“The Silence Of The Austerians”: Here’s Why 2014 Could Be The Year America Finally Ditches its Inane Deficit Obsession
The year 2013 will be seen as a year of crushing intellectual defeat for advocates of fiscal austerity. There were many smaller victories, but this big one came in April. Researchers at the University of Massachusetts examined the Austerian ur-paper, “Growth in a Time of Debt,” by Carmen Reinhart and Ken Rogoff, which said that countries whose debt-to-GDP ratio reaches 90 percent experience dramatically slower growth. The UMass folks found not only dodgy statistics and backwards causation, but a goof in the paper’s Excel spreadsheet. The causation and statistics errors were more serious, but the fact that elites around the globe had gleefully embraced something with a flub any office temp could understand was horribly embarrassing.
It was an intellectual rout that badly wrong-footed the Austerians, who have since been notably half-hearted in the face of a resurgent left now campaigning on economic justice. This includes, for example, increasing Social Security benefits, which was unthinkable two years ago, when the fight to stop benefits from being cut was nearly lost.
The question for 2014, then, will be whether this triumph can be consolidated and expanded into the policy sphere. Because despite the intellectual collapse, Austerian assumptions and reasoning still dominate United States policy, which is undertaking fiscal consolidation at a pace not seen since the WWII demobilization. If the current Austerian death grip on the framework of policy negotiation can be broken, there might be a chance.
The answer to this question turns on how one views intellectual debate. Given the history of the last few years, one could be forgiven for thinking it’s pointless. As the Polish economist Michal Kalecki demonstrated brilliantly, there are powerful cultural and class-based reasons for both political and business elites to favor austerity now.
We see this today, as Steve Randy Waldman has demonstrated, in the blatant double standards applied to austerity as compared to inequality or raising the minimum wage. Consider a recent paper by the liberal economist Jared Bernstein, which while outlining much excellent evidence about the economic harm of inequality, is stuffed with unnecessary hedging and hesitation. The Reinhart and Rogoff paper, by contrast, was weak even without knowing about the Excel and stats errors (as Paul Krugman, among others, observed at the time), but elites nearly tripped over their own feet seizing on it anyway. Their bogus “90 percent” conclusion was stated as economic fact by everyone from Paul Ryan to the Washington Post editorial board.
However, biased reasoning is different than no reasoning at all. Seizing on a fig leaf paper fulfills a deep psychological need. Current elites may be largely greedy, corrupt hypocrites, but the cultural credibility of science is such that what amounts to outright class warfare must have an “evidence-based” patina. It’s far too gauche to simply ram through one’s favored policies because you want all the money or to kick the poor.
Therefore, fiscal policy in 2014 and 2015 will hinge on whether the Austerian coalition can be split (assuming, as is probable, that progressive Democrats don’t sweep the 2014 midterms).
Roughly speaking, we’re talking about the center and the right, and there are good reasons to suppose that neither will be brought around. For the center, it takes an intellectual defeat roughly akin to the Battle of Trafalgar to get them to grudgingly abandon austerity. (And if some hack economist churns out another pro-austerity paper, they will probably grab it eagerly.) Meanwhile, “straight” reporters have been culturally conditioned to code deficit reduction as a non-ideological good thing, so even very recent straight reporting still contains buried Austerian assumptions.
And on the right, things look especially hopeless. Denial and motivated reasoning are so epidemic that even Mitt Romney believed the “unskewed” polls before the 2012 election. Ivory tower arguments alone are useless here.
However, all hope is not lost. The key is to change what is considered acceptable for budgetary negotiations. Right now, they all assume that any new spending must be “offset” by cuts elsewhere. That aversion to deficit spending is 100% Austerian.
So while Republicans are largely immune to evidence, it’s also true they don’t actually care about the deficit in and of itself. They favor reduced taxes on the rich, and cutting social insurance. What’s more, conservative reformists at places like National Affairs have gotten louder and bolder in their advocacy of new thinking, even including infrastructure spending.
So if the center, especially including President Obama, can be persuaded to drop their deficit obsession (and again, it’s hardly possible to overstate how badly this debate has been lost), we could trade tax cuts for some austerity relief, like re-extending unemployment benefits and food stamps. And, it’s important to note, both spending increases and tax cuts count as austerity relief. Tax cuts, especially on the rich, aren’t very good stimulus, but they still put money into people’s pockets.
But the main point is to shift ground for negotiation. This strategy of “tax cuts for more spending” has been suggested many times in the past few years and gone nowhere. But before that, it has been the basis for many successful bipartisan deals, including expanding Medicaid in the 80s and the CHIP program in the 90s.
