“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
“The Tea Party, Now And Forever?: That Cosmopolitan, Multiracial Man In The White House Is The Embodiment Of Everything They Fear
People (including me, I’ll admit) have been predicting the demise of the Tea Party for a long time, yet it has managed to stick around, the tail wagging the Republican dog even unto the point of shutting down the government and bringing the country within hours of default. Yet at the same time, if you paid attention to this crisis, you would have seen the words “Tea Party” escaping only the lips of Democrats (and a few reporters). None of the Republicans holding out to destroy the Affordable Care Act started their sentences with “We in the Tea Party…” It has become a name—or an epithet—more than a movement, even as its perspective and its style have woven themselves deeply within the GOP. Not that there aren’t still Tea Party organizations in existence, but how many Republican politicians in the coming months are going to be eager to show up at a rally where everyone’s wearing tricorner hats?
What this moment may mark is the not so much the death of the Tea Party as the final stages of a transition. The silly costumes will get put away, and the angry rallies may draw no more than a handful of fist-shakers. But we should finally understand that the Tea Party has metastasized itself within its host, even if fewer people use its name. It would probably help to come up with a new name for it, since the word “party” misdirects us into thinking that if it isn’t doing practical things like endorsing candidates or putting forward a policy agenda, then it’s fading. But it isn’t, and defeats like this one don’t necessarily make it weaker.
The time has come to stop looking at the Tea Party as a political movement and understand it as a psychological, sociological, and religious phenomenon. That isn’t to say it’s unalterable, and I do think it’s going to be politically wounded in 2014. What is likely to happen is a geographical winnowing, with its politicians losing where they were weakest to begin with. In 2010, many Tea Partiers got elected even in places where they weren’t thick on the ground, since that’s what wave elections can produce. But in the next election we’ll probably see the defeat of people like Maine governor Paul LePage—in other words, those who come from anywhere other than the South and certain corners of the Midwest and interior West. Tea Partiers will still win in Alabama, but not in New England.
The ones who remain will not be chastened by what just happened, nor when their numbers decrease. As there is after every Republican defeat, there’s talk now amongst the base about the need for more “true conservatives.” But if you look at the people who decided to end the crisis, they aren’t that different in their policy beliefs from the Tea Partiers. Mitch McConnell would genuinely like to repeal the ACA, and outlaw abortion, and slash food stamps. This isn’t even a dispute about tactics, because that would mean the Tea Partiers have some kind of coherent set of tactics in mind, beyond “Fight, fight, fight!” It’s about the apocalyptic worldview that animates the Tea Partiers. Establishment Republicans like McConnell have the same policy agenda as the Tea Partiers, but they also know that if they lose this round, there will be another round, and another after that. They don’t think that America could literally come to an end if they don’t prevail in the next election.
But the Tea Partiers do. In one recent poll, 20 percent of Republicans said they believe Barack Obama is the Antichrist. It’s easy to laugh, but try for a moment to imagine that you believed that. What kind of tactics would you favor? Would you be amenable to compromise? How would you look at even a small political defeat? As Andrew Sullivan argues, even for those who are a step back from imagining a literal apocalypse coming some time in the next few months, the root of the problem is modernity itself, and the stakes are impossibly high:
What the understandably beleaguered citizens of this new modern order want is a pristine variety of America that feels like the one they grew up in. They want truths that ring without any timbre of doubt. They want root-and-branch reform – to the days of the American Revolution. And they want all of this as a pre-packaged ideology, preferably aligned with re-written American history, and reiterated as a theater of comfort and nostalgia. They want their presidents white and their budget balanced now. That balancing it now would tip the whole world into a second depression sounds like elite cant to them; that America is, as a matter of fact, a coffee-colored country – and stronger for it – does not remove their desire for it not to be so; indeed it intensifies their futile effort to stop immigration reform. And given the apocalyptic nature of their view of what is going on, it is only natural that they would seek a totalist, radical, revolutionary halt to all of it, even if it creates economic chaos, even if it destroys millions of jobs, even though it keeps millions in immigration limbo, even if it means an unprecedented default on the debt.
It isn’t just that they sincerely believe that the most uncompromising tactics are the path to victory, it’s also that they believe that adopting anything short of the most uncompromising stance is itself a surrender, before the battle has even begun. You can’t let the devil just sit in the parlor for a while and hope you’ll be able to convince him to leave. You have to bar the door. And as Ed Kilgore notes, this isn’t just about very religious people bringing a religious worldview to their politics; it’s a circular process:
It’s not just that these culturally threatened folk embrace their politics like it’s a religion. The actual religious outlook many of them espouse—whether they are conservative fundamentalist Protestants or neo-ultramontane Catholics—has imported secular political perspectives into their faith. They’ve managed to identify obedience to God with the restoration of pre-mid-twentieth-century culture and economics, and consequently, tend to look at themselves as the contemporary equivalents of the Old Testament prophets calling a wicked society to account before all hell literally breaks loose. So their politics reinforces their religion and vice-versa, and yes, the Republican Party, like the squishy mainline Protestant Churches and lenient do-gooder Catholic priests, are generally within crisis-distance of being viewed as objectively belonging to enemy ranks.
