“Kick That Can”: Fiscal Austerity Should Wait Until The Economy Has Recovered
John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.
But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.
Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.
This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience — for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.
Even Republicans admit, albeit selectively, that spending cuts hurt employment. Thus John McCain warned earlier this week that the defense cuts scheduled to happen under the budget sequester would cause the loss of a million jobs. It’s true that Republicans often seem to believe in “weaponized Keynesianism,” a doctrine under which military spending, and only military spending, creates jobs. But that is, of course, nonsense. By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing.
Still, won’t spending cuts (or tax increases) cost jobs whenever they take place, so we might as well bite the bullet now? The answer is no — given the state of our economy, this is a uniquely bad time for austerity.
One way to see this is to compare today’s economic situation with the environment prevailing during an earlier round of defense cuts: the big winding down of military spending in the late 1980s and early 1990s, following the end of the cold war. Those spending cuts destroyed jobs, too, with especially severe consequences in places like southern California that relied heavily on defense contracts. At the national level, however, the effects were softened by monetary policy: the Federal Reserve cut interest rates more or less in tandem with the spending cuts, helping to boost private spending and minimize the overall adverse effect.
Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force.
The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.
But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.
Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 7, 2013
“Suicide Conservatives”: The GOP, A Party That Can’t Rally Around A Unified Vision Of What It Wants To Be When It Grows Up
There used to be a political truism: Democrats fall in love, while Republicans fall in line.
That’s no longer true. Not in this moment. Democrats have learned to fall in love and fall in line. Republicans are just falling apart.
Last week, the opening salvos were launched in a very public and very nasty civil war between establishment Republicans and Tea Party supporters when it was reported that Karl Rove was backing a new group, the Conservative Victory Project, to counter the Tea Party’s selection of loopy congressional candidates who lose in general elections.
The Tea Party was having none of it. It sees Rove’s group as a brazen attack on the Tea Party movement, which it is. Rove sees winning as a practical matter. The Tea Party counts victory in layers of philosophical purity.
Politico reported this week that an unnamed “senior Republican operative” said that one of the party’s biggest problems was “ ‘suicide conservatives, who would rather lose elections than win seats with moderates.’ ”
Democrats could be the ultimate beneficiaries of this tiff. Of the 33 Senate seats up for election in 2014, 20 are held by Democrats. Seven of those 20 are in states that President Obama lost in the last presidential election. Republicans would have to pick up only a handful of seats to take control of the chamber.
But some in the Tea Party are threatening that if their candidate is defeated in the primaries by a candidate backed by Rove’s group, they might still run the Tea Party candidate in the general election. That would virtually guarantee a Democratic victory.
Sal Russo, a Tea Party strategist, told Politico: “We discourage our people from supporting third-party candidates by saying ‘that’s a big mistake. We shouldn’t do that.’ ” He added: “But if the position [Rove’s allies] take is rule or ruin — well, two can play that game. And if we get pushed, we’re not going to be able to keep the lid on that.”
The skirmish speaks to a broader problem: a party that has lost its way and can’t rally around a unified, coherent vision of what it wants to be when it grows up.
The traditional Republican message doesn’t work. Rhetorically, the G.O.P. is the party of calamity. The sky is always falling. Everything is broken. Freedoms are eroding. Tomorrow is dimmer than today.
In Republicans’ world, we must tighten our belts until we crush our spines. We must take a road to prosperity that runs through the desert of austerity. We must cut to grow. Republicans are the last guardians against bad governance.
But how can they sell this message to a public that has rejected it in the last two presidential elections?
Some say keep the terms but soften the tone.
A raft of Republicans, many of them possible contenders in 2016, have been trying this approach.
Louisiana’s governor, Bobby Jindal, speaking at a Republican National Committee meeting last month, chastised his party for being “the stupid party” that’s “in love with zeros,” even as he insisted, “I am not one of those who believe we should moderate, equivocate, or otherwise abandon our principles.”
Jindal’s plan, like that of many other Republicans, boils down to two words: talk differently.
Other Republicans, like Marco Rubio, seem to want to go further. They understand that the party must behave differently. He is among a group of senators who recently put forward a comprehensive immigration proposal that would offer a pathway to citizenship for the millions of undocumented immigrants in this country.
