Barack Obama and the Debt Crisis: a Successful Con Game Explained

The phony debt ceiling crisis was, from beginning to end, a con. It was an elaborate and successful hoax in which the nation’s first black president, the Democratic and Republican parties, Wall Street and corporate media all played indispensable parts. The object of the supposed “crisis” was to short circuit public opinion, existing law, democratic process and traditions of public oversight, in order to deal fatal blows to Medicaid, Medicare, social security, job growth and public expenditures for the common good. It worked. We’ve been conned.

President Barack Obama as First Actor in the Con

The key actor in the con was and is Barack Obama, leader of the Democratic party and president of the United States. When the Bush and Obama administrations bailed out the banksters in 2008, 2009 and 2010 they didn’t print new warehouses of greenbacks and send them over in a fleet of trucks. The Federal Reserve simply opened its spreadsheets, and wrote numbers with lots of zeroes crediting the banksters’ accounts. It literally created the new money by giving it away, and next proceeded to borrow those funds back from the banksters at interest. The debt ceiling crisis was nothing but those same banksters twirling their mustaches and oinking “Well, we don’t think you (the government that created the money by giving it to them) can really afford to repay all these loans you’ve been taking out… We might have to downgrade your credit rating…”

The whole notion of excessive government indebtedness, or that government might not be able, as the president threatened, to issue or cash social security checks was always a crock, a sham. There was never, ever a moment when Barack Obama didn’t know that his homey analogies about government having to live within its means just like a family were just cynical fairy tales.

The president could have prevented this “crisis” by passing a debt ceiling when he had a 50 vote majority in Congress for all of 2009 and 2010. He could have avoided it again by allowing the Bush tax cuts to expire. Instead the president renewed the Bush tax cuts when he had a 50 vote majority in Congress. The president could have defused it in the last month by any of a number of means, including simply calling it fake. But giving away the game is not what actors in a con do.

The Second Actor: Corporate Media

The second key actor in the con was and is the corporate media establishment. Media is nothing less than the sum total of the public conversation. Our corporate media is owned by a tiny group of greedy billionaires and soulless corporations who get to decide what most of us see and hear, what gets in and what gets left out of that supposedly public conversation. So corporate media cynically repeated the bankster’s doubts about getting their free money paid back.

Over the years, corporate media moguls had manufactured an entire Matrix-like world of fake “money experts” and economists who assured us in the 90s that tech stocks would never go down, and in the 2000s that real estate prices would never decrease, and always that lower taxes on the rich would trickle down to create jobs for the poor.

For these masters of alternative realities, re-branding the white nationalist wing of the Republican party as “the tea party” portraying it as a mass movement, and riffing on a new/old set of lies about the government going broke were par for the course. Corporate media set the limits of the political discourse inside a false reality — one where the myths that the US government could and might go broke, and where trickle down economics were unquestioned facts. It portrayed the only political choices available in that universe as the president’s accommodation vs the “tea party’s” extremism.

The Third Actors: Republicans and their tea party faction

Every Jeff needs a Mutt, every good cop needs a bad cop. This was the role played by Republicans. Throughout the Obama presidency their job has been to refuse the president’s pre-emptive compromises to meet them fifty, seventy, ninety percent of the way, moving the goal ever rightwards. Along the way a secondary function is to gratuitously insult the president, sometimes in openly racist terms, thus enabling some of the president’s backers to try to rally black and progressive support around him despite his utter abandonment of any progressive agenda.

The power of Republicans and their tea party subsidiary to dictate the course of events has always been exaggerated. During the first two years of the Obama presidency they had no legislative majorities anywhere and could not even call a committee meeting. Even with a majority in the House since the beginning of this year, Republican power to do damage is always limited by the combined power of the Democratic White House and a large Democratic minority in Congress. Despite the insistence of Republicans and the power of corporate media the imaginary “debt crisis” would not have existed unless the White House and Congressional Democrats co-signed it into existence.

The Fourth Actors, Hand Wringing Democrats, Progressives, and the Black Establishment

Last week we decided that Barack Obama, far from being weak, vacillating, and too spineless to stand up for the tens of millions of working and poor people who elevated him to office, was simply smarter than they were. Barack knows which side he’s on — only Democrats and so-called “progressives” don’t know, or pretend not to know.

Every abusive relationship has two parts. There’s an abuser, who does what he does, and there’s an enabling victim who forgives and makes excuses for the abuser. When Democrats and progressives waste ink and air on President Barack Obama trying to “make him do it” or discoursing on his “weakness” and lack of progressive backbone, they are effectively enabling his serial abuse by ascribing it to curable causes open to democratic remedies rather than deliberate intent and the people-proof mechanisms of their own party and of US governance in general. They enable their abuser.

The most pitiful and sometimes the most unprincipled of these are members of the Black Misleadership Class who support President Obama. The only card they have left is to point to the daily stream of racist quips and quotes from Republicans and tea partyers or Glen Beck, or whoever they can find that day calling the president a White House porch monkey, or some other racist epithet, as the reason to circle the wagons, squelch examination of Obama policies and silence criticism of his many betrayals in office of the cause of peace and justice.

The Directors of the Skit: Wall Street and Corporate America

Was there every really any danger of the US going broke? The stock market didn’t crash. The holders of US Treasury bonds didn’t try to unload them with this horrific train wreck a mere 24 hours distant. That was because they knew the train and the tracks were imaginary, they knew it was a hoax. They knew that President Obama could have declared it a foolish stunt and ignored it. They knew they would get their money any damned way.

President Obama expects to raise more than 1 billion dollars in direct financing of his 2012 presidential campaign alone, most of it from corporate sources and from Wall Street. This doesn’t count the money going to other Democrats in the House and Senate, or Democratic candidates for governor, for state and county level judges and other offices, for state legislatures and the like. Substantially the same contributors not only fund and own both parties, but also bankroll and dictate the policy positions of organizations like the Urban League, the National Council of LaRaza, and the NAACP.

If you don’t think dependence on corporate money, as a politician, or say as the National Urban League, whose keynote address this weekend was delivered by billionaires Bill Gates, makes you subservient to a corporate agenda, you’re living in some other world. All the actors in this drama live at the corporate trough. That’s it, and that’s all.

The Deal: Super-committees, Automatic Cuts, and Default Governing By Budget Cutting

With all the players acting their parts, the rigged game produced its expected outcome. Contrived in the imaginary universe where trickle down economics are the accepted norm, The Deal contains no new taxes on corporations and the wealthy.

President Obama announced that he has averted a crisis with more than a trillion dollars in immediate spending cuts, a number much higher than the value of the stimulus package passed at the beginning of his administration. A bipartisan “super-committee” of perhaps only a dozen Senate and House members will earmark a further $3 trillion in near term budget cuts, which will be submitted to Congress as up-or-down no-amendment, take-it-or-leave-it votes. And should Congress reject them, a round of automatic budget cuts dictated by some unknown formula will ensue. Medicare, Medicaid, social security, environmental protection and much more will inevitably fall.

Thus on the strength of a single vote in Congress drummed up by this fake crisis, the will of the American people has been subverted. Medicare, Medicaid and social security, if put up for popular votes would all win. If Congress had to debate them under scrutiny and take votes in public on them, Wall Street and the corporations would lose and the people would win. But that’s the purpose of a modern political “crisis:” to engineer the enactment of measures on behalf of elites that normal political processes would not allow.

Welcome to the future, where a black president has been the indispensable anchor player in the con game that ended the New Deal and Great Society.