“Morning Joe’s Accuracy Deficit”: If It’s Way Too Early, It’s Just Flat Out Wrong
We’ve all played the game “telephone,” where a message gets distorted in the retelling, often so much so that the original sender has a hard time recognizing it when it comes back. Nowadays, “telephone” is played in the blogosphere, and that’s how I felt when I first learned that my views on reducing the federal budget deficit were portrayed as in sharp contrast to those of my famous Princeton colleague, Paul Krugman.
The story began when Krugman appeared as a guest on “Morning Joe” on January 28th. He locked horns with host Joe Scarborough and others over how urgent it is to reduce the deficit, with Krugman arguing that we have lots of time and Scarborough (and others) arguing that we need to act post haste. Krugman did not dispute the notion that we must eventually get ourselves off the explosive debt path on which we now find ourselves. But he insisted that, with the economy so weak and the markets so welcoming of U.S. Treasury debt, we can and should go slowly.
Scarborough, though cordial to his guest, was incredulous and even amused. He subsequently argued in POLITICO that Krugman’s view is extreme, dangerous, and — most germane to this note — shared by almost no one else. It certainly wasn’t the consensus view on “Morning Joe” that day.
When Scarborough speaks, people listen. So controversy quickly erupted in the blogosphere. In POLITICO on February 15th, Scarborough invoked me as being on his side of the debate — which was news to me. While there are nuances of difference between my views on the budget issue and Krugman’s, and notable differences in rhetorical style, our positions are broadly similar. I’m probably a tad more hawkish than my colleague, but there’s not much distance showing between us.
So why had Scarborough declared me a deficit hawk?, I wondered when someone informed me of the alleged schism within the Princeton economics department. Here’s the answer.
In my new book, “After the Music Stopped” (Penguin Press, 2013), which was published a few days before the Scarborough-Krugman debate, I argued that there is not just one, but actually three distinct deficit problems, each with its own solution.
PROBLEM 1: In the very short run, meaning right now, we probably have too much deficit reduction. The U.S. economy could actually use some fiscal stimulus (to wit, larger deficits) today, rather than more fiscal contraction, because unemployment is still so high. Doesn’t that sound like Krugman?
PROBLEM 2: Over the coming decade, however — which is the focus of Simpson-Bowles, the so-called grand bargain, and most other plans — we do need to bring the deficit down, I argued. And, indeed, Problems 1 and 2 should be linked: by joining together some modest stimulus now with perhaps ten times as much deficit reduction over the ten-year budget window. In Washington-speak, we would thus “pay for” the stimulus ten times over. Furthermore, I argued, we could accomplish that without undue pain and suffering.
PROBLEM 3: The real budget crunch comes well down the line — a decade or two or three from now. The problem is simple to diagnose — healthcare costs are projected to soar — and it looks massive. By the way, that doesn’t mean we shouldn’t start addressing the healthcare cost problem now.
An excerpt from my book, making these points, was published in The Atlantic on January 25th — three days before the “Morning Joe” show. Interestingly, The Atlantic entitled the excerpt: “How to Worry About the Deficit: (1) Don’t; (2) Wait a Few Years; (3) Then Worry About Healthcare Costs.” A bit long as headlines go, and maybe a bit misleading, but it did capture the three separate deficit issues.
Apparently the article caught Scarborough’s eye. In that POLITICO article, he cited me as among the anti-Krugmans, claiming I was “particularly supportive of the “Morning Joe” panel’s view.” Why? Because I had warned of “truly horrific problems” ahead and “even shared [the] conclusion that the coming Medicare crisis will be so great that Democrats won’t be able to tax their way out of it.”
Well, I did say those things, but they referred to Problem 3, the long-run explosion of healthcare costs, not to Problem 2, the ten-year budget. Here’s the actual quotation about taxing our way out of the exploding healthcare costs (from “After the Music Stopped,” p. 404):
“The government can cover no more than a small fraction of the projected deficits by raising taxes. Sorry, Democrats, but the Republicans are right on this one. Americans are used to federal taxes running about 18.5 percent of GDP; they will not allow them to rise to 32 percent of GDP. Never mind that a number of European countries do so; we won’t.”
Krugman subsequently noted in his blog (on February 16) that his position is “not so different” from mine.
I don’t blog, so the purpose of this missive is simple: Can we please end the mini-debate right here? While there may be some small differences between Krugman’s position on reducing the deficit and my own, they are pretty small. Had I been on “Morning Joe” that day, the debate surely would have been two against four, not one against four. Furthermore, Krugman and I are not occupying some obscure corner of the policy debate, where only weirdos live. A large number of economists are on our side. Others, of course, are closer to the Scarborough camp.