This is a position Democrats have advocated, and it’s a position that Republicans have to accept if they want Hispanic support — and a chance of winning a presidential election.
The Tea Party crowd did not seem pleased with that plan. Glenn Beck, the self-described “rodeo clown” of the right, said:
“You’ve got John McCain, Lindsey Graham, and now Marco Rubio joining them because Marco Rubio just has to win elections. I’m done. I’m done. Learn the Constitution. Somebody has to keep a remnant of the Constitution alive.”
For Beck’s wing of the party, moderation is surrender, and surrender is death. It seems to want to go further out on a limb that’s getting ever more narrow. For that crowd, being a Tea Party supporter is more a religion than a political philosophy. They believe so deeply and fervently in it that they see no need for either message massage or actual compromise.
While most Democrats and Independents want politicians to compromise, Republicans don’t, according to a January report by the Pew Research Center. The zealots have a chokehold on that party, and they’re sucking the life — and common sense — out of it.
For this brand of Republican, there is victory in self-righteous defeat.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, February 8, 2013
“Lipstick On A Pig”: A New GOP, Or Just A Cosmetic Touchup?
Maybe the party is finally over.
Meaning not simply the Grand Old Party, but more specifically the bacchanal of the bizarre and carnival of crazy to which it has lately devolved. So obvious has this devolution become that even Republican stalwarts have been heard to decry the parody of a party the GOP has become.
Except now we see signs suggesting maybe a corner has been turned. There was, for example, that surprising bipartisan consensus on immigration reform, which one would have thought about as likely as a Ted Nugent concert on the White House lawn. And Politico reports that Karl Rove has started a Super PAC whose mission is to keep the more … ahem, colorful candidates from winning Republican primaries. Politico also quotes what it calls a high-profile strategist who said party leaders are now trying to “marginalize the cranks, haters and bigots” they until recently portrayed as courageous truth tellers.
There’s more. Fox “News,” for many years the communications arm of the GOP, just ditched two of its fieriest firebrands: Dick Morris and Sarah Palin, who, like Linus in the pumpkin patch, kept assuring true believers of the Great Pumpkin of a Mitt Romney victory. This comes as Fox, though it still has numbers CNN would kill for, sees its ratings fall to a 12-year low among a key demographic. A new Public Policy Polling survey finds trust in Fox at the lowest level in the short (four years) history of the survey.
Then there is Bobby Jindal. The Louisiana governor, widely considered a rising star of the GOP, has, since the election, been preaching with evangelistic zeal that Republicans must “stop being the stupid party,” which could be a reference to Herman Cain, presumably still poring over a map looking for “U-beki-beki-beki-becki-stan-stan;” or to Michele Bachmann, perhaps still searching out terrorists in the office of the Secretary of State. Or to any of a series of GOP candidates who made statements on rape so spectacularly ignorant they would stun even the men in those dusty places where wives are bought like cattle.
So yes, signs are plentiful that something is afoot among the Republicans. But what does it mean?
One might hope it signifies the party’s decision to abandon its alternate universe, offer reasonable alternatives to those voters not convinced that any one party or ideology has all the answers. One might hope it means an orderly retreat from the hard edge of coded racism, gay bashing, Mexican electrocuting, anti-intellectualism and fact avoidance that has been passed off as wisdom in recent years. One might hope it means a return of grownups, pragmatism, reason — and reasonableness.
One might hope.
But one might be well advised to gird that hope with wariness, given that this is the same party whose leaders, as reported on PBS’ Frontline, held a meeting in 2009 and chose obstructionism as a political strategy. Note that, even while repeating his “stupid party” admonition at a GOP meeting in Charlotte last month, Jindal assured his audience this did not mean rethinking or even moderating the party’s hardcore — and frankly, out-of-touch — stands on issues such as abortion and marriage equality.
No, he explained, he’s talking about changing the packaging — not what’s in it. Putting lipstick on the proverbial pig, in other words.
That will inevitably disappoint those longing for a new GOP. One hopes the party’s soul searching eventually leads it to understand the need for evolution. It should not — and does not need to — become simply a pale imitation of the other party. But it also should not — and better not — settle for being simply a prettied-up version of the extremist outlier it has become.
