The Obama Budget

By Robert Reich, Robert Reich's Blog

15 February 11

The Obama Budget: And why the coming debate over spending cuts has nothing to do with reviving the economy.

resident Obama has chosen to fight fire with gasoline.

Republicans want America to believe the economy is still lousy because government is too big, and the way to revive the economy is to cut federal spending. Today (Sunday) Republican Speaker John Boehner even refused to rule out a government shutdown if Republicans don't get the spending cuts they want.

Today (Monday) Obama pours gas on the Republican flame by proposing a 2012 federal budget that cuts the federal deficit by $1.1 trillion over 10 years. About $400 billion of this will come from a five-year freeze on non-security discretionary spending – including all sorts of programs for poor and working-class Americans, such as heating assistance to low-income people and community-service block grants. Most of the rest from additional spending cuts, such as grants to states for water treatment plants and other environmental projects and higher interest charges on federal loans to graduate students.

That means the Great Debate starting this week will be set by Republicans: Does Obama cut enough spending? How much more will he have cut in order to appease Republicans? If they don't get the spending cuts they want, will Tea-Party Republicans demand a shutdown?

Framed this way, the debate invites deficit hawks on both sides of the aisle to criticize Democrats and Republicans alike for failing to take on Social Security and Medicare entitlements. Expect Erskine Bowles and Alan Simpson, co-chairs of Obama's deficit commission, to say the President needs to do more. Expect Alice Rivlin and Paul Ryan, respectively former Clinton hawk and current Republican budget hawk, to tout their plan for chopping Medicare.

It's the wrong debate about the wrong thing at the wrong time.

To official Washington it seems like 1995 all over again, when Bill Clinton and Newt Gingrich played a game of chicken over cutting the budget deficit, the hawks warned about the perils of giant deficits, and the 1996 general election loomed over all. Washington politicians and the media know this playbook by heart, so it's natural for them to take on the same roles, make the same arguments, and build up to the same showdown over a government shutdown and a climactic presidential election.

But the 1995 playbook is irrelevant. In 1995 the economy was roaring back to life. The recession of 1991 had been caused (as are most recessions) by the Fed raising interest rates too high to ward off inflation. So reversing course was relatively simple. Alan Greenspan and the Fed cut interest rates.

In 2011 most Americans are still in the throes of the Great Recession, which was caused by the bursting of a giant debt bubble. The Fed can't reverse course by cutting interest rates; rates have been near zero for two years.

Big American companies are sitting on almost $2 trillion of cash because there aren't enough customers to buy additional goods and services. The only people with money are the richest 10 percent whose stock portfolios have been roaring back to life, but their spending isn't enough to spur much additional hiring.

The Republican bromide – cut federal spending – is precisely the wrong response to this ongoing crisis, which is more analogous to the Great Depression than to any recent recession. Herbert Hoover responded the same way between 1929 and 1932. Insufficient spending only deepened the Great Depression.

The best way to revive the economy is not to cut the federal deficit right now. It's to put more money into the pockets of average working families. Not until they start spending again big time will companies begin to hire again big time.

Don't cut the government services they rely on – college loans, home heating oil, community services, and the rest. State and local budget cuts are already causing enough pain.

The most direct way to get more money into their pockets is to expand the Earned Income Tax Credit (a wage subsidy) all the way up through people earning $50,000, and reduce their income taxes to zero. Taxes on incomes between $50,000 and $90,000 should be cut to 10 percent; between $90,000 and $150,000 to 20 percent; between $150,000 and $250,000 to 30 percent.

And exempt the first $20,000 of income from payroll taxes.

Make up the revenues by increasing taxes on incomes between $250,000 to $500,000 to 40 percent; between $500,000 and $5 million, to 50 percent; between $5 million and $15 million, to 60 percent; and anything over $15 million, to 70 percent.

And raise the ceiling on the portion of income subject to payroll taxes to $500,000.

It's called progressive taxation.

The lion's share of America's income and wealth is at the top. Taxing the very rich won't hurt the economy. They spend a much smaller portion of their incomes than everyone else.

Sure – take some steps to cut federal spending over the longer term. Cut the bloated defense budget. Tame the growth in healthcare costs by allowing the federal government to use its bargaining clout - as the nation's biggest purchaser of drugs and hospital services under Medicare and Medicaid and the Veterans Administration – to get low prices. While we're at it, cut agricultural subsidies.

But don't believe for a moment that federal spending cuts anytime soon will get the economy growing soon. They'll have the opposite effect because they'll reduce total demand.

The progressive tax system I've outlined will get the economy growing again. This, in turn, will bring down the ratio of the debt as a proportion of the total economy - the only yardstick of fiscal prudence that counts.

