Libertarian Michael Ostralenk of the Campaign for Liberty helped put together the coalition that signed the December 2 CAF letter opposing the Bernanke reappointment until the Federal Reserve had been audited. It was signed by myself, Robert Borosage, Dean Baker, Chris Bowers, Adam Green, James Galbraith, Tyler Durden and Tiffiniy Cheng (who blogs over at the Seminal today).

It was also signed by Matt Kibbe of FreedomWorks, Duane Parde of the National Taxpayers Union, Larry Greenley of the The John Birch Society and yes, Grover Norquist.

He writes today of the hostility that greeted my letter with Norquist that called for an investigation before more funds were allocated to Freddie Mac (which happened the following day), and compares it to the response on the right that greeted anti-war libertarians:

At least the attacks on Jane from the left, which I will call the Establishment left are for the most part not as bad (yet) as the attacks by the establishment right against the libertarian and paleo-conservative right during the second gulf war. I have not seen her called a traitor or unpatriotic but its interesting to note that the establishment on both sides of the aisle share mostly the same perspectives on the ‘how’ of politics and they both have similar means of either dismissing voices outside of their mainstream or of attempting to co-op them.

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The Obama Administration and their allies in Congress are not socialists as they are commonly derided as being by the right wing press. At least not in terms of the policies they have been promoting to date. If the medical reform bill that just passed the Senate is any indication of their polititcal preferences, I would have to use the word ‘corporatists’ with a liberal bent to better describe them. They don’t call for State control of the means of production, and they obviously do not take kindly to a free market or even a freer market, but they support establishing significant government control over business and labor in collussion with labor and big business interests. Its nothing new, its pretty much a continuation and expansion of the policies under Bush the Younger.

He’s right that the corporatist politicians who dominate both parties are equally hostile to grassroots activists on both sides who challenge the money train. But I would argue that Robert Cruickshank’s response to Glenn Greenwald was correct: the right, whose numbers are relatively small and whose views are generally far outside of the main stream, has dominated politics for the past 30 years because they made an alliance with the corporations. It’s only natural that Democrats have sought power by replicating that model, even at the price of destroying the illusion that they’re the “party of the people” and fracturing the support that put Obama in office.

The Democrats are trying to secure their political ascendence by tying up the money, no different than Tom DeLay did. But whereas the Democratic Party represented a net to collect and unite those disaffected with the kleptocracy of George Bush, the actions of the Democrats since securing the White House this time around have dimmed the hopes that the Democrats present a real alternative.

The Bush Republicans flogged social issues in order to obviate the need for populist economic measures. They satisfied the base by treating them to a banquet of God, guns and gays while they looted the taxpayer trough. The Democrats, however, are making a sacrifice play on social issues and enabling corporatism by triangulaing against their own base. Thus, so-called “fiscally conservative” Blue Dogs can justify a radical vote forcing people to pay almost as much to private insurance companies as they do in federal taxes because it strikes a blow against pro-choice women. Likewise, the White House positioned themselves as “centrist” after the widely popular public option was dispensed with, simply because it was something “liberals” seemed to want too.

What they’re forcing, however, is a situation where there is no place for populist liberal discontent to rationally go. The Democrats assume that the “base” will stay with them because the President is popular and the GOP is worse, but the GOP was never able to achieve the kind of raid on the public sphere that the Democrats are enabling in the health care bill. Social Security privatization was defeated because the Democrats joined with unions, blogs and other liberal institutions to oppose it. The Republicans were never successful in channeling Social Security taxes into the coffers of Wall Street.

The annual individual contribution to Social Security is 6.2%, to a maximum of $6,621 per year for someone making $106,800. But the health care bill passed by the Senate mandates that 8% of your annual income be channeled to private insurance companies, and the cap is the cost someone is willing to pay for a policy. Thus, as Marcy notes, a family of 4 making $66,800 per year will be mandated to pay $5,243 for a policy that only covers 70% of their medical expenses. But the average cost of an insurance policy for a family of four right now is $13,375 per year.

The cost of that plan is not going to go down if the Senate bill passes — in fact, it will continue to increase at an average rate of $1,000 per year. The only difference this bill will make is that people from 130% to 400% of poverty level on the individual market (12% of the population) will get some assistance from the government in buying those policies in the form of subsidies. But that money will still go straight to insurance companies.

As Marcy noted the other day:

I understand the temptation to offer 30 million people health care. What I don’t understand is the nonchalance with which we’re about to fundamentally shift the relationships of governance in doing so.

George Bush couldn’t pull off the great Social Security robbery because of opposition from the left. But Obama has neutralized liberal institutional pushback by locking them in the veal pen, holding EFCA hostage to sideline the unions and relying on his own personal magnitism to to keep member organizations like MoveOn or the Sierra Club from making a strong move without fracturing their own ranks.

With no place to go for refuge from corporatist entrenchment, populist opposition from the left and right will continue to have no choice but to work together in order to oppose it. No doubt the demonization for doing so from party loyalists on both sides who don’t want their control of the kleptocracy to be challenged will only get more fierce.