The One And Only Cause Of “Fiscal Cliff” Economic Crisis: Republicans Fear Of Tea Party Primaries
Often, economic crises are caused by real physical problems – like draught, war, demography, or technological innovation that robs one economy of a competitive advantage over another.
Other times, economic crises result when asset bubbles burst, or financial markets collapse. That was the case of the Great Depression – and more recently the Great Recession.
The economic crisis of the moment – the “fiscal cliff” – does not result from any of these factors. In fact it is not a real “economic crisis” at all, except that it could inflict serious economic hardship on many Americans and could drive the economy back into recession.
The “fiscal cliff” is a politically manufactured crisis. It was original concocted by the Republican Senate Leader, Mitch McConnell as a way to get past the last crisis manufactured by the Republicans – the 2011 standoff over increasing the Federal Debt Ceiling.
Theoretically, “the cliff” – composed of increased taxes and huge, indiscriminant cuts in Federal programs – would be so frightening to policy makers that no one would ever consider allowing the nation to jump.
Now, America is on the brink of diving off the cliff for one and only one reason: many House Republicans are terrified of primary challenges from the Tea Party right.
That’s right, if your tax bill goes up $2,200 a year, or you’re one of the millions who would stop receiving unemployment benefits, the cause of your economic pain is not some a natural disaster, or a major structural flaw in the economy. The cause is Republican fear of being beaten in a primary by people like Sarah Palin, Sharon Angel or Richard Mourdock – funded by far Right Wing oligarchs like Sheldon Adelson and the Koch Brothers. It’s that simple.
Most normal Americans will have very little patience with Republicans as they begin to realize that GOP Members of Congress are willing to risk throwing the country back into a recession because they are worried about being beaten in low turn out primaries by people who do a better job than they do appealing to the extreme right fringe of the American electorate – and to the far Right plutocrats that are all too willing to stoke right wing passion and anger.
Nate Silver, of the New York Time’s 538.com, argues in a recent column that one of the reasons for this phenomenon is the increasing polarization of the American electorate. That polarization translates in to fewer truly “swing” Congressional seats and an increasing number where Members are more concerned with primary challenges than they are with losing in a general election. He concludes that at this moment the number of solidly Republican seats is larger the number of solidly Democratic seats.
This, he argues is partially a result of redistricting by Republican legislatures that packed Democrats into a limited number of districts in many states. But he also contends it results from increasing polarization of the electorate in general. And it is due to the fact that solidly Democratic urban areas have very high concentrations of Democrats, where Republican performing areas tend to have relatively lower concentrations of Republicans. These reasons help explain why, even though Democrats got more votes in House races this cycle than Republicans, Republicans still have more seats in the House.
Increased political polarization in the United States is not a result of some accident or act of God. In 2006, political scientists Nolan McCarty, Kevin T. Poole and Howard Rosenthal published a study of political polarization called Polarized America: The Dance of Ideology and Unequal Riches. Their study found that there is a direct relationship between economic inequality and polarization in American politics.
They measured political polarization in congressional votes over the last century, and found a direct correlation with the percentage of income received by the top 1% of the electorate. It is no accident that the years following the second World War, a period of low political polarization, was also a period that economist Paul Krugman refers to as the “great compression” — with robust economic growth for most Americans and reducing levels of economic inequality. In other words, it turns out that if you want less political polarization, the best medicine is reducing income inequality.
Of course, one of the other major factors feeding the GOP fear of primaries is that, because of the Citizens United decision, far right plutocrats can now inject virtually unlimited amounts of money into primary races. Unlimited independent expenditures have so far been much more successful in unseating incumbent Republican Members of Congress than it has been winning General Elections.
In the end, of course the relatively more diluted presence of Republicans in Republican districts – and the country’s changing demographics — may allow Democrats to win many currently Republican seats. What’s more, Republican near term concern about primary challenges – and the stridency it breeds — may alienate increasing numbers of moderate Republican leading independents. We’ve already seen this effect in the Presidential and Senate races and it would not be surprising that by 2014 many of the primary obsessed Republican incumbents are hoisted on their own petard in the General Election. Just ask Tea Party Members of Congress who were defeated in 2012, like Alan West and Joe Walsh. But in the near term, at least, there is also no question that many occupants of Republican seats appear far more concerned with primary challenges than they are with general elections.
