Those voters who thought the election results might convince Obama to get some spine and stand for the little people against the monied interests had a rude awakening today. Bowing to Republican pressure--caving at the git-go without getting anything in return--Obama instituted pay freezes for two million Americans who work for the federal government (but not Congress, or Congressional staffers, or government contractors, or military personnel, or federal court judges and workers). He justified his action as "getting this deficit under control" while claiming to empathize with the people whose lives he was impacting. See O'Keefe, Obama announces 2-year pay freeze for federal workers, Washington Post, Nov. 29, 2010.
I think John Gage of the American Federation of Government Employees has it right when he claims that this is "nothing more than political public relations". The stagnation in wages that the corporate coalitions have successfully imposed on a de-unionized private sector with no strong voice for working people will now be imposed on federal government workers as well, with the austerity measure tending to exacerbate, not improve, the Great Recession problems of too few jobs with too little pay. Meanwhile, the country's wealthy elite--bankers with their multi-million dollar takehomes, CEOs making an average of $14 million a year, private equity managers getting capital gains preference on their services income of hundreds of millions a year, and other elite managers and owners of financial assets--will continue raking in the lion's share of any economic growth and the lion's share of the tax expenditures in the budget. (About 70% of American taxpayers don't even itemize, so the itemized deductions are already benefiting a mere 30%, and the big deductions--like charitable donations of high value, low basis stock--are for the truly wealthy).
Surely if Obama was going to freeze wages he should have gotten something in return--like, for instance, an agreement from the Republicans to pass a middle income tax cut without encumbering it with another giveaway tax cut for the rich, or a promise to lift the Social Security cap so that wealthy people pay Social Security on their millions just like poor folks pay on their few dollars. (Better still, a promise to apply the Social Security tax to all income, whether earned or unearned. Or an agreement to do away with the capital gains preference altogether, etc.) As it is, the Republicans like Darrell Issa (from a state that the Republicans have successfully run into the ground with similar attempts to avoid needed tax increases) just call on Obama to do even more of their dirty work for them ushering in the corporate state. And Obama is already talking federal furloughs.
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