“Build We Won’t”: Weakening The Economy In The Short Run While Undermining Its Prospects For The Long Run
You often find people talking about our economic difficulties as if they were complicated and mysterious, with no obvious solution. As the economist Dean Baker recently pointed out, nothing could be further from the truth. The basic story of what went wrong is, in fact, almost absurdly simple: We had an immense housing bubble, and, when the bubble burst, it left a huge hole in spending. Everything else is footnotes.
And the appropriate policy response was simple, too: Fill that hole in demand. In particular, the aftermath of the bursting bubble was (and still is) a very good time to invest in infrastructure. In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.
But what actually happened was exactly the opposite: an unprecedented plunge in infrastructure spending. Adjusted for inflation and population growth, public expenditures on construction have fallen more than 20 percent since early 2008. In policy terms, this represents an almost surreally awful wrong turn; we’ve managed to weaken the economy in the short run even as we undermine its prospects for the long run. Well played!
And it’s about to get even worse. The federal highway trust fund, which pays for a large part of American road construction and maintenance, is almost exhausted. Unless Congress agrees to top up the fund somehow, road work all across the country will have to be scaled back just a few weeks from now. If this were to happen, it would quickly cost us hundreds of thousands of jobs, which might derail the employment recovery that finally seems to be gaining steam. And it would also reduce long-run economic potential.
How did things go so wrong? As with so many of our problems, the answer is the combined effect of rigid ideology and scorched-earth political tactics. The highway fund crisis is just one example of a much broader problem.
So, about the highway fund: Road spending is traditionally paid for via dedicated taxes on fuel. The federal trust fund, in particular, gets its money from the federal gasoline tax. In recent years, however, revenue from the gas tax has consistently fallen short of needs. That’s mainly because the tax rate, at 18.4 cents per gallon, hasn’t changed since 1993, even as the overall level of prices has risen more than 60 percent.
It’s hard to think of any good reason why taxes on gasoline should be so low, and it’s easy to think of reasons, ranging from climate concerns to reducing dependence on the Middle East, why gas should cost more. So there’s a very strong case for raising the gas tax, even aside from the need to pay for road work. But even if we aren’t ready to do that right now — if, say, we want to avoid raising taxes until the economy is stronger — we don’t have to stop building and repairing roads. Congress can and has topped up the highway trust fund from general revenue. In fact, it has thrown $54 billion into the hat since 2008. Why not do it again?
But no. We can’t simply write a check to the highway fund, we’re told, because that would increase the deficit. And deficits are evil, at least when there’s a Democrat in the White House, even if the government can borrow at incredibly low interest rates. And we can’t raise gas taxes because that would be a tax increase, and tax increases are even more evil than deficits. So our roads must be allowed to fall into disrepair.
If this sounds crazy, that’s because it is. But similar logic lies behind the overall plunge in public investment. Most such investment is carried out by state and local governments, which generally must run balanced budgets and saw revenue decline after the housing bust. But the federal government could have supported public investment through deficit-financed grants, and states themselves could have raised more revenue (which some but not all did). The collapse of public investment was, therefore, a political choice.
What’s useful about the looming highway crisis is that it illustrates just how self-destructive that political choice has become. It’s one thing to block green investment, or high-speed rail, or even school construction. I’m for such things, but many on the right aren’t. But everyone from progressive think tanks to the United States Chamber of Commerce thinks we need good roads. Yet the combination of anti-tax ideology and deficit hysteria (itself mostly whipped up in an attempt to bully President Obama into spending cuts) means that we’re letting our highways, and our future, erode away.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 3, 2014
“Calling The Shots”: Who If Not Tea Folk Control GOP Agenda?
We’re now in the less fertile summer plain of primary elections, with no contests this month other than the unfinished business of runoffs in Alabama and North Carolina on July 15 and Georgia on July 22. So it’s a good time to look back on what Republicans in particular hath wrought, and at TPMCafe Harvard’s expert on (among other things) the Tea Party, Theda Skocpol, suggests we should be looking at Congress rather than the primary outcomes for a sense of where things stand inside the GOP.
An obsession with toting up wins and losses in primaries completely misreads how Tea Party forces work, how they have moved the governing agendas of the Republican Party ever further right and maintained a stranglehold on federal government action….
Tea Party clout in and upon Republican officials, officeholders, and candidates is actually maximized by the dynamic interplay of top-down and bottom-up forces, both pushing for absolute opposition to President Barack Obama and obstruction of Congressional action involving compromises with Democrats. Tea Party forces are neither inside nor outside, neither for nor against the Republican Party in any simple sense, because they are sets of organizations and activists seeking leverage over the choices and actions of Republican leaders and candidates.
