Who is Influencing Obama’s Budget Proposal? Follow the Funders. » New Deal 2.0

robert-johnsonHow the brave new world of money in politics is compromising America’s future.

President Obama is a smart man. When Gallup surveys suggest that unemployment is around 10 percent — and that unemployment plus underemployment is 19 percent of the workforce — then it’s clear that the best way to raise revenues and close the deficit is to put people back to work. President Obama surely knows this. But his actions don’t seem to follow this obvious logic. Why is that?

Part of the reason lies in a group of people who pour money into our political system but don’t necessarily want the same things that ordinary Americans want. In fact, some of these people benefit from municipal crises, breaking teachers unions, and increasing the fear of the workforce. They fall disproportionately into the group that Harvard professor Lawrence Lessig identified as “the funders” in his recent TedX Talk in San Antonio, Texas. The increasing power of this group produces political contortions by buying results in Congress that do nothing for regular folks. Their influence also steers President Obama to focus on his reelection rather than trying to change the climate of opinion and become America’s Great Persuader. The public has now heard the conservative mantra that government is the problem and not the solution for 40 years. Couple that with the experience of valid rage following the bank bailouts, and it’s not surprising that the public overwhelmingly feels that the government has become an instrument of the wealthy and powerful. Strong leadership is needed to challenge this narrative. But the President seems content to conform to the prevailing suspicion of government. He fails to convince the public that the government can have an active response to the jobs crisis — a response that benefits them, not monied interests.

And that suits many funders in the top 3 percent of the wealth distribution just fine.

With profits so high and so many slack resources, it is sad that President Obama continues on the path of “triangulation” and chooses to “pre-concede” so much to the Republicans. In electoral terms, the breaking of all of the unions at the state and local level will serve to benefit the Republican party in many regions and exacerbate inequality. It is surprising the the President does not resist this for the benefit of his own party’s future. But Presidents often fly solo rather than represent their party when reelection looms — especially in a post-Citizens United world that will be influenced by unprecedented rivers of money.

Looking forward, we can see that our infrastructure is worn out in many, many places. We can also see that a dearth of public goods, education, basic science and infrastructure portend a weakening of the living standard of our nation. President Obama seemed to acknowledge this in his State of the Union address vision. But his budget strategy does not. The current budgets, both Democrat and Republican, appear to be imposing cuts on the lower middle class and poor. We are, as Paul Krugman said in the New York Times on Monday, eating our future.

Unfortunately, the proposed budget appears more likely to contribute to the ongoing widening of wealth and income inequality. And it seems more likely to increase, rather than reduce, the idle resources in our society. This budget logic makes little sense, and the human costs are dreadful. Only the logic of power sheds light on our path of dysfunction in the USA. Andrew Mellon must be smiling.

Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.