Obama’s deal with the GOP exposes two sad truths

President sacrifices key campaign promise for the sake of political expediency.

It is said that a stereotype gains traction because there is within it an element of truth. This week, we appear to have further confirmation of this idea. In the United States, President Barack Obama has agreed to a deal that sees the economically disastrous tax cuts passed under George W Bush extended for another two years, having campaigned against them in 2008. In this one move, Obama has, for a large number of people, demonstrated the truth in two stereotypes.

First, that politicians from all sides of the spectrum will go back on their campaign promises if it suits them politically. Morals be damned; political expediency is king (another recent example of this was when Obama's predecessor said – with a straight face – that he was not in the business of nation-building). Obama is not bowing to public pressure to appear strong in the face of an enemy as Bush did, however. He is caving in to the pressure from rich Republicans who threatened to filibuster tax relief for the middle-class households of America if the tiny minority of millionaires and billionaires did not also get the same treatment.

Which leads us to the second stereotype: the weak Democrat.

The Democratic Party has been infuriating the American left for years because it appears to be utterly unwilling to fight the Republicans on any issue. The GOP is moving further and further to the right side of the political spectrum, which is dragging what should be the centre to the right. Instead of having a right-left divide, the weakness of the Democratic Party has resulted in a far-right/centre-right divide.

The recent health-care legislation battle is a perfect example. Instead of starting from an absolute position (for instance, a single payer system) and compromising from there, the Democrats started from a compromise position and worked right. The result was a watered-down bill, most of which will not go into effect until 2014.

This tax debate was an example of the same idea. Economists overwhelmingly say that the Bush tax cuts were a major force in the explosion of the national deficit, and that their extension (especially to the super-rich) would only aggravate the problem. Obama could have taken this position and run with it. He could have called the GOP's bluff and told it that the super-rich were not getting their cuts extended and allowed them to filibuster. He would then be able to go in front of the American public and lay the blame at the feet of the corporate-friendly (or more corporate-friendly, at least) Republican Party. They would be responsible for a massive tax rise for everyone, because they wanted to help their already obscenely rich friends and contributors. Now, there is even more fuel on the GOP's "It's Obama's fault for the huge deficit" fire.

Obama has given the Republicans the stick with which to beat him. He claimed when announcing the deal that he would fight the Republicans on this issue, and others, over the next two years.

One question that immediately leaps to mind is this: if he went back on his pledge to fix the American tax system now, what reason is there to believe he won't just do it again in 2012 when the new tax cuts expire? By then, he may no longer be the president. Whose fault would that be? Certainly the Republican political machine and the conservative media outlets will claim responsibility, but honestly the blame would rest mostly on Mr Obama's shoulders.

Yes, we can? Prove it.

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Jeremy Corbyn is not standing down - 172 people cannot drown out democracy

The Labour Party could right now be exploiting a bitter Conservative leadership contest, writes shadow chancellor John McDonnell. 

The shadow chancellor writes exclusively for The New Statesman amid one of the most turbulent weeks in politics this century.

The “coup” taking place in the Labour Party

The instability from Brexit has extended into the Parliamentary Labour Party with members of the shadow cabinet standing down. I would like to thank all of those who have participated with me for their work.

Frustratingly, this has come at the worst possible time for our country. And at a time in which we our party could have used to reset the economic narrative that the Tories planted in the public during the summer of 2010 when our party was in the midst of a leadership contest.

Our party right now could be exploiting a bitter Conservative leadership contest that’ll probably lead to electing a Tory leader who will be responsible for any economic fallout from Brexit. The Tories have peddled lies over the past six years over the management of our economy and the state of the public finance, which the decision last Thursday is sadly exposing.

I strongly believe that if some colleagues are not careful then they may cause irreparable damage to our party and the country. 

The Labour Party changed last September. Jeremy was elected with the largest mandate of any political leader in the history of our country. Our party’s values of democracy and solidarity seem to be asked of the membership and always met. Sadly not by some members of the PLP. 

There are those in our party who could not come to terms with the fact that a quarter of a million members could clearly see that the our party’s broken election model has lead to two back to back defeats and needed replacing. Like the wisdom of crowds, our membership understands that we cant keep going on doing the same thing electorally and getting the same results.

I believe that we can all still work together, but I feel some MPs need to get off their chest what they have been holding back since last Autumn. Maybe then they will hear the message that our membership sent them.

The truth is that Jeremy is not standing down. In the Labour Party our members are sovereign. There was an election held and a decision made, and 172 people cannot outweigh a quarter of a million others. 

It would risk sending the worst possible message we could send as a party to the electorate - that Labour does not respect the democratic process.

The economics of Brexit

The Leave vote delivered an immense shock to the political system creating great instability. Of immediate concern is the deteriorating economic situation. Credible economic forecasters virtually unanimously warned that leaving the European Union would be an enormous shock to the economy. 

The disagreements centred on the severity of the shock, and the long-term damage done. To that initial shock must be added the realisation that there was no plan made for a post-Brexit Britain. 

George Osborne has not secured the foundations of our economy and the market volatility reflects that missed opportunity. With turmoil continuing, and major employers already threatening redundancies, the immediate task is to stabilise markets and reassure investors and savers that financial institutions remain rock solid. 

The measures announced by Bank of England Governor Mark Carney early on Friday morning, and the later statement from the Chancellor, are to be welcomed and we have requested a briefing under Privy Council rules on the financial authorities’ contingency plans. It is also reassuring that George Osborne has now moved a threatened, post-Brexit austerity Budget until at least the Autumn. 

Nonetheless, with a recession now forecast, any attempt to push further austerity measures in response to the crisis would be an act of exceptional economic folly. The Chancellor’s own fiscal targets have long since been missed and simply redoubling the misery of spending cuts and tax rises will not bring them any closer to achievement. 

What is needed in a crisis like this is urgent government action to shore up investment, already falling before the vote. Shovel-ready projects should be brought forward, creating jobs and focused on beginning to rebuild those parts of the country currently most deprived – and where the vote to Leave was strongest. As a country we will get through this crisis, and we will do so when we no longer tolerate a situation in which too many of our people are excluded from even the chance of prosperity.

The referendum result

I have been in consultation with many economist, trade union and business leaders since the early hours of the morning when we learnt the result. I hope to give a speech this Friday going into further details of Labour’s economic response, but the result last Thursday came as a blow to many of us in the Labour Party.

All wings of the Labour movement fought hard, and two-thirds of our voters swung to Remain – the same as the SNP, and far more than the Tories, who split 60:40 for Leave. 

Labour will now be fighting to ensure whatever negotiations now take place, and whatever proposals the government chooses to bring forward, will maintain hard-won protections for working people in this country.

The new Labour leadership inherited the Labour In campaign last year. Obviously as with any campaign we will now have to reassess, but the hard work of the staff who worked on the campaign cannot be questioned. They did a fantastic job. 

Jeremy Corbyn also managed to help get out a larger number of our voters than the other main Westminster leaders across the country. 

But the sad truth is that we lost regardless. We need to learn lessons of the referendum and the General Election campaigns, and question whether the way we campaign as a party needs to be changed. 

It is clear that we cannot fight the next election using the same outdated practises and policies that were in place at the last two general elections, and the recent referendum. 

We cannot continue to do the same things in the same ways and get the same results. Those people who need a Labour government the most cannot afford it.


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015.