How Right is the Right?
As the right jams its utopian economic theory down America’s throat, polls indicate many Americans have begun to question the historical economic basis for the right-wing’s claims. As politicians from both sides of the political spectrum seem to be drinking Eric Cantor’s Kool-Aid, out here in Middle America, our natural sensibility toward the middle of political thought is finally being offended.
The right wing continues to ignore Americans while ironically saying they somehow speak for them.
As we look to the leadership in Washington for the next step in this right-wing engineered crisis, it might be instructive to examine the basis for the fight. History gives us clues as to the viability and vulnerability of the common right-wing manifesto which seems to be winning the debate in Washington and some say threatens our American way of life. If you agree, or at least will consider, the parallels between today’s economic situation and the Great Depression, you might be able to analyze the path which the right-wing seems to be shoving down America’s throat.
Our current “economic recession” is strikingly similar to the Great Depression of the twenties and thirties in haunting ways. Both were products of years of deregulation, government spending cuts and, at a minimum, the complete discount of the power of working class spending. We have heard this song before. The only historical difference was the Republican Party’s former tendency to shut down global trade.
The wingnuts tell us we have a government spending problem in the face of massive state/local layoffs, the largest economic class separation since the aforementioned depression and stock market/financial/corporate industries which seem wildly disconnected from reality out here in Middle America. We all yawn when economists tell us these things but, we might want to pay attention. The right has proven they will take hostages like the debt ceiling in the face of American opinion to the contrary to establish the very circumstances which induced the Great Depression.
FDR’s alphabet soup of government programs and spending could not even break the back of the Great Depression. The Depression was finally broken by the greatest government spending spree ever, World War II. Yet, wingnuts want to go the other way. They seem to want a sendup of the mid-depression circumstances which insured a deep, dramatic and enduring economic decline.
The right-wing is asking America, forcing America, to give them the keys to America’s economic engine. Their corporate minders have somehow hijacked the Tea Party sentiment which sent many to Congress in the 2010 elections. They secretly co-opted a real response by some regular Americans to a government which took their money and spent it protecting corporate interests. Somehow they talked Tea Partiers into a fantasy in which corporate interests were theirs. The result may be an economy and a government which serves neither. The ruling class in America might get their collective wish. Their economic and governmental utopia might instead of making them richer only serve to relegate America to a global second class status.
32 Responses to “How Right is the Right?”
Unfortunately that comes close to summing it up. Americans are certainly slow anymore to grasp the difference between when they are being advocated for and when they are being taken for a ride. My own fear is that too much damage has already been done for us to pull out of this in my lifetime. I’m not so worried for myself as I am my neices, nephews, and their own kids.
Maybe the next GOP prez can start another war of choice and improve the economies of the military industrial complex. Of course that won’t help the majority of the population and it would likely kill more tens or hundreds of thousands of civilians, but you have to break a few eggs to make an omelet right? (false equivalencers, don’t even try to compare Libya to Iraq)
It pains me to have seen this country go from one with so much accomplishment and so much promise, to one that is being destroyed by greed, corruption and ignorance. There was a point at which the electorate (had it been burning a little more than 15 watts) could have staved off some of this, but I’m not sure how much they can do in the current corporatocracy even if scales all fall from their eyes.
I think it’s deeper than that.
The way they keep using “business” as the shinning example for everything economically sound, wisdom beyond all philosophical borders, and, purist Americana at it’s finest, I think they are talking themselves into more corporate authority over the American people in general, beyond what they have now over their employees. Imagine if you couldn’t quit your job without official approval.
I sincerely believe that our “captains of industry” believe that they know what is best for the American people. I also believe they are manipulating the right wing, (or any politician they can), via the lobby, unabashed, with the goal of national control. They even openly state they want to weaken government! This government is ultimately controlled by the individual voter, as long as ballots aren’t absconded with. So the tactic of “divide and conquer” utilizing partisan incompatibility serves their purpose of weakening government. Weakening government leaves a power vacuum they want to fill.
