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PORTSIDE  November 2012, Week 3

PORTSIDE November 2012, Week 3

Subject:

Waging Class War

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Sun, 18 Nov 2012 21:58:10 -0500

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1) A 'Grand Bargain' on the Fiscal Cliff Could Be a 
Grand Betrayal
2) Waging Class War

(1)
A 'Grand Bargain' on the Fiscal Cliff Could Be a 
Grand Betrayal
Robert L. Borosage
This article appeared in the December 3, 2012 edition
of The Nation.
November 14, 2012   
http://www.thenation.com/article/171266/grand-bargain-fiscal-cliff-could-be-grand-betrayal

With the election behind us, President Obama and the
lame-duck Congress return to Washington to face a fiscal
showdown, occasioned by automatic tax hikes and spending
cuts scheduled to kick in after the first of the year.
Most economists, including the nonpartisan Congressional
Budget Office, agree that if nothing is done, this
arbitrary, Washington-created "fiscal cliff," as Federal
Reserve chair Ben Bernanke dubbed it, will likely drive
the economy back into recession.

It is probably already contributing to slower growth.
The New York Times reports that manufacturers are
delaying capital improvements and postponing hiring for
fear that no deal will be made. More than a third of the
nation's school districts have reduced programs and
hiring in anticipation. If there's no deal, domestic
agencies face an 8 percent cut across the board in
fiscal year 2013.  Middle-class families will see an
income tax hike of about $1,500, a cut in child tax
credits by about $500 per kid, a cut in tuition tax
credits by $700 a year, and a hike in the payroll tax of
$1,000 a year. Lower-income families will suffer cuts in
the earned-income tax credit. The result is renewed
discussion of a "grand bargain" to avoid that self-
destructive course.

But the "cliff," with its misleading metaphor of an
imminent, irreversible fall, has been misconstrued by
the media. These changes are not irrevocable; it's not
as if they can't be fixed after January 1 (more on this
later). But in true shock doctrine fashion, the ersatz
crisis is being used to demand changes that would
otherwise be politically impossible: cuts in Social
Security, Medicare and Medicaid, along with deep cuts in
basic government services, combined with tax increases.
Wall Street billionaire Pete Peterson has enlisted
bankers and CEOs in a multimillion-dollar campaign
spearheaded by the hysterical Cassandras of debt, Alan
Simpson and Erskine Bowles, former co-chairs of
President Obama's deficit commission, to demand action
now. Editorial opinion and much of the punditry, along
with a claque of supposedly bipartisan or nonpartisan
lobbying groups, have dutifully echoed the call. Gaggles
of senatorial aides have been meeting to explore what a
deal might look like.

In an initially off-the-record campaign interview in
late October with The Des Moines Register, Obama
indicated that he intended to offer Republicans a deal
similar to the one he offered House Speaker John Boehner
in the summer of 2011: meeting the Simpson-Bowles target
of $4 trillion in deficit reductions over ten years,
with a ratio of $2.50 in spending cuts for every $1 in
new revenue as well as "working to reduce the costs of
our health care programs." Since the election, Boehner
and Senate Republicans have indicated they would support
an agreement that reduces deficits by cutting Medicare
and Social Security in exchange for tax reform that
lowers rates but raises more revenue through closing
loopholes.

Virtually every aspect of this hysteria is wrong. The
United States does not have a short-term deficit
problem, and the fundamental long-term problem isn't one
of soaring debt; rather, it is the lack of a foundation
for sustainable growth that includes working people.
Without a political movement to achieve the latter, very
little progress will be made on the former.

The grand bargain being discussed in Washington reflects
an elite consensus far removed from what voters want.
Americans want action on jobs, and most support the
president's call to raise taxes on the rich.
Overwhelmingly, they want basic family security programs
protected. Any deal that cuts Medicare and Social
Security, slows growth and increases unemployment will
look a lot more like a grand betrayal than a grand
bargain. And virtually the entire organized base of the
Democratic Party, from unions to civil rights and
women's groups, is mobilizing in opposition.