So while the deck is stacked against the anti-Austerians, continuing the intellectual battle is by no account useless. It’s highly possible to influence even a crooked debate.
By: Ryan Cooper, The New Republic, February 5, 2014
“Not Just For The Few”: A Government To Love, One That Works For Everybody
Rep. Steve King of Iowa told a local TV station a few weeks ago that “the best thing anybody can do” in Congress is not come up with positive solutions, but to “kill bad bills.” He wasn’t just speaking for himself. He was explaining the philosophy of today’s right wing.
Of course elected officials should oppose bills they disagree with. But King and his party have taken this to an extreme, opposing any efforts to use the power of government to fix problems that affect ordinary people. This anti-government strain of the Tea Party that is calling the shots in today’s GOP doesn’t represent just hands-off libertarianism, as many would like us to believe. The Tea Party does want government to work: but they only want it to work for a few of us.
This growing movement that claims to be anti-government has caught us up in almost daily skirmishes over federal programs and budget line items. But these battles have obscured the real issue. It’s not a big government vs. small government debate. It’s a debate about who the government works for.
It’s not enough for progressives to fight these selective battles. We must also go on the offense, envisioning and proudly defending a government that works. A government that works serves the needs of all Americans. A government that works provides a safety net that allows us to take reasonable risks. A government that works is one that helps make the American Dream possible for everyone.
It’s important to note that the bashers of big government aren’t really against government in any form. They’re fine with the government that they want; they just don’t want one that serves all of us. When the Ted Cruz wing of the Republican Party shut down the federal government for weeks on end last year with their bluster about cutting the size of government, not everyone was hurt equally. Hundreds of thousands of government employees were sent home without pay, and government agencies shut down many services for low-income people, veterans, pregnant women, and National Institutes of Health patients. Also on hiatus: yes, environmental and financial regulators.
When the Senate refused to confirm any of President Obama’s nominees to the influential Court of Appeals for the D.C. Circuit, it wasn’t just a refusal to let government do its job and thereby limit the work of the court. It was an attempt to preserve a Republican-appointed majority on the court that had been consistently rewriting the law to favor the interests of large corporations — that kind of government, they like just as is.
When the House Republicans voted to make drastic cuts to food stamps and Senate Republicans filibustered an effort to extend unemployment insurance to the long-term jobless, they weren’t concerned with shrinking the size of government. Instead, they focused their “small government” rhetoric on the minor portion of federal spending that goes to helping everyday Americans get a chance.
Unsurprisingly, the right, led by Senate Minority Leader Mitch McConnell, also favor “small government” when it comes to letting corporations and wealthy individuals give huge amounts of unaccountable money to political campaigns, drowning out the voices of individual Americans. Limits on campaign spending, some of which go back more than a century, are what allowed us to build our strong, vibrant government of the people — a government that is now under constant attack.
When President Obama said in his State of the Union address that “it should be the power of our vote, not the size of our bank accounts, that drives our democracy,” he wasn’t offering a platitude. He was outlining a clear vision of government that works. We must remain aware of what the government-bashers are really after and proudly stand for a government that works for all Americans.
By: Michael B. Keegan, President, People For the American Way; The Huffington Post Blog, February 7, 2014
“Pitting The Poor Against The Other Poor”: America Should Treat All Poor People As Well As It Treats Poor Veterans
The message about American soldiers is almost always the same across partisan lines: They are hard-working, courageous, brave heroes, the essence of upstanding, wholesome, and industrious citizenry.
This picture may well be true. But there’s a troubling underbelly to this ideal: Our culture’s respect and admiration for the troops is matched in extremity by its disrespect for the poor.
The poor in this country are often described in polar opposite terms of those employed to exalt soldiers. The poor are takers, morally degenerate, lazy, and so welfare-addicted that they can’t even have life dreams and projects. In our depictions of soldiers and veterans, we construct paragons of virtue. In our depictions of the poor and downtrodden, we construct paragons of vice.
However, lurking behind this contrast is an uncomfortable reality: The two groups substantially overlap.
In 2011, nearly 1 in 7 of our country’s homeless were veterans, nearly 1 in 3 veterans between the ages 18 and 24 were unemployed, and veterans lived in 1 in 5 households poor enough to qualify for low-income heating assistance. Last year, nearly 1 million veterans were on food stamps, and many more doubtlessly received low-income transfer payments like the Earned Income Tax Credit, the kinds of transfers being pilloried by those who decry the “47 percent.”
The poor are often veterans, and veterans are often poor.
This fact occasionally puts conservative lawmakers and commentators who heap disdain on the poor in very tough spots. After all, how do you level rhetorical attacks on the poor and the programs that serve them without also attacking the poor veterans whom we lionize in their capacity as former soldiers?