For employees business is a dictatorship that people must endure for money, but I think some business leaders want more power to control their employees lives as well as the nation in general. Maybe even through their employees voting habits, but obviously through the lobby.
It’s not worth repeating the remedial education lecture this time.
What are you going to do or what or whom will you blame (any excuse to avoid the truth) when the money runs out completely in the 2020s and governments must be pared down finally?
Right. Balanced budgets are a bad idea because the tea party is pushing for them. And the tea party is bad because they’re affiliated with the Koch brothers. And the Koch brothers are bad because they’re backed by corporations. And corporations are bad because they amorally advance the interests of their shareholders. And shareholders are bad because…sorry, why were shareholders bad again?
Or alternatively, you could stop the endless stack of ad hominems and address the actual issue. Why is balancing the budget a bad idea, other than that the wrong people are calling for it?
@Dr. J.
The analogy that most people and nearly all politicians, right up to Obama, constantly make between household debt and federal debt is utterly deceiving. Money is a fungible IOU. These IOU’s are ultimately backed up by IOU’s from the treasury. The federal government creates those IOU’s by borrowing. A balanced budget amendment would only serve to halt the creation of new money and stop economic growth dead in its tracks. In fact, the only thing to dislike about the deficit is that the banks get a cut, ostensibly for directing capital into productive activities (as they proved in 2008 …). But even that wouldn’t be so bad if a large portion of those banks weren’t foreign entities. Which for all practical intents and purposes includes our own multinational banks today. In short, the US of A is on the brink of self destruction due to the simple fact that its people do not have the faintest idea of how their economy works. GIven our commitment to capitalism at any cost, that may be the ultimate irony.
DLS, J,
I fully and wholeheartedly stipulate the government has spent too much. Additionally, I stipulate the Speaker is right when he says taxing, at this juncture, will cost jobs. I think entitlements should be means tested, at a minimum and the rising costs of medical entitlements in particular should be reduced, somehow. Balancing the budget is a great idea.
But,
If you agree with Mr. Boehner’s rationale regarding taxes at this time, you must at least consider the impact of the withdrawal of government support of the economy through spending cuts. Since states can not respond to economic crisis due to balanced budget requirements, they are making draconian cuts. Last month’s jobs report bears this out. We took one step forward with private sector jobs and one step back with public sector (mostly state and local) jobs. At this rate, the economy is in some ways more fragile than immediately following the 08 crash. I (and economist and increasing numbers of the American people) are simply going with Boehner’s lead and asking the question. “Given the strength of this recovery, are draconian cuts to the federal spending a good idea at this time?” Forgive us if we are just a wee bit cynical regarding the “trickle down” like theories saying we should hand corporations a big pile of money and hope for the best (tax loopholes). We can all agree to cut spending, in the fair way the President suggests, without doing it right now, today.
Those small businesses (millionaires) are paying too much taxes because GE, Exxon and others aren’t paying their fair share. All this hoopla wingnuts raise about taxing millionaires is disingenuous because if they really wanted to help these job creators (only a small percentage of millionaires are really small businesses-see previous columns), they would fix the tax code (as the Dems suggest) so legitimate small businesses would quit having to pay for the whole corporate tax burden.
As far as the infallibility of the free market ergo the holiness of the Kochs and others, I think the behavior of the free market in the housing crisis (Enron) makes the opposing case. Shareholders should be interested in their part of the long-term well being of their company and the markets. They and corporations should be interested in feeding the cow so they can get some milk tomorrow. They, in many cases, however have proven through the 08 crisis they can not be trusted not to take the milk and eat the cow. Too much of the incentive structures of corporations are skewed. The system needs fixing before it can be trusted again. I am like Regan, trust but verify. We need real regulatory cops on the beat, not the neutered, underpaid, understaffed “watchdogs” we have today. That system needs fixing before we begin to balance the budget.
DR
By the way, early on, I went to a few Tea Party rallies. I found myself identifying with much of what the early TP said. However, as time went on sadly, the TP was taken over by the government haters and absolutists. All government or government spending is not bad. All politicians are not bad. Most are well meaning people trying to give back to their country. They do not deserve to have Hitler mustaches drawn on their pictures.