Austerity Bites

There are still more than 20 million people in need of
full-time work. Mass unemployment guarantees stagnant or
falling wages and sputtering growth. Long-term
unemployment-40 percent of those out of work have been
jobless for more than twenty-seven weeks-erodes skills,
confidence and lives. The Federal Reserve, understanding
the danger, has used monetary policy to keep interest
rates low and pump money into the economy. Yet Americans
are still strapped, given declining real wages, the
collapse of the value of their homes and the rising cost
of necessities, from gas to college education to
healthcare. Companies are sitting on trillions in
profits, waiting for demand to pick up for their
products. The Fed can't generate the growth we need
through monetary policy alone. In this situation, the
federal government should be acting to boost the
economy.

Washington's obsession with deficits is illogical for
two reasons: first, there is no sign of accelerating
inflation; interest rates are near record lows, as
global investors seek shelter in US securities from
economic turmoil abroad. We will never have a better
opportunity to rebuild our decrepit infrastructure, so
there's no reason for Washington to focus on belt
tightening now.

Second, austerity is, paradoxically, likely to undermine
the stated goal of deficit reduction. Cutting spending
and raising taxes in a weak economy destroys jobs and
slows growth. The increased unemployment leads to
declining tax revenue as well as increased demands on
government services, all of which adds to the deficit.
This is the famous "debt trap" recently experienced in
much of Europe, where premature and harsh austerity
drove many EU countries into recession. Spain, Portugal
and Greece have piled up worse debt burdens as their
economies collapsed.

American CEOs, fearful of the recession that would ensue
from the fiscal cliff, have been clamoring for a deal to
avoid it. But given the faltering recovery, the same
logic applies to the less harsh grand bargain now under
discussion. Job creation is barely able to keep up with
new people coming into the workforce. Federal government
purchases were down last year, as spending from Obama's
2009 stimulus bill declined, and they are declining
again this year. State and local expenditures continue
to fall off. The results are felt all over the country
as teachers are laid off, aging sewers collapse and Head
Start programs close. Streets grow unsafe as police
forces are reduced. Adding to the drag on the economy
are the budget caps passed by Congress-as part of the
2011 debt ceiling deal-that will reduce discretionary
spending by $1.5 trillion over the next ten years. Any
new deal would only add to the drag on the economy in a
world where Europe is in recession and emerging nations
like China, India and Brazil are struggling.

The hysteria about deficits ignores both their source
and their solution. Publicly held debt was only about 36
percent of GDP in 2007, before the crash. When the
housing bubble exploded, the economic collapse meant
falling revenue and rising spending (particularly on
unemployment insurance, food stamps and other programs
for the jobless). The result just about doubled the debt
burden, to 73 percent of GDP. Spending from the
president's recovery act temporarily contributed to the
deficits, but that has already petered out. As a result,
deficits are coming down; they are currently three-
quarters of what they were in 2009, relative to the size
of the economy.

Putting people back to work does more to reduce deficits
than any other factor. That requires more federal
spending now, preferably in areas vital to the economy,
like modernizing our infrastructure and keeping teachers
on the job. Once the economy is growing and people are
working, the deficit will come down. Additional steps
can be taken, if necessary, to reduce remaining
imbalances and address our long-term debt problem.

It is the long-term, seventy-five-year debt projections-
illustrated in the lavish charts that Pete Peterson's
various front groups have plastered across the country-
that have terrified so many people. But those long-term
deficits come almost entirely from one source: our
broken healthcare system. The projected increase in
healthcare costs-through Medicare, Medicaid, children's
and veterans' healthcare-drive long-term deficits. The
costs of Medicare and other public healthcare programs
are rising more slowly than private healthcare, but even
so, in the long term they are unaffordable. As economist
Dean Baker of the Center for Economic and Policy
Research has pointed out, if per capita US healthcare
spending were comparable to what other industrialized
countries spend (with better results), we would be
projecting budget surpluses as far as the eye could see.
The solution requires challenging the predatory
oligopolies-the insurance companies, drug companies and
hospital complexes-that profit from high costs.
Obamacare began that process; Medicare costs have begun
to rise more slowly. The sensible solution to our long-
term debt problem is continued healthcare reform, not
cuts in basic security for Americans.