If House Speaker Boehner is to be successful passing any form of compromise to avoid the “fiscal cliff” – either before the end of the year or after – he will need to convince Republican Members of the House that he is doing them a favor by bringing a bill the floor that can pass even with many Republicans voting no. That, of course requires that the deal is good enough to allow many Democrats to vote yes.
Boehner will get political cover for that kind of maneuver if a bill passes out of the Senate with bi-partisan support. But even then, he will certainly weigh whether he risks his otherwise certain re-election as Speaker on January 3rd if he acts before the country goes over the cliff at midnight, December 31.
Of course the many Republicans that will never support any form of tax compromise don’t justify their position by explaining they are more concerned with primaries than they are of general elections. In fact they generally fall back on one of three myths that are themselves utter nonsense.
Myth #1 – You shouldn’t tax the wealthy because they are “job creators”. The plain fact is that no one invests money in any business if they do not think there are customers with money in their pockets to buy the products or services they produce.
Customers with money in their pockets are “job creators” – and the root of our current economic problems can be traced directly to the fact that everyday consumers are receiving a smaller and smaller percentage of the national economic pie and as a result have less ability to to buy the increasing number of products and services our economy can create. In fact, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government started keeping records in 1947. And corporate profits have climbed to their highest levels since the 1960’s.
Over the last two decades, per capita Gross Domestic Product has gone up; productivity per hour of work has gone up; but the median income of ordinary Americans has remained stagnant. That is only possible because all of the growth in our economy has been siphoned off by the top 2% of the population.
And it has meant that everyday people haven’t had the money in their pockets to buy the increased numbers of goods and services that are the consequence of that increased productivity. Stagnation and slow economic growth has been the result.
Henry Ford had this right. For the economy to grow over time, workers need to be paid enough to buy the products they produce.
If you want the economy to grow, the fruits of economic growth must be spread equally throughout the economy – if not consumers won’t have the money to buy and, as a consequence, investors won’t invest.
Higher taxes on the wealthy – including higher estate taxes on fortunes left to the sons and daughters of multi-millionaires – are not “bad” for the economy – just the opposite. They help address the economic inequality that is the core problem in our economy.
Myth #2 – Our biggest problem is the federal deficit. This is just flat wrong. It is the economic equivalent of the medieval view that you should “bleed” patients when they are sick.
We have learned from centuries of economic history, that when an economy is recovering from a recession, the right medicine for sluggish economic demand is more fiscal stimulus – and in the short run that does not mean lower deficits.
More economic stimulus, of the type that the President proposed in the American Jobs Act over a year ago, puts money in people’s pockets who can then spend it on more products and stimulate more investment. Austerity and reducing national debt will yield the same outcome we have recently seen in Europe – another recession. And that is exactly what the deficit hawks are likely to get if America slides of the fiscal cliff and stays there.
Right Wing deficit hawks are fond of warning that if we don’t cut the deficit, the country could turn into Greece – or some other European country that can’t pay it’s bills. They ignore the fact that right now U.S. Treasury Bonds are considered the safest investments in the world, and interest rates are at a record low. They also ignore the fact that, unlike the Europeans, the American Federal Reserve can monetize the federal debt and assure that U.S. bond holders are always paid — unless, of course, the Republicans refuse to pay the debts that we owe, which would be like committing economic Hara-Kiri.
In fact, the quickest way for America to become like Europe is a precipitous reduction of the federal spending. Ask the Brits how that worked out.
Finally, of course, let’s remember that the way to reduce the deficit is not an inscrutable mystery. When Democrat Bill Clinton was President he did it, just a few short years ago. The recipe for success involved two factors: increasing revenue, especially from the wealthy, and growing the economy.
