“Always Pick Door Number 2”: The Lessons Of John Boehner’s Latest Failure
A last-ditch plan by House Republicans to extract concessions in exchange for hiking the nation’s borrowing limit fell apart Tuesday morning, with conservative holdouts leaving the party short of the necessary votes.
That the GOP caved isn’t as surprising as the speed with which it did, just a few minutes into a morning conference meeting. All along, it was clear Republicans had no leverage with their debt-ceiling threats; they’d caved before, and public opinion was firmly against more debt limit extortion.
Still, the GOP’s latest debt ceiling defeat is yet another sign of how difficult it has become for Speaker John Boehner (R-Ohio) to move anything through his divided caucus. And Boehner’s inability to control his party is a real liability, as it’s given Democrats even less reason to concede ground in future negotiations — not only on the debt ceiling, but on other major issues as well.
Even after Republicans self immolated during last year’s debt ceiling negotiations by offering a fantastical hostage list, the party again wanted to extract some kind of concessions this time. But though the ask list was smaller, the party again couldn’t agree on a single plan, and a handful of proposals quickly collapsed. In a weird Bizarro World twist, the last idea — to restore pension benefits to some veterans — would have had Republicans either voting to raise spending, or voting against the military.
In the end, the potential damage to the GOP was so great that party leaders knew they had two options on the debt ceiling: Stand firm and destroy the party’s approval rating (again), or ask Democrats for help. Boehner gave the finger to the Tea Party and picked Door Number 2.
So now, Democrats and President Obama, who insisted throughout the ordeal that they would only support a clean debt ceiling vote, have watched the GOP cave once again. When Republicans return with more debt ceiling demands in the future, Democrats will surely be emboldened to shrug them off and say “nope” again, confident the demands are merely more empty threats.
But will Boehner keep bucking the right wing? Immigration offers a salient test case, with Boehner seemingly interested in passing some reforms, and conservative critics blasting any action as “amnesty.”
The fallout for Republicans from spiking immigration this year wouldn’t be as visceral as the damage from, say, the government shutdown. But it would give Democrats a huge talking point — “Republicans are anti-immigration” — and further impinge on the party’s ability to court minority voters.
In short, Boehner is, as he has been for some time, caught between his need to appease the right and his need to do his job. The latest debt ceiling brouhaha has only exposed how tricky that balancing act is, and shown Democrats that, with a little pressure, they can force him to dump the right and seek out their help.
By: Jon Terbush, The Week, February 11, 2014
“When Tribalism Takes Over”: Republicans Are Being Driven To Identify In All Ways With Their Tribe
Pollsters have found that in the Obama era, the number of self-identified Republican voters who believe in evolution has dropped sharply. Similarly, in recent years, GOP voters routinely tell pollsters that the federal budget deficit has gone up, even as it drops quickly.
What drives results like these? It’s probably the result of the same phenomenon that drives attitudes like these, as reported by Greg Sargent yesterday, about the Affordable Care Act.
My Post colleague Sean Sullivan … points to a Gallup poll this week finding that only 19 percent of Americans say the law has hurt them or their family, while 64 percent say it has had no effect, and another 13 percent say it has helped.
But who are those 19 percent? It turns out those telling Gallup the law has hurt them or their family are very disproportionately Republican and conservative.
Of course they are. Greg got in touch with Gallup, which offered him a closer look at the details of the poll results. In all, a small percentage of Democrats and independents said the health care law has hurt them or their family directly, while 60% of Republicans or Republican-leaning independents said the ACA is doing them direct harm.
Similar results were seen along ideological lines: most conservatives said “Obamacare” is hurting them or their family, most moderates and liberals said the opposite.
Now, I suppose it’s possible that an extraordinary coincidence is unfolding on a national scale. By sheer chance, the very people who oppose the law just so happen to be the exact same people who are adversely affected by it. What a truly remarkable fluke! Who could have guessed?
Or maybe, as Greg put it, “some who already dislike Obamacare are more likely to tell pollsters they’ve been negatively impacted by it.”
It’s amazing what tribalism can do to public perceptions.
Are Republican voters really turning against modern biology in greater numbers? Probably not. Do GOP voters actually believe the deficit has gotten bigger during the Obama era? Maybe, but I rather doubt it.