But we can't get to this point – or even to have a debate about it – if Obama allows Republicans to frame the debate as how much federal spending can be cut and how to shrink the deficit.

The President has to reframe the debate around the necessity of average families having enough to spend to get the economy moving again. He needs to remind America this is not 1995 but 2011 - and we're still in a jobs crisis brought on by the bursting of a giant debt bubble and the implosion of total demand.

---

Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.

Foucault- The Nature of Discourse

I just found this text and it looks like something worth paying attention to.

Foucault 

The Nature of Discourse 

In order to begin this investigation into the relevance of Foucauldian theory, I believe it is 

important to arrive at a contextual definition of power, which has become a very 

multifaceted expression in the present age. Is power in cyberspace entirely decentralised 

as the utopian camp would have us believe, or is this a myth and in actuality it is held by 

a few companies/institutions? It would appear on the surface that the Internet facilitates 

decentralised power, with all having equal publishing rights and free speech. The 

commonly accepted virtual ideology upholds this utopian view of power as decentralised, 

but we need to look at Foucault here to establish a theoretical framework. Although 

Foucault died of Aids in 1984 his theories of power and discourse provide a ‘vehicle for 

thought’, enabling us to map existing notions onto cyberspace. Through looking at the 

interplay between discourse and ideology, I hope to illuminate a Foucauldian theory of 

power in cyberspace, whilst maintaining a clear direction and sense of purpose. This use 

of Foucault’s method will be self-conscious at every stage in order to provide signposts 

for future research. Before I can bring any Foucauldian logic to bear on cyberspace, we 

first need to look closely at his method of historical study through analysis of discourse.  

Foucault's concept of discourse is an important one for understanding much of his 

thinking on power. According to Foucault discourses are historically situated truths or 

means of specifying knowledge. Power and knowledge are intimately linked together 

through a multiplicity of discursive elements, and ultimately bond in the formation of 

discourse.  

“We must make allowance for the complex and unstable process whereby discourse can 

be both an instrument and an effect of power… Discourse transmits and produces power; 

it reinforces it, but also undermines and exposes it, renders it fragile and makes it 

possible to thwart it… there can exist different and even contradictory discourses within 

the same strategy…” (Foucault, 1990, 101)  

At the same time as producing power, discourse is also produced by it, as legitimating 

discourses produce counter discourses attacking the same validation. That is to say, for 

every discourse there is an alternative reading. Foucault states that there can be no power 

without resistance, as counter discourses produce new knowledge and ways of thinking. 

Thus ‘truth’ is never an absolute, as it is constituted through discourse. By means of an 

example one might consider the recent feminist thinking that has contested the stability of 

the categories of sex and gender. Within the strategy of Feminism there exist multiple 

discourses approaching the problem of equality from different perspectives. 

“The theory that bodies are not biological essences, but are culturally constructed, just as 

much as sexuality and sex are cultural constructions, hobbles the possibility of a feminist 

identity grounded in any kind of “natural” category of women” (Ramazanoglu, 1993, 

116). 

Broadly speaking the two main camps of feminist thought oppose each other on these 

very grounds. On the one hand ‘Goddess’ feminism seeks a spiritual connection with 

mother earth, and on the other there is radical feminism, which rejects everything that can 

be plausibly situated within male defined institutions. These are but two counter 

discourses to a system of compulsory heterosexuality. These resistant discourses speak 

new truths, validating different sexual identities right across the board. As one such 

resistant discourse, feminism utilises Foucault’s notion of bodies as a battleground of 

interests and power. 

“Bodies are produced, understood, deployed in the service of certain interests and 

relationships of power… Foucault’s understanding of bodies as the simultaneous source 

and product of a notion of self allows for strategic redeployment of these embattled 

bodies” (Ibid., 115). 

Jana Sawiki (1991) notes that Foucault’s theory of identities as culturally constructed and 

plural gives rise to a ‘politics of difference’ where different identities intersect, 

multiplying the forms of resistance.  

“Where there is power there is resistance” (Sawiki, 1991, 56). 

Indeed power always produces resistance through discourse. Power relations are 

established within the historical field of conflict and struggle, with the potential for 

liberation and domination, just as discourse legitimates or opposes the societal order. 

“Foucault does not hope to transcend power relations altogether but rather to multiply the 

forms of resistance to the many forms that power relations take” (Ibid., 62). 

Foucault’s politics of difference rejects humanism, which places the subject at the centre 

of history and reality, as the subject is fragmented and decentred in the social field 

through the very process of subjectivisation. For example the technologies of femininity 

(i.e. makeup, dress, how to walk in high heels etc.) subjugate by developing skills & 

competencies.  