Thanks for the substantive reply, OldMan. I share your skepticism about balanced budget amendments, but still I’m having trouble following your reasoning.
Money is ultimately a claim not on the treasury but on other people’s time. My employer pays me for my time, and the money is useful to the extent I can trade it to, say, a plumber for his time to fix my drain. The treasury and money are just intermediaries in these exchanges. Social Security is in trouble not so much because of dollar balances but because we’re promising future retirees more of everyone else’s time than future workers will be prepared to give.
So I question your link between the creation of new money and economic growth. Increasing M1, on its own, doesn’t create more workers, give them more hours in the day, or let them get more done in the 24 they have. Borrowing would seem to grow the economy only when it genuinely leads to greater production efficiency. I don’t see how government borrowing in general does so.
And I do see harmful effects. Just as in the private sector, unbalanced books are a sign of some dishonesty about the value being delivered. Letting Social Security run in the red is ultimately overpromising future retirees how long a retirement they’ll be able to enjoy. If I can’t afford to retire at 65, I’d rather find that out at age 50 than at age 80.
I don’t believe the premise, that more deficit spending strengthens the economy. Deficit spending doesn’t mean we travel forward in time, get new money, and bring it back with us. It means we siphon money from one part of the economy–the bond markets, in this case–and inject it into another. The siphon might result in the money getting invested better than it would have been otherwise, or it might mean the opposite.
Nor do I believe raising Exxon’s taxes hits a different group of people than the middle-class taxpayers filling up at the pumps and would somehow be a net gain to the economy. Both of these arguments have this money-from-thin-air quality about them. There’s no free lunch, D.R.
There are no unicorns, either, and when I read people calling for “real regulatory cops on the beat” that’s what I think they’re describing. The brinksmanship and political gameplaying going on in Washington are outrageous, but–hello–these are the people in charge, and this is is the way the system works. When you ask for more regulators, you don’t get the ones you’re hoping for, you get more like these.
Dr. J, you did not address the point about draconian spending cuts contributing to unemployment. In the real world, the level of cuts required to meet the goal of a balanced budget with absolutely no tax cuts and a decrease in corporate taxes (the Republican ideal) would result in hundreds of thousands of people becoming unemployed, quite possibly more. They would no longer be paying income taxes or payroll taxes,further reducing the government’s revenue. Once their initial unemployment runs out their contributions to state incomes via sales taxes drop drastically. The balanced budget demand, would, after all, guarantee no unemployment extensions. Some would lose their homes. This is a certainty.
Jim,
That’s incorrect. In the real world, we could grow spending at 3% per year for the next decade; and, at the end of the decade, we will have spent $4 trillion less than the President called for in his last budget.
The notion of “draconian cuts” is pushed by people who don’t do math.
Now, I don’t believe you can get to a balanced budget in the short term, nor do I believe we should try. However, the argument that cutting $3 or $4 trillion out of the budget over the course of a decade is somehow draconian seems overwrought to me.
DR,
Can you point me to anything that suggests that anyone is proposing immediate, draconian cuts in spending?
Indeed, can you provide me any proposal that actually proposes to cut spending at all (as opposed to slowing its rate of growth)?
Steve,
Yes I can, take the continuing resolution for example, it was held hostage for 40 billion, this year. Ryan plan- Pre 2008 levels, now.
Cut, Cap and Balance-31 billion discretionary, 51 billion, mandatory.
should I go on?
I have heard estimates of 100k government jobs lost in the first year of CCB
DR,
The CCB numbers you are citing are versus baseline not versus current. The difference is rather large. And currently, mandatory spending is about $2 trillion…even if it were a nominal cut (which it isn’t) 2.5% is hardly draconian. Similar picture on discretionary.
The $40 billion in the CR wasn’t $40 billion…turns out it was less than 5.
I wouldn’t be surprised if 100K government jobs were lost next year with or without CCB but DR, Federal jobs are up during the recession not down. State and local jobs are down but that’s not a function of Federal spending.