Do these same partisans and ideologues genuinely believe the Affordable Care Act has hurt them or their families? Maybe some had to change plans or see a new doctor, but odds are, most of these folks are giving the pollsters an ideologically satisfying answer.
It’s not about dishonesty or ignorance; it’s about political tribalism in a period of stark polarization.
When the Pew report came out last month showing Republicans rejecting evolution in large numbers, Paul Krugman had a good piece on the broader dynamic.
The point … is that Republicans are being driven to identify in all ways with their tribe – and the tribal belief system is dominated by anti-science fundamentalists. For some time now it has been impossible to be a good Republicans while believing in the reality of climate change; now it’s impossible to be a good Republican while believing in evolution.
And of course the same thing is happening in economics. As recently as 2004, the Economic Report of the President (pdf) of a Republican administration could espouse a strongly Keynesian view, declaring the virtues of “aggressive monetary policy” to fight recessions, and making the case for discretionary fiscal policy too. […]
Given that intellectual framework, the reemergence of a 30s-type economic situation, with prolonged shortfalls in aggregate demand, low inflation, and zero interest rates should have made many Republicans more Keynesian than before. Instead, at just the moment that demand-side economics became obviously critical, we saw Republicans – the rank and file, of course, but economists as well – declare their fealty to various forms of supply-side economics, whether Austrian or Lafferian or both. Compare that ERP chapter with the currency-debasement letter and you see a remarkable case of intellectual retrogression.
In all likelihood, many on the right are choosing to stick with their “team” and answer pollsters’ questions accordingly. It’s probably best to look at all of these polls accordingly.
By: Steve Benen, The Maddow Blog, February 7, 2014
“Don’t Even Give Them A Fig Leaf”: Democrats Should Call The GOP’s Debt Ceiling Bluff
“We don’t want ‘nothing’ out of this debt limit,” Rep. Paul Ryan (R-Wis.) said in December.
With a deadline to raise the debt ceiling approaching this Friday (though Treasury Secretary Jacob Lew has said he can manage until the end of February), House Republicans are indeed talking about what they’d like in exchange for upping the nation’s borrowing limit. However, their internal talks aren’t going so well.
The GOP’s two leading ideas for handling the debt ceiling — tying it to a provision mandating the construction of the Keystone XL pipeline, or one tweaking ObamaCare — fell apart Wednesday due to a lack of Republican support. Both would have included a one-year extension of the debt ceiling.
More from The Washington Post’s Robert Costa:
Both ideas were debated at a conference meeting and members expected the conference to coalesce around one of the plans by later this week.
That playbook soon fizzled, however, once GOP leadership aides fanned out throughout the Capitol to take the temperature of members about the plans. Instead of finding growing support, they found unease and complaints, with myriad concerns raised by the House’s right flank. [Washington Post]
Sound familiar?
It should. Republicans folded twice last year on their debt ceiling demands after realizing that threats to plunge the nation into potential financial chaos aren’t too popular with voters.
Just a few months ago, Republicans entered the debt ceiling and government funding talks with a fantastical list of demands. The ask rapidly shrank, though, when Democrats refused to budge. Yet House leadership, fearful of angering the party’s right wing, refused to give in either.
The plan backfired, and Republicans came away with nothing except historically low poll numbers:
For Republicans to think they have any more leverage now is just delusional.
President Obama has insisted that Congress send him a clean debt ceiling bill, meaning one free of any extraneous provisions. Public opinion is on his side. A recent CNN survey found that 54 percent of Americans would blame the GOP if the debt ceiling isn’t raised. Only 29 percent would blame Obama.
Speaker of the House John Boehner (R-Ohio) reportedly has a Plan B in the works that would swap the debt ceiling hike for the restoration of some military benefits. Yet there is no guarantee the plan could overcome the objections on the right, since it would technically raise spending, something anathema to Tea Partiers. And even if it were to somehow get the support of a majority of the GOP caucus, House Democrats reaffirmed Wednesday that they wouldn’t bargain, period.
The whole standoff is reminiscent of Rep. Marlin Stutzman’s (R-Ind.) oblivious remark about the debt ceiling standoff back in October: “We have to get something out of this. And I don’t know what that even is.” Republicans want something, anything, in exchange for a debt ceiling vote, but they can’t even settle on what that something might be.