Other than our broken healthcare system, our structural
problem is not so much deficits and debt as that the
United States does not have a stable foundation for
growth. In 2007, before the recession hit, annual
deficits were down to less than 3 percent of GDP, a
level that could easily be sustained indefinitely. This
was despite the Bush administration's two unfunded wars,
tax cuts and a prescription drug benefit that wasn't
paid for (indeed, the Bush excesses and the Bush
economic crash have contributed far more to the current
national debt than anything Obama has done). But the low
deficits reflected the growth, employment and
consumption generated by the housing bubble. We can't
reinflate that bubble, and we shouldn't want to. As
discussed below, we need a different basis for growth.

The most damaging implication behind the call to balance
our books now rather than get the economy moving is that
it assumes the current recovery is adequate and that
mass unemployment is the new normal. We will probably
see a flood of articles by economists explaining that
high unemployment is structural, and that workers don't
have the skills needed for the twenty-first-century
economy. As New York Times columnist and economist Paul
Krugman has written, this callous assumption is not only
wrong; it condemns millions of people to joblessness and
despair.

This election was fought over which candidate and which
party would do better at producing jobs and growth. To
turn to deficit reduction now would be a great betrayal.
But it would not be the only one.

Chump Change

The grand bargain not only offers the wrong answer; it
poses the wrong question. In Washington, the bargainers
intone the same mantra: It is a time for shared
sacrifice. Everything must be on the table, from
Medicare, Medicaid and Social Security to tax hikes. We
must all do our part.

The call for shared sacrifice makes no sense given that
in recent decades, the rewards have not been shared. The
middle class lost ground even before the Great
Recession, while the wealthiest 1 percent pocketed about
two-thirds of the rewards of growth. In the first year
after the recession, the top 1 percent pocketed a
staggering 93 percent of income growth, as the stock
market roared back but housing values and wages did not.
The pious summons to shared sacrifice violates both
fairness and common sense. Worse, the focus is on
programs for ordinary Americans and the vulnerable, not
on the people who have made out like bandits. For
example: our debt burden nearly doubled because Wall
Street's excesses blew up the economy and drove us into
the deepest recession in seventy-five years. So you
would think any discussion of how to reduce the deficit
would start by demanding that Wall Street pay for the
damage it caused. You would be wrong.

We are witnessing the worst inequality since the Gilded
Age. The top 1 percent of taxpayers pocket more income
each year than the bottom 40 percent, and they own more
wealth than 90 percent of Americans. Yet their tax rates
are near the lowest in post-World War II history. As
billionaire investor Warren Buffett has noted-and as
Mitt Romney has demonstrated with his 13.9 percent tax
rate on $20 million in income-the richest Americans are
often paying lower tax rates than their secretaries. You
would think that any discussion of reducing deficits
would begin with the assumption that there must be
higher tax rates on millionaires and billionaires. You
would be wrong.

Multinational corporations based in the United States
pay among the lowest effective tax rates in the
industrialized world. Many, like General Electric, earn
billions in profits and pay nothing. Lower rates,
corporate loopholes, offshore tax havens and transfer
pricing have reduced the corporate share of federal tax
revenues consistently since the 1950s. You would think
that any discussion of reducing deficits would begin
with a call for higher taxes on corporations and a
clampdown on overseas tax havens. You would be wrong.

The military budget has doubled over the past decade,
now exceeding what it was, in comparable dollars, at the
height of the cold war. The United States and its NATO
allies spend more on their militaries than the rest of
the world combined. At the same time, domestic spending-
with the temporary exception of Obama's 2009 stimulus
bill-has declined as a portion of the economy, despite a
growing population and spreading poverty. The president
brags that nonsecurity discretionary spending-everything
outside the military and guaranteed programs like Social
Security and Medicare-is projected to decline to levels
not seen since the Eisenhower era. The result is a
continued decline in public provision: decrepit sewers,
airports and bridges; an outmoded electric grid;
inadequate research and development; national parks in
decline; infants without adequate nutrition; families
without affordable shelter; glaringly inadequate
investment in public education from pre-K to college.
You would think the focus of any spending cuts would be
on the military, not on domestic spending. You would be
wrong.

