Mutually Assured Destruction

by digby

I’ve been reading some rather amusing emails this morning about this new polling suggesting that the public is really upset about deficits. People seem to suddenly be getting the idea that Democrats talking like a bunch of fiscal conservatives all the time might just be counterproductive. I’ve been a Cassandra on this issue for many years and it gives me little pleasure to say “I told you so,” but,well, I did.

There was never any doubt that the fiscal scolds would come out of the woodwork once the Republicans were out of office and there was never any doubt that the public would buy into the notion that deficits were a huge danger to their financial security. This is because nobody has ever even tried to tell them otherwise for more than 30 years and they have nothing else to explain why everything has gone to hell in a handbasket. (Lord knows it would be wrong to blame the drunken gambling elite who nearly destroyed the world economy. That would be “class warfare” and there’s nothing more unseemly than that.)

Low taxes, eliminating welfare (“as we know it”) demagogueing entitlements and expanding military spending has pretty much been Reagan’s program which both parties continue to run on and govern with. You’ll recall that Bill Clinton declared “the era of big government is over.” And Obama famously evoked Reagan during the campaign and more recently talked about striking a “Grand Bargain” on cutting “entitlements.” (Or Peter Orzsag saying that social security reform is “a test of manhood.”)

Of course, this comes back to the basic problem of the Democratic party which lost its moorings some time back and even with a huge majority can’t seem to figure out how to govern outside the center right paradigm. (That assumes they would even want to do that, which is, at this point, highly questionable.)

On health care, arguably the most important Democratic initiative of our lifetimes, they are bargaining away any hope of real success because basically it cannot fit into the Reagan governance program. They took single payer off the table years ago and the presidential candidates kicked it completely out the door. Today, as dday lays out in all its ugly detail below, they are bargaining away the public option, the only hope of keping the insurance companies from irrevocably corrupting the reform efforts. Evidently, they refuse to fight the insurance companies which, after the banks (who have also asserted their ownership of the US government) are their most valued benefactors. (I should point out that I did hear a White House spokesperson say that the insurance companies were being “partners” in reform simply because they are good Americans, so perhaps I’m being too harsh.)

The bipartisan elite consensus that governs this country is quite simple. First, deficits and high taxes are always the basic cause of economic stress or the biggest threat facing a recovery, no matter the circumstances. (The corollary is that cutting taxes and spending are the ultimate answer to every economic challenge.) Taxes on the wealthy (excuse me “the most productive”) must be kept as low as possible, the military cannot be subject to any budgetary constraint and the national security state cannot be held accountable, business and industry must always be given top priority and all other government expenditures are legislative bargaining chips regardless of their impact on the lives of average Americans. Nobody questions that consensus or even suggests that some other set of priorities might be useful from time to time.

I see nothing that makes me think any of that is changing, regardless of my hopes that it might. There was always a chance that given enough power and a crisis situation, the Democrats would see a chance to break the consensus and create a new one on their own terms. But it was always a long shot.

If you look at California today, where Reagan had a big head start, you can see where the country is headed if we don’t change direction.

Update: Perlstein, currently wallowing in the excesses of the 70s, writes in to point out that it didn’t start with Clinton. It started with an earlier southern center-right Democratic president:

“We need patience and good will, but we really need to realize that there is a limit to the role and the function of government. Government cannot solve our problems, it can’t set our goals, it cannot define our vision. Government cannot eliminate poverty or provide a bountiful economy or reduce inflation or save our cities or cure illiteracy or provide energy.”

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