“The Damage Done”: Estimates Of Damage From GOP Hostage-Taking Understate The True Harm Done
The government is reopening, and we didn’t default on our debt. Happy days are here again, right?
Well, no. For one thing, Congress has only voted in a temporary fix, and we could find ourselves going through it all over again in a few months. You may say that Republicans would be crazy to provoke another confrontation. But they were crazy to provoke this one, so why assume that they’ve learned their lesson?
Beyond that, however, it’s important to recognize that the economic damage from obstruction and extortion didn’t start when the G.O.P. shut down the government. On the contrary, it has been an ongoing process, dating back to the Republican takeover of the House in 2010. And the damage is large: Unemployment in America would be far lower than it is if the House majority hadn’t done so much to undermine recovery.
A useful starting point for assessing the damage done is a widely cited report by the consulting firm Macroeconomic Advisers, which estimated that “crisis driven” fiscal policy — which has been the norm since 2010 — has subtracted about 1 percent off the U.S. growth rate for the past three years. This implies cumulative economic losses — the value of goods and services that America could and should have produced, but didn’t — of around $700 billion. The firm also estimated that unemployment is 1.4 percentage points higher than it would have been in the absence of political confrontation, enough to imply that the unemployment rate right now would be below 6 percent instead of above 7.
You don’t have to take these estimates as gospel. In fact, I have doubts about the report’s attempt to assess the effects of policy uncertainty, which relies on research that hasn’t held up very well under scrutiny.
Yet it would be a mistake to conclude that Macroeconomic Advisers overstated the case. The main driver of their estimates is the sharp fall since 2010 in discretionary spending as a share of G.D.P. — that is, in spending that, unlike spending on programs like Social Security and Medicare, must be approved by Congress each year. Since the biggest problem the U.S. economy faces is still inadequate overall demand, this fall in spending has depressed both growth and employment.
What’s more, the report doesn’t take into account the effect of other bad policies that are a more or less direct result of the Republican takeover in 2010. Two big bads stand out: letting payroll taxes rise, and sharply reducing aid to the unemployed even though there are still three times as many people looking for work as there are job openings. Both actions have reduced the purchasing power of American workers, weakening consumer demand and further reducing growth.
Putting it all together, it’s a good guess that those estimates of damage from political hostage-taking understate the true harm done. Elections have consequences, and one consequence of Republican victories in the 2010 midterms has been a still-weak economy when we could and should have been well on the way to full recovery.
But why have Republican demands so consistently had a depressing effect on the economy?
Part of the answer is that the party remains determined to wage top-down class warfare in an economy where such warfare is particularly destructive. Slashing benefits to the unemployed because you think they have it too easy is cruel even in normal times, but it has the side effect of destroying jobs when the economy is already depressed. Defending tax cuts for the wealthy while happily scrapping tax cuts for ordinary workers means redistributing money from people likely to spend it to people who are likely to sit on it.
We should also acknowledge the power of bad ideas. Back in 2011, triumphant Republicans eagerly adopted the concept, already popular in Europe, of “expansionary austerity” — the notion that cutting spending would actually boost the economy by increasing confidence. Experience since then has thoroughly refuted this concept: Across the advanced world, big spending cuts have been associated with deeper slumps. In fact, the International Monetary Fund eventually issued what amounted to a mea culpa, admitting that it greatly underestimated the harm that spending cuts inflict. As you may have noticed, however, today’s Republicans aren’t big on revising their views in the face of contrary evidence.
Are all the economy’s problems the G.O.P.’s fault? Of course not. President Obama didn’t take a strong enough stand against spending cuts, and the Federal Reserve could have done more to support growth. But most of the blame for the wrong turn we took on economic policy, nonetheless, rests with the extremists and extortionists controlling the House.
Things could have been even worse. This week, we managed to avoid driving off a cliff. But we’re still on the road to nowhere.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 17, 2013
“Captain Of The USS Republican”: Raking In The Money, Ted Cruz Discovers The Fringe Benefits Of Failure
The recent political turmoil in Washington was multifaceted and involved quite a few personalities, motivations, and working parts. No one person was ultimately responsible for the entire nightmare.
But if we were to focus in on one main culprit, it’s safe to say Sen. Ted Cruz (R-Texas) would lead the list of suspects. He spent the August recess demanding his party follow his shutdown plan; he offered leadership to House Republicans; the right-wing senator even made himself the public face of this fiasco with a 21-hour speech that served no legislative purpose, but made it easy for Ted Cruz to celebrate his fondness for Ted Cruz.
The freshman Republican became so notorious that when he campaigned for Ken Cuccinelli in Virginia a couple of weeks ago, the gubernatorial hopeful didn’t want any photographs taken of the two of them together.
But let’s not miss the forest for the trees. Cruz led his party into a ditch and drew the ire of Republicans who blame him for his misguided crusade, but the far-right Texan appears to still be in the midst of a long con.