It’s true that this phenomenon is the latest iteration of a pattern we’ve seen before, whether it was the Birchers during the Johnson years or the militia movement under Clinton. Some portion of American conservatives comes to believe that the country has been infected with the most diabolical of viruses, and the normal democratic means are no longer sufficient to confront the evil within our borders. But by now we have to conclude that it’s been worse this time, and not only because the Tea Party’s forebears never got a fraction of the influence within the GOP that it now has. The threat of modernity that Sullivan points to is, for these people, all too real. The world is leaving them behind. And that cosmopolitan, multiracial man in the White House became the embodiment of everything they fear. Every one of his policies, whether born in The Communist Manifesto or at the Heritage Foundation, they see clearly as a rapier thrust at their very hearts. There is no telling them to wait for a more opportune moment to strike, or that the battle of the moment is one they cannot win. To lose is to lose everything.
So when does the Tea Party end? In the simplest terms, it ends whenever the next Republican president takes office. When that happens, there will be no more government shutdowns, no more cries of Washington tyranny, no more debt ceiling standoffs, no more Republican obsession with deficits. The tricorner hats will be put away. But the fears and resentments that created and sustained the Tea Party will fester, waiting until the next Democratic presidency to burst out. And it will begin all over again.
By: Paul Waldman, Contributing Editor, The American Prospect, October 18, 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
“A Love Story For The Ages”: Republicans And The Sequester
The deal allowing the government to reopen today included a mandate that the House and Senate engage in a new round of budget negotiations, with the lawmakers involved facing the unenviable task of reconciling the different tax and spending plans passed by each respective chamber. One contentious issue right off the bat is whether or not to preserve the spending levels under the so-called “sequester,” which were a byproduct of the 2011 debt ceiling debacle.
To review, when Republicans took the debt ceiling hostage two years ago, the deal crafted to avoid default – known as the Budget Control Act – mandated the creation of a “supercommittee” that was supposed to come up with a budget compromise. The sequester was meant to be the stick that would force a deal, as it included cuts that were supposedly so painful to each party that they would have no choice but to agree on something else.
Except that’s not what happened. The negotiations fell apart where they always fall apart: with Republicans refusing to accede to one dime in new revenue. The sequester went into effect and is now cutting an indiscriminate path through the budget.
Democrats, then, have made some noise about undoing the sequester, for at least a short period of time, during this new round of budget negotiations. But Senate Minority Leader Mitch McConnell, R-Ky., made clear on the Senate floor yesterday that he is not interested in such an idea.
“I’m also confident that we’ll be able to announce that we’re protecting the government spending reductions that both parties agreed to under the Budget Control Act, and that the president signed into law. That’s been a top priority for me and my Republican colleagues throughout this debate. And it’s been worth the effort,” McConnell said. “Some have suggested that we break that promise as part of the agreement. … But what the BCA showed is that Washington can cut spending. … And we’re not going back on this agreement.” Rep. Jim Jordan, R-Ohio, called sequestration, “one of the good things that has happened” and “an important thing that we have achieved.” Rep. Kevin Brady, R-Texas, even threatened another debt ceiling standoff in the new year should Democrats try to undo the sequester.
But when the sequester first went into effect, Republicans did everything they could to blame it on Obama. They even tried to call it the “Obamaquester.” In fact, here’s what McConnell had to say about the sequester back in February: “Take the Obama sequester as just one example. The president had a chance last night to offer a thoughtful alternative to his sequester, one that could reduce spending in a smarter way. That is what Republicans have been calling for all along.”
So in just eight short months, those spending cuts went from “the Obama sequester” to a “top priority” for the GOP. How the times change.
During his floor speech, McConnell also excoriated Obamacare for “killing jobs.” Not only is that false, but if McConnell wants to see a real job killer, he needs to look no further than his precious sequester spending levels. As I noted last week, the sequester has not only been gutting important programs, but is slowly strangling economic growth. According to the Congressional Budget Office, the spending levels under the sequester will cost up to 1.6 million jobs through fiscal year 2014.
Of course, the GOP to this point has been impervious to the mountain of evidence showing that cutting spending in a weak economy just makes for a weaker economy. So perhaps it’s best that McConnell and co. are just owning up to the fact that the sequester is something they desire and admire. It’s a love story for the ages: the sequester, once spurned, is now the one thing Republicans want to ensure will be staying around forever.
By: Pat Garofalo, U. S. News and World Report, October 17, 2013
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