Friday, June 25, 2010

The deficit or unemployment--tackle which first?

The Republican Party leadership and nearly all of its members in Congress don't care about the deficit. They're only using "The Deficit" as a tool to defeat Democrats. They'll abandon it as soon as they regain power.

I'm not reading minds. Just relying on what they did when they were in power.

The Republicans in Congress--especially their leadership--have no interest in deficit reduction, except as a propaganda tool until the instant they regain power.

I don't have to be a mind reader to say this. I just have to remember what these amoral moralizers actually did--as opposed to what they said--when they controlled all three branches of government for six years.

And when they regain power, they've given us no reason to believe they won't take up where they left off: with as much government expansion as Democrats like (only in different areas), enormous tax cuts for the rich, inconsequential tax cuts for the middle class (offset by all the hidden forms of taxation Republicans have become adept at levying), and major belt-tightening for the poor--all adding up to a big ramp-up of the deficit.

They're done this pretty much every time they've gotten into power, justifying it by claiming that if we give the rich what they need to become the ultra-rich, these Masters of the Universe will deign to toss us a few crumbs.

Only they don't. In the recovery from the 2000 downturn, middle class real wages didn't go up--the ultra-rich appropriated pretty much all the increase brought about by the recovery. Turns out feeding greed doesn't satiate it--it just ramps up to take the present largesse for granted as it lusts for more...always more.

So now they're lying. Unless you believe they've had a spiritual awakening as cataclysmic as St. Paul had on the road to Damascus.

None of this means the Democrats in Congress and the White House are angels with halos. It just means that putting the Republicans back in power--even if you believe that deficits are the problem, rather than unemployment--won't get you what you want.

The problem is that cutting spending now is what our intuition tells us to do, and what Professor Krugman advocates is counterintuitive.

But we can't depend on our intuition any more than we can depend on Republican leaders (as opposed to Republican rank and file, of whom I know many, including my spouse, who I would and do trust with my life).

See, our intuition evolved to keep us safe and happy as nomadic hunters and gatherers in the highlands of East Africa 100,000 years ago. It hasn't changed since we started adapting our environment to us instead of adapting to our environment.

Go back to living as a nomadic hunter/gatherer and you'll be able to rely on your intuition. Otherwise you have to take it with a grain of salt.

And here we have to remember that no one is saying "deficits don't matter." You remember who actually said that, right? President Obama is just saying we should be spending now--in specific ways--to get us out of this slump. He never said we could or should do that indefinitely.

The Achilles Heel of the Democrats is that--even accepting liberal economists Paul Krugman's position (tackle unemployment now, then the deficit when the economy has recovered), which I generally do--government employees are generally overpaid relative to their employers in the private sector--us. And that includes unfunded pension time bombs that are starting to bankrupt cities, counties and state governments.

Democrats would do a lot to gain credibility for their position if they tackled this issue aggressively.

Oh, and to those who blame this downturn on Obama--it takes a lot less time to rob a bank than to build such an institution. And the Republicans had six years to loot the treasury, which they did with a vengeance. It will take vastly longer than that to rebuild all the regulatory mechanisms they destroyed as they looted and pillaged--like bank robbers blowing up the alarm system and the safe locks.

They may well persuade enough people that Obama did this to us instead of the Republican leadership. After all, money talks, and the Republicans' paymasters have literally billions to spend on black-is-white up-is-down propaganda.

Limitless campaign spending puts the bullhorns in the billionaires' hands. Obama was able to overcome this in 2008 through adroit campaigning, but a repeat performance will be dicey at best.


Sean said...

Ehkzu, I too think it's disgusting how the deficit has skyrocketed since 2001. Certain policies have slowly been eroding the financial well being of our nation, but I'd like to stress that it is indeed the policies that are at fault, and not an evil group of billionaires hell-bent on destroying America in exchange for another record-breaking yacht. Yes, most billionaires do not have the best interests of the US at heart, and yes, it does seem like Republicans are more likely to side with corporations. However, I'd like to point out that there are other forces that have contributed to our current situation (such as the repeal of the Glass-Steagall Act). You defended policies of the Democrats by absolutely thrashing the Republicans. This does seem to be the popular thing to do these days, but I was really hoping for a little less partisan mud-slinging. California seems interested in moving away from winner-takes all primaries and giving a bit more power to the independent voters. Hurray for California - maybe well-rounded political policies will eventually take precedence over clan-like political wars.

Just a quick thought on fact-based claims... I was surprised that you didn't backup much of your arguments. For example, the often cited "enormous" Bush tax cuts: I'd have to do some more research, but I'm not entirely convinced that the 2003 Bush tax cuts were quite so malicious as you suggest. I think that our obsession with the Middle East, and unfunded programs (such as federal education programs and entitlement programs) caused more damage than anything else during the Bush II era. Unlike the 1940's, a war isn't pulling this country out of high unemployment. Here's something we both might agree on: offer the unemployed an opportunity to build fences along the Mexico-US border - Civilian Conservation Corps type projects would be great right now.

Ehkzu said...

Sean, my answer's too long to fit in a comment, so I'm making it an entry. You can see it in the blog proper.

And as you'll see from my long answer, I don't think the Bush tax cuts were malicious--just indifferent to the public weal. They were part & parcel of the redistribution of wealth engineered by the country's richest 1/2%, such that Fortune 500 CEOs made 20X what their entry level employees made in the 1960s to 400X now. This isn't some wacky leftist claim, but a matter of record.

Even the appropriation of taxpayers funds by public employee unions is dwarfed by this redistribution--which has transformed America's wealth distribution to that of places like Russia and Mexico, unlike other rich countries.

The danger in dealing with problems with many fathers is that it's tempting to focus on the dads your side dislikes and ignore the ones you imagine are on your side.

Thus the Tea Party narrative has elements that aren't false per se--but they omit huge factors such as deregulation and Chinese currency manipulation, creating lies out of truth, if you get my drift.

I've always thought Satan's favorite weapon is truth misused (speaking purely metaphorically).

Your fencebuilding idea ain't bad. I actually have a plan I presented a few years ago--you can find it in my blog--a Plan of National Salvation, based on the idea that some people can't take care of themselves, yet are able to live OK and do useful work in a semimilitary milieu.

So someone could present themselves to the government and say "I can't deal." And the government would take him in. In exchange he'd give up his right to vote and to procreate (women would get Norplant), and the government would send him/her where their work was most needed. They'd live in dorms. Children would be cared for during the time their parents were working. Everyone would get DNA typing at birth and both parents would be on the hook for their children's upkeep. Those who were insane or too feeble to work would be cared for in institutional settings. Those who violated the rules but were able to work would be tossed out of the system. And reinstituting the vagrancy laws would force them to find work or go into the system--no loitering about with no visible and legal means of support.

This would be expensive to do--we'd probably spend more on it than the value of the work provided, actually--but I think it would help society, being as caring as leftists ask for but as responsibility-requiring as right wingers demand.