“An Ugly GOP Ideology”: Boehner Blasts America’s Unemployed As Lazy
After the 2012 elections, it was tempting to think Republicans would be a little more cautious about economic elitism and callous indifference towards those struggling to get by. But in 2014, many GOP officials have thrown caution to the wind and embraced elitism with both arms.
Senate Minority Leader Mitch McConnell (R-Ky.), for example, recently defended cuts to student aid by saying, “Not everybody needs to go to Yale.” As McConnell sees it, the nation’s elite institutions of higher ed should be within reach for students from rich families – and no one else. Soon after, Rep. Tom Cotton (R-Ark.), a leading U.S. Senate candidate, called those who rely on the safety net as “addicts.”
And then there’s House Speaker John Boehner (R-Ohio), who appeared at the American Enterprise Institute last week to discuss the economy. Asked about Rep. Paul Ryan’s (R-Wis.) anti-poverty plans, Boehner was quite candid about his thoughts on the unemployed.
“I think this idea that’s been born out the last – maybe out of the economy last couple of years that, ‘You know, I really don’t have to work. I don’t really want to do this, I think I’d just rather sit around.’ This is a very sick idea for our country.”
The Speaker’s perspective is bizarre as a matter of public policy, but I’m glad he made these comments because his candor sheds light on an ugly ideology.
When GOP lawmakers cut off extended jobless aid, on a substantive level, it seems bewildering. In recent decades, neither party even considered such radicalism with high unemployment, if for no other reason because cutting jobless aid hurts economic growth. But Boehner has offered a peek behind the curtain – the Republican argument isn’t about economics, so much as it’s about personal animosity. The Speaker and his allies seem to think there’s something wrong, and perhaps even offensive, about families struggling to get by.
It’s part of the same phenomenon that leads GOP officials to demand drug tests for those relying on the safety net. If you need a hand keeping your head above water, it may very well be the result of a drug addiction. If you want a job and can’t find one, the argument goes, the problem is almost certainly your fault – it’s because you’d “rather sit around” than work.
It stems from a school of thought that says many social-insurance programs shouldn’t exist because struggling Americans are lazy and simply don’t deserve public assistance.
I realize that evidence and substance has very little effect in this debate, but Igor Volsky explained that laziness isn’t the real problem.
Currently, there are more than two job seekers for every job opening in the country and the severity of the recession has created a long-term unemployment problem that has made many job seekers almost unemployable. Research shows that being unemployed for nine months has the same impact on your odds of getting hired as losing four full years of experience from a résumé. As a result, many people who lost their jobs have gone back to school, retired early, or continue to look for work without success.
In fact, millions of unemployed people are having a harder time finding a job since Congressional Republicans allowed the long-term unemployment benefits program to lapse. Research – and real world experience – has found that the program’s job search requirements encourage people to spend more time job hunting and helps cover essentials like internet service for job applications or gas money for interviews.
In theory, Boehner and his allies would be taking a huge risk by making comments like these in an election year. After all, if every unemployed and underemployed American turned out in the fall, furious by the implication that they’re lazy, Republicans would be in pretty big trouble.
But the Speaker and his party are confident that those struggling most probably won’t participate in the elections – and those assumptions are probably correct – so remarks like these won’t come with any consequences.
By: Steve Benen, The Maddow Blog, September 22, 2014
“The Inflation Cult”: The Broad Appeal Of Prophets Whose Prophecies Keep Failing
Wish I’d said that! Earlier this week, Jesse Eisinger of ProPublica, writing on The Times’s DealBook blog, compared people who keep predicting runaway inflation to “true believers whose faith in a predicted apocalypse persists even after it fails to materialize.” Indeed.
Economic forecasters are often wrong. Me, too! If an economist never makes an incorrect prediction, he or she isn’t taking enough risks. But it’s less common for supposed experts to keep making the same wrong prediction year after year, never admitting or trying to explain their past errors. And the remarkable thing is that these always-wrong, never-in-doubt pundits continue to have large public and political influence.
