A Merry Obama Christmas

It was a good week for Obama according to most politicos. He got repeal of DADT, passage of the arms treaty with Russia, and adoption of the 9-11 victims’ medical funding. After a shellacking on November 2, many see these accomplishments as signs that Obama is not dead and that he is well on the road to redefining his presidency and proving that he will be able to work with the GOP for the next two years. There is, a new life for Obama and he demonstrated that he has the skill to work across the aisle. Obama proved his abilities and competencies this past week.

This is the conventional reading of what happened. But is this reality? Maybe, but I think a lot more has to do with the fact that Obama capitulated on one big item–the Bush era tax cuts–and as a result the GOP got what it really wanted and all else did not matter.

Let’s look at the victories of the last few weeks. Obama gets unemployment insurance extensions, some minor stimulus in the tax bill, and then all the legislation noted above. All good perhaps, but there are other ways to look at all this.

First, too little too late. By that, Obama gets all this way past when it mattered. He needed to get much of this before November 2, to help him and the Democrats. Repeal of DADT before then might have helped with his base. But it took until the last minute after the election to get it repealed. It provided no political bump for November 2, and it is not clear how much passage of any of these items will be either to his base or swing voters in 2012.

Second, many of these items should have been secured easily. An arms treaty, extension of unemployment, and DADT, all should have been easy. Some of them should have received broad GOP support especially when many workers are Republicans who have lost their jobs. Thus, it is good they passed, but that should have happened all along. Obama gets credit for doing now what should have been no brainers earlier in the year. Good job.

But was it Obama’s skills that rounded up Democrats and eroded GOP opposition? This is Obama’s read. However, for the most part, the GOP gave up fighting on these because in the end they were the hostages in a bigger battle–tax cuts for the wealthy.

It’s the (capitalist) economy stupid!
What really mattered to the GOP was the extension of the Bush tax cuts to the rich. This is what they really wanted. It means mega billions for the rich, a massive continuation of wealth transfer or retention for America’s wealthy. It is worth hundreds of billions to them, even though the tax cuts do little or nothing productive in terms of producing jobs, investment, or helping the economy. The cuts do little to stimulate, they do little to ease unemployment, they do little to address home owner foreclosures, they do little to encourage capital investment in the new green economy or in upgrading our infrastructure. They do add $900 to the federal deficit!

The GOP got what they wanted. They and Obama were willing to mortgage America’s fiscal future to serve their political needs.

Once Obama capitulated on the tax cuts he essentially melted GOP resistance on everything else that was being held hostage. To the GOP they were minor issues. Don’t get me wrong, repeal of DADT is important, as is the arms treaty and the other measures passed. But they pale in comparison to the GOP and others in terms of the economic consequences of the tax cut. The cuts continue the economic era of Reagan and Bush, failing to really reverse course on what matters most–the economy.

The melting of GOP opposition on many issues demonstrates how many social and other issues are simply sideshows and wedge issues for the bigger game of the economy and protecting rich corporate interests. Sadly, Obama went along with that in his effort to refine his presidency. He got some things he wanted but at the expense of losing the big one on taxes and the economy.

Thus, the great skill Obama might have demonstrated this past week was to recognize that he could win on all the other issues so long as he gave on this big one. Merry Christmas from Barack Obama.