Maybe We Should Ask Republicans What They Mean When They Talk About Economic Growth

Marco Rubio is the latest “rising star” in a dying party to espouse the empty and pointless rhetoric of American conservativism.  The text of his response to President Obama’s State of the Union speech is here.

Marco Rubio

Understanding what conservatives have in mind when they talk about America’s future and economic growth requires holding their rhetoric accountable to the facts.

The simple fact is we have lower taxes, fewer regulations, and more wealth in the hands of job creators than at any other time in recent history.  If GOP rhetoric were anywhere near the truth, we should be awash in new jobs and prosperity.  But we are not.

Rubio claims that large government and taxes that promise to help the middle class has “failed every time it has been tried.” Well, that is true if you forget mid-century America or turn a blind eye to the strength of European countries like the Netherlands, Denmark, Norway, Sweden, and Germany.

Republicans like to say President Obama is anti-private sector, but the Obama administration overall accommodates the private sector quite well.  Obama went out of his way to remind us that the private sector is the key to prosperity.  In today’s political wars, however, the messenger is more important than the message.  Again, perhaps it is time to look at facts, not rhetoric.

We currently have the tax cuts, less government, and fewer regulations.  The wealthiest — the job creators — have seen their wealth increase by over 60% in the last decade.  So…keep asking…where are the jobs?  Where is the prosperity?  Where is the answer to these questions?

A classic worth repeating…because it is so true.

Rubio also says our financial problems begin with a country that spends too much, spends a trillion more than it takes in.  While that certainly is a problem, it is hard to see why this isn’t a funding problem.  We cut taxes with the idea that wealth would trickle down.  The increased overall prosperity would bring in increased revenues, the argument went, and that would cover the lower tax rates.  But as we see, that does not happen.

Moreover, Republicans — by giving even more cuts and subsidies, adding Medicare prescriptions benefits, and a few ill-advised wars — added to our financial unmet financial burdens.  Let’s not forget doing absolutely nothing to address the core issues behind the banking crisis that put us here in the first place and thus added even more to our deficits.

Yes…it is all the fault of government too big, isn’t it?  Hardly.  It is a mismanaged government finance policy that erroneously puts the blame on government generally.  Simply put, if you manage government to fail, it will likely fail.  It can’t be any more plain than that.

However, when Rubio argued that annual GDP growth at 4% would be a big part of helping balancing our books…he was right!  That’s why notable experts like Paul Krugman make the case for government stimulus to push economic growth.  It will be much easier to pay down the cost of this stimulus — and more — if we have ten years of growth versus doing nothing, as we are doing now, and let things remain stagnate.

(But Krugman, and others like him, is an expert.  He’s intelligent and informed.  He has spent his career understanding economics.  So he must be wrong.)

Anyway…this is all so tiresome.  What is it that Republicans want that we don’t have right now?  Are they really concerned about jobs or just growth?  And who are they anyway?  Millions of people vote GOP in this country as if those votes serve their interests.  Why?

I ask this because we should ask what exactly do conservatives have in mind when they talk about growth and prosperity.  The rank and file Republican voter certainly doesn’t understand this question.  If it simply is growth, especially for the wealthiest, Republicans have that and lots of it.  If they are talking about middle class growth and prosperity then things are not so clear.

Rubio served up a rambling list of tired complaints and clichéd promises that simply do not fit the facts of conservative principles.  They are intentionally misleading the public and misrepresenting their true objectives.  It is hard to understand how an informed and intelligent person could see things otherwise.  Show us some progress on the conservative agenda first, then may you have an argument that the less-is-more approach is a winning one.

If Rubio is a rising star representing the future of the Republican Party, there isn’t much to excite people expecting a more moderate and sensible GOP.  We have heard all of this before.  (We haven’t forgotten the 2012 elections already, have we?)

Alas, this is looking more and more like class warfare to me.  The conservative elite are pushing for more by demanding that the rest live with less…and pay for the privilege.  Conservatives have focused on dismantling government for nearly 30 years now.  It is the “Starve the Beast” argument and, unfortunately, it is winning and most Americans are losing.

How do conservatives address this fact?  How does their rhetoric square with reality?  It is time to ask more about what does a prospering America really look like in the ideal GOP world.

Related articles

• Translating Obama’s State of the Union and Rubio’s Response (usnews.com)
• What Marco Rubio Doesn’t Understand About Debt And The Economy (thinkprogress.org)
• Rubio’s economic remedy: More austerity! (tv.msnbc.com)

Why Wage Stagnation Matters

When I read about wage stagnation, I can’t help but think that it should be a concern, even for those largely untouched by the matter.