One way conservatives deal with this tension is to just flatly exclude veterans from their welfare bashing. So for instance, when Senate Republicans sought an accounting of all of the means-tested benefits paid out by the federal government each year, they directed the Congressional Research Service to specifically exclude means-tested welfare programs for veterans. After all, if you are going to construct a list of programs that you intend to trash as wasteful, you can’t have it include means-tested veterans’ health care and means-tested veterans’ pensions. That would be far too disrespectful and intolerably dissonant with pro-troop messaging.
On the liberal side of the aisle, the existence of poor and economically suffering veterans presents a huge rhetorical opportunity, but one that the left constantly manages to bungle. Right now, big name Democrats talk about poor veterans in ways that tend to preserve the notion that they are particularly special. So for instance, when Cory Booker discussed the impact of cutting unemployment insurance on veterans, he emphasized that this was a special crime because “these men and women who fought for our country … are not lazy.” Instead of using this opportunity to defend the poor at large, we get special pleading based on the notion that poor and struggling veterans are somehow different from and more virtuous than the other program beneficiaries.
The more sensible move here, both on the merits and politically, is not to sequester poor veterans off into their own special category of poor people. Such hiving off only reinforces the toxic and illegitimate distinction we make between the deserving and undeserving poor. Instead of separating veterans out, they should be depicted as being very much like most people who find themselves in economic trouble.
The reason why veterans — people who in prior years proved themselves capable of adhering to extreme discipline and undertaking grueling amounts of difficult labor — wind up poor or unemployed is because poverty and unemployment are mainstream conditions that affect huge swaths of our population, not just some mythical class of degenerate scum. Four out of five Americans spend at least one year of their adult life in or near poverty, jobless, or reliant on welfare. Over half of American adults spend at least one year of their life in poverty and nearly 1 in 7 Americans report having been homeless at some point in their life.
As the the President’s Commission on Income Maintenance Programs pointed out in 1969, “our economic and social structure virtually guarantees poverty for millions of Americans. Unemployment and underemployment are basic facts of American life.”
It’s time to reform mainstream understanding of the poor. Ask yourself: If the exemplars of greatness in our society can fall into poverty and unemployment, then who else might be in those ranks alongside them?
By: Matt Bruenig, The Week, February 6, 2014
“The ‘Wingnut Hole’ Measured”: 5 Million Without Insurance Thanks To GOP Refusal
Because of the decision on Obamacare by the Supreme Court, which left the decision to expand Medicaid (a key part of Obamacare) up to the individual states, most Republican-controlled states refused said expansion, leaving substantial portions of the citizenry in the lurch.
Ed Kilgore has been calling this the “wingnut hole,” and many have been speculating about its size. How many Americans will go without health insurance simply because the GOP dislikes the president? Well, happy 2014, dear readers: initial estimates are in, and we have 5 million lucky winners!
About 5 million people will be without health care next year that they would have gotten simply if they lived somewhere else in America. . . . The court effectively left it up to states to decide whether to open Medicaid, the federal-state program for the poor and disabled, to more people, primarily poor working adults without children. . . .
Twenty-five states declined. That leaves 4.8 million people in those states without the health care coverage that their peers elsewhere are getting through the expansion of Medicaid, according to a Kaiser Family Foundation estimate. More than one-fifth of them live in Texas alone, Kaiser’s analysis found.
That’s approximately the combined population of Delaware, Vermont, the District of Columbia, North Dakota, South Dakota, Wyoming and Alaska. Or alternatively, either Alabama, South Carolina, Colorado or the whole of Norway alone.
The Supreme Court decision was doubly unfortunate, because Republican states tend to be poorer than average and contain a disproportionate number of potential beneficiaries who are losing out. Obamacare, by virtue of distributing benefits downward, was aimed at those very people; it never occurred to the law’s architects that the vagaries of politics and law might give states a way out, and so they didn’t design a backup coverage mechanism.
Some refusenik states, like Iowa, might go forward with an Obamacare-instead-of-Medicaid expansion, but most probably will do nothing. Prospects are bad enough that health-care industry groups have basically given up trying to push through the expansion by lobbying and are just biding their time until conditions are more favorable.
It’s worth remembering that the federal government will pay 100 percent of the cost of the Medicaid expansion through 2016 and 90 percent of the cost afterward. It could very well work out that refusenik states will not even save money because of additional spending on the uninsured in emergency rooms and elsewhere.
But regardless of the pitiful sums involved, make no mistake: This action is utterly gratuitous. Combined with the probable coming Republican refusal to extend unemployment benefits that George wrote about this morning, this is a particularly stiff kick in the teeth to the United States’ most vulnerable citizens to usher in the new year.