The baseline vs. current argument is fun but not based in reality. Just as you wouldn’t go to Wal-Mart and demand milk for last year’s prices, you can’t ask me to build the same road I built last year for you for the same price. Neither can I expect to hire a new engineer to replace the retired one for last year’s salary. It is also common sense to include growth. If you task me to build a road to carry an expected 10 more cars, you can’t expect me to build it for the price of the old smaller road. The baseline which includes expected growth and inflation is just the reality of asking for services. If you are intellectually honest, you realize putting off an expenditure till next year requires you include both growth and inflation.
Same concept with federal jobs being up.
State and local jobs are most certainly a function of federal spending. Much of the costs of your state DOT personnel are defrayed by federal gas tax money. The same concept exists for many other state jobs like environmental protection etc.
2.5% of 2 trillion is 50 million. If for the sake of the jobs argument those were all 100k jobs then that is a loss of a half million jobs.
I would like to see your citation for the 40 vs. 5 on the CR
DR,
Federal spending is currently projected to increase faster plus inflation plus population and has pretty much since 1945. The notion that there are real per capita cuts anywhere in our future is laughable
The cite is here
http://www.opencongress.org/articles/view/2264-CBO-Spending-Bill-Cuts-352-Million-Not-38-Billion-as-Advertised
D. R. Welch:
First of all, I’ve never defended Boehner’s or more accurately the House GOP’s position on no new taxes at all. I’m not impressed in the least by the silly answers when even conservative or GOP-leaning commentators have asked House Republicans if they’re willing to concede anything at all on taxes just for the sake of getting a reasonable budget agreement done and the debt raised.
(I have not hesitated to defend them against stupid attacks, though, and I’ve emphasized that the Dem craziness with class warfare tax gimmicks and lunacy about entitlement reform makes them as bad or worse than the Republicans, an evident fact now.)
The real problem always has been spending (notably entitlement spending) and that’s where the solution lies. We’ve seen (as I’ve said time after time) that the Congress spends any new revenues it gets and more, time after time. They’ve raided the entitlement (FICA temporary surplus, achieved earlier, no more) trust funds (and as I’ve said, this shows the folly of creating any reserve fund of any kind) as well as how they’ve handled general revenues (a single large fund) and other funds to overspend as much as they can. (to buy votes and re-election, and to acquire power and influence)
A balanced budget amendment is sound and Americans want it. It’s a separate issue whether it should be pushed at this time, as well obviously as if it should be required to raise our debt limit.
The details of the balanced budget amendment the GOP in the House is currently pushing include “escape clauses” including being at war formally or informally, as well as being able to rely on “estimates” to establish the figures on which to base receipts and outlays (revenues and expenses).
The 18 per cent of GNP limit (which escape clause, of course) is a welcome desire, but of course unrealistic because even with long-overdue reforms to entitlements, these monsters of the budget will require us to exceed 20 per cent of GNP simply due to future demographics. There’s no real need for a percentage-of-GNP rule. Exceeding 18 per cent is bad and shouldn’t be sought, of course, but we’ll have to face that because entitlements, reformed in various ways eventually, will remain with us. (Indeed, I have said that more will depend on Social Security to a greater extent than they know now, and there will be serious questions, not earlier-decade vote-buying gimmick bogus questions, of benefit adequacy and “dignity” for dependent beneficiaries.)
The real argument isn’t about the propriety of such an amendmen, requirement imposed on Washington, and the underlying philosophy, which is standard mainstream US philosophy, after all. (Americans want a balanced federal budget and an amendment to enforce it, if needed.) The real argument is about what details should be in the amendment (and here and now, that it really shouldn’t complicate the process of raising the debt limit).
The same is true about spending reform and of course about entitlement reform, the core of the problem we have. We’ll be forced to reform eventually, and it has long been better to do it earlier and less painfully than what we’ll end up doing, do it later and more painfully. (The same is true for rationalizing and correcting governments and expectations from them in general.)