The bottom line is that since Republicans caved in the past, there’s no reason to believe they won’t cave again. Boehner himself admitted earlier this week that “there’s no sense picking a fight we can’t win.”
The GOP can’t win. Democrats should call that bluff and not even give them a fig leaf.
By: Jon Terbush, The Week, February 6, 2014
“The Vicious Circle Of Income Inequality”: New Forces Are Causing Inequality To Feed On Itself
Almost every culture has some variation on the saying, “rags to rags in three generations.” Whether it’s “clogs to clogs” or “rice paddy to rice paddy,” the message is essentially the same: Starting with nothing, the first generation builds a successful enterprise, which its profligate offspring then manage poorly, so that by the time the grandchildren take over, little value remains.
Much of society’s wealth is created by new enterprises, so the apparent implication of this folk wisdom is that economic inequality should be self-limiting. And for most of the early history of industrial society, it was.
But no longer. Inequality in the United States has been increasing sharply for more than four decades and shows no signs of retreat. In varying degrees, it’s been the same pattern in other countries.
The economy has been changing, and new forces are causing inequality to feed on itself.
One is that the higher incomes of top earners have been shifting consumer demand in favor of goods whose value stems from the talents of other top earners. Because the wealthy have just about every possession anyone might need, they tend to spend their extra income in pursuit of something special. And, often, what makes goods special today is that they’re produced by people or organizations whose talents can’t be duplicated easily.
Wealthy people don’t choose just any architects, artists, lawyers, plastic surgeons, heart specialists or cosmetic dentists. They seek out the best, and the most expensive, practitioners in each category. The information revolution has greatly increased their ability to find those practitioners and transact with them. So as the rich get richer, the talented people they patronize get richer, too. Their spending, in turn, increases the incomes of other elite practitioners, and so on.
More recently, rising inequality has had much impact on the political process. Greater income and wealth in the hands of top earners gives them greater access to legislators. And it confers more ability to influence public opinion through contributions to research organizations and political action committees. The results have included long-term reductions in income and estate taxes, as well as relaxed business regulation. Those changes, in turn, have caused further concentrations of income and wealth at the top, creating even more political influence.
By enabling the best performers in almost every arena to extend their reach, technology has also been a major driver of income inequality. The best athletes and musicians once entertained hundreds, sometimes thousands of people at one time, but they can now serve audiences of hundreds of millions. In other fields, it was once enough to be the best producer in a relatively small region. But because of falling transportation costs and trade barriers in the information economy, many fields are now dominated by only a handful of the best suppliers worldwide.
Income concentration has changed spending patterns in other ways that widen the income gap. The wealthy have been spending more on gifts, clothing, housing, celebrations and other things simply because they have more money. Their extra spending has shifted the frames of reference that shape demand by others just below them, so these less wealthy people have been spending more, and so on, all the way down the income ladder. But because incomes below the top have been stagnant, the resulting expenditure cascades have made it harder for middle- and low-income families to make ends meet. Despite taking on huge amounts of debt, they’ve been unable to keep pace with community standards. Interest payments impoverish them while enriching their wealthy creditors.
But perhaps the most important new feedback loop shows up in higher education. Tighter budgets in middle-class families make it harder for them to afford the special tutors and other environmental advantages that help more affluent students win admission to elite universities. Financial aid helps alleviate these problems, but the children of affluent families graduate debt-free and move quickly into top-paying jobs, while the children of other families face lesser job prospects and heavy loads of student debt. All too often, the less affluent experience the miracle of compound interest in reverse.
More than anything else, what’s transformed the “rags to rags in three generations” story is the reduced importance of inherited wealth relative to other forms of inherited advantage. Monetary bequests are far more easily squandered than early childhood advantage and elite educational credentials. As Americans, we once pointed with pride to our country’s high level of economic and social mobility, but we’ve now become one of the world’s most rigidly stratified industrial democracies.
Given the grave threats to the social order that extreme inequality has posed in other countries, it’s easy to see why the growing income gap is poised to become the signature political issue of 2014. Low- and middle-income Americans don’t appear to be on the threshold of revolt. But the middle-class squeeze continues to tighten, and it would be imprudent to consider ourselves immune. So if growing inequality has become a self-reinforcing process, we’ll want to think more creatively about public policies that might contain it.