By: Ryan Cooper, The Plum Line, The Washington Post, December 31, 2013
“Good Poor, Bad Poor”: Where You Stand Depends On Where You Sit
On Sundays, this time of year, my parents would pack a gaggle of us kids into the station wagon for a tour of two Christmas worlds. First, we’d go to the wealthy neighborhoods on a hill — grand Tudor houses glowing with the seasonal incandescence of good fortune. Faces pressed against the car windows, we wondered why their Santa was a better toy-maker than ours.
Then, down to the valley, where sketchy-looking people lived in vans by the river, in plywood shacks with rusted appliances on the front lawn, their laundry frozen stiff on wire lines. The rich, my mother explained, were lucky. The poor were unfortunate.
Dissenting voices rose from the back seat. But didn’t the poor deserve their fate? Didn’t they make bad decisions? Weren’t some of them just moochers? And lazy? Well, yes, in many cases, my mother said, lighting one of her L&M cigarettes, which she bought by the carton at the Indian reservation. But neither rich nor poor had the moral high ground.
As the year ends, this argument is playing out in two of the most meanspirited actions left on the table by the least-productive Congress in modern history. The House, refuge of the shrunken-heart caucus, has passed a measure to eliminate food aid for four million Americans, starting next year. Many who would remain on the old food stamp program may have to pass a drug test to get their groceries. At the same time, Congress has let unemployment benefits expire for 1.3 million people, beginning just a few days after Christmas.
These actions have nothing to do with bringing federal spending into line, and everything to do with a view that poor people are morally inferior. Here’s a sample of this line of thought:
“The explosion of food stamps in this country is not just a fiscal issue for me,” said Representative Steve Southerland, Republican from Florida, chief crusader for cutting assistance to the poor. “This is a defining moral issue of our time.”
It would be a “disservice” to further extend unemployment assistance to those who’ve been out of work for some time, said Senator Rand Paul, Republican of Kentucky. It encourages them to sit at home and do nothing.
“People who are perfectly capable of working are buying things like beer,” said Senator James Inhofe, Republican of Oklahoma, on those getting food assistance in his state.
No doubt, poor people drink beer, watch too much television and have bad morals. But so do rich people. If you drug-tested members of Congress as a condition of their getting federal paychecks, you would have most likely caught Representative Trey Radel, Republican of Florida, who recently pleaded guilty to possession of cocaine. Would it be Grinch-like of me to point out that this same congressman voted for the bill that would force many hungry people to pee in a cup and pass a drug test before getting food? Should I also mention that the median net worth for new members of the current Congress is exactly $1 million more than that of the typical American household — and that that may influence their view?
For the record, the baseline benefit for those getting help under the old food stamp program works out to $1.40 a meal. And the average check for those on emergency unemployment is $300 a week. If you cut them off cold, the argument goes, these desperate folks would soon find a job and put real food on the table. They are poor because they are weak.
I met a wheat farmer not long ago in Montana whose family operation was getting nearly $300,000 a year in federal subsidies. With his crop in, this wealthy farmer was looking forward to spending a month in Hawaii. No one suggested that he pass a drug test to continue receiving his sizable handout, or that he be cut off cold, and encouraged to grow something that taxpayers wouldn’t have to subsidize.
One person deserves the handout, the other does not. But these distinctions are colored by your circumstances — where you stand depends on where you sit.
When a million Irish died during the Great Famine of the 1850s, many in the English aristocracy said the peasants deserved to starve because their families were too big and indolent. The British baronet overseeing food relief felt that the famine was God’s judgment, and an excellent way to get rid of surplus population. His argument on relief was the same one used by Rand Paul.
“The only way to prevent the people from becoming habitually dependent on government is to bring the operation to a close,” Sir Charles Trevelyan said about the relief plan at a time when thousands of Irish a day were dropping dead from hunger.
This week, Mayor Mike Bloomberg tried not to sound like a plutocrat out of Dickens when asked about the homeless girl, Dasani, at the center of Andrea Elliott’s extraordinary series in The New York Times — a Dickensian tale for the modern age.
“The kid was dealt a bad hand,” Bloomberg said. “I don’t know why. That’s just the way God works. Sometimes some of us are lucky, and some of us are not.”
And in that, he echoed my mother at Christmas. Luck is the residue of design, as the saying has it. But the most careful lives can be derailed — by cancer, a huge medical bill, a freak slap of weather, a massive failure of the potato crop. Virtue cannot prevent a “bad hand” from being dealt. And making the poor out to be lazy, or dependent, or stupid, does not make them less poor. It only makes the person saying such a thing feel superior.
By: Timothy Egan, Contributing Op-Ed Writer, The New York Times, December 19, 2013
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