Here is the text (below), if you hadn’t seen it when I’ve posted it before. You can see it is not limited to a balanced budget but has other limitations in there, including of course tax limitations (and a “supply-sider” sop, treating revenues anticipated from reduced taxes as special). I thought Section 8 (an add-on) is quite good.
Jim, perhaps you meant “absolutely no tax increases?” I agree the hardest-line stance from within the GOP is too drastic. We do need to raise taxes, and refusing to end even ethanol tax breaks is absurd. But I can’t imagine they’ll end up getting their way, and in the meantime I don’t begrudge either side a negotiating stance.
As for job losses, to have a substantive discussion about them, we’d need a more stable plan than what’s getting batted around in these fast-moving negotiations. And job losses need to be measured against people who actually have them rather than hypothetical growth baselines.
D. R. Welch, please also know I’ve been all for reforming the tax laws (the “tax code”) to eliminate all “loopholes,” exemptions, credits (the hoops Washington wants us to jump through like circus animals), and distinctions made of various parties to be taxed, forms of income, all that. And I welcome increased revenue that can be had merely from reform that consists only of simplification. Yes, we can lower tax rates and still get higher taxes than before — all can win.
When the Republicans object to this, on the grounds that it raises revenue, that is even worse than doing it to defend special interests; they’re just loony. It’s one reason I don’t take the GOP’s position (the House GOP’s position) or their proponents seriously.
(It needn’t raise revenue [now -- read on]; it can be made the same as before, with lower tax rates or assessments! It also makes it easier to achieve the inevitable tax increases we’ll have to make after the 2020s to pay for even reformed entitlements.)
Those who want better to assess and gauge past, present, and future federal government size and composition of revenues and expenses should (I say, once more) consult the Historical Tables of the annual Budget of the United States Government (the standard source, I say).
Look at the sizes of expenditures and where the money is going. Look at the sizes not only nominally and in constant dollars, but as fractions of GDP.
http://www.gpoaccess.gov/usbudget/fy11/pdf/hist.pdf
Steve, I was responding not to the current serious proposals. I was responding to what seemed to me to be DJ’s support for the Republican House’s desire for large immediate cuts and a balanced budget amendment. Combining those two would most certainly produce the results I described. In addition the results of a balanced budget amendment such as the currently proposed one would be catastrophic when the next recession rolls around, which would be almost immediately if the Republicans in the House were to get their way.
So you were responding to what you wanted to respond to? OK.
Jim, please read what I’m actually writing. My first comment was a criticism of the lack of substance in the OP. My second was about the relationship between the money supply and economic growth, and the general desirability of balancing the federal books. My third was about DR’s reliance on free money and reliable regulators.
These are not hard-liner comments, and I came nowhere near endorsing Republican hard-liners. Reading such an endorsement into them is simply unreasonable.
I interpreted as a defense of the balanced budget amendment, DJ. Since that is the desire of the House Republicans the rest followed. My apologies if I was mistaken.
Ah, you mean the amendment I said I shared ThisOldMan’s skepticism about? -sigh-
Apology accepted, and sorry if I’m overreacting. This is a frustrating pattern on here–with you, yes, but with virtually all the writers on the left. Unless I come out on the far left and rail about the “GOP’s corporate masters”, whatever I do write gets read and replied to as “worshiping at the alter of Ayn Rand.”
I just don’t know what to do. How does one have a moderate discussion if no one can perceive moderate positions?
Steve,
Shame on me (I guess) for believing the party who wanted the cuts on the 40b. I think I referred more to intent anyway.
DLS,
As far as Amending the Constitution goes…I agree with the Pres. why codify into the Constitution something that is already Congress’ job. Somebody, somewhere voted for the dude who wants the spending. If (s)he is in error, unelect them or not.
If the problem with spending is undue influence, I think a better Amendment would be money does not equal speech in political issues. This idea however is whole other column.