In an article Sunday’s New York Times, MIT economist Erik Brynjolfsson correctly points out “There is no economic law that says that technological progress has to benefit everyone or even most people.”  And of course it is more than just a matter of technological progress that affects economic growth.  But overall as the economy has grown in recent decades, the benefits of that growth have not been shared as equally as in the past.  Again, there is not hard fast economic law that says it should.

There is, however, another reason why stagnation should matter.  It has to do with the intangibles that support an economy.  For decades the United States has been draw for people — and their wealth of energy, ideas, and capital — to come to this country for all that it offered that was not found in other parts of the world.  Along with the benefits of strong social services and security, perhaps the most attractive draw has been opportunity.

If we let our social services and infrastructure crumble around us, that’s one story; but if we start to neglect the conditions of shared growth and opportunity, then that is something else altogether.  We shouldn’t take it for granted that the world’s talent will continue to flock to American shores and contribute to a better future.

Right now it might seem absurd to think that American culture and society should lose out to a foreign competitor, but that kind of hubris is bad for American citizens today and a threat for the future.   Look at the global changes that have occurred in just the last 30 years.  The modernization of the world and its economy is happening at an incredible pace.  If we neglect our working and middle classes, why shouldn’t we expect other economies to benefit.

Yes, we have democracy and enormous economic size that will sustain American competitiveness, but why compromise our competitive advantages?  Government economic policy that caters to those gaining the most from our growth has not benefited the majority of working Americans equally and yet those benefiting most likely would not have the level of economic growth they have enjoyed without the benefit of working Americans.

So why shouldn’t those who benefit the most invest more for their gains?  In the long run, I believe you can make the argument that it would be a good investment in a strong American future.

Related articles

• Growing social and wealth inequality in America (presstv.com)
• Robots and Robber Barons (nytimes.com)
• Inequality is rising. Should we blame robots or the government? Or both? (washingtonpost.com)
• The Unequal State of America (reuters.com)

Raise the Taxes

Two reasons why we should raise taxes.  First, there is little evidence that keeping taxes low will lead to faster economic growth.  Second, we NEED to raise the taxes.

Let’s start with the need.  Over recent decades this country — largely under conservative principles — has managed to under-fund government even as it raised costs (wars, medicare benefits, tax cuts).

Grover Norquist is the news quite a bit recently for his simple-minded anti-tax pledge.  We need to be aware of this.  In the church of small government, Norquist is pope and too many conservatives bend down to kiss his papal ring.

All these so-called independent and intelligent conservatives cower before Norquist.  Impressive.  And it is important to be aware of the pledge, but the goal of the pledge is the real concern.

Lower taxes are not necessarily bad, in fact everyone would agree that lower taxes would be a good thing, if the tax rate were fiscally responsible.  However Grover Norquist’s goal is smaller government for the sake of smaller government.   Conservatives don’t cut government programs because it is a necessary and unfortunate evil, they cut government because less government is their long term goal.

Not Relevant

Why, for example, do Republicans propose raising the age of Medicare benefits qualification?  Because they want less Medicare, if they must have it at all.  (Curious coming from a party that ran against Obama just two months ago warning that Obama would eliminate Medicare!  Truth and facts mean nothing to the misleading political right.   It’s disgraceful.)

So why reduce the taxes?  The argument goes that it will create jobs and growth.  Republicans will tell you that jobs and growth are their long term goal.  If we have growth, tax revenues will increase, and we will be able to pay down our deficit and maintain our government programs.

Republicans are funny.  The anti-intellectual party claims to rely on common sense.  Even here they seem unable to set things straight, however.  Common sense would tell you that the anti-tax, less-is-more approach to economic growth hasn’t worked all that well.

We have the tax cuts which the GOP is fighting to save — we have them RIGHT NOW — and we have had them for years.  Nevertheless we managed to fall into our recession, have struggled to recover from the recession, and job growth remains sluggish.  Ask your favorite GOPer:  If these tax cuts work ,  if more money for “job creators” creates jobs…well, where the hell are the jobs?

Not Relevant

Republicans either know nothing about market demand, the labor market, and the global economy or they are dismal liars.  Sadly, I think the party of the right is both.  They are misleading the public, and in doing so leading us right over the cliff to achieve their anti-government goals.

If you are, in fact, worried about the future for your children and grand children — a politician’s favorite trope — don’t vote for anti-future Republicans.

Let’s apply common sense to the tax cut argument.  First, we see that the tax cuts don’t work, not for the fiscal and economic problem we have now.  Look at what we have with cuts.  Second, look at what higher tax rates did to economic growth in the past.  It didn’t seem to hurt it.  Our most robust years coincide with higher tax rates.  How does that square with GOP rhetoric?

We need to close loopholes, raise some taxes, and find some savings, but all of this alone will not erase our deficit and eliminate our debt.  It won’t alone save the economy.  The numbers don’t add up.  We need growