“Tea Party Absolutism”: The High Cost Of Hating Government Levies An Enormous Unnecessary Cost On Everyone Else
The tourniquet applied by the outgoing Congress to the economy allows a two-month breather before we are consumed by the next deadline. The president and his party can allow themselves a brief moment of celebration for imposing higher taxes on the richest Americans, but the next stage in fixing the nation’s fiscal problems may not be as easy. By the end of February, lawmakers must find enough cuts in public spending to allow the debt ceiling to be raised. Two more months of uncertainty will prevent businesses and consumers from making spending decisions that would bolster the economic recovery.
The devil is not so much in the detail of the arguments to come as the big picture that frames the debilitating running debate. While the difference between the sides is ostensibly over taxes and public spending and borrowing, the more profound division is over where government should begin and end. For many of the Republican Party’s Tea Party insurgents, the choice is even more fundamental: whether there should be a government at all. Their unbending position, demanding an ever-diminishing role for the federal government, has levied an enormous unnecessary cost on everyone else.
Since Republicans regained control of the House in the 2010 mid-terms, when the Tea Party tide was in full force, they have attempted to freeze the size of government, coincidentally putting a brake on economic recovery. They have vetoed attempts at further economic stimulus, encouraged America’s economy to be downgraded by the ratings agencies by threatening not to extend the debt ceiling, and tried to veto any and every tax increase in the fiscal cliff talks. Their aim is to shrink government by starving it of funds. Such uncompromising absolutism has led to the dampening of business confidence and investment that would have created jobs.
It is not just the economy that has suffered from the absolute positions held by the anti-government rump in the GOP. Their insistence that the Founding Fathers intended us to be allowed to carry guns of any sort, including the rapid-fire assault weapon that killed 20 children and six adults in Newtown, Connecticut, last month, continues to hamper attempts to curb the nation’s murderous gun violence. Ghosts from the eighteenth century are preying on our school-children, abetted by those who believe that compromise on amending our gun laws is surrendering to the forces of big government. Such unbending absolutism costs human lives.
Similarly, suspicion of government is behind the growth in home schooling, that narrows the education of children, deprives them of a sense of community, and diminishes their social skills. It came as little surprise to read reports that the Newtown shooter was kept home from school by his mother, a “survivalist” or “Doomsday Prepper”, who stockpiled food and guns because she expected an imminent economic apocalypse. Such paranoia about the role of government is a recurring theme in our society’s most appalling massacres, from the bombing of the Federal Government Building in Oklahoma City in 1995 by the anti-government militiaman Timothy McVeigh, who killed 168, including 19 children, to the FBI siege of the anti-government Branch Davidian sect in Waco, Texas, in 1993, that left 76 dead.
Hostility to government also ensures that health care is unnecessarily expensive. The average cost of American health care is $8,233 per person per year, the most expensive in the developed world. In comparable Western countries such as France, which has a private health insurance mandate administered by the state, it is $3,974. In Britain, which for 65 years has enjoyed a taxation-funded national health system, it is $3,433. As much as Americans may prefer to believe that they have a health care system second to none, there is little discernible difference between the quality of health care provided, nor the efficacy of the medicine administered in the three countries, while dealing with the health insurance bureaucracy here is considerably more time-wasting, expensive, and irritating.
Changes in demography, with Americans living longer and using more medical resources to enjoy a tolerable quality of life, mean that health care costs will continue to rise unless reforms are made. The easiest way to reduce American health care costs would be for the federal government to provide a “single payer” alternative to compete with the near-monopolistic private health insurance companies. But such a system is considered an abomination by absolutists who demand that the federal government should keep out of healthcare. The harsh alternative is to cut the amount of care the system provides to the elderly. Again, an unbending attitude to the government’s role and responsibilities comes at an exorbitant cost.
Conservative theologians have devoted themselves to explaining why government interference is a bad thing. For Milton Friedman, the American system of government was so monetized from the moment the Republic was founded, and so open to corruption, that he always advocated small government – at least in the United States. For the Austrian thinker Friedrich Hayek, writing in his influential masterwork The Road to Serfdom, a burgeoning state could lead to tyranny. To be fair to Hayek, who wrote his topical tract as World War II was drawing to a close, he was principally concerned that free enterprise might continue to be stifled by the imperatives of the wartime command economy once peace was declared. In The Road to Serfdom, in a passage often ignored by contemporary conservatives, he insisted that all governments should provide a generous safety net for the needy, homes for the homeless, and universal health care.