Medicare, Medicaid and Social Security, the pillars on
which family security rests, are not generous. The
average annual Social Security benefit is $14,800,
sufficient only to put a minimal floor under seniors.
The average 65-year-old couple on Medicare will spend an
average of $230,000 out of pocket on healthcare over the
course of their retirement years. Without Social
Security, 14 million more elderly Americans would live
in poverty; without Medicare, few would be able to
afford medical expenses.

Americans want these programs protected. They are so
popular that politicians in both parties vied during the
election to show who would protect them the most.
Republicans strafed Obama and the Democrats by falsely
claiming that they cut $716 billion from Medicare to pay
for Obamacare. Joe Biden guaranteed absolutely that an
Obama presidency would not allow cuts in Social
Security. In an election night poll by the Campaign for
America's Future with Democracy Corps, fully 79 percent
of Americans-from across the political spectrum-stated
that they would find unacceptable any deal that cut
Medicare benefits; 62 percent opposed an agreement that
would cut Social Security over time. You would think
those programs would be off the table in any discussion.
You would be wrong.

The Sting

The general frame for the grand bargain violates almost
all these common-sense priorities. In Obama's 2011 talks
with Boehner, the president offered to trade cuts in
Medicare and Social Security for a tax reform that
lowered rates on the rich and corporations while closing
loopholes and exemptions to generate more revenue. Any
tax proposal to raise revenue that begins with cutting
top rates deserves only scorn. As Romney demonstrated
with his mathematically impossible tax proposal during
the campaign, raising significant revenue by cutting
rates and then closing loopholes isn't easy. To gain
enough revenue, popular middle-class deductions-for home
mortgages or employer-provided healthcare-are likely to
get hit. And of course, as we saw with the Reagan-era
tax law, such reforms eliminate loopholes but not
lobbies. Pretty soon, new loopholes are slipped in,
while rates remain at the lower level. The overall
result: a more regressive, unjust tax system.

How did politicians arrive at this bad bargain? The
essential dynamic is that Democrats reward Republican
intransigence with concessions. Republicans refuse to
hike taxes, so to entice them, Democrats offer the crown
jewels: Medicare and Social Security. Republicans still
resist tax hikes, so the austerity crowd suggests
"reform" that will in theory bring in more revenue while
lowering tax rates. Behind this are the big money
lobbies that rig the rules: the Wall Street bankers,
CEOs and private equity vultures who want to protect the
scandalously low tax rates they now enjoy. The result is
the outline of a deal that betrays promises made on the
campaign trail and compromises the historic legacies of
the New Deal and the Great Society. And it does all this
while addressing the wrong problem.

No Home to Go Back To

Last fall, as part of his comeback from the disastrous
negotiations over the debt ceiling, President Obama put
forth the American Jobs Act, calling for a $447 billion
program that included $65 billion to rebuild schools and
keep teachers on the job, $50 billion in infrastructure
spending, an extension of the payroll tax cut and other
measures. Senate majority leader Harry Reid offered to
pay for it with a surtax on millionaires. This was a no-
brainer, estimated to create another 1.9 million jobs by
2013. Republicans blocked all but a few minor parts.
Mysteriously, Obama walked away from his own plan,
choosing not to make an issue of it during the campaign.

Many assume that the White House will seek to add some
money for jobs in the coming grand bargain, as a
sweetener for Democrats. But this economy needs far more
than a short-term spending jolt. Although austerity and
stimulus head in opposite directions, they share one
assumption: that there will be a healthy economy to
return to one day. Austerians would cut deficits and
regulations. Stimularians would spend money and put
people back to work. But the economy was not working for
most Americans even before the Great Recession. The Bush
years witnessed the first "recovery" in which most
American households lost ground. Most real incomes went
down, not up. The wealthiest few captured most of the
rewards of growth. The middle class took on greater and
greater debt simply to stay afloat.

The Excluded Alternative

The debate we should be having is about how to make the
economy work for working people again, how to revive a
broad middle class and make the American Dream more than
a nostalgic fantasy. That would require both investments
now in areas vital to our future and a fundamental
change of course. It would include a strategy to revive
domestic manufacturing and thus reduce the destabilizing
trade deficits that have contributed to the global
crisis. It would include an industrial policy designed
to help the United States lead the new global green
revolution. A serious long-term commitment to rebuild
America would renovate our infrastructure to withstand
the extreme weather that is already upon us. It would
break up the big banks and shackle finance so that it
serves, rather than threatens, the real economy.
Measures to transform corporate governance, curb
excessive executive compensation, and empower workers to
organize and bargain collectively would help counter
extreme inequality.