“Disciplinary technologies control the body through techniques that simultaneously 

render it more useful, more powerful and more docile” (Ibid., 83). 

These are highly effective as they enhance the power of the subject at the same time as 

subjugating him/her. However, female body builders define a new aesthetic that 

destabilises feminine bodily identity and confuses gender. As power cannot exist without 

resistance, individuals are the vehicles as well as the targets of power. Audre Lorde, a 

black lesbian feminist mother and poet remarks: 

“I find that I am constantly being encouraged to pluck out some one aspect of myself and 

present this as the meaningful whole” (Ibid., 65).  

Being the vehicle as well as the target of power in this case necessitates the repression of 

other character aspects. It is through disciplinary technologies and the notion that power 

cannot exist without resistance, that women are produced by patriarchal power at the 

same time as they resist it. One of Foucault’s principal aims was to analyse the power 

relations governing the production and dissemination of discourses. He was aware that 

oppositional discourses often extend the very relations of their own domination. Critical 

feminist theory has resistance to identification built into it as dis-identification with 

femininity, as it has been defined by a male dominated society. 

Thus far in the chapter I have introduced the concept of discourse as constituting its own 

truth. This is a crucial mechanism for understanding a Foucauldian application of theory, 

as it forms a conceptual base that theoretical building blocks may be placed on top of. We 

can already see the relevance to this thesis, as power being constituted through discourse 

is extremely pertinent when one considers the nature of cyberspace as a facilitator of 

discourse transactions. From here the discussion moves onto ‘bio-power’ and 

‘genealogy’, as Foucauldian mechanisms serving the theoretical project of an “invitation 

to discussion” (http://www.leeds.ac.uk/ics/ctr-fou3.htm, 1). 

Bio Power and Genealogy 

“[Foucault]… he examines particular ways whereby the conception of a subject and its 

domain, such as sexuality, punishment or pathology, is constituted within knowledge as a 

concern central to a specific age, society or social stratum” (Featherstone, Hepworth & 

Turner, 1991, 226). 

The conception of a subject as central to a specific age involves locating the body as a 

site for the operations of power. It is primarily through sex and the establishment of 

‘normal’ behaviour by society that the notion of bio-power arises. The new domain of 

political life constituted by body (bio) politics consists of the following aspects: 

“…the investment of the body with properties making it pliable to new technologies of 

control; the emergence of normalisation; the divestment of power from an absolute 

sovereign to a magnitude of regulative agencies located throughout the social body; and, 

the advent of empirical human sciences, making possible these new technologies of 

control” (Ibid., 228). 

In cyberspace these regulative agencies are replicated from real life, for example you may 

be punished for illegal acts. However there are also specific instances of self regulatory 

systems such as moderated discussion groups, where the group itself upholds order by 

“flaming” (reproaching by expressing a point of view opposed to the recipient; also 

verges on character assassination), or exclusion (perhaps the most effective self 

regulatory mechanism). Deviations from ‘the norm’ established by either society or 

cybercommunity then, can be disciplined. The mechanisms for judging both deviations 

and extent of deviation are embedded in the very core of our society: teachers, 

psychiatrists, social workers etc. It is through the process of problematisation that the 

illusion of ‘normality’ is created. In this light normalisation becomes the great strategy of 

power.  

“…these transformations involved new forms of knowledge and power, both reinforcing 

one another within what Foucault terms the power/knowledge complex (pouvoir/savoir). 

Clinical medicine, psychiatry, educational psychology and criminology arose to provide 

discourses that promulgated new technologies of intervention, new targets and new 

policies” (Foucault 1979a, 189-91: cited in Featherstone, Hepworth & Turner, 1991, 

229). 

Thus bio-power is power over bodies, inscribed into the regulative mechanisms of society 

through social policy, which has become one of the main apparatuses of state power. 

‘Policing’ in this context is defined as the ensemble of mechanisms upholding societal 

order, the conditions for health preservation and properly channelled accumulation of 

wealth (Featherstone, Hepworth & Turner, 1991, 238). It is the main technology of 

discipline that accounts for the local origins of bio-power.  

Policing and power are united with knowledge through discourse. Foucault’s method of 

studying history through the analysis of discourses is called genealogy. This method was 

designed to study how discourses exercise power, rather than exploring to whom power 

actually belongs. Subjects are constituted in this method within the discourse of social 

policy. Within any one instance of discourse, a relationship between subject and social 

conditions is evident, illuminating the way they are constituted as knowledge within 

discourse. It is the analysis of these socially and historically situated discourses that 

constitutes genealogy. Foucault’s genealogical method was concerned with tracing 

discursive formation. This replaced the method of archaeology, which sought to 

‘excavate’ the rules that form an exclusive discourse, during the 1970’s.  