This dynamic long preceded the inauguration of Obama and the formal launching of the Tea Party Movement, but has surely intensified since 2009.
To see that the Tea Party remains supremely effective, just look at what Congressional Republicans are doing, or not doing. Eric Cantor’s sudden defeat sealed the GOP House’s determination to block immigration reform, but that reform was already effectively dead even before that one primary election happened. Republicans have pulled away from decades-old compromises to fund transportation systems, to support agricultural subsidies along with Food Stamps, to renew the Export-Import Bank that most U.S. business interests want continued. House and Senate Republicans are spending their time mainly on obstruction and media-focused investigations, anything to challenge and humiliate President Obama. In state houses, Tea Party-pushed Republicans are mainly passing anti-abortion restrictions and blocking the expansion of Medicaid favored by hospitals and businesses.
What do primary elections have to do with such effective agenda control? Not nearly as much as the basketball finals approach to tallying total wins and losses implies. In a way, unpredictable and somewhat random victories against fairly safe Republican power-brokers are the most effective outcomes for Tea Party voters and funders. Sure, the big Tea Party funders would like to have gotten a win for Chris McDaniel, their guy in Mississippi, and they are furious that they did not. But backing up and looking at the big picture, does anyone really imagine that nervous GOP officeholders are reassured that the Tea Party is dead or “under control” following a scenario in which old timer Thad Cochran had to raise millions for what should have been a taken-for-granted primary victory, and his allies had to orchestrate an all-out voter mobilization effort that even reached out to some African American Democrats? Cochran’s near-death sends a powerful message that loudly hewing hard-right on policy issues and obstruction is the way to go. Similarly, Eric Cantor’s huge defeat is even more frightening to many Republican politicians because it happened without big-money backing from the likes of Heritage Action.
Another way to put it is to ask whether there’s any issue on which the GOP has decisively pushed back on the Tea Party agenda? Yes, there was the decision to abandon the government shutdown last year, but even the Tea Folk understood that couldn’t go on forever. Other than that, it’s hard to see where and how the alleged “Establishment” primary victories are going to make any actual difference. Look at the Common Core educational standards issue, supposedly a huge priority for the business community that has given so generously to the Establishment cause. Chamber of Commerce beneficiaries Thom Tillis of North Carolina, Joni Ernst of Iowa and Jack Kingston of Georgia have all come out against Common Core. Who’s really calling the shots in the GOP, if not the radicalized conservative movement we call the Tea Party?
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, July 4, 2014
“On July 4, A Message For Patriots Of All Persuasions”: We Need To Remind Ourselves, There Is No Monoply On Patriotism
When the flags fly proudly on the Fourth of July, I always remember what my late father taught me about love of country. He was a deeply patriotic man, much as he despised the scoundrels and pretenders he liked to mock as “jelly-bellied flag flappers.” It is a phrase from a Rudyard Kipling story that aptly describes the belligerent chicken-hawk who never stops squawking – someone like Dick Cheney or Rush Limbaugh.
Like many who volunteered for the U.S. Army in World War II, my dad never spoke much about his four tough years of military service, which brought him under Japanese bombardment in the Pacific theatre. But eventually there came a time when he attached to his lapel a small, eagle-shaped pin, known as a “ruptured duck” – a memento given to every veteran. With this proof of service, he demonstrated that as a lifelong liberal, he loved his country as much as any conservative.
Would such a gesture resonate today? Right-wingers have long sought to establish a monopoly on patriotic expression. On this holiday, when we celebrate the nation’s revolutionary founding, we need to remind ourselves just how hollow that right-wing tactic is and always has been. Only our historical amnesia permits the right – infested with neo-Confederates and other dubious types — to assert an exclusive franchise on the flag, the Declaration of Independence, the Constitution, and the whole panoply of national symbols. In the light of history, it should be plain that progressives are fully entitled to a share of America’s heritage; indeed, perhaps even more than their right-wing rivals.
Let’s begin at the official beginning. Although “right” and “left” didn’t define political combat at that time on these shores, there isn’t much doubt that behind the American Revolution, and in particular the Declaration of Independence, was not only a colonial elite but a cabal of left-wing radicals as well.
