“The Silence Of The Austerians”: Here’s Why 2014 Could Be The Year America Finally Ditches Its Inane Deficit Obsession
The year 2013 will be seen as a year of crushing intellectual defeat for advocates of fiscal austerity. There were many smaller victories, but this big one came in April. Researchers at the University of Massachusetts examined the Austerian paper, “Growth in a Time of Debt,” by Carmen Reinhart and Ken Rogoff, which said that countries whose debt-to-GDP ratio reaches 90 percent experience dramatically slower growth. The UMass folks found not only dodgy statistics and backwards causation, but a goof in the paper’s Excel spreadsheet. The causation and statistics errors were more serious, but the fact that elites around the globe had gleefully embraced something with a flub any office temp could understand was horribly embarrassing.
It was an intellectual rout that badly wrong-footed the Austerians, who have since been notably half-hearted in the face of a resurgent left now campaigning on economic justice. This includes, for example, increasing Social Security benefits, which was unthinkable two years ago, when the fight to stop benefits from being cut was nearly lost.
The question for 2014, then, will be whether this triumph can be consolidated and expanded into the policy sphere. Because despite the intellectual collapse, Austerian assumptions and reasoning still dominate United States policy, which is undertaking fiscal consolidation at a pace not seen since the WWII demobilization. If the current Austerian death grip on the framework of policy negotiation can be broken, there might be a chance.
The answer to this question turns on how one views intellectual debate. Given the history of the last few years, one could be forgiven for thinking it’s pointless. As the Polish economist Michal Kalecki demonstrated brilliantly, there are powerful cultural and class-based reasons for both political and business elites to favor austerity now.
We see this today, as Steve Randy Waldman has demonstrated, in the blatant double standards applied to austerity as compared to inequality or raising the minimum wage. Consider a recent paper by the liberal economist Jared Bernstein, which, while outlining much excellent evidence about the economic harm of inequality, is stuffed with unnecessary hedging and hesitation. The Reinhart and Rogoff paper, by contrast, was weak even without knowing about the Excel and stats errors (as Paul Krugman, among others, observed at the time), but elites nearly tripped over their own feet seizing on it anyway. Their bogus “90 percent” conclusion was stated as economic fact by everyone from Paul Ryan to the Washington Post editorial board.
However, biased reasoning is different than no reasoning at all. Seizing on a fig leaf paper fulfills a deep psychological need. Current elites may be largely greedy, corrupt hypocrites, but the cultural credibility of science is such that what amounts to outright class warfare must have an “evidence-based” patina. It’s far too gauche to simply ram through one’s favored policies because you want all the money or to kick the poor.
Therefore, fiscal policy in 2014 and 2015 will hinge on whether the Austerian coalition can be split (assuming, as is probable, that progressive Democrats don’t sweep the 2014 midterms).
Roughly speaking, we’re talking about the center and the right, and there are good reasons to suppose that neither will be brought around. For the center, it takes an intellectual defeat roughly akin to the Battle of Trafalgar to get them to grudgingly abandon austerity. (And if some hack economist churns out another pro-austerity paper, they will probably grab it eagerly.) Meanwhile, “straight” reporters have been culturally conditioned to code deficit reduction as a non-ideological good thing, so even very recent straight reporting still contains buried Austerian assumptions.
And on the right, things look especially hopeless. Denial and motivated reasoning are so epidemic that even Mitt Romney believed the “unskewed” polls before the 2012 election. Ivory tower arguments alone are useless here.
However, all hope is not lost. The key is to change what is considered acceptable for budgetary negotiations. Right now, they all assume that any new spending must be “offset” by cuts elsewhere. That aversion to deficit spending is 100 percent Austerian.
So while Republicans are largely immune to evidence, it’s also true they don’t actually care about the deficit in and of itself. They favor reduced taxes on the rich and cutting social insurance. What’s more, conservative reformists at places like National Affairs have gotten louder and bolder in their advocacy of new thinking, even including infrastructure spending.