““Genealogy is gray, meticulous and patiently documentary.” This announces Foucault’s 

treatment of history as text. Genealogy is gray because it is not black or white; it is not 

random or haphazard but a careful consideration of texts that have been written and 

rewritten from multiple perspectives. It is opposed to ‘metahistory’, which presupposes a 

grand teleology and search for origins…” (“Nietzsche, Genealogy, History,” (1971) cited 

in http://www.csun.edu/~hfspc002/fouc.B1.html) 

Foucault’s genealogy takes all the available discursive documents to re-evaluate the 

surface of cultural activity in a given period. It attempts to discover what the historical 

discourses hide from themselves. Through exposing the legitimating ideologies of a 

system such as cyberspace by archiving events into narrative form, genealogy produces a 

new reading based on a different set of assumptions than the customary one. This kind of 

analysis produces a different way of conceiving the present through changing the way we 

read the past. 

“…Foucault chooses the organic metaphor, seeing the present as ‘birthed’ by the past” 

(Ibid.). 

The present having been born to the past is an excellent metaphor for comprehending 

Foucault’s notion of genealogy. I will give a brief example here of what a genealogy of 

cyberspace might look like. However, whilst I recognise this as a worthy pursuit, I do not 

intend to fully explore it here. Consequently this is one such point which may be taken up 

for further research at a later date. 

A Genealogy of the Internet 

During the Cold War in the late 1950’s, the United States Department of Defence 

decided that the nation’s communication systems needed protecting against the threat of 

a nuclear conflict. Such a war would completely destroy the existing communication 

network. In 1962 a researcher named Paul Baran proposed building a decentralised 

network, connecting remote computers all over the United States. In the event of a 

nuclear detonation this system would be able to maintain communication by 

dynamically adjusting its connections. Thus, it could survive any of the network nodes 

being destroyed. The proposal was expanded upon and developed by various members 

of the computing community. In 1969 the first packet switching (a technical name for 

packets of data being sent through a system of nodes) network was funded by the 

Pentagon’s Advanced Research Projects Agency (ARPA). ARPAnet linked four 

research facilities: the University of Utah, the Stanford Research Institute, and the 

Universities of California at both Los Angeles and Santa Barbara. Being decentralised, 

it was relatively easy to add more machines to ARPAnet.  All that was needed was a 

modem (computer hardware for communicating over a telephone), a telephone line, and 

some Network Control Protocol software to enable the addressing and interpretation of 

data packets. ARPAnet had grown to include over one hundred mainframe computers 

within just a couple of years. As the main use of this system was to facilitate interaction 

between scientists and researchers, it immediately became a forum for the exchange of 

information and ideas. Thus, the decentralised public information network known as the 

Internet was born.  

Without analysing any additional texts we can utilise the genealogical method here, as an 

exploration of the historical situation reveals the military and academic roots that has 

shaped the nature of cybersociety today. For instance the social landscape of cyberspace 

is still largely composed of white male professionals and academics exchanging 

information on diverse topics.  

The present is not a fixed product of the past however. It is rather one of many events, 

embedded into a process that is forever striving towards the future. If history is viewed as 

a series of fictions then the present must also be fictitious, as it only exists as such for a 

moment, before becoming history itself. Rather than freeze present and past as in 

metaphysics, genealogy attempts to leave this inevitable process of time in motion. Thus 

the fiction of simultaneous events suggests there is no fixed reality. The nature of truth, 

discourse and power as constituted within genealogy resist absolutes, rather than 

attempting to be determinate. 

I began this subsection with the notion of bio-power and normality as created through the 

mechanism of problematisation. This is relevant here, as bio-power offers us a theoretical 

means of thinking about the mechanisms of social control being embedded into the core 

of society itself. I believe this notion can be applied to cyberspace, which operates with 

the same mechanisms for judging deviation as real life. That is to say, it is the same 

doctors, teachers, social workers etc. that regulate normality in cyberspace as in real life, 

as they are the same people with the same knowledge, but in a different environment. 

Thus the autonomous regulation which is taken for granted in many news groups can be 

theorised through the vehicle of Foucault.  

The discussion of genealogy is an extension of bio-power in some respects, as it brings 

temporality into the equation. Genealogy then, is the recording of moments in history 

where new discursive forms emerge out of inflected truths, attempting to uncover 

‘legitimating ideologies’. 

The thesis now moves onto where Foucault stands in relation to the notion of a class 

society faced with globalisation. I’ve used Marx here to illustrate my ideas, as being the 

initiator of class discourse he is a good example of a trans-discursive theorist. I also 

discuss power through the notion of individual and collective consciousness. This is 

highly relevant to identity within virtual worlds.