How else to describe Samuel Adams and Thomas Paine, the revolutionary idealists who declared their contempt for monarchy and aristocracy? It is true that many of their wealthier and more cautious comrades in the Continental Congress disdained Adams as a reckless adventurer “of bankrupt fortune,” and Paine as a rabble-rousing scribbler. Of course popular democracy was a wildly radical doctrine in colonial times, only tamed in the writing of the Constitution by the new nation’s land-owning elites and slaveholders.
The right-wingers of that era were the Tories — colonists who remained loyal to the British crown, opposed to change, and, in their assistance to George III’s occupying army, exactly the opposite of patriots. Only after two centuries of ideological shifting can Tea Party “constitutionalists” claim that the republican faith of the Founding Fathers is “conservative.”
The Civil War was just as plainly a struggle between left and right, between patriots and … well, in those days the Confederate leaders were deemed traitors (a term avoided since then out of a decent concern for Southern sensibilities). Academics dispute the war’s economic and social basis, but there is no doubt that the 19th-century left sought to abolish slavery and preserve the Union, while its right-wing contemporaries fought to extend slavery and destroy the Union.
Reverence for the Confederacy remains an emotional touchstone for right-wing Southern politicians and intellectuals (not to mention the Ku Klux Klan, assorted neo-Nazis, and many activists in the Tea Party). All of these disreputable elements denigrate Lincoln, our greatest president, and promote nostalgia for the plantation, sometimes known as “the Southern way of life.” The latest example is Chris McDaniel, the defeated Tea Party candidate for the Senate in Mississippi, a flag-waver if ever there was one – except when he was delivering fiery speeches to the secessionist Sons of Confederate Veterans. At the risk of offending every “conservative” who runs around with a Stars and Bars bumper sticker, it is hard to see how his conduct qualifies as American patriotism.
Still another inglorious episode in the annals of the right preceded World War II. The “America First” movement that opposed U.S. intervention against Hitler camouflaged itself with red, white and blue but proved to be a haven for foreign agents who were plotting against the United States. (Philip Roth brilliantly depicted this sinister campaign in The Plot Against America.)
Although Communists and pacifists had opposed American entry into the war for their own reasons, the broad-based left of the New Deal coalition understood the threat from the Axis very early. After Pearl Harbor most conservatives honorably joined the war effort, but some continued to promote defeatism and appeasement. And the historical roots of postwar conservatism — the “Old Right” of Joseph McCarthy and Pat Buchanan, the Buckley family and yes, the Koch brothers — can be traced to those prewar Nazi sympathizers.
What does true patriotism mean today? Do you truly love your country if you are a corporate leader hiding billions of dollars in profits offshore or insisting on the declining wages that have ruined the American dream? Do you love your country if you demand the right to pollute its air and water and despoil its countryside, no matter the cost to future generations? Do you love your country when you scheme to deprive your fellow citizens of the right to vote, which so many died to preserve?
Somehow the wingers righteously wrap themselves in Old Glory, as if our heritage belongs to them alone. On this holiday, and every other day, it surely does not.
By: Joe Conason, Featured Post, The National Memo, July 4, 2014
“Supreme Anointment Court”: Sheltered From Sun And Light In Our Nation’s Holiest Building
True Blood, the magic, devilish, vampire TV world of shape-shifters where blood is a bottled commodity to drink in a bar and extreme graphic violence and sex is recklessly paired will finally have the stake driven into its heart and exit at the conclusion of this seventh season.
I remember the show’s big surprise lesson from season one that no matter how scary and powerful, vampires cannot enter your home without being invited. However, there is no end in site of the bad true bloody struggles between the five conservative and four liberal justices of our Supreme Court, and no matter how societal changing a Court decision is, the public mostly never gets invited in, never gets to be witness to these omnipotent secret cultish figures dressed in robes sitting elevated and fortressed behind sacred wood protected in their house from uninvited intruders while drinking their own ideological dogmatic “blood.” We never get to see their clever shape-shifting after taking up the bar forever in residence chambered and sheltered from sun and light in our nation’s holiest building. We never get to experience these high priests of the constitution experiencing the life we live that they interpret for us. We never get to see whose influential blood and money they drink that becomes the magic elixir of their last words that toss the ingredients of our melting pot. We never get to see their expressions as indicators of how bad the blood between them might really be as they depart company after each session to take solace and recharge in their secluded coffined off chamber.
Throughout much of our history, we have mostly accepted, obeyed, revered and patiently waited with undying respect for the Court’s directives. We knew they knew better what was better for our society. For Americans, this was the place where evil, malice, patronage, cronyism, politics, and the compromising inducements of avarice and greed humans are so easily soiled by held to a higher standard that truly defined how great a system ours was. We hardly ever get to see this side of the court any more. Just as divided and unpredictable as the world depicted in True Blood, the Supremes on the Court dominated by extremist conservatives are driving the stake into the disunited states of America.