If you were curious, talking on television for 21 straight hours is very lucrative. Over the last quarter, Ted Cruz’s still-young political action committee pulled in $797,000 during the period that included his extended C-SPAN advertorial. It’s nearly twice what Cruz pulled in the quarter prior. […]
His October report, which covers July 1 to September 30, notes that his PAC has $378,000 on-hand after the nearly $800,000 haul, money that will be used to support conservative candidates and issues close to Cruz’s heart.
Cruz isn’t making many friends among his Senate colleagues; he has no prospects for actually passing bills; and he’s cultivated a public reputation as a dangerous extremist. This may seem like a poor combination, but the senator clearly doesn’t see it that way.
While pushing his party over a cliff, Cruz has also positioned himself as a guy capable of winning straw polls, quickly raising a lot of money, and collecting a massive new database of conservative donors and activists – which may come in handy if a certain someone intends to launch a bid for national office in a couple of years.
Cruz’s party shut down the government and caused a debt-ceiling crisis for reasons that still don’t make any sense, leading to a surrender in which Republicans gained nothing. In fact, it was worse than nothing – the GOP has seen its support collapse, ending up with a deal that could have been better for the party had it been less ridiculous weeks ago.
But from Cruz’s perspective, these developments, while unfortunate, are a small price to pay for advancing his personal ambitions.
By: Steve Benen, The Maddow Blog, October 17, 2013
“Speaker In Name Only”: Why John Boehner’s Failures Don’t Affect His Job Security
House Speaker John Boehner (R-Ohio) has struggled since grabbing the gavel 33 months ago, but the last few weeks have been especially brutal. He didn’t want a government shutdown, but his own members rejected his advice. Boehner didn’t want a debt-ceiling crisis, either, but his members balked at following his lead on this, too.
Even last night, after the Speaker endorsed a bipartisan resolution to the crisis his own caucus created, most House Republicans rejected the plan Boehner grudgingly supported.
Indeed, just 24 hours ago, National Review’s Robert Costa had breakfast with some House Republican lawmakers who said they’re “losing faith in their leadership.”
So how much trouble is Boehner really in? Not as much as common sense might suggest.
House conservatives said Wednesday that Speaker John Boehner (R-Ohio) is in no danger of losing his post, despite presiding over a Republican defeat in the fight over government funding and the debt ceiling.
“I don’t think Speaker Boehner has anything to worry about right now,” said Rep. Raúl Labrador (R-Idaho), a conservative who refused to vote for Boehner in January.
When Boehner hosted a caucus meeting yesterday, breaking the news that the House would have to pass the Senate’s bipartisan compromise, he received a standing ovation – even though most House Republicans opposed and rejected the plan.
Roll Call added, “GOP lawmakers from across the conference say there are no coup attempts in the works and few complaints over the job Boehner did on the shutdown and debt limit fights.”
How is this possible? As implausible as this may seem, congressional Republicans are pointing a lot of fingers this morning, but none of them are pointed at the Speaker. GOP pragmatists are blaming Tea Partiers; Tea Partiers are blaming pragmatists; and they’re both blaming the media. Republicans are furious with President Obama for not caving the way they expected him to, and are even angrier with Senate Majority Leader Harry Reid for making them look bad.
But Boehner, at least for the time being, is in the clear. He took orders from his followers, so for now, they’re satisfied.
Stepping back, though, the bigger picture offers a good-news/bad-news dynamic for the embattled, accomplishment-free Speaker. The good news is, Boehner’s GOP conference still likes him and sees no need to replace him.
The bad news is his members intend to keep ignoring his wishes and rejecting his advice.
In other words, Boehner is still the Speaker. He’s also still the Speaker In Name Only.
By: Steve Benen, The Maddow Blog, October 17, 2013
“What Lesson Was Learned?”: For Republicans, It’s About “The How” Rather Than “The What” And “The Why”
So if the end of the fiscal crisis represents, as Ross Douthat calls it, a “Teachable Moment” for the GOP, what would that lesson, exactly, be? It mostly appears to be about strategy and tactics, not goals or ideology (or “principles” as ideologues like to say in their endless efforts to ascribe dishonesty and gutlessness to dissidents).
Even for Douthat, who clearly wants the memory of the Tea Folk (or to use his term, “populist”) failure in this incident to be seared into the collective memory of Republicans, it’s mostly about the how rather than the what and the why:
The mentality that drove the shutdown — a toxic combination of tactical irrationality and the elevation of that irrationality into a True Conservative (TM) litmus test — may have less influence in next year’s Beltway negotiations than it did this time around, thanks to the way this has ended for the defunders after John Boehner gave them pretty much all the rope that they’d been asking for. But just turn on talk radio or browse RedState or look at Ted Cruz’s approval ratings with Tea Partiers and you’ll see how potent this mentality remains, how quickly it could resurface, and how easily Republican politics and American governance alike could be warped by it in the future.
