from work that pays sufficiently to live decently.

Obama, using straightforward prose, addressed the members of Congress through this middle class. He advocated for “manufacturing innovation institutes,” for universal high quality pre-schools, strengthening the link between high school education and advanced technical training, addressing the costs and benefits of higher education, and raising the minimum wage. In other words, along with his discussion of Medicare, Social Security and Obamacare, he raised the immediate economic concerns of a broad swath of the American public. Noteworthy is that the concerns of the “aspiring middle class” (i.e. poor folk) were central in his presentation.

And then there was the passion focused on immigration, voting rights and gun violence. The closing crescendo, with Obama calling for a vote from Congress on gun violence, dramatically referred back to Obama’s opening, calling for concerted bi-partisan action on the crises of our time. As I heard it, this was about gun violence and its victims, but also the victims of Congressional inaction on jobs and the economy, on the sequester, on the need to invest in our future, i.e. on pressing issues concerning the middle class and those who aspire to be in the middle class. The closing was powerfully delivered, as the response to the delivery was even more powerful. As Obama takes his message to the country in the coming days, and as Democrats and Republicans start negotiations about the budget, I think that there is a real possibility that the coalition that formed in negotiating the resolution to the fiscal cliff and debt ceiling conflicts may very well lead to necessary action, at least to some degree, and they will be debating about the right things, at last.

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The Fiscal Cliff: American Follies Seen from Abroad http://www.deliberatelyconsidered.com/2013/01/the-fiscal-cliff-american-follies-seen-from-abroad/ http://www.deliberatelyconsidered.com/2013/01/the-fiscal-cliff-american-follies-seen-from-abroad/#respond Thu, 10 Jan 2013 21:29:28 +0000 http://www.deliberatelyconsidered.com/?p=17197

The American president has signed the bill drafted by Democratic and Republican leaders, which allows the United States to avoid “fiscal cliff.” The solution adopted by the Congress does not, however, solve the problem, but only touches some of its elements and postpones dealing with the others for a few weeks. So who won in this dramatic battle, fought late into the first night of the New Year? Choosing the winner depends on one’s point of view, but no matter the viewpoint we take, one thing seems to be certain – the national interest has lost.

Regardless of who we consider to be the main wrongdoer, it is difficult to identify a clear winner. Obama’s spin doctors are striving to present the agreement as a triumph of the administration, since it succeeded in making many Republicans vote in favor of tax increase for the first time in 20 years. For the richest Americans, with annual revenues of more than $ 400,000, the tax rate will rise from 35 percent to 39.6 percent, i.e. to the rates existing under Bill Clinton before George Bush’s cuts. The problem is that President Obama wanted to set up a new tax threshold at $ 250,000 of annual income. That’s a significant difference. The White House hoped the tax increase would bring $ 1.5 trillion over the next decade, but according to the current arrangements the federal government will receive a modest 600 billion. Given the scale of the U.S. debt, it’s not much, and what’s more, this money will only contribute to the U.S. budget, if all the citizens who should pay more actually do. But will they?

The main problem with taxing the rich is that while these are the people who have the most money to share, they also have the most money to find ways to avoid sharing. When a few months ago Mitt Romney (remember him?) revealed his 2011 tax return, it turned out he paid tax rate of 14 percent instead of 35 percent or, to put it in dollars, 1.9 million instead of 4.8 million. If every American . . .

Read more: The Fiscal Cliff: American Follies Seen from Abroad

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The American president has signed the bill drafted by Democratic and Republican leaders, which allows the United States to avoid “fiscal cliff.” The solution adopted by the Congress does not, however, solve the problem, but only touches some of its elements and postpones dealing with the others for a few weeks. So who won in this dramatic battle, fought late into the first night of the New Year? Choosing the winner depends on one’s point of view, but no matter the viewpoint we take, one thing seems to be certain – the national interest has lost.

Regardless of who we consider to be the main wrongdoer, it is difficult to identify a clear winner. Obama’s spin doctors are striving to present the agreement as a triumph of the administration, since it succeeded in making many Republicans vote in favor of tax increase for the first time in 20 years. For the richest Americans, with annual revenues of more than $ 400,000, the tax rate will rise from 35 percent to 39.6 percent, i.e. to the rates existing under Bill Clinton before George Bush’s cuts. The problem is that President Obama wanted to set up a new tax threshold at $ 250,000 of annual income. That’s a significant difference. The White House hoped the tax increase would bring $ 1.5 trillion over the next decade, but according to the current arrangements the federal government will receive a modest 600 billion. Given the scale of the U.S. debt, it’s not much, and what’s more, this money will only contribute to the U.S. budget, if all the citizens who should pay more actually do. But will they?

The main problem with taxing the rich is that while these are the people who have the most money to share, they also have the most money to find ways to avoid sharing. When a few months ago Mitt Romney (remember him?) revealed his 2011 tax return, it turned out he paid tax rate of 14 percent instead of 35 percent or, to put it in dollars, 1.9 million instead of 4.8 million. If every American taxed at a new rate follows Romney’s example, the increase in state revenue will have virtually no effect on American finances. President Obama used to say that even closing all the loopholes in the U.S. tax system – which ironically enough was something Romney argued for – would not suffice to fix the budget. He is certainly right, but just rising the taxes for the rich, without ensuring they actually pay them, will not do the job either.

When the French president François Hollande announced his will to introduce the 75% tax rate for the richest, it was supposed to affect only a tiny fraction of the French society and only for a “trial period” of two years. Yet the government’s intentions sparked a vehement national debate. Many rich Frenchmen announced they would leave the country, the others – like singers Johnny Hallyday and Charles Aznavour, or actors like Daniel Auteil and Alain Delon – have already left. And even if the American rich do not follow suit in terms of leaving the country, their incomes might do exactly that.

Does the above mean the Republicans won? Hardly. In two months, they will have to persuade the American public that it is necessary cut social benefits for the poor and elderly. Our society is aging, they insist, and soon the government will be unable to meet its obligations. There is some truth in this argument, although it remains a mystery why it is better to cut social benefits rather than military spending at a time when the United States spend more money on defense than the next 10 military powers – such as China, Russia, France, England, Germany and Japan – combined.

So probably in a few weeks, when the night falls over Washington D.C., American legislators will once again sit down to their own version of the game of chicken. When they reach an agreement – because probably some agreement will be reached – in the very morning they will reappear in front of the cameras in wait for appraisals. Some journalist might again express their admiration, yet as was aptly noted by Andy Borowitz in “The New Yorker,” praising Congressmen in this case is like praising an arsonist for putting out his own fire.

In pre-1989 Poland there was a similar joke about the communists in power which said: “The Party solves only those problems, which it has itself created.” There was also another one that comes to mind after congressional negotiations: “In 1945 [the year communists took over the power], Poland was standing on the edge of a precipice. And what happened next? We’ve made a great leap forward”…

*Łukasz Pawłowski is a contributing editor for ‘Kultura Liberalnaand a PhD candidate at the Institute of Sociology, University of Warsaw.

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