Today we would have to add, the need to control the spiraling increase in health care costs. While ObamaCare will make big steps in that direction, much more will be needed. Shifting costs to seniors and other consumers by cutting Medicare or Medicaid benefits is not controlling health care costs – it is simply shifting them from government to individuals. And what is needed is not more de-regulation of for-profit health care companies. In fact we ultimately need to follow the model of the Canadians – and most of the other industrial nations in the world – and provide a universal Medicare coverage to all Americans. Our system of private health insurance is simply too expensive. Americans, after all, pay 40% more than any other country per capita for health care and have outcomes that rank only 37th in the world.
Myth #3 – Government is always bad and- as Grover Norquist argues – must be shrunk so it can be drowned in a bathtub.
Let’s ignore for a moment the fact that while Republicans talk about small government, they inevitably expand it when they control the White House – mostly in the form of larger military budgets.
Government, as Congressman Barney Frank says, is the name we give to the things we choose to do together–and that includes many of the most important things we do in our economy. From fire and police protection to providing free public education and health care for all, to building public infrastructure, to creating the Internet – government does a better, more efficient, more equitable job in many economic arenas than the private sector.
To hear the Republicans talk you wouldn’t know it, but right now taxes are at their lowest levels since 1958.
Right now in America we need more government – more education, more roads and bridges, more mass transportation, more cancer research, more health care, more nutrition programs, more drug education and treatment – not less. More government shouldn’t mean more regulation of our freedom – it should mean that when we co-operate together we have the ability to achieve more than if everyone is left to sink or swim. Government action is necessary to provide the foundation from which each person can individually excel.
The question of the type of society we want in America was squarely on the ballot in the election last November, and voters overwhelming voted for a society where we have each other’s back – where we’re all in this together, not all in this alone.
Progressives need to make all of these arguments to win the battle for the future. But let’s remember that the unwillingness of most Republicans to compromise to avoid the “fiscal cliff” – or anything else – has less to do with their commitment to their ultra right principles than to the protection of their own political hides.
That being the case, there are only two ways to convince Republicans to compromise. One is to demonstrate that their obsession with primary challenges from the right will ultimately lead them to defeat in General Elections. The second is to defeat them so badly in the next General Election that they no longer have the power to impose the will of an extremist minority on the people of the United States.
By: Robert Creamer, The Huffington Post, December 29, 2012
“Not A Pox On Both Houses, Just The GOP’s”: Republicans Are Responsible For The Fiscal Cliff And Washington Gridlock
The public is furious at Congress. The business community is furious at Congress. The president is furious at Congress. Heck, the Congress is furious at Congress!
The “Plan B” debacle has further eroded House Speaker John Boehner’s standing in his own caucus. It hasn’t helped much out in the countryside either, telegraphing an image of inaction and disorganization.
All that seems to be left to come out of the Republicans is finger pointing and petty politics. Democrats are so mad that they aren’t far behind either.
But it is the Republicans who have been boxed in by their own extremism. We are to a point where the leadership of the congressional Republicans may be constitutionally (I don’t mean capital “C”) incapable of achieving a deal on almost anything controversial that comes before them. They are so far out of the mainstream, and they answer to their most extreme members, that it is nearly impossible for them to deliver on legislation, without jeopardizing their jobs.
Right now it is the fiscal cliff, next it will be the debt ceiling, then immigration, then climate change, then confirmation of presidential appointments and judges. And somehow Republicans still believe that paralysis will allow them to win elections. They are so caught up in the politics and strapped into their own ideological straight jackets that the word compromise does not leave their lips.
Forget that such intransigence is bad for the country. Forget that the public overwhelmingly supports President Obama’s positions. Forget that the vitriol directed at Congress is at an all time high and only climbing.
Sure, the Republicans now represent more extreme districts politically. Sure, many of them could get beat in a primary if they acted responsibly. Sure, the interest groups headed by the likes of Grover Norquist or now Jim DeMint will come down their throats. But, really, you don’t have the backbone, the spine, the courage to sign on to a compromise that helps the nation? Even when the public has shown in poll after poll that is what they want? Why did you run for Congress in the first place?
The notion of legislators taking on the tough problems and solving them is almost a relic with this crop of Republicans. They don’t see how important it is to work across the aisle and actually accomplish something. Think about it: Would Ronald Reagan tolerate this nonsense? How about George H.W. Bush? How about Dwight Eisenhower? Or Everett Dirksen? Or Howard Baker?