There’s something happening here. What it is ain’t exactly clear. But as regular readers know, I’ve been trying to figure it out, because I think it’s important to understand the persistence and power of the inflation cult.
Whom are we talking about? Not just the shouting heads on CNBC, although they’re certainly part of it. Rick Santelli, famous for his 2009 Tea Party rant, also spent much of that year yelling that runaway inflation was coming. It wasn’t, but his line never changed. Just two months ago, he told viewers that the Federal Reserve is “preparing for hyperinflation.”
You might dismiss the likes of Mr. Santelli, saying that they’re basically in the entertainment business. But many investors didn’t get that memo. I’ve had money managers — that is, professional investors — tell me that the quiescence of inflation surprised them, because “all the experts” predicted that it would surge.
And it’s not as easy to dismiss the phenomenon of obsessive attachment to a failed economic doctrine when you see it in major political figures. In 2009, Representative Paul Ryan warned about “inflation’s looming shadow.” Did he reconsider when inflation stayed low? No, he kept warning, year after year, about the coming “debasement” of the dollar.
Wait, there’s more: You find the same Groundhog Day story when you look at the pronouncements of seemingly reputable economists. In May 2009, Allan Meltzer, a well-known monetary economist and historian of the Federal Reserve, had an Op-Ed article published in The Times warning that a sharp rise in inflation was imminent unless the Fed changed course. Over the next five years, Mr. Meltzer’s preferred measure of prices rose at an annual rate of only 1.6 percent, and his response was published in another op-ed article, this time in The Wall Street Journal. The title? “How the Fed Fuels the Coming Inflation.”
So what’s going on here?
I’ve written before about how the wealthy tend to oppose easy money, perceiving it as being against their interests. But that doesn’t explain the broad appeal of prophets whose prophecies keep failing.
Part of that appeal is clearly political; there’s a reason why Mr. Santelli yells about both inflation and how President Obama is giving money away to “losers,” why Mr. Ryan warns about both a debased currency and a government that redistributes from “makers” to “takers.” Inflation cultists almost always link the Fed’s policies to complaints about government spending. They’re completely wrong about the details — no, the Fed isn’t printing money to cover the budget deficit — but it’s true that governments whose debt is denominated in a currency they can issue have more fiscal flexibility, and hence more ability to maintain aid to those in need, than governments that don’t.
And anger against “takers” — anger that is very much tied up with ethnic and cultural divisions — runs deep. Many people, therefore, feel an affinity with those who rant about looming inflation; Mr. Santelli is their kind of guy. In an important sense, I’d argue, the persistence of the inflation cult is an example of the “affinity fraud” crucial to many swindles, in which investors trust a con man because he seems to be part of their tribe. In this case, the con men may be conning themselves as well as their followers, but that hardly matters.
This tribal interpretation of the inflation cult helps explain the sheer rage you encounter when pointing out that the promised hyperinflation is nowhere to be seen. It’s comparable to the reaction you get when pointing out that Obamacare seems to be working, and probably has the same roots.
But what about the economists who go along with the cult? They’re all conservatives, but aren’t they also professionals who put evidence above political convenience? Apparently not.
The persistence of the inflation cult is, therefore, an indicator of just how polarized our society has become, of how everything is political, even among those who are supposed to rise above such things. And that reality, unlike the supposed risk of runaway inflation, is something that should scare you.
By: Paul Krugman, Op-Ed Columnist, The New York Times, September 12, 2014
“Two Different Fantasies”: The Coming Conservative Tax Cut Deficits Will Make Bush’s Look Puny
For going on a year now, a group of reform-minded conservatives has been gently coaxing more pious coreligionists into supporting a tax reform plan that would violate the first commandment of supply-side economic theory.