So if the center, especially including President Obama, can be persuaded to drop their deficit obsession (and again, it’s hardly possible to overstate how badly this debate has been lost), we could trade tax cuts for some austerity relief, like re-extending unemployment benefits and food stamps. And, it’s important to note, both spending increases and tax cuts count as austerity relief. Tax cuts, especially on the rich, aren’t very good stimulus, but they still put money into people’s pockets.
But the main point is to shift ground for negotiation. This strategy of “tax cuts for more spending” has been suggested many times in the past few years and gone nowhere. But before that, it had been the basis for many successful bipartisan deals, including expanding Medicaid in the 1980s and the CHIP program in the 1990s.
So while the deck is stacked against the anti-Austerians, continuing the intellectual battle is by no account useless. It’s highly possible to influence even a crooked debate.
By: Ryan Cooper, Web Editor of The Washington Monthly; Published in The New Republic, January 5, 2014
“The Social Justice Majority”: We Are Far More United Than Our Politics Permit Us To Be
Why are we arguing about issues that were settled decades ago? Why, for example, is it so hard to extend unemployment insurance at a time when the jobless rate nationally is still at 7 percent and higher than that in 21 states ?
As the Senate votes this week on help for the unemployed, Democrats will be scrambling to win support from the handful of Republicans they’ll need to get the required 60 votes. The GOP-led House, in the meantime, shows no signs of moving on the matter.
It hasn’t always been like this. It was not some socialist but a president named George W. Bush who declared: “These Americans rely on their unemployment benefits to pay for the mortgage or rent, food and other critical bills. They need our assistance in these difficult times, and we cannot let them down.”
Bush spoke those words, as Jason Sattler of the National Memo noted, in December 2002, when the unemployment rate was a full point lower than it is today.
Similarly, raising the minimum wage wasn’t always so complicated. The parties had their differences, but a solid block of Republicans once saw regular increases as a just way of spreading the benefits of economic growth.
The contention over unemployment insurance and the minimum wage reflects the larger problem in American politics. Rather than discussing what we need to do to secure our future, we are spending most of our energy re-litigating the past.
A substantial part of the conservative movement is now determined to blow up the national consensus that has prevailed since the Progressive and New Deal eras. The consensus envisions a capitalist economy tempered by government intervention to reduce inequities and soften the cruelties that the normal workings of the market can sometimes inflict.
This bipartisan understanding meant that conservatives such as Bush fully accepted that it was shameful to allow fellow citizens who had done nothing wrong to suffer because they had been temporarily overwhelmed by economic forces beyond their control.
The current debate is flawed for another reason: It persistently exaggerates how divided we are. Of course there are vast cultural differences across our nation. It’s not just a cliche that the worldview of a white evangelical Christian in Mississippi is quite distant from the outlook of a secularist on Manhattan’s Upper West Side. African Americans, Latinos, Asians and whites can offer rather diverse interpretations of the meaning of our national story.
But on core questions involving social justice, we are far more united than our politics permit us to be. A survey released at the end of December by Hart Research, a Democratic polling firm, found that Americans supported extending unemployment insurance by a margin of 55 percent to 34 percent. Several recent surveys, including a Fox News poll, found that about two-thirds of Americans support an increase in the minimum wage.
This leads to two conclusions. The first is that most Americans broadly accept the New Deal consensus. We may disagree about this or that regulation or spending program. We may squabble over exactly how our approaches to policy should be updated for a new century. But there is far more agreement among the American people than there is among Washington lobbies, members of Congress or political commentators on the core proposition that government should help us through rough patches and guarantee a certain level of economic fairness.
The second conclusion is that we have to stop letting the politics of culture wars so dominate our thinking that we forget how much we share when it comes to life’s day-to-day struggles and what we can do to ease them. Disputes over personal morals and lifestyle choices may get more page views or rating points, but they do little to improve anyone’s standard of living.
The minimum-wage increase is typically labeled a “liberal” idea. Yet many grass-roots Republicans see respect for those who work hard as rooted in sound conservative principles demanding decent compensation for a day’s labor. An evangelical might see fair pay as a biblical imperative while a secularist might view the question through a more worldly philosophical prism. Nonetheless, their distinctive reasoning processes lead them to the same place.