The time for Tea Party extremism is over. Real Republicans should recognize that.
By: Peter Fenn, U. S. News and World Report, December 28, 2012
“A Party Of Spineless Legislators”: John Boehner’s Failure And The GOP’s Disgrace
Remarkably, John Boehner couldn’t get enough House Republicans to vote in favor of his proposal to keep the Bush tax cuts in place on the first million dollars of everyone’s income and apply the old Clinton rates only to dollars over and above a million.
What? Even Grover Norquist blessed Boehner’s proposal, saying it wasn’t really a tax increase. Even Paul Ryan supported it.
What does Boehner’s failure tell us about the modern Republican party?
That it has become a party of hypocrisy masquerading as principled ideology. The GOP talks endlessly about the importance of reducing the budget deficit. But it isn’t even willing to raise revenues from the richest three-tenths of one percent of Americans to help with the task. We’re talking about 400,000 people, for crying out loud.
It has become a party that routinely shills for its super-wealthy patrons at a time in our nation’s history when the middle class is shrinking, the median wage is dropping, and the share of Americans in poverty is rising.
It has become a party of spineless legislators more afraid of facing primary challenges from right-wing kooks than of standing up for what’s right for America.
For all these reasons it has become irrelevant to the problems America faces.
The Republican Party is in the process of marginalizing itself out of existence. I am tempted to say good riddance, but that would be premature.
By: Robert Reich, Robert Reich Blog, December 20, 2012
“Never Ever, Ever, Ever…”: Grover Norquist’s Pledge Used To Be Politically Expedient, Now It’s Not
A few words to ponder as we sail toward the fiscal cliff. Those words would be: “That was then, this is now.”
Strip away the false piety and legalistic hair-splitting offered by Republican lawmakers rationalizing their decision to abandon a pledge that they will never ever, ever, ever vote to raise taxes, and that’s pretty much what the explanation boils down to.
Rep. Peter King says he understood the pledge, propounded by the almighty Grover Norquist and his group Americans for Tax Reform, to obligate him for only one term. Apparently, he thought it had to be renewed, like a driver’s license.
Sen. Lindsey Graham says that if Democrats agree to entitlement reform, “I will violate the pledge … for the good of the country” — a stirring statement of patriotism and sacrifice that warms your heart like a midnight snack of jalapeño chili fries.
In other words: bull twinkies. If you want the truth of why a trickle of GOP lawmakers is suddenly willing to blaspheme the holy scripture of their faith, it’s simple. The pledge used to be politically expedient. Now it is not.
This is not, by the way, a column in defense of the Norquist pledge. The only thing dumber than his offering such a pledge was scores of politicians signing it, an opinion that has nothing to do with the wisdom or lack thereof of raising taxes and everything to do with the fact that one ought not, as a matter of simple common sense, make hard, inflexible promises on changeable matters of national import. It is all well and good to stand on whatever one’s principles are, but as a politician — a job that, by definition, requires the ability to compromise — you don’t needlessly box yourself in. Never say never.
Much less never ever, ever, ever.
So this revolution against “he who must be obeyed,” however modest, is nonetheless welcome. It suggests reason seeping like sunlight into places too long cloistered in the damp and dark of ideological rigidity.
But it leaves an observer in the oddly weightless position of applauding a thing and being, simultaneously, disgusted by it. Has politics ever seemed more ignoble than in these clumsy, self-serving attempts to justify a deviation from orthodoxy? They have to do this, of course, because the truth — “I signed the pledge because I knew it would help me get elected, but with economic ruin looming and Obama re-elected on a promise to raise taxes on the rich and most voters supporting him on that, it’s not doing me as much good as it once did” — is unpretty and unflattering.
In this awkward about-face, these lawmakers leave us wondering once again whether the vast majority of them — right and left, red and blue, Republican and Democrat — really believe in anything, beyond being re-elected.
There is a reason Congress’ approval ratings flirted with single digits this year. There is a reason a new Gallup poll finds only 10 percent of Americans ranking Congress “high or very high” in honesty and ethics.