In a broad sense, the two groups share similar goals. Both want to distribute income upward. The difference is that reformicons would like to limit the amount of upward redistribution to preserve some significant spoils for middle-class workers with children. They’ve rallied behind legislation, drafted by Senator Mike Lee (a Tea Party favorite from Utah) that would lower the top marginal tax rate only modestly—from about 40 to 35—while creating generous new tax credits for families with kids. The supply siders, as you probably guessed, want to ply those spoils into even larger rate cuts for the wealthy. The poor are left almost entirely out of the equation.
Under normal circumstances, the two camps would resolve a policy dispute like this by splitting the baby (the proverbial one; not the human one that comes with a generous tax-subsidy). But as supply-side stalwart Congressman Paul Ryan explained recently, asking rate-cutters like him to check their rate-cutting ambitions would be like asking Lance Armstrong to share his “secret sauce” with mid-tier racers—not much help for them, at the expense of his competitive edge. And on the flip side, the reformicons can’t yield too much to the supply siders, because at some point the political payoff (more money for the middle class) would disappear along with the whatever supposed incentive the credits would create for people to start families.
Enter Ramesh Ponnuru, a high-profile reformicon, with a plan to win Ryan over using clever spin. Just pretend the Lee plan’s child tax subsidies are comparable to tax cuts for investors, except the investors here are parents rescuing the country from a bleak demographic future, and the tax cuts are actually new tax expenditures.
“You can’t draw up a realistic budget with a top tax rate of 25 percent and a large child credit,” Ponnuru writes for Bloomberg. “(You might not be able to draw up a realistic budget with a top rate of 25 percent even without the credit.) You probably can, however, draw up one with a lower top rate than we have today and better treatment for investment — including parents’ investment in the next generation. Because that mix of policies would leave many millions of middle-class families ahead, it may well be easier to enact than a plan that concentrates solely on reducing the top rate. Supply-siders, that is, might achieve more of the rate reduction they seek if they embrace the credit.”
This is another way of saying that the politics of the Lee plan are vastly more appealing than the politics of the Ryan plan. The tax blueprint in Ryan’s budget is such a political disaster that it would likelier die in committee than become law in some less radical form, leaving Ryan with no rate reduction at all. Under the circumstances, he’d be better off settling for less-severe rate cuts and plying some of the projected deficits into the pockets of the middle class.
That’s absolutely true. But for supply-sider zeal, it would settle the argument under the prevailing terms. Yet those terms omit something fundamental to both plans: deficits. Neither party to the conversation has used the word deficit even once. And when you introduce the idea that both of these plans—not just Ryan’s—are deficit-financed (or financed with implicit tax increases on the poor and middle classes) it becomes hard to fathom why a tug of war between the reformicons and the supply-siders is necessary at all.
Lee offsets his tax cuts by eliminating and reducing a swath of tax expenditures. Nevertheless, they would increase deficits $2.4 trillion over ten years. Ryan’s plan would probably increase them by twice as much (before offsets, which he’s never specified). There isn’t a point along the connecting line where this trespasses into fantasy. These are just two different fantasies. Under the circumstances, the smart play isn’t for the reformicons to out-debate the supply siders, or to negotiate with them, but to buy them off. Give Ryan a big rate cut. Keep the middle-class child subsidies. Don’t bother paying for either, in full.
This, as Ponnuru sort of implies, would be deeply irresponsible. But it would enjoy the dual benefits of papering over the rift and solving the GOP’s miser problem, in much the same way that George W. Bush solved his regressivity problem in 2001 by cutting everyone’s taxes (the wealthy merely got a hefty bonus tax cut).
Instead Lee is teaming up with Senator Marco Rubio to narrow the $2.4 trillion shortfall. Perhaps they’ll succeed. But they’ll also have widened the conservative rift, leaving them a plan that’s intended to forge an alliance between the ruling and working classes, but does less for the former than the supply siders and less for the latter than Democrats. Actually legislating will almost certainly require surrendering to one faction or the other.