President Obama’s old line challenging the idea of red and blue Americas unalterably opposed to each other seems terribly outdated or naive. Electorally, at least, those divisions are still painfully obvious. But on matters of economic justice, we shouldn’t let a defective political system distract us from what we have in common.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, January 5, 2014
“A Gaping Wound In The Republican Psyche”: Obamacare Is No Longer Doomed, It Will Become A Scandal
Obamacare — actual, real, Obamacare, with doctors and cards and everything — has been operational for nearly a week now. It has been … extremely boring. It does not look like Stalinist collectivization. There aren’t even any beheadings. It looks like regular medical insurance, except several million more people now have it than before.
How conservatives will respond next to this mundane new world has become the subject of combative speculation. Greg Sargent predicts Republicans will soon come to terms with the law and begin negotiating for incremental improvements. On the right, Conn Carroll angrily replies that the law’s demise remains “inevitable” and liberals will turn against the law, citing Michael Moore as a harbinger of pro-single-payer liberals who will help Republicans dismantle Obamacare, somehow.
I predict a slightly different outcome than either. Obamacare will neither collapse, nor will Republicans accept its legitimacy, but the nature of their opposition will instead slowly morph. Gleeful predictions of imminent collapse will give way to bitter recriminations at the nefarious tactics used to make the law work. Obamacare will cease to be the something certain to destroy Obama and become something Obama has gotten away with.
In recent weeks, it has begun to dawn on some conservatives that the actuarial death spiral they confidently predicted for years — in which the young and healthy shun the exchanges, leading to sicker and costlier patients and rising prices, in turn driving out the remaining healthy customers — may not actually transpire. It won’t for several reasons, one of them being a set of protections embedded in the law itself called risk corridors and reinsurance, which compensate insurance companies that wind up with a sicker customer base in the first three years of the law’s operation, thus preventing a death spiral.
Republicans, having just learned of these provisions, demand that they be abolished, to hasten the death spirals. Repentant immigration reformer Marco Rubio is at the forefront with a bill to strike them from the law. Obviously Obama would never sign such a bill, but Charles Krauthammer offers a solution: demand he sign it or else refuse to lift the debt ceiling. The program is “a huge government bailout,” argues Krauthammer. This is true in the sense that any cost overrun by a defense contractor is also a huge government bailout — which is to say, it’s not true.
But it feels true, and that is the important thing. The premise that Republicans will seek to alter Obamacare in conservative-friendly ways assumes that the policy design of health-care law is their primary motivating force. Everything about the history of Republican health-care thought suggests the opposite. Just five years ago, Mitt Romney was running on a platform of taking his Massachusetts plan, with its individual mandate, national, provoking only the mildest grumbling on the right.
Obamacare is a gaping wound in the Republican psyche, representing not only the rise of a majority moocher class but a potential symbol of a successful Obama presidency. Health-care reform, George F. Will has ludicrously if representatively declared, amounts to Obama’s “single” achievement. If it lives, it will vindicate his presidency as a liberal Reagan, rather than the reprise of Jimmy Carter (or George W. Bush) Republicans wish him to be.
If and when the law melds into the national fabric, the proximate Republican response will not be to adapt their policy ideas to it, but to denounce it as a kind of stolen law. You can see this spirit creeping out not only in Rubio’s proposal but elsewhere. Eleven Republican attorneys general have denounced Obama’s various administrative maneuvers to make the law functional as illegal. “It was powerful corporate America, with its influential lobbyists, that got an additional year to meet the insurance mandate — when individuals did not,” complains The Wall Street Journal columnist Kimberly Strassel, “It was the unions that got a reprieve from a health-insurance tax — when individuals and small businesses were left to pick up the tab.” The hapless Obamacare is slowly giving way to the devious Obamacare.
In the very long run, Obamacare may become a thing, like Social Security and Medicare, that Republicans initially predict will destroy the fabric of capitalism but eventually accept and then finally swear up and down they will not harm. In the shorter term, it will remain a bloody shirt. Obamacare will be Benghazi or the IRS scandal writ large.