“This is a frustrating pattern on here–with you, yes, but with virtually all the writers on the left. Unless I come out on the far left and rail about the “GOP’s corporate masters”, whatever I do write gets read and replied to as “worshiping at the alter of Ayn Rand.” – Dr J
I’d say if the shoe doesn’t fit then you don’t need to worry about wearing it, but there are plenty of people it does fit and why run interference for them? Meanwhile, have you read many of DLS’s posts? I doubt there is anyone else at TMV who bashes a perceived tribe as gratuitously, frequently, and with less provocation. And how about SD, who raises his pet alarm about the dangers of the brown people (multiculturalism, immigration, and the resulting eventual loss of white influence) in nearly every post he makes? And there is LP who isn’t terribly successful in disguising an overiding resentment of the left, although he isn’t above trotting out the old false equivalence meme when it’s convenient. I could continue in this vein, but really, what’s the point? Ideological bias (or indoctrination) in almost any political forum seems to trump all else, and it’s incredibly rare to see anyone admit a wrong – even more rare to see anyone stray beyond the (fairly easy to generalize) philosophies of their tribe. I agree with you though, it is very frustrating. It’s also very, very counterproductive.
No, there you go again. Disagreeing with ad hominem arguments from the left is not running interference for the right. That’s my point: there’s a great deal of territory in the middle.
I agree with you that DLS is condescending, SD is xenophobic, and LP has a chip on his shoulder. But I’m not sure what your point is–that that justifies lumping us all together, ascribing common caricatured opinions to us, and ignoring what we’re actually writing?
Just trying to level the picture a bit that’s all. I don’t subscribe to the ad hominem stuff either, but I’ve been accused of attacks in the past for doing no more than quoting the aggrieved party’s own words. Apparently some folks have trouble recognizing their own countenance. In any case, I suspect we may have more views in common then we do at odds – this despite your comment, “with virtually all the writers on the left”, which (if I’m not mistaken) is also “lumping”
Dr. J, you most definitely defended the idea of “balancing the budget” while at the same time saying you have skepticism about the balanced budget amendment. But if you are going to attack your political opponents for doing any borrowing under any circumstances, which is what those people you are defending are insisting upon, what’s the difference?
Please point out where I took that position.
D. R. Welch wrote:
Last point first — that’s as quirky or more than a flag-burning amendment. So many things shouldn’t be part of the Constitution.
To your first point: Congress doesn’t want to do its job, which is to control its expenditures and even withhold appropriations if and when necessary. It’s worse, because not only does Congress do the opposite, but so has Obama, who is obviously in no place to say Congress is fiscally irresponsible, truthful though that is.
They can’t be trusted, hence a Constitutional amendment, which is sound and well-supported by sensible people, who aren’t swayed by Chicken Littles (who usually want even more spending and an even bigger and farther-reaching federal government).
The only real criticism of a balanced budget amendment imposing balance on the federal government is the somewhat “removed” one by the late Milton Friedman: it’s the amount of spending (and size of government) that really is the most important thing and the real problem; a one-trillion-dollar federal government that runs a deficit was better to him than a four-trillion-dollar federal government that has a balanced budget or is running a surplus.
A balanced-budget amendment never has been in any way gimmicky. (The only reasonable concerns about the current version of it sought by the House GOP are that that the amendment wanders from its claimed purpose and it introduces other details and goals that may rightly be questioned.) Obviously it along with a budget agreement and US fiscal policy don’t all have to be settled in order to raise the debt limit. (They obviously all are related, though. We have so much debt because of our fiscal problem, enormous and excessive spending, particularly on entitlements, and we can’t try to escape the problem by raising taxes greatly, nor continuing to borrow.)
In case you didn’t see it, here is the text again of the amendment the House GOP is seeking. Some details are questionable (even on a purely objective basis; even reformed entitlements will force Washington eventually above 20 per cent of future GOP, e.g..) but the concept of a balanced budget amendment has never been bad. (Any other readers who still haven’t seen it can see it here.)
If you’re curious, I don’t approve of this amendment and more importantly, I don’t approve of introducing this amendment at this time, complicating the process of raising the debt ceiling.
(“Approve” isn’t being conceited but answers the question, do I think it’s right and good, yes or no, the amendment and holding the debt limit increase hostage to it as part of a budget agreement.)