He should have fought this one. The richest 2 percent of the country just got an extension of tax cuts they didn't need at great cost to us all. President Barack Obama should have been fighting against the self-interest of the very wealthiest Americans long before this. So he is now backed into a corner, and just made a compromise that he thinks is the best deal possible when up against the clock. He got some good things for working families in the payroll tax cut, the extension of unemployment benefits, various refundable tax credits, and the important middle class tax cut. But the president is now presiding over the great redistribution of wealth that has been going on for a very long time -- the redistribution of wealth from the middle and the bottom to the top of American society -- and leaving us with the most economic inequality in American history. This will only grow larger with the Obama "compromise."
If Obama had fought earlier, he could have ensured the protection of small business owners who are the primary job creators. He could have focused the higher tax rates on the very rich and protected those who are more in the middle and are really creating jobs. But now, most of the people who will be keeping their tax cuts are not job creators. After all, how many jobs will be created by Goldman Sachs traders, or the hedge fund gamblers, or the celebrities who dominate our lives? Almost none. On the contrary, they have been the "job destroyers," having wrecked this economy and the lives of so many people.
Let's be clear here: At the root of the crisis was just a handful of banks -- not the banking industry, not business in general, but a handful of very rich people who took big risks. They are already getting richer because of our taxpayer bailout, and now we're giving them more tax breaks and estate tax bonanzas. There is socialism in America, but it's only for the rich. Risk has been socialized for some of the very richest people in the country, and then, the "free market" pain is distributed to all the rest.
The rich are too big to fail in America, while many in the rest of the country really are failing. The president did want to keep some things for average Americans in this compromise, but he lost the big battle a long time ago when he did not fight the people whose greed, recklessness, and utter lack of concern for the common good led us into this terrible crisis. He waited too long to fight, to force a national debate on economic fairness, and to counter the distortions of the Republicans who clearly don't mind adding huge sums to the deficit as long as it benefits their wealthy patrons. The Republicans will now seek to reduce the deficit by adding more pain to the rest of us -- especially those on the bottom and increasingly shaky middle rungs of the economy. And now, Obama and the rest of us are all backed into corners without a way out.
Our national economic philosophy is now to reward the casino gamblers on Wall Street and to leave the majority of the country standing outside the casino with a tin cup, hoping that the gamblers are at least big tippers. More tax breaks and benefits for the very wealthiest people in America is not only bad economics and bad policy; it is fundamentally immoral. In a letter to the president signed by more than 100 religious leaders, we said just that.
So far, they haven't listened.
Jim Wallis is the author of Rediscovering Values: On Wall Street, Main Street, and Your Street -- A Moral Compass for the New Economy, and CEO of Sojourners. He blogs at www.godspolitics.com. Follow Jim on Twitter @JimWallis.