In the meantime, the proportion of our citizens who never make it out of rags will continue to grow.
By: Robert H. Frank, Economics Professor, The Johnson Graduate School of Management at Cornell University; The New York Times, January 11, 2014
“Fiscal Fever Breaks”: 2013 Was The Year Journalists And The Public Finally Grew Weary Of The Boys Who Cried Wolf
In 2012 President Obama, ever hopeful that reason would prevail, predicted that his re-election would finally break the G.O.P.’s “fever.” It didn’t.
But the intransigence of the right wasn’t the only disease troubling America’s body politic in 2012. We were also suffering from fiscal fever: the insistence by virtually the entire political and media establishment that budget deficits were our most important and urgent economic problem, even though the federal government could borrow at incredibly low interest rates. Instead of talking about mass unemployment and soaring inequality, Washington was almost exclusively focused on the alleged need to slash spending (which would worsen the jobs crisis) and hack away at the social safety net (which would worsen inequality).
So the good news is that this fever, unlike the fever of the Tea Party, has finally broken.
True, the fiscal scolds are still out there, and still getting worshipful treatment from some news organizations. As the Columbia Journalism Review recently noted, many reporters retain the habit of “treating deficit-cutting as a non-ideological objective while portraying other points of view as partisan or political.” But the scolds are no longer able to define the bounds of respectable opinion. For example, when the usual suspects recently piled on Senator Elizabeth Warren over her call for an expansion of Social Security, they clearly ended up enhancing her stature.
What changed? I’d suggest that at least four things happened to discredit deficit-cutting ideology.
First, the political premise behind “centrism” — that moderate Republicans would be willing to meet Democrats halfway in a Grand Bargain combining tax hikes and spending cuts — became untenable. There are no moderate Republicans. To the extent that there are debates between the Tea Party and non-Tea Party wings of the G.O.P., they’re about political strategy, not policy substance.
Second, a combination of rising tax receipts and falling spending has caused federal borrowing to plunge. This is actually a bad thing, because premature deficit-cutting damages our still-weak economy — in fact, we’d probably be close to full employment now but for the unprecedented fiscal austerity of the past three years. But a falling deficit has undermined the scare tactics so central to the “centrist” cause. Even longer-term projections of federal debt no longer look at all alarming.
Speaking of scare tactics, 2013 was the year journalists and the public finally grew weary of the boys who cried wolf. There was a time when audiences listened raptly to forecasts of fiscal doom — for example, when Erskine Bowles and Alan Simpson, co-chairmen of Mr. Obama’s debt commission, warned that a severe fiscal crisis was likely within two years. But that was almost three years ago.
Finally, over the course of 2013 the intellectual case for debt panic collapsed. Normally, technical debates among economists have relatively little impact on the political world, because politicians can almost always find experts — or, in many cases, “experts” — to tell them what they want to hear. But what happened in the year behind us may have been an exception.
For those who missed it or have forgotten, for several years fiscal scolds in both Europe and the United States leaned heavily on a paper by two highly-respected economists, Carmen Reinhart and Kenneth Rogoff, suggesting that government debt has severe negative effects on growth when it exceeds 90 percent of G.D.P. From the beginning, many economists expressed skepticism about this claim. In particular, it seemed immediately obvious that slow growth often causes high debt, not the other way around — as has surely been the case, for example, in both Japan and Italy. But in political circles the 90 percent claim nonetheless became gospel.
Then Thomas Herndon, a graduate student at the University of Massachusetts, reworked the data, and found that the apparent cliff at 90 percent disappeared once you corrected a minor error and added a few more data points.
Now, it’s not as if fiscal scolds really arrived at their position based on statistical evidence. As the old saying goes, they used Reinhart-Rogoff the way a drunk uses a lamppost — for support, not illumination. Still, they suddenly lost that support, and with it the ability to pretend that economic necessity justified their ideological agenda.
Still, does any of this matter? You could argue that it doesn’t — that fiscal scolds may have lost control of the conversation, but that we’re still doing terrible things like cutting off benefits to the long-term unemployed. But while policy remains terrible, we’re finally starting to talk about real issues like inequality, not a fake fiscal crisis. And that has to be a move in the right direction.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 29, 2013
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