The more important question is the substantive issue of the day: Should we be going for more fiscal austerity right now, or not? Those of us who say “not” urge you to consider some pertinent facts: the unemployment rate remains sky high; fiscal austerity has failed in Europe, where it is harming growth; the U.S. Treasury can still borrow at super-low interest rates; and we have already made serious progress on the ten-year budget problem. Now make up your own minds.
By: Alan S. Blinder, Opinion Contributor; Professor of Economics and Public Affairs, Princeton; Former Vice Chairman of the Federal Reserve, Politico, March 4, 2013
“The Dunce Vs Deceiver Debate”: Either John Boehner Is Confused Or He Thinks You’re Confused
Watching House Speaker John Boehner (R-Ohio) on “Meet the Press” yesterday, it was hard not to wonder about the Republican leader’s frame of mind. Given the distance between reality and his rhetoric, one question hung over the interview: does Boehner actually believe his own talking points?
For example, the Speaker insisted, “[T]here’s no plan from Senate Democrats or the White House to replace the sequester.” Host David Gregory explained that the claim is “just not true,” leading Boehner to respond:
“Well, David that’s just nonsense. If [President Obama] had a plan, why wouldn’t Senate Democrats go ahead and pass it?”
Now, I suppose it’s possible that the Speaker of the House doesn’t know what a Senate filibuster is, but Boehner has been in Congress for two decades, and I find it implausible that he could be this ignorant. The facts are not in dispute: Democrats unveiled a compromise measure that required concessions from both sides; the plan enjoyed majority support in the Senate; and Republicans filibustered the proposal. That’s not opinion; that’s just what happened.
“If he had a plan, why wouldn’t Senate Democrats go ahead and pass it?” One of two things are true: either the House Speaker has forgotten how a bill becomes a law in 2013 or he’s using deliberately deceptive rhetoric in the hopes that Americans won’t know the difference. It’s one or the other.
What’s worse, the “dunce vs. deceiver” debate intensified as the interview progressed.
Consider this gem:
“Listen, there’s no one in this town who’s tried harder to come to an agreement with the president and to deal with our long-term spending problem, no one.”
If by “tried,” Boehner means “blew off every overly generous offer extended by the White House,” then sure, he tried. In reality, Boehner walked away from the Grand Bargain in 2011, walked away from another Grand Bargain to pursue “Plan B” (remember that fiasco?); and walked away from balanced compromise on sequestration.
Or how about this one about the sequester:
“Listen. I don’t know whether it’s going to hurt the economy or not.”
Boehner, just two weeks ago, wrote a Wall Street Journal op-ed arguing that the sequester is going to hurt the economy. Does the Speaker not remember this?
And finally, let’s not forget this one:
“I’m going to say it one more time. The president got his tax hikes on January the first. The issue here is spending. Spending is out of control.”
First, no sane person could look at stagnant government spending rates during the Obama era and think it’s “out of control.” Second, using Boehner’s own logic, the Speaker got his spending cuts in 2011 — to the tune of nearly $1.5 trillion — so if we’re following his line of reasoning, the issue isn’t spending.
Honestly, Boehner came across as a man who’s just terribly confused about the basics of the ongoing debate. Putting aside ideology and preferred policy agendas, the Speaker just doesn’t seem to keep up on current events especially well — he doesn’t remember the 2011 spending cuts; he doesn’t remember last week’s Senate filibuster; he doesn’t remember President Obama’s offers to cut more spending; he doesn’t remember his own op-eds; and he doesn’t remember the economic growth that followed tax increases in the 1980s and 1990s.
I’m tempted to take up a collection to help buy Boehner some remedial materials, but I’m not sure what he’d need first: an Economic 101 textbook or a subscription to a daily newspaper.
By: Steve Benen, The Maddow Blog, March 4, 2013
“Intent On Dismantling The Government”: The Sequester And The Tea Party Plot
Imagine a plot to undermine the government of the United States, to destroy much of its capacity to do the public’s business, and to sow distrust among the population.
Imagine further that the plotters infiltrate Congress and state governments, reshape their districts to give them disproportionate influence in Washington, and use the media to spread big lies about the government.
Finally, imagine they not only paralyze the government but are on the verge of dismantling pieces of it.