The new foundation would also require doing at least the
basics in public education: universal preschool, small
classes in the early years, greater rewards and respect
for teachers, after-school programs, affordable college
and advanced training. And of course it would feature
progressive tax reform, compelling the wealthy and
corporations to pay their fair share. It would continue
healthcare reform and guarantee affordable care as a
right for every citizen, not a privilege allowed only to
those who can afford it. This requires taking on the
most powerful and entrenched interests: multinationals
that drive trade policy, Big Oil's hold on energy
policy, Wall Street's grip on financial regulation, the
military-industrial complex, the medical-industrial
complex and more.

In the salad days of his presidency, Obama called for
rebuilding the economy on a new foundation, not on the
shifting sands of debt and bubbles. His recovery act,
healthcare reform, Wall Street reforms and energy bill
were first steps in that effort. But just as his
premature turn to deficit reduction sabotaged the need
to expand the initial recovery act, his turn now to a
grand bargain will squelch any serious discussion of
fundamental reforms.

Will Democratic legislators join Republicans in a danse
macabre of austerity, accepting mass unemployment as the
new normal? Will Democrats support a deal that cuts
Medicare, Medicaid and Social Security while lowering
tax rates on the rich and corporations? Will they
embrace an austerity that makes vital public investments
impossible? We've just completed a money-drenched
election, and many Democratic officeholders will be
tempted to curry favor with the deep pockets once more.
But no one should be misled. Obama doesn't have to run
for re-election-legislators do. Voters want Medicare and
Social Security protected, not cut. They want jobs and
growth, not deficit reduction at the price of higher
unemployment. Politicians who embrace such a deal may
reap the whirlwind.

The battle lines are being drawn. The AFL-CIO, SEIU and
AFSCME have announced labor's opposition to cuts in
entitlement programs and to continued tax cuts for the
rich. Groups representing the base of the Democratic
Party-from African-Americans to Latinos, women and the
young-are lining up around a four-point program calling
for jobs first; protecting Medicare, Medicaid and Social
Security; letting the top-end Bush tax cuts expire; and
protecting programs for the vulnerable.

Reaching no deal is preferable to a bad one that cuts
entitlements. Going over the so-called fiscal cliff is
perilous, but probably preferable to a bargain under the
terms currently in play. With no agreement, the Bush tax
cuts would expire. In January the Senate would
immediately push to revive the lower rates for everyone
but the top 2 percent. Republicans could vote for tax
cuts, but rates at the top would rise. The automatic
spending cuts would not kick in immediately (although
the stock market might feel the hit quickly). But the
thing to remember about failure to reach a deal before
January is that Medicare, Social Security and many
programs for the most vulnerable are shielded from the
cuts. And the new Congress would likely act rapidly to
reverse the cuts to military and domestic spending. The
already faltering recovery would surely weaken,
threatening the loss of more jobs. But that might force
Congress to address the real crisis-jobs and growth-
rather than court a ruinous austerity.

Whatever the outcome, the battle is likely to be only
the first skirmish of a defining struggle over the
future of the Democratic Party and the progressive
movement. We've just had what might be called the first
of a new era of class-warfare elections. The plutocracy
ran one of their own, on their agenda and with their
money. The American people's rejection of Mitt Romney,
despite the lousy economy, demonstrated the declining
appeal of the conservative, trickle-down agenda. The
budget debate will draw battle lines within the
Democratic Party, between the Wall Street-dominated New
Democratic wing and the progressive wing fighting for
the change this country desperately needs.

We are headed into a new era of upheaval. Our money-
soaked politics may suffocate growing demands for
change. But if Democratic legislators join the president
in a grand betrayal, they may witness a powerful Tea
Party movement from the left, as Republican legislators
have from the right.