Tea Party members owe less to conservative thinkers such as Friedman and Hayek than to uncompromising proponents of the untrammelled free market such as the libertarians Ayn Rand and Ron Paul. When the new Congress comes to head off another fiscal cliff crisis at the end of next month, it will take courage from the Republican leadership to keep their extreme wing in check. If they fail to do so and they demand too deep cuts to public spending too quickly, they will not only cause the American economy to return to recession but may find that the middle ground voters who decide elections will add together the vast cost of their allies’ absolutist intransigence and keep them in opposition forever.
By: Nicholas Wapshott, The National Memo (originally appeared at Reuters.com), January 7, 2013
“It’s Really Not That Complicated”: Republicans Are At The Intersection Of Recklessness And Stupidity
Sen. John Cornyn (R-Texas) has an op-ed in the Houston Chronicle today, explaining why he believes it’s responsible to hold the debt ceiling hostage until President Obama “puts forward a plan” that makes Republicans happy. The piece is filled with errors of fact and judgment, but there was one truly bizarre claim that stood out for me.
“The coming deadlines will be the next flashpoints in our ongoing fight to bring fiscal sanity to Washington,” the Texas Republican wrote. “It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country.”
Just at a surface level, this is ridiculous — to prevent possible trouble in the future, Cornyn intends to cause deliberate trouble now? But even putting that aside, I’m not sure if the senator understands the nature of the controversy. Failing to raise the debt limit — that is, choosing not to pay the bills for money that’s already been spent — doesn’t just “partially shut down the government,” it pushes the nation into default and trashes the full faith and credit of the United States.
Does Cornyn, a member of the Finance and Budget committees, not understand this? Just as importantly, is Senate Minority Leader Mitch McConnell (R-Ky.) equally confused?
“By demanding the power to raise the debt limit whenever he wants by as much as he wants, [President Obama] showed what he’s really after is assuming unprecedented power to spend taxpayer dollars without any limit,” McConnell argued on the Senate floor.
At the risk of being impolite, McConnell’s comments are plainly dumb. As a policy matter, it’s just gibberish, and the fact that the Senate Minority Leader doesn’t seem to know what the debt ceiling even is, after already having threatened default in 2011 and planning an identical scheme in 2013, raises serious questions about how policymakers can expect to resolve a problem they don’t seem to understand at a basic level.
For the record, Congress, by constitutional mandate, has the power of the purse. Unless you’re Ronald Reagan illegally selling weapons to Iran to finance a secret and illegal war in Nicaragua, the executive branch can’t spend money that hasn’t already been authorized by the legislative branch.
If the president had the authority to raise the debt ceiling on his or her own, it would not give the White House the authority to “spend taxpayer dollars without any limit,” since any administration would still be dependent on Congress for expenditures. The debt limit has nothing to do with this — spending authority would be unchanged no matter which branch had the power over raising the limit, and whether the ceiling existed or not.
It’s really not that complicated. Congress approves federal spending, the executive branch follows through accordingly. When the legislative branch spends more than it takes in, the executive branch has to borrow the difference.
In the 1930s, Congress came up with the debt ceiling, mandating the White House to get permission to borrow the money that Congress has already spent. If McConnell, Cornyn, and their hostage-taking friends refuse to raise the ceiling, the administration can’t pay the nation’s bills. It’s that simple.
Either GOP lawmakers like McConnell and Cornyn haven’t yet grasped these basic details, or they’re cynically hoping the public is easily misled by bogus rhetoric. Either way, there’s little hope of a sensible public debate if Senate Republican leaders repeat nonsense about a looming national crisis.
By: Steve Benen, The Maddow Blog, January 4, 2013
“A Terminally Angry Man”: John McCain’s Dark Quest For Relevancy Has Turned Him Into A Comic Book Villain
It’s a story as old as literature and as modern as a current edition of a Marvel comic book.
A once young and talented protagonist sets out on the road to glory, intent on using his special abilities for the good of mankind in his noble quest to become a hero of mythic proportion.
Along the way, life deals our hero a catastrophic blow—one that turns our protagonist away from the road of righteousness and onto the very different and destructive path of the antagonist. Suddenly, his clarity altered by the indignities, disappointments and tragedies life has unexpectedly visited upon him, our hero resolves to prove to the world the terrible mistake they made when casting him aside—no matter what it takes to do so.