So for undeluded conservatives of all persuasions, lessons must be learned. If the party’s populists want to shape and redefine and ultimately remake the party, they can’t pull this kind of stunt again.
The problem was “the stunt,” not the violent antipathy towards a pale version of universal health coverage or the conviction that the New Deal/Great Society legacy is fatal to America or the belief that nearly half the country is composed of satanic blood-suckers and baby-killers.
Eric Cantor stressed this distinction between strategy and tactics, on the one hand, and ideology on the other in his speech to yesterday’s doomed House Republican Conference:
“We all agree Obamacare is an abomination. We all agree taxes are too high. We all agree spending is too high. We all agree Washington is getting in the way of job growth. We all agree we have a real debt crisis that will cripple future generations. We all agree on these fundamental conservative principles. . . . We must not confuse tactics with principles. The differences between us are dwarfed by the differences we have with the Democratic party, and we can do more for the American people united,” he told them.
In fact, I’m beginning to get the sense that the more loudly a conservative denounces the tactics of the fiscal fight as idiotic, the more he or she can be counted on to insist on agreeing with the ideology that motivated the idiocy in the first place.
One of my favorite characterizations of the whole “defund Obamacare” crusade was by the conservative blogger Allahpundit:
If “defund” was more likely than repeal, it was more likely in the sense that an 85-yard field goal is more likely than a 90-yard one.
But don’t confuse that strategic argument with any broader sense that conservatives or Republicans should rethink their entire militant opposition to the Affordable Care Act. No, it just means recognizing that getting rid of this law–as opposed to obstructing it and making sure the number of people benefitting from it is as small as possible–must await the kind of victory in 2016 that eluded the party last year.
Don’t get me wrong here: there’s great value to the nation in convincing one of our two major political parties to respect the results of elections and eschew wildly disruptive legislative strategies and tactics. But even if that “lesson was learned,” and the jury’s still out on that proposition, it’s not the same as a serious reconsideration of today’s radical conservatism, which may well emerge from this incident as strong as ever.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 17, 2013
“Standing With Mitch”: Is Rand Paul A Secret RINO?
Rand Paul (R-KY) was one of the 18 senators who voted against the deal brokered between Senate Majority Leader Harry Reid (R-NV) and Senate Minority Leader Mitch McConnell (R-KY) that ended the government shutdown and raised the debt limit — but that deal would likely never have happened if not for Paul’s alliance with McConnell.
Less than four years ago, Paul easily defeated Secretary of State Trey Grayson, McConnell’s choice to replace Senator Jim Bunning, in a GOP primary. The minority leader quickly moved to make amends with Paul as the Tea Party favorite cruised to a win in the general election.
Since 2010, the two men have formed a relationship of equals that’s worked to the advantage of both. “You know, I think when we call people a ‘mentor,’ I think that overstates,” Paul said when asked about the nature of their bond earlier this year. “We are colleagues, and I do respect him.”
McConnell backed Paul’s “drone” filibuster of future CIA director John Brennan. Paul has not only endorsed McConnell’s re-election, he’s lent out his campaign manager Jesse Benton to the senator. A hot mic caught the two senators discussing tactics for how to avoid blame for the government shutdown.
It’s impossible to imagine McConnell being able to swoop in at the last moment to negotiate a deal if he weren’t leading his primary opponent — Tea Partier Matt Bevin — by as much as 40 percent. And it’s impossible to imagine McConnell crushing a hardline opponent so handily if Paul had decided to back said hardline opponent.
In the wake of the McConnell-Reid compromise, Speaker John Boehner (R-OH) has gotten most of the grief from the Tea Party. You can get a sampling of the vile things he’s being called on his Facebook page from this Tea Party Insult Generator. The Speaker is much more deserving of grief because he let the shutdown happen and refused to even hold a vote on the “clean” continuing resolution that McConnell let pass the Senate.
However, Sarah Palin said on Thursday that she’s ready to fight in Kentucky in order to “shake things up in 2014.”
McConnell has already said there will not be another shutdown over Obamacare. He also refused to comment on the ascent of Senator Ted Cruz (R-TX). To those who have embraced the junior senator from Texas as the new leader of the conservative movement, this makes the minority leader a member of the “Surrender Caucus.”
It used to be a big deal when a former member of a national Republican ticket threatened to support a primary challenge to the GOP’s leader in the Senate. But that was back when Republican congressmen didn’t accuse former GOP standard-bearers of being in league with al Qaeda.
Palin’s threat would be a much bigger problem for the senator if Rand Paul weren’t standing with Mitch. And if you’re wondering where Paul’s loyalty is coming from, ask the man both men have employed — Jesse Benton. If he doesn’t know he’s being recorded, Benton might tell you, “I’m sorta holdin’ my nose for two years, cause what we’re doin’ here is going to be a big benefit for Rand in ’16…”
By: Jason Sattler, The National Memo, October 17, 2013
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