Far-fetched? Perhaps. But take a look at what’s been happening in Washington and many state capitals since Tea Party fanatics gained effective control of the Republican Party, and you’d be forgiven if you see parallels.
Tea Party Republicans are crowing about the “sequestration” cuts beginning today (Friday). “This will be the first significant tea party victory in that we got what we set out to do in changing Washington,” says Rep. Tim Huelskamp (Kan.), a Tea Partier who was first elected in 2010.
Sequestration is only the start. What they set out to do was not simply change Washington but eviscerate the U.S. government — “drown it in the bathtub,” in the words of their guru Grover Norquist – slashing Social Security and Medicare, ending worker protections we’ve had since the 1930s, eroding civil rights and voting rights, terminating programs that have helped the poor for generations, and making it impossible for the government to invest in our future.
Sequestration grew out of a strategy hatched soon after they took over the House in 2011, to achieve their goals by holding hostage the full faith and credit of the United States – notwithstanding the Constitution’s instruction that the public debt of the United States “not be questioned.”
To avoid default on the public debt, the White House and House Republicans agreed to harsh and arbitrary “sequestered” spending cuts if they couldn’t come up with a more reasonable deal in the interim. But the Tea Partiers had no intention of agreeing to anything more reasonable. They knew the only way to dismember the federal government was through large spending cuts without tax increases.
Nor do they seem to mind the higher unemployment their strategy will almost certainly bring about. Sequestration combined with January’s fiscal cliff deal is expected to slow economic growth by 1.5 percentage points this year – dangerous for an economy now crawling at about 2 percent. It will be even worse if the Tea Partiers refuse to extend the government’s spending authority, which expires March 27.
A conspiracy theorist might think they welcome more joblessness because they want Americans to be even more fearful and angry. Tea Partiers use fear and anger in their war against the government – blaming the anemic recovery on government deficits and the government’s size, and selling a poisonous snake-oil of austerity economics and trickle-down economics as the remedy.
They likewise use the disruption and paralysis they’ve sown in Washington to persuade Americans government is necessarily dysfunctional, and politics inherently bad. Their continuing showdowns and standoffs are, in this sense, part of the plot.
What is the President’s response? He still wants a so-called “grand bargain” of “balanced” spending cuts (including cuts in the projected growth of Social Security and Medicare) combined with tax increases on the wealthy. So far, though, he has agreed to a gross imbalance — $1.5 trillion in cuts to Republicans’ $600 billion in tax increases on the rich.
The President apparently believes Republicans are serious about deficit reduction, when in fact the Tea Partiers now running the GOP are serious only about dismembering the government.
And he seems to accept that the budget deficit is the largest economic problem facing the nation, when in reality the largest problem is continuing high unemployment (some 20 million Americans unemployed or under-employed), declining real wages, and widening inequality. Deficit reduction now or in the near-term will only make these worse.
Besides, the deficit is now down to about 5 percent of GDP – where it was when Bill Clinton took office. It is projected to mushroom in later years mainly because healthcare costs are expected to rise faster than the economy is expected to grow, and the American population is aging. These trends have little or nothing to do with government programs. In fact, Medicare is far more efficient than private health insurance.
I suggest the President forget about a “grand bargain.” In fact, he should stop talking about the budget deficit and start talking about jobs and wages, and widening inequality – as he did in the campaign. And he should give up all hope of making a deal with the Tea Partiers who now run the Republican Party.
Instead, the President should let the public see the Tea Partiers for who they are — a small, radical minority intent on dismantling the government of the United States. As long as they are allowed to dictate the terms of public debate they will continue to hold the rest of us hostage to their extremism.
By: Robert Reich, The Robert Reich Blog, February 28, 2013
“Both Sides Are Not To Be Blamed”: John Boehner Will Accept Only A 100%-0% “Compromise” Deal
President Obama met with congressional leaders from both parties and both chambers at the White House this morning about the latest in a series of self-inflicted, easily-avoided wounds. There were no realistic hopes that the policymakers would somehow reach an agreement to replace the sequestration cuts, and expectations were met: the group spoke for about an hour and then quit, resolving nothing.
House Speaker John Boehner (R-Ohio) left the meeting and spoke for about a minute to reporters without taking questions. For those who can’t watch clips online, he argued:
“Let’s make it clear, the president got his tax hike on January 1st. The discussion about revenue, in my view, is over. It’s about taking on the spending problem here in Washington.”