You see, in our character’s mind, he is not the evil one. It is the world that is to blame for failing to accept the greatness our once heroic figure so generously offered to us, something the world will finally understand when our protagonist—now the antagonist—forces us to acknowledge his worthiness, even if it means using dark and dastardly methods to make us appreciate the terrible error the world or, in this case, his country has made in rejecting him.
Earlier this week, as I watched Senator John McCain threaten, during a CNN interview with Wolf Blitzer, to lead an effort to take the world’s economies hostage by refusing to raise the debt ceiling until he accomplishes the spending cuts he desires, I could not help but be reminded of this classic, “hero to villain” literary scenario just as I could not help but feel profound sadness for the transformation that has taken place in this man I once respected—a transformation that can be traced directly to the disappointment McCain suffered when losing his life’s objective, the presidency of the United States.
If you doubt the impact of McCain’s threat, you need only consider the words of Mark Zandi, Chief Economist at Moody’s Analytics and one-time senior economic advisor to John McCain’s presidential campaign:
“The cornerstone of the global financial system is that the United States will make good on its debt payments. If we don’t, we’ve just knocked out the cornerstone and the system will collapse in turmoil.”
This is, indeed, very serious business.
And yet, the 2013 version of John McCain was giddy with joy as he filled the television screen with his warnings of the havoc he plans to rain down upon the American and world economies via the hostage drama the Senator and his accomplices are cooking up, a drama that could aptly be billed as “Debt Ceiling II- Revenge Of The Republicans.”
I have no objection to Senator McCain having his position on spending reduction, although I think he would be far more credible on the subject if he was willing to, at the least, choose to consider spending cuts in all government programs— including his beloved defense budget—rather than looking solely to entitlements as the object of his chainsaw’s desires.
I also recognize that a majority of Americans likely share the GOP’s belief that spending cuts are required if we are to get the nation on a more realistic and sustainable financial footing. And while the timing of such cuts remains a critical question—lest we bring our economic recovery to a screeching halt by cutting too deeply and too quickly—getting things on the right track will no doubt involve changes to our entitlement programs just as we will need to alter our defense spending habits.
However, using the threat of destroying the world’s economies to accomplish the direction preferred by McCain, and those who share his objectives, is a plot line far better suited to an old James Bond movie than it is to a rational policy discussion among the leaders of the world’s largest economic power, the United States of America.
Certainly, no American should be willing to stand for anyone who would adopt the tactics of fictional villains as the means to accomplish their wants and desires—even if they believe that their desires are in the best interests of the nation. There is no shortage of leverage points available to Senator McCain in pursuing his agenda—none of which involve taking our nation, and by extension, the nations of the word, hostage by threatening to do unspeakable damage in order to get his way.
You have to ask yourself whether—prior to suffering the loss of the presidency—the one-time “Maverick of the Senate” would have so much as considered blackmail as an acceptable tactic in pursuing a policy direction he believed to be in the nation’s interest.
I truly do not think so.
McCain of old would have hit the television talk show circuit and done his best to sell his countrymen on the merits of his position—not hold a gun to the nation’s head until we cried ‘uncle’. The McCain of old would have campaigned for his point of view with the self-effacing charm and reasonableness we came to expect of him, maybe even dropping by “Saturday Night Live”—the comedy program he used to regularly appear on for a quick cameo—in an effort to bring us around to his point of view.
But that John McCain has disappeared, replaced by a terminally angry man who would now be completely out of place in any environment designed to remind us that it is precisely because he did not take himself too seriously that we should take him all the more seriously.
I have no doubt that Senator McCain believes he is acting in the best interest of the nation. Isn’t that always the way of the ‘hero turned villain’ who believes that imposing his will on the world—by doing whatever it takes—is what is required of him? Don’t these characters always persuade themselves that, while the medicine they are forcing down our throats may be painful, illegal or immoral, we will all thank them for it in the end when we’ve finally seen with our own eyes just how right they are?
It’s tragic that this is the path that John McCain has chosen to pursue. However, it is not a path that we, as a nation, can tolerate from McCain or anyone else.
No matter how much you may agree with Senator McCain’s cost-cutting objectives…no matter how strong your belief that extreme cuts to any particular government program is essential to our financial survival… our national survival cannot be accomplished by giving in to those who would threaten to take us down if we fail to give in to their blackmail.