(2)
Waging Class War

In 2012, candidates who supported the economic interests
of the many over the few won their elections. Populism
was the voice, but economic opportunity was the message.
The pundits may wring their hands, but in the future it
won't be values voters, angry white men or soccer moms
that win elections. It will be class war.

by Robert L. Borosage
Wage Class Warfare
Last modified November 18, 2012
http://wageclasswar.org/

In 2012, class warfare broke out in American politics.
And from the president to key Senate races, the middle
class won.

When the 2012 campaign began, the lousy economy made
President Obama vulnerable. Republicans were favored to
take back the Senate, given retirements in conservative
states. Republican billionaires - the Koch brothers,
Adelson and others - put up big money in the effort to
have it all. Instead the president swept to victory, and
Democrats gained seats in the Senate and the House.

Many factors contributed. Republicans learned once more
the shortcomings of a stale, male, pale, Southern-based
party in a nation of diversity. The GOP "legitimate
rape" caucus helped give away two Senate seats. But too
little attention has been paid to the new emerging
reality. This was the first class warfare election of
the new Gilded Age - and the middle class won big.

The Republican nominee Mitt Romney was inescapably the
candidate of, by and for the 1 percent. He came from the
world of finance and carried their agenda. He won the
primaries, as Newt Gingrich complained, because he had
more billionaires than anyone else. And the rich right
were on a wilding, not only funding the Romney campaign,
but also filling the coffers of superPACs and their
offspring with hundreds of millions of dollars.

The class war, ironically, broke out in the Republican
primaries. After Romney's victory in New Hampshire, Newt
Gingrich and Rick Perry savaged Romney as a "vulture
capitalist," the "man from Bain" who profited from
breaking up companies, shipping jobs abroad, and leaving
a broken carcass behind. Romney's negatives soared,
reaching the highest on record.

And of course Romney reinforced the impression with
revealing moments that exposed his yacht club
cluelessness: "Corporations are people, my friends"; "I
like firing people"; elevators for his cars; the $10,000
bet; $375,000 in speaking fees "isn't a lot of money";
trying to appeal to Bubba because he knows a lot of
NASCAR owners. He secreted his past income tax
statements, while the one he revealed exposed a 14
percent tax rate on over $20 million in income, with, in
the imitable phrase of former Ohio Governor Ted
Strickland, his money "wintering in the Cayman Islands
and summering in the Swiss Alps."

Needless to say, Obama is neither by temperament nor
predilection a populist class warrior. But faced with
potential defeat, he turned to what works. The depths of
the Obama presidency came in the summer of 2011 after
the debt ceiling debacle, in which the president was
roughed up by Tea Party zealots, and emerged looking
weak and ineffective.

Obama came back by deciding to stop seeking back-room
compromises with people intent on destroying him and to
start making his case. In the fall, he put out the
American Jobs Act and stumped across the country
demanding that Republicans vote on it. His standing in
the polls began to rise. Then Occupy Wall Street
exploded, driving America's extreme inequality and
rigged system into the debate. In December, the
president embraced the frame: He traveled to Osawatomie,
Kansas, revisiting a campaign stop Teddy Roosevelt had
made in the first Gilded Age. He indicted the "you're on
your own" economics of Republicans while arguing that
"this is a make-or-break moment for the middle class,
and for all those who are fighting to get into the
middle class."

In the run-up to the election, the president's campaign
employed two basic strategies. First, the president
consolidated his own coalition. He defended
contraception and pay equity while his campaign attacked
the Republican "war on women." He reached out to
Hispanics by ending the threat of deportation for the
Dream kids. He not only ended "don't ask, don't tell,"
but also moved to embrace gay marriage. Widely described
as socially liberal measures, these were also profoundly
bread-and-butter concerns. Could women choose when to
have children? Could Hispanic children be free to pursue
the American dream? Could gay people gain the economic
benefits of marriage?

At the same time, the president's campaign made a risky
but remarkably successful decision. Their opinion
research showed that painting Romney as a flip-flopper
had little traction, but the attacks on vulture
capitalism hit home. They decided to spend big money
early in such key states as Ohio on a negative ad
barrage defining Romney as the heartless vulture
capitalist from Bain. Both campaigns believe that Romney
never recovered.

