Manufacturing Crisis Yet Again

The history of neoliberalism has been wrought with crises from the 86 S&L imbroglio to the 87 stock market collapse to the Asian, Russian and Argentinian financial collapses to the 2007-08 world near-depression. One could argue that all of these resulted from the push toward deregulation and austerity packages in first the developing and now developed worlds. Crises, as Stieglitz notes, have increased dramatically since the early 90s, resulting from the "liberation" of markets, deregulation and abrogation by governments of responsibility for managing local and global economic affairs (giving that duty to corporations and financial institutions). The latest crisis on the horizon is the so called fiscal cliff that stands but a month or so away. But is this really a crisis in the offing? In fact, according to leading economists like Paul Krugman, it is anything but. Some facts to clarify the nature of another conservative ploy that the oh so incredulous media is more than happy to uncritically parrot (courtesy of Moveon.org):
  

3. The "Fiscal Cliff" Is A Myth. As Paul Krugman put it, "The looming prospect of spending cuts and tax increases isn't a fiscal crisis. It is, instead, a political crisis brought on by the G.O.P.'s attempt to take the economy hostage." Republicans are manufacturing this crisis to pressure Democrats to extend the Bush tax cuts for the wealthy and accept painful cuts to Social Security, Medicare, and Medicaid.
4. The Bush Tax Cuts Finally End December 31. If Congress does nothing, the ax will fall on all the Bush tax cuts on New Year's Eve. Then, on January 1, the public pressure on John Boehner and House Republicans to extend the middle-class tax cuts (already passed by the Senate and waiting to be signed by President Obama) will become irresistible. So the middle-class tax cut will eventually get renewed, and we'll have $823 billion more revenue from the top 2% to do great things with.
5. The Sequester. The sequester is another political creation, forced on Democrats by Republicans in exchange for lifting the debt ceiling last year to avoid crashing our economy. It's a set of cuts (50% to a bloated military budget and 50% to important domestic programs) designed to make both Republicans and Democrats hate it so much that they'd never let it happen. And the cuts can be reversed weeks or months into 2013 without causing damage.
6. The Big Three. Nothing happens to Social Security, Medicare, and Medicaid benefits on January 1—unless Republicans force painful cuts to beneficiaries in exchange for tax increases on the wealthy, which are going to happen anyway if Congress does NOTHING. So, there's literally no reason benefits cuts should be part of the discussion right now.
7. We Should Be Talking About Jobs. The real crisis Americans want Congress to fix is getting people back to work. And with just a fraction of that $823 billion from the wealthiest 2%, we could create jobs for more than 20,000 veterans and pay for the 300,000 teachers and 52,000 first responders, which our communities so desperately need. That's not to mention jobs from investing in clean energy and our national infrastructure. 

As I have pointed out repeatedly on this blog, the GOP is so adroit at manufacturing crises and lies, they quickly become conventional wisdom. The media is too liberal, so it pushes right. There is no such thing as global warming, so let's not even discuss the future of the planet and its inhabitants in a presidential election year. 911 and Sadaam Hussein are somehow connected so let's attack. And on the list goes. At the top for over 30 years is the uncritical statement that government is bad and markets good. This has been fortified as time has passed by the duel notion that taxes are always bad and the government can do nothing to help people in times of economic hardship. Now they are holding the entire country and potentially global economy hostage to ensure that the richest Americans do not pay another few percentage points in taxes. It is an absurd argument from the party of the absurd. Ionesco could right a play based on the GOP today, but he wouldn't even need to change the script from the reality to make it absurd. And so the discrete alarm of the bourgeoisie continues to rule the debate ...