If Senator McCain— and those who share his point of view— wish to hold up every bit of legislation or appointment offered up by the President or the Democratic leadership in Congress, or utilize any of the many legitimate levers of power that come with the roles they have been granted by way of their being elected to office, that is their right.
It will then be up to the American people to determine whether or not the behavior of those willing to legally obstruct government in furtherance of their conscious was appropriate and in the best interest of the nation—an opinion that will be expressed by the voters during the 2014 election cycle and beyond.
However, threats to create an economic cataclysm as a means to accomplish a political or policy goal is not such a permissible tactic as such are the tactics of thugs and blackmailers. They are the tactics best left to the characters of comic literature and the movies—not the elected officials of a great democracy.
The President is right when he says he will not have a debate nor negotiate with those who seek to blackmail the nation into doing things their way. And whether you support this president or not, every Americans should stand up and reject this profoundly disturbing behavior on the part of Senator McCain and his cohorts. In America, we don’t negotiate with anyone who would threaten to destroy our country, no matter how much they have convinced themselves that it is, in some sick way, in the nation’s best interest to do so.
By: Rick Ungar, Op-Ed Contributor, Forbes, January 2, 2013
“A Deal For All”: A New Focus For Congress Called “Fixing The Economy”
The Perils of Pauline melodrama over the “fiscal cliff” will drag on as Washington heads toward another “debt ceiling” faceoff that will climax over the next eight weeks or so.
This farce captivates the media, but no one should be fooled. This is largely a debate about how much damage will be done to the economic recovery and who will bear the pain. There is bipartisan consensus that the tax hikes and spending cuts that Congress and the White House piled up to build the so-called fiscal cliff are too painful and will drive the economy into a recession. So the folderol is about what mix of taxes and spending cuts they can agree on that won’t be as harsh.
Largely missing is any discussion of how to fix the economy, to make it work for working people once more. Just sustaining the faltering recovery won’t get it done. We’re still struggling with mass unemployment, declining wages and worsening inequality. Corporate profits now capture an all-time record percentage of the economy; workers’ wages have hit an all-time low. A little constriction, or a lot, won’t do anything to change that reality.
So how about a New Year’s resolution for Washington’s political class: Vow to focus on what can be done to fix the economy, rather than on how much to lacerate it. That would require dealing with causes, not effects. And those surely would include:
Inequality: Clearly — as even the International Monetary Fund has recognized — extreme inequality saps the effective demand needed for a robust economy.
We need to rebuild a middle class if we want to again have a vibrant, growing economy. That requires a lot more than repealing the Bush tax breaks for the top 2 percent. We should be lifting the minimum wage, empowering workers to bargain for a fair share of the productivity and profits they help to generate, and limiting CEO pay packages that give them multimillion-dollar incentives to ship jobs abroad or plunder their own companies. Congress and the White House might also imitate the Federal Reserve and keep pressing the stimulus pedal until we move much closer to full employment.
Catastrophic climate change: Gross domestic product registers growth when people go to work picking up the pieces after a climate disaster, but Americans suffer rather than benefit. It’s long past time for the United States to get serious about global warming, make the investments needed to capture a lead in the green industrial revolution that is sweeping the world, end the subsidies to Big Oil and King Coal, and help the movement to clean energy.
Fixing health care: The wrongheaded agonizing over whether to cut scholarships for poor students or lay off food inspectors ignores the gorilla in the accounting books. Our long-term budget deficits are a consequence of our broken health-care system. If we spent per capita what other industrial nations spend on health care (with, incidentally, better health results), we would be projecting surpluses. This isn’t about stripping 65-year-olds of Medicare; it’s about taking on the drug and insurance companies and hospital complexes that drive up our costs. Affordable health care is a right, not a privilege.
Rebuilding America. While Washington hyperventilates about cutting spending, the excesses of this conservative era have starved society of essential building blocks. A high-wage economy needs a modern, efficient, world-class infrastructure to be competitive. Families depend on effective governance for clean air and water, safe sewage, enforcement of occupational safety standards, world-class schools and more. Our debate has deteriorated to the point that a Democratic president brags that domestic discretionary spending — which covers basic public services from the Coast Guard to child nutrition — will be cut to a share of the economy not seen since Eisenhower. That is, in a word, goofy.
Why not at least begin an informed discussion of the services we need and the ways we can afford them?
