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Wall Street's Plan to Push Obama to Betray Those Who Elected Him

Through its lobbying group Third Way and media mouthpieces, Wall Street is determined to destroy the social safety net.

The safety net is the glory of America and the unending nightmare of Wall Street. That's why Wall Street’s leading “false flag” group, the Third Way (which calls itself a "leading moderate think tank"), has responded to the warnings that Robert Kuttner, AFL-CIO President Trumka, and I have made that if President Obama is re-elected our immediate task will be to prevent the Great Betrayal – the adoption of self-destructive austerity programs and the opening wedge of the effort to unravel the safety net (including Social Security, Medicare, and Medicaid).

Here's what you need to know about this plan to rob Americans of their future.

1. Both Democrats and Republican Oppose Cuts to the Safety Nets

Huge majorities of Americans oppose cuts in the safety nets: A majority of Republicans oppose such cuts and Democrats overwhelmingly oppose the cuts. The American people love the safety net because they know it is essential to a humane America.  They know that it has transformed the nation.  Before Social Security, older Americans were frequently reduced to poverty and dangerously inadequate health care that made the remainder of their lives dangerous and miserable. 

The safety net does not cover only the elderly and the sick.  My father, for example, died when I (the eldest of three children) was 19 and a sophomore at the University of Michigan.  Even though in-state tuition was inexpensive in those days, I would have had to drop out of school.  Survivors’ benefits allowed me to obtain a superb education and pay back the nation with service and decades of greater taxes because education increased my income.  Food stamps and unemployment insurance frequently provide the temporary support that prevent tragedy and allow Americans to obtain useful education and jobs.  The safety net has made America a nation we are proud of and a nation that makes it possible for Americans to recover from hard times and tragedy and to lead lives that are vastly more productive and enjoyable.

2. Only a Democrat Can Make it Politcally Safe for GOP Pols to Unravel the Net

One of the most important reasons that more Americans support the Democratic Party than the Republican Party is that the Democratic Party is viewed as the Party that created and guards the safety net.  The elements of the safety net are the crown jewels of Democratic Party policy successes.

Only a Democrat can make it politically safe for Republicans who hate the safety net to unravel it (a process that would occur over a number of years) by legitimizing the claim that the safety net must be cut.  Obama may not intend to unravel the safety net. He may have been convinced by Wall Street that it is necessary to begin to unravel the safety net in order to save it.  But the result would be to declare open season on the safety net by legitimizing the false Republican memes that the safety net is unsustainable and harms the nation.  The Republican Party’s and Wall Street’s greatest frustration is that they have been unable to unravel or discredit the safety net. The Democratic Party has its Wall Street wing, but the Republican Party has been Wall Street’s principal representative for decades. The Republican Party has been unable to deliver Wall Street’s unholy grail – privatizing Social Security.

3. Wall Street's Schemes for Social Security Endanger the Economy

Wall Street salivates at the prospect of any privatization of social security.  This would lead to them being able to charge tens of billions of dollars in fees annually. The banks that administered the privatized program would be Too Big to Fail, or what I call "systemically dangerous institutions" (SDIs) because the consequences of allowing bank failures to cause tens of millions of Americans to lose their retirement savings would require either that all such deposits be federally insured or that the failing banks be bailed out by the federal government. Privatization, therefore, is a convenient fiction. The banks’ profits will be private; any catastrophic losses will be borne by the public.  The SDIs’ that already enjoy massive political power, often exerted through front groups like "Third Way,” will burgeon.