By: Jonathan Chait, Daily Intelligencier, New York Magazine, January 5, 2014
“Maine, The Way Life Should Not Be”: Senate Candidate Has Been “Jailed Repeatedly”
The last few election cycles have offered campaign watchers quite a motley crew of far-right Senate candidates. The cast of characters – Angle, Mourdock, Akin, Buck, O’Donnell, et al – doesn’t include any winners, but it does feature some candidates who are tough to forget.
Will the 2014 cycle offer similarly memorable conservatives? It’s too soon to say, though Erick Bennett, who’s taking on Sen. Susan Collins in a Republican primary in Maine, appears well worth watching. Amanda Marcotte explained why.
Bennett was convicted of domestic violence in 2003 after attacking his wife, who has since divorced him. While this sort of thing traditionally turns voters off, Bennett is employing an unusual strategy by wielding his conviction as evidence that you should vote for him in Maine’s Republican primary.
“The fact that I have been jailed repeatedly for not agreeing to admit to something I didn’t do should speak to the fact of how much guts and integrity I have,” he exclaimed to the press, trying to convince them that his lying ex-wife set him up for reasons unknown. “If I go to D.C., I’m going to have that same integrity in doing what I say, and saying what I do, when it comes to protecting people’s rights, as well as their pocketbooks.”
According to a report in the Bangor Daily News, Bennett also told reporters this week that his domestic-violence conviction has helped encourage him to pursue a “pro-family” agenda.
I’ve met many campaign aides over the years who’ve boasted that just about anything in a candidate’s background is survivable with the right spin. But this Republican Senate candidate appears to be testing the limits of this thesis.
When was the last time anyone saw a credible statewide candidate argue that being “jailed repeatedly” is proof of his “integrity”?
By: Steve Benen, The Maddow Blog, January 3, 2014
“Feeling A Little Left Out”: The Religious Right Won’t Tolerate Being Ignored
The defining debate within the Republican Party over the last several months has pitted Tea Partiers against the GOP’s Corporate wing. The two contingents have already begun gearing up for some notable primary fights in advance of this year’s midterm elections.
But there’s another wing of the party that’s apparently feeling a little left out.
On a recent snowy day in the Washington suburb of Tyson’s Corner, Va., some of the religious right’s wealthiest backers and top operatives gathered at the Ritz-Carlton to plot their entry into the conservative civil war.
Their plan: take a page out of the playbooks of Karl Rove and the Koch brothers by raising millions of dollars, coordinating their political spending and assiduously courting megadonors…. It’s all geared toward elevating the place of social issues like abortion and gay marriage in conservative politics.
To be sure, all of this makes sense. The religious right, as a political movement, wants to remain relevant with its allies, so it stands to reason that leading social conservatives would begin plotting to defend and expand its influence. It may make intra-party tensions a little more complicated in the coming months, but the religious right probably doesn’t much care.
The trouble, though, is in the assumption that social conservatives have been irrelevant of late.
Indeed, the Politico article stated as fact that social issues have “been largely relegated to the sidelines” in Republican politics, and the GOP’s competing wings have both “steered away from social issues they deem too divisive.”
I can appreciate why this might seem true – after all, it’s not as if John Boehner, Mitch McConnell, and Eric Cantor run around prioritizing the culture war above other GOP goals. But the closer one looks, the more these assumptions start to crumble.
For example ,the Guttmacher Institute, a non-profit reproductive health research organization, found that “abortion was at the forefront of the state legislative debate during the past three years – so much so that states added more restrictions to the books from 2011-2013 than during the entire preceding decade.”
This isn’t the result of a party steering away from divisive social issues; this is the opposite.
What’s more, as we discussed a few months ago, let’s not forget that Republican leaders lined up to kiss the religious right movement’s ring at the 2013 Values Voter Summit, and GOP officials incorporated their opposition to contraception into the government-shutdown strategy. While Republican governors spent much of the year trying to limit women’s reproductive choices, it’s not limited to state government – just about the only bills House GOP lawmakers find it easy to pass deal with abortion.
The Republican Party’s commitment to the culture war remains alive and well. The religious right is worried about lost relevance, but the movement already has considerable influence over the GOP’s direction.
By: Steve Benen, The Maddow Blog, January 3, 2014
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