The Congressional Progressive Caucus has started that discussion with its “Deal For All” — a smart mix of fair-share taxes and cuts designed to ensure that those who never benefited from “shared prosperity” don’t get whacked unjustly by the prevailing mantra of “shared sacrifice.”
Americans, sensibly enough, will grow more disgusted with Washington whatever resolution is reached on the fiscal cliff over these next weeks. Politicians will continue to fight about how much damage to do, not how to build what comes next. What the country needs is legislators who will focus on building rather than dismantling.
By: Katrina vanden Heuvel, Opinion Writer, The Washington Post, December 31, 2012
“When Prophecy Fails”: It’s Time To Stop Taking The Members Of The Doomsday Cult Seriously
Back in the 1950s three social psychologists joined a cult that was predicting the imminent end of the world. Their purpose was to observe the cultists’ response when the world did not, in fact, end on schedule. What they discovered, and described in their classic book, “When Prophecy Fails,” is that the irrefutable failure of a prophecy does not cause true believers — people who have committed themselves to a belief both emotionally and by their life choices — to reconsider. On the contrary, they become even more fervent, and proselytize even harder.
This insight seems highly relevant as 2012 draws to a close. After all, a lot of people came to believe that we were on the brink of catastrophe — and these views were given extraordinary reach by the mass media. As it turned out, of course, the predicted catastrophe failed to materialize. But we can be sure that the cultists won’t admit to having been wrong. No, the people who told us that a fiscal crisis was imminent will just keep at it, more convinced than ever.
Oh, wait a second — did you think I was talking about the Mayan calendar thing?
Seriously, at every stage of our ongoing economic crisis — and in particular, every time anyone has suggested actually trying to do something about mass unemployment — a chorus of voices has warned that unless we bring down budget deficits now now now, financial markets will turn on America, driving interest rates sky-high. And these prophecies of doom have had a powerful effect on our economic discourse.
Thus, back in May 2009 the Wall Street Journal editorial page seized on an uptick in long-term interest rates to declare that the “bond vigilantes,” the “disciplinarians of U.S. policy makers,” had arrived, and would push rates inexorably higher if big budget deficits continued. As it happened, rates soon went back down. But that didn’t stop The Journal’s news section from rolling out the same story the next time rates rose: “Debt fears send rates up,” blared a headline in March 2010; the debt continued to grow, but the rates went down again.
At this point the yield on the benchmark 10-year bond is less than half what it was when that 2009 editorial was published. But don’t expect any rethinking on The Journal’s part.
Now, you could say that The Journal’s editors didn’t give a specific date for the fiscal apocalypse, although I doubt that any of their readers imagined that they were talking about an event at least three years and seven months in the future.
In any case, some of the most prominent deficit scolds have indeed been willing to talk about dates, or at least time horizons. In early 2011 Erskine Bowles confidently declared that we would face a fiscal crisis within around two years unless something like the Bowles-Simpson deficit plan was enacted, and Alan Simpson chimed in to say that it would be less than two years. I guess he has about 10 weeks left. But again, don’t expect either Mr. Simpson or Mr. Bowles to admit that there might have been something fundamentally wrong with their analysis.
No, very few of the prophets of fiscal doom have acknowledged the failure of their prophecies to come true so far. And those who have admitted surprise seem more annoyed than chastened. For example, back in 2010 Alan Greenspan — who is, for some reason, still treated as an authority figure — conceded that despite large budget deficits, “inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued.” But he went on to declare, “This is regrettable, because it is fostering a sense of complacency.” How dare reality not validate my fears!
Regular readers know that I and other economists argued from the beginning that these dire warnings of fiscal catastrophe were all wrong, that budget deficits won’t cause soaring interest rates as long as the economy is depressed — and that the biggest risk to the economy is that we might try to slash the deficit too soon. And surely that point of view has been strongly validated by events.
The key thing we need to understand, however, is that the prophets of fiscal disaster, no matter how respectable they may seem, are at this point effectively members of a doomsday cult. They are emotionally and professionally committed to the belief that fiscal crisis lurks just around the corner, and they will hold to their belief no matter how many corners we turn without encountering that crisis.
So we cannot and will not persuade these people to reconsider their views in the light of the evidence. All we can do is stop paying attention. It’s going to be difficult, because many members of the deficit cult seem highly respectable. But they’ve been hugely, absurdly wrong for years on end, and it’s time to stop taking them seriously.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 22, 2012
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