Because you know what you call a pig with lipstick on? A pig with lipstick on.
By: Leonard Pitts, Jr., The National Memo, February 10, 2013
“Yep, It’s A Problem”: Chris Christie Is A Bit Of A Hothead
We all know Chris Christie is a bit of a hothead. I mean, it’s a bit like saying a hothead is a bit of a hothead. It’s not observation but truism. Republicans love him or loved him for it. And Democrats started to too because his blow ups don’t all follow ideology. There was this time back in 2011 when he flipped out at a reporter for questioning whether a Muslim-American judge he’d appointed to the bench might be a security risk or sympathetic to al Qaeda.
Then there was Sandy. Republicans were irate; Dems cheered. What it all really comes down to is that in addition to being a very big man Christie is clearly a big-hearted man. I don’t mean that in the sense that he’s necessarily a great guy in every respect. But he doesn’t do artifice well. He has his emotions on his sleeve. And on his lapel and his pants and his hat if he’s wearing one. He’s just all out there in the 24/7 run of performance art called being Chris Christie.
But this calling the “hack” doctor thing strikes me as a big deal. Not in the sense of the fate of the republic being at stake but in the sense of Christie’s future above the rank of governor.
Here’s what TPM Reader JL just wrote in …
Christie never had the remotest shot at the nomination. At least not after Sandy. But he had a shot at making some noise. Not anymore I suspect. And I say that as something of a fan.The thing is that to take CC seriously as a prez candidate you have to believe that his anger is an asset that he deploys deliberately and skillfully. Which often appears to be the case. But if it starts to look like the anger controls him rather than the other way around, his appeal really plummets.
I suspect the ill advised phone call was a pretty big deal. If I were he, I’d be working overtime on damage control.
This strikes me as exactly right. Calling this women up and berating her over the phone is the sign of someone whose anger has the better of him and lacks impulse control.
Governors don’t have armies or security services. So if they’re a bit nuts or reckless it’s not that big a deal. People evaluate presidents very, very differently.
By: Josh Marshall, Editor and Publisher, Talking Points Memo, February 8, 2013
“Waiting For The Reckoning”: Inside The Republican Civil War
TPM Reader JB (a former GOP staffer if I remember right) doesn’t think either side of the current GOP struggle has reckoned with the first decade of this century …
I don’t think I rely on analysis dripping with the smugness and self-satisfaction your correspondent NS displays.
Instead, let’s eschew the pop psychology jargon and look at the public record. Both the Tea Party types and the big GOP donors represented by Karl Rove were fully on board with just about everything the Bush administration said or did. For all their zeal now, the only major policy issue on which Republicans now aligned with the Tea Party ever clashed with Bush was immigration reform — for which Bush himself, remember, didn’t actually fight that hard.
Neither side in this putative civil war has been willing to reckon honestly with the consequences of the Bush administration for the country (substantively) or the Republican Party (politically). Both do their best to present their views to the public as if the last Republican President had never existed. This has left both groups of activists somewhat unmoored; in politics, you talk ideology and principles when you can’t brag about accomplishments, because voters are a lot better at relating the latter to their own lives.
Since neither the Tea Party types or the big donors and the campaign operatives working for them are thinking of repudiating a Republican administration that lost two wars and wrecked the economy, they are left to air their differences on issues no one besides campaign junkies cares about. The self-styled conservatives complain that Rove and his people say mean things about them; the moneybags wing is dedicated to recruiting candidates who will avoid gaffes. Big deal.
Republicans in the 1930s and Democrats in the 1980s both resisted strongly the idea that their respective parties had earned defeat at the polls. In each case, several election cycles (and epochal world events) were required to restore the fortunes of the party that had earned the kind of defeat the Republicans suffered last fall — when a black incumbent Democratic President whose first term had coincided with the worst recession in 80 years nonetheless won reelection easily. It’s because neither the Tea Party nor the moneybags faction will face the real reason for that debacle that they are facing off against one another now.
By: Josh Marshall, Editor and Publisher, Talking Points Memo, February 8, 2013
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