By: Brian Beutler, The New Republic, August 26, 2014
“Hawks Crying Wolf”: The Usual Republican Inflation Suspects Are Saying The Usual Things
According to a recent report in The Times, there is dissent at the Fed: “An increasingly vocal minority of Federal Reserve officials want the central bank to retreat more quickly” from its easy-money policies, which they warn run the risk of causing inflation. And this debate, we are told, is likely to dominate the big economic symposium currently underway in Jackson Hole, Wyo.
That may well be the case. But there’s something you should know: That “vocal minority” has been warning about soaring inflation more or less nonstop for six years. And the persistence of that obsession seems, to me, to be a more interesting and important story than the fact that the usual suspects are saying the usual things.
Before I try to explain the inflation obsession, let’s talk about how striking that obsession really is.
The Times article singles out for special mention Charles Plosser of the Philadelphia Fed, who is, indeed, warning about inflation risks. But you should know that he warned about the danger of rising inflation in 2008. He warned about it in 2009. He did the same in 2010, 2011, 2012 and 2013. He was wrong each time, but, undaunted, he’s now doing it again.
And this record isn’t unusual. With very few exceptions, officials and economists who issued dire warnings about inflation years ago are still issuing more or less identical warnings today. Narayana Kocherlakota, president of the Minneapolis Fed, is the only prominent counterexample I can think of.
Now, everyone who has been in the economics business any length of time, myself very much included, has made some incorrect predictions. If you haven’t, you’re playing it too safe. The inflation hawks, however, show no sign of learning from their mistakes. Where is the soul-searching, the attempt to understand how they could have been so wrong?
The point is that when you see people clinging to a view of the world in the teeth of the evidence, failing to reconsider their beliefs despite repeated prediction failures, you have to suspect that there are ulterior motives involved. So the interesting question is: What is it about crying “Inflation!” that makes it so appealing that people keep doing it despite having been wrong again and again?
Well, when economic myths persist, the explanation usually lies in politics — and, in particular, in class interests. There is not a shred of evidence that cutting tax rates on the wealthy boosts the economy, but there’s no mystery about why leading Republicans like Representative Paul Ryan keep claiming that lower taxes on the rich are the secret to growth. Claims that we face an imminent fiscal crisis, that America will turn into Greece any day now, similarly serve a useful purpose for those seeking to dismantle social programs.
At first sight, claims that easy money will cause disaster even in a depressed economy seem different, because the class interests are far less clear. Yes, low interest rates mean low long-term returns for bondholders (who are generally wealthy), but they also mean short-term capital gains for those same bondholders.
But while easy money may in principle have mixed effects on the fortunes (literally) of the wealthy, in practice demands for tighter money despite high unemployment always come from the right. Eight decades ago, Friedrich Hayek warned against any attempt to mitigate the Great Depression via “the creation of artificial demand”; three years ago, Mr. Ryan all but accused Ben Bernanke, the Fed chairman at the time, of seeking to “debase” the dollar. Inflation obsession is as closely associated with conservative politics as demands for lower taxes on capital gains.
It’s less clear why. But faith in the inability of government to do anything positive is a central tenet of the conservative creed. Carving out an exception for monetary policy — “Government is always the problem, not the solution, unless we’re talking about the Fed cutting interest rates to fight unemployment” — may just be too subtle a distinction to draw in an era when Republican politicians draw their economic ideas from Ayn Rand novels.
Which brings me back to the Fed, and the question of when to end easy-money policies.
Even monetary doves like Janet Yellen, the Fed chairwoman, generally acknowledge that there will come a time to take the pedal off the metal. And maybe that time isn’t far off — official unemployment has fallen sharply, although wages are still going nowhere and inflation is still subdued.
