Capitulation Point

Obama has thrown in the towel on the economy.

He has now fully bought into the entire deficit reduction is more important than jobs line of the Republicans.

President Obama yesterday tapped veteran adviser Jacob “Jack’’ Lew, former staffer to Bay State lawmakers, to head the Office of Management and Budget.

Lew, who worked for Representative Joseph Moakley and former House speaker Thomas P. “Tip’’ O’Neill in the 1970s and ’80s, has a long record of public service, serving as both deputy director and director of OMB during the Clinton administration.

The 54-year-old Lew is currently a top aide to another Clinton — Secretary of State Hillary Rodham Clinton — and would replace outgoing OMB director Peter Orszag.

“I was actually worried that Hillary would not let him go,’’ Obama said in the Diplomatic Reception Room at the White House yesterday, introducing Lew. “I had to trade a number of No. 1 draft picks to get Jack back at OMB.’’

When he worked for Bill Clinton, Lew presided over a substantial budget surplus.

If he goes back to his old job, Lew will have to wrangle with the biggest budget deficit in history, forcing him to look for more cuts and revenues to reach the president’s ultimate goal of a reduced deficit.

“Jack’s challenge over the next few years is to use his extraordinary skill and experience to cut down that deficit and put our nation back on a fiscally responsible path. And I have the utmost faith in his ability to achieve this goal as a central member of our economic team,’’ Obama said.

Senate Budget Committee chairman Kent Conrad, Democrat of North Dakota, called Lew “a superb choice’’ and a person of “the highest integrity.’’

“He knows how to make the tough choices. And he knows how to reach across the aisle to find bipartisan solutions,’’ Conrad said.

The only question at this point is how quickly we reach the deflationary spiral point of no return where the only option left is to turn on Helicopter Ben's Magic Printing Press.

Brad DeLong thinks we're basically already there now.  The best part of all this is that Republicans will insist on tax cuts and spending cuts, and when this fails to balance the budget, they'll blame Obama for not cutting enough spending while the transfer of wealth upwards continues at a breakneck pace.

If Republicans get control in 2010, we're pretty much done.  As it is, we're going to be facing some very hard, very painful years ahead.  The top 1% of the country will however have the most profitable and decadent years since the Gilded Age.

As Susie Madrak says,

Do they really not understand how many people are in real trouble right now? Because frankly, I don’t care what else he does if he doesn’t take care of the unemployed.

How many people are out there going "You know, at least under Bush and the Republicans I had a job."   The Fed?  Gosh, they don't see the need for additional anything.  9.5% unemployment is A-OK in their book!

The smoking remains of middle-class America are going to walk out on Obama and hand it right back over to the fanatics who still give a damn.  And the fanatics will burn the last 80 years of government to the ground and say "You're on your own.  Adapt or die."  The corporations will run rampant, the transfer of wealth upward will be all but complete, and when we finally wake up and smell the ashes, the real fascism will slam down upon us like a cage.

It's getting harder and harder to fight back on this, especially when the Democrats don't give a damn anymore.