I’m trying to think of a way to explain this in a way Boehner will understand. As the Speaker sees it, the very idea of a balanced compromise is ridiculous — a compromise would necessarily include revenue, Democrats already got new revenue, so it’s outrageous for anyone to even raise the possibility.
Let’s put this as plainly as possible: in the summer of 2011, both sides accepted a debt-reduction deal that cut spending by over $1.2 trillion without any additional revenue — a win for Republicans. In late 2012, both sides accepted another deal that raised about $600 billion in revenue without any additional cuts — a win for Democrats.
Now it’s time to add another piece to the puzzle, and the Speaker of the House only remembers part of the very recent past.
This sentence…
“Let’s make it clear, the president got his tax hike on January 1st. The discussion about revenue, in my view, is over.”
…makes exactly as much sense as this sentence:
“Let’s make it clear, Republicans got their spending cuts in 2011. The discussion about spending cuts, in my view, is over.”
Substantively, there is no difference between the two arguments. Both represent extremes. Except right now, Republicans think the first sentence makes perfect sense and no one is even bothering with the second sentence.
Indeed, if Boehner were to accept Obama’s compromise, Boehner would still come out on top since the spending-cut totals would still easily outweigh the revenue totals. The president’s offer, at face value, is already a win for the GOP.
But Republicans won’t accept a win; they’ll accept a rout. According to Boehner, the only available solution to a problem he helped create is one in which his side gets 100% of what it wants, predicated on the assumption that the massive spending cuts agreed to in 2011 have escaped Republicans’ memories altogether.
At this point, most Americans want a compromise. Most Democrats want and have already proposed a compromise. But Boehner wants everyone to know there will be no compromise, and there’s nothing the president can say or do to change his mind.
I’ll now look forward to pundits everywhere telling me how “both sides” are to blame.
By: Steve Benen, The Maddow Blog, March 1, 2013
“Co-Opted By The Extremists”: John Boehner And The GOP Choose The Tea Party Over The Middle Class
The Republicans, now led from behind by House Speaker John Boehner, are painting themselves into a tiny corner. Boehner may have secured his job as speaker but he has categorically rejected any hope of a grand bargain, thereby leading his party in a rejection of America’s middle class. Unless he can be persuaded by Republican senators and a few dozen of his House colleagues to accept a balanced deal with the president and the Democrats he will severely harm his party by appealing only to the Tea Party.
Leaving the White House after the meeting with the president, Speaker Boehner dug in his heels against the closing of any tax loopholes or raising any revenue. Hasn’t he learned anything since the election?
Look at what has happened to the Republicans. Democrats have a 22 point advantage (according to the NBC/Wall Street Journal poll) on who would look out for the middle class, the largest margin in 20 years. The same poll found that 36 percent of the public viewed the Republicans favorably in October of 2012, only 29 percent view them favorably today—a remarkable drop in just four months.
And there are very good reasons why House Republicans, who really are the current face of the party, are tanking. They are completely out of touch with the American people on the critical issues. Putting aside votes on the Violence Against Women Act or relief for Hurricane Sandy or averting the “fiscal cliff” or even gay rights, choice, and immigration, they are digging a huge hole for themselves on economic issues.
Right now, 76 percent of Americans want a balanced approach to cutting the deficit, only 19 percent support the Republican position of “cuts only.” By over 2 to 1, voters think the sequester is a bad idea. If the House Republicans and John Boehner continue down their radical path of refusing to negotiate, threatening government shutdowns, and not raising the debt limit, their public standing will continue to erode.
According to a National Journal survey, four-fifths of Americans want to completely exempt Social Security and Medicare from any deficit reduction.
With entitlements making up two-thirds of the budget and growing, it doesn’t take Willie Sutton to figure out that’s where the money is! In order to get Democrats to take on entitlements and the political heat that would bring, the Republicans need to acknowledge that the wealthy must pay their fair share, that hedge fund managers and corporate jet owners shouldn’t be getting more tax breaks. Real tax reform means that we have a fairer and more equitable system. That really is only common sense.
But right now, if Boehner continues to march in lock step with his right flank, there will be no grand bargain, there will be no tax reform, there will be no stabilizing of future budgets. Boehner caved during the last grand bargain negotiations in 2011, according to this week’s New Yorker, because Eric Cantor and the Tea Party forced him to pull out of the deal.
Now, he refuses to negotiate, to work across the aisle, to even work with Senate Republicans. This is not the mark of a leader but someone who has been co-opted by the extremists in his party.
By: Peter Fenn, U. S. News and World Report, March 1, 2013
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