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Money for Nothing

February 19, 2012

We’ve crossed an inflection point in the Obama Presidency. He’s riding a wave of fairly key victories across a variety of boards. But what makes these victories so powerful is not so much in their substance so much as their political positioning. I say this because Democrats scoring victories by virtue of political strategy and maneuvering have been rare in the majority of my adult life. And I’m not sure about how I feel about them now.

First the Andrew Sullivan article seemed to really energize some of the Democratic base (at least in my perception).

It’s not that I don’t understand the critiques of Barack Obama from the enraged right and the demoralized left. It’s that I don’t even recognize their description of Obama’s first term in any way. The attacks from both the right and the left on the man and his policies aren’t out of bounds. They’re simply—empirically—wrong.

But then Obama totally followed Sullivan up by outmaneuvering the growing Republican chorus in opposition to national health care covering the costs of contraception. It was a silly and narrow chorus, but Obama destroyed them by proposing the “third way” of shifting the of covering contraception costs purely to insurance companies, who would have to asking the individual, who can make the decision to use contraception or not (leaving the employer out of it entirely). Everyone wins, except the Republicans.

And now it’s the the payroll tax cut exemption, passed after the Republicans conceded the issue when it became clear that it was going to be fully paid for by spectrum sales. Wait, what? This last bit seemed to be a late addition to the deal, and immediately caused me to perk up and pay attention. Now they’ve used the spectrum sales bargaining chip on the payroll tax cut extension? For one year?!

They’re selling the “D Block” of the digital spectrum for even less money than they tried to sell it for before (in 2008) because the purchaser has to build out nationwide security channels (which have been in political demand since 9/11). Firefighters and police officers need their own uncluttered radio channels, ok? And who’s going to say no to a first responder? Nobody running for office.

Though spectrum sales are popular for love of firefighters alone, more chunks of the public’s spectrum is going to be sold to yet more private companies (instead of allowing some kind of digital commons for free innovation, chiefly), the sales now have rules written in that prohibit the FCC from stopping anyone from bidding (remember when AT&T tried to buy T-Mobile? Yeah.). So there’s the politically expedient kind of fast friends with the telecom industry by passing the payroll tax cut exemption. And oh yeah, the telecom industry are good friends in return.

As my law school Professor Eben Moglen wrote a long time ago, this is the stuff of a digital barbecue. Regulatory capture at its most pure. Big pools of capital sit around, coming up with ingenious carrots like the payroll tax-cut extension to dangle in front of legislators. They, in turn, sell a public asset to whatever corporations want to pay, who are all too happy to pay a few million here or there, knowing they are in for huge returns on the cut-rate sales prices they obtain for the spectrum. This is just part of their negotiation.

And that’s what Obama is doing very well these days. Looks like 2012 is already well under way, electorally speaking.

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