But the last people you want to ask about appropriate policy are people who have been warning about inflation year after year. Not only have they been consistently wrong, they’ve staked out a position that, whether they know it or not, is essentially political rather than based on analysis. They should be listened to politely — good manners are always a virtue — then ignored.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 21, 2014
“Imagine, Registering People To Vote”: By All Means, We Should ‘Politicize’ Ferguson
After another chaotic night in Ferguson, MO, there are a dozen competing narratives swirling about this crisis, with everyone hoping that their preferred interpretation of what is happening, why it’s happening, what it means, and what should be done about it, will lead the discussion. A new argument is emerging on the right, one articulated by Paul Ryan when he addressed the issue this morning:
“The first thing I do is don’t try to capitalize on this tragedy with your own policy initiatives,” Ryan said in an appearance on “Fox & Friends.” “Don’t try to link some prejudged conclusion on what’s happening on the ground right now.”
“What I don’t want to do, as a political leader, is try to graft my policy initiatives or my preferences onto this tragedy,” he added. “I think that would just be disrespectful.”
Today on Brietbart.com, there’s an article about how appalling it is that some people set up a table in Ferguson to register voters. The executive director of the Missouri GOP says:
“If that’s not fanning the political flames, I don’t know what is,” they quote the executive director of the Missouri GOP saying. “I think it’s not only disgusting but completely inappropriate.”
Imagine — registering people to vote! Disgusting.
This argument isn’t just wrong, it’s precisely backward. “Politicizing” this crisis is exactly what we should be doing.
“Let’s not politicize this” is something we hear whenever a dramatic (and especially tragic) event occurs, and talk inevitably turns to the larger issues and policy implications raised by the event in question. The guardians of the status quo always say that this isn’t the time to talk about those implications (this is particularly true of gun advocates, who inevitably argue that the latest mass shooting isn’t the time to talk about the fact that our nation is drowning in firearms).
But what’s a better time to talk about those larger issues than when the nation’s attention is focused on a particular crisis or tragedy? The events in Ferguson have highlighted a number of critical issues — the treatment of black people by police, the unequal distribution of power in so many communities, the militarization of law enforcement, and many others. Does anyone think that if we all agreed not to propose any steps to address any of those problems for a few months, that we’d actually restart the debate over these issues unless there was another tragedy that forced it into the news?
The emerging conservative “move along, nothing to see here” caucus can call it “exploiting” the crisis if they want, but you can put that label on anyone who talks about it. Are the libertarians and liberals who want to talk about the long-developing issue of the militarization of law enforcement “exploiting” Ferguson for their own purposes? If you mean that they’re hoping that the crisis will lead to change, and making a case for why it should, then I suppose so.
But that’s how change happens. When events draw public attention, they spur people to think about things they might have been unaware of or just been ignoring. Politicians feel increased pressure to come up with ways they can address the problem, which will vary depending on where they’re situated. So members of Congress want to reexamine the 1033 program that has transferred billions of dollars of military equipment to local police forces, because that’s an area where the federal government’s actions have played a part in what we’re seeing in Ferguson.
Meanwhile, people in that community may be thinking more about their lack of political power, which might lead them to do things like register voters. I’m sure that all over the country, local activists are starting to ask questions about their own police departments and whether they suffer from some of the pathologies we’ve seen in Ferguson. That’s not exploitation, it’s the political process in action.
Since I’m generally cynical, I’m not particularly optimistic that creative and far-reaching solutions are going to come out of this crisis. The deepest problems it has revealed, like the general hostility with which police so often view black people, are the ones that can’t be fixed with a bill in Congress. The militarization of law enforcement is about the equipment they’ve been given, but it’s even more about a mentality that has spread through departments all over the country.
But change certainly isn’t going to happen if we all agree to defer talk about the policy steps we can take to solve those problems until the media leaves Ferguson, everybody’s memory fades, and the urgency disappears. If we want to make crises like this less likely in the future, this is the best opportunity we have.
By: Paul Waldman, Contributing Editor, The American Prospect; The Plum Line, The Washington Post, August 19, 2014
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 