Lawyers rank higher. Advertisers rank higher. Even journalists rank higher.
This is the sad pass to which years of congressional grandstanding, fact spinning, cookie-jar pilfering and assorted harumphing and pontificating have brought us. And while a certain cynicism toward its leaders functions as a healthy antigen in the body politic, it cannot be good for either the nation or its leaders that so many of them are held in plain contempt.
The moral malleability exemplified by the likes of King and Graham will not help. Perhaps we should ask them to sign a new pledge: “I will always tell you what I think and what I plan to do in plain English, regardless of whether you like it or it benefits me politically.”
But no lawmaker would make that pledge. And who would believe them if they did?
By: Leonard Pitts, Jr., The National Memo, December 10, 2012
“Comedy Central”: Grover Norquist Is Wrong About The Tea Party’s Second Coming
This past Sunday, on NBC’s Meet The Press, Grover Norquist had a warning for the president, Democrats, the nation, and perhaps the world: If America ends up going over the “fiscal cliff” there will be a Tea Party revival that will outweigh that of the 2010 midterm elections. “Tea Party two is going to dwarf Tea Party one if Obama pushes us off the cliff.”
I have a question. Has Mr. Norquist resigned as president of Americans for Tax Reform and turned to comedy? If not, maybe he should quit his day job because I laughed so hard at the idea of “Tea Party two” as a warning to our president, my political party, and our nation. Oooh…”Tea Party two.” Scared President Obama? Democrats? You should be, or so Mr. Norquist thinks. Is the “Tea Party two” like Jaws II, or worse yet, Godfather III?
Look, all joking aside, the Tea Party, which isn’t a party at all, had a handful of political victories in 2010. But as I predicted, those “Tea Party candidates,” who are technically Republicans, acted like the red R on their cape dictated when it came time to voting. There was no “T” next to their name when they ran or were elected and when they got to Washington. The GOP schooled them not only on how to behave, but on how to vote. So the faithful lost their religion so to speak. And America wasn’t fooled by a party which was a movement. America also wasn’t fooled by a group that claimed to be nonpartisan, not conservatives, not angry, or not anti-Obama when it turned out to be just that: extremely partisan, very conservative, angry and definitely against the president. In other words, the original plan for the Tea Party either got off track or they lied. Oh, excuse me, let me use political terms: They misspoke.
Another reason I had to laugh at Mr. Norquists’s warning of the second coming of the Tea Party? Polls show since last spring a continuing decline in support for the Tea Party. And there was an analysis done by the Pew Research Center showing that support for the Republican Party has fallen even further in those places that once supported Tea Party candidates than it has in the country as a whole. In the 60 districts represented in Congress by a member of the House Tea Party Caucus, Republicans were viewed about as negatively as Democrats. And the analysis suggests that the Tea Party may be dragging down the Republican Party. That analysis was proven true by the results of the last election. Other polls have shown a decline in support for the Tea Party and its positions, particularly because of its hard line during the debate over the debt ceiling and deficit reduction.
So when Mr. Norquist warns the president about pushing the country over the fiscal cliff, I think he is really speaking to Republicans who are lining up now to walk away from their original pledge to him and his organization not to increase taxes. I think Mr. Norquist is saying, work with the Democrats and we’ll put so much power and money behind a Tea Party candidate to challenge your seat in Congress that you’ll lose your job. So a warning to the president? Or a threat, an unspoken form of bullying to any of the 95 percent of Republicans who signed his pledge?
Some say Democrats should heed Mr. Norquist’s warning. Some say the Tea Party is no longer relevant, they had their 15 minutes of fame and they were a one hit wonder. (This blogger among those of that opinion).
So when Mr Norquist took center stage on NBC’s Meet The Press and David Gregory asked the question “Are you over?” I think it was Sen. Claire McCaskill, a Democrat of Missouri who was in the same segment on Sunday, who said it best: “I just met him for the first time this morning,” McCaskill said. “Nice to meet him. But, you know, who is he?” Or perhaps my two toddlers, who when they hear me mentioning “Grover,” think I’m talking about a furry guy on Sesame Street.
By: Leslie Marshall, U. S. News and World Report, December 5, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 