Recent polling supports the perception of a society absolutely at odds with all forms of government. The Supreme Court has lost the confidence of Americans. We are now adrift without a moral compass, without checks and balances, without a credible mandate voice in any of our three plus media equals four branches of government. A majority of voters elected President Obama twice with such a mandate. But increasingly, we are witnessing a court that has anointed itself as representative to its secreted world to drive The Stake to drain the blood of Obama-ism. What after-world can and will emerge in such a divided state and in what state of health and personhood will each of us be in at that time? As we do get to witness many hot spots around the globe descend into horror, can we save America and ourselves?
By: Allen Schmertzler, The Huffington Post Blog, July 3, 2014
“This Just Shouldn’t Be Possible”: Job Creation Trips Up GOP Message Machine
The more America’s job market improves, the tougher it is for Republicans to explain what’s happening. According to GOP talking points, tax hikes, regulations, and “Obamacare” are dragging down the economy, making it impossible for employers to create jobs.
And yet, the unemployment rate is at a six-year low, we’re on track for the best year for jobs since the Clinton era, and we just broke the record for the most consecutive months of private-sector job gains. For the right, this just shouldn’t be possible.
So how do Republicans reconcile the reality and their rhetoric? At least at Fox News, the answer is to ignore the inconvenient truths. Dylan Byers noted:
We won’t do the screen shots this time, but per usual FoxNews.com is the one major news site downplaying Thursday’s positive employment report. CNN, MSNBC, The New York Times, The Wall Street Journal and The Washington Post are all leading their sites with the news (in large fonts, no less). Fox News has it buried in fine print on a sidebar.
It’s hard to argue that such a decision is a matter of unbiased editorial judgment.
Ya think?
Given recent history – good news is ignored, bad news is trumpeted – it’s probably safe to assume the right’s not-so-subtle approach is intended to keep the bubble intact for conservative audiences.
But even funnier was House Speaker John Boehner’s (R-Ohio) unintentionally hilarious statement in response to the new jobs report.
The headline clearly says the press released relates to the “June 2014 Unemployment Report,” but remarkably, the Speaker of the House managed to issue a statement that ignores the June 2014 Unemployment Report.
“The House has passed dozens of jobs bills that would mean more paychecks and more opportunities for middle-class families. But in order for us to make real progress, the president must do more than criticize. From trade to workplace flexibility, there’s no shortage of common ground where he can push his party’s leaders in the Senate to work with us. Until he provides that leadership, he is simply part of the problem. For our part, we will continue to listen to and address the concerns of Americans who are still asking ‘where are the jobs?’”
Look, it’s the day before a major national holiday. It’s quite possible that Boehner never even saw the job numbers and this statement was written days ago and released to the media by some poor intern stuck in a largely empty office.
But given the importance of jobs to the American public, is it really too much to ask that Boehner put a little effort into this? Let’s unpack the response to jobs data that managed to ignore jobs data:
* “The House has passed dozens of jobs bills.” Actually, it hasn’t. If you look at Boehner’s list of “jobs bills,” it’s primarily a bunch of bills written for and by the oil industry, encouraging drilling everywhere. Here’s the challenge for the Speaker’s office: put together a jobs bill, subject it to independent scrutiny, find out how many jobs it would create, and get back to us. We’ve been waiting for three years. It hasn’t happened.
* “[T]he president must do more than criticize.” Well, he has. Obama has sent real, independently scored bills that would create jobs. The House Republican majority has so far failed to even vote on them.
* “Until he provides that leadership, he is simply part of the problem.” Boehner is practically allergic to leadership, unable to convince his own far-right caucus to listen to him on most issues, making this a curious line of attack. Regardless, the president, unlike the hapless Speaker, has lowered unemployment and has presented real plans to expand on this progress. Can Boehner say the same?
* “For our part, we will continue to listen.” To whom? I can think of a whole lot of measures that Americans have urged Congress to pass, which Boehner has ignored entirely. Who exactly does the Speaker think he’s listening to?
* “[A]ddress the concerns of Americans who are still asking ‘where are the jobs?’” They’re right here. If the Speaker’s office looked at the jobs report before commenting on the jobs report, this would have been obvious.
By: Steve Benen, The Maddow Blog, July 3, 2014
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