But rhetoric and attack ads alone would not have
sufficed. In critical Ohio and the Midwest the president
was buoyed by one of his most activist - and
controversial - interventions: the rescue of the auto
industry. Unpopular at the time, opposed by many of his
advisors, the auto rescue was risky, painful and messy.
But it became the president's closing argument, for
workers knew that he had their backs when they were in
trouble.

And when Romney put Rep. Paul Ryan on his ticket,
Medicare became central to the debate. Republicans
labored to portray themselves as the defenders of
Medicare, attacking the president for cutting "$716
billion out of Medicare to pay for a health care plan no
one wanted." But in the Democracy Corps/CAF election
night poll, the president had a greater margin on who
would do better on Medicare than on any other issue.

And of course, perhaps the most telling bit of class
attack was self-inflicted: Romney's infamous scorn for
the "47 percent" of Americans who are "victims" who
"don't take responsibility for their lives." Many
Americans took the comments, uttered in a private
setting before deep pocket donors, as revealing Romney's
true feelings. The Obama campaign took full advantage
and opened up the largest lead of the campaign going
into the first debate.

The president's listlessness in that debate showed how
vulnerable he was.Voters wanted change. They
overwhelmingly think the country is on the wrong track.
The president's campaign - from its slogan "forward!" to
its closing argument - perversely refused to offer
anything than more of the same. As Bill Clinton pled at
the Democratic Convention, his policies just need more
time.

That left Romney an open field to be the candidate of
change. But the Bain attacks countered his central
argument, "I'm a businessman; I can fix this." His
agenda - a warmed over stew of conservative staples -
let Obama argue that we can't go back to what got us in
this mess. The Republican convention, with its
disingenuous "we built this" thematic, gave Romney no
boost. In the end, voters gave Romney a small edge on
who would do better on the economy, but they gave Obama
a big edge on who better understands "people like me,"
or who will do better restoring the middle class.

Most important, "God, guns and gays" didn't work this
time. The socially divisive tricks that political
operatives Lee Atwater and Karl Rove perfected to divide
working people and counter populist appeals backfired.
The Republican effort to suppress the vote aroused
insulted African American and young voters. The harsh
anti-immigrant posturing of the Republican primaries
drove Hispanics and Asians into Democratic arms.

Class warfare also benefited Democrats in Senate races.
Elizabeth Warren, the scourge of Wall Street, used a
powerful economic populist message to beat Massachusetts
Sen. Scott Brown, a popular incumbent and Tea Party
poster boy, running a smart campaign that sought to
label her an elitist "professor" who manipulated
affirmative action to get ahead.

Ohio Sen. Sherrod Brown faced over $30 million in
outside negative ads, as Karl Rove made him his leading
target. He won as a consistent champion of working
people, for the auto rescue, against corporate trade
accords, for taking on the big banks. Tammy Baldwin, the
only openly gay woman in the Congress, took down the
favored former governor of Wisconsin, Tommy Thompson,
largely by painting him as a lobbyist for special
interests divorced from the concerns of working people.
And Heidi Heitkamp produced the biggest upset of all in
North Dakota, running an old-time plains populist
campaign, for Medicare and Social Security, against
corporate trade deals, while savaging her opponent for
mistreating tenants in his housing projects.

America's growing diversity and its increasingly
socially liberal attitudes played a big role in this
election. But looking back, we are likely to see this as
the first of the class warfare elections of our new
Gilded Age of extreme inequality. A besieged middle
class is increasingly aware that the rules are rigged
against them. They are increasingly skeptical of
politicians and parties, and believe - not incorrectly -
that Washington is largely bought and sold. But they are
looking for champions.

For years, conservatives in both parties have warned
against class warfare. Americans, we're told, don't like
that divisiveness. They see it as the politics of envy.
Inequality should, as Mitt Romney said, only be talked
about in back rooms.

Nonsense.

More and more of our elections going forward will
feature class warfare - only this time with the middle
class fighting back. And candidates are going to have to
be clear about which side they are on. Politicians in
both parties are now hearing CEOs telling them that it
is time for a deal that cuts Medicare and Social
Security benefits in exchange for tax reform that lowers
rates and closes loopholes. Before they take that
advice, they might just want to look over their
shoulders at what will be coming at them.

___________________________________________

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on the left that will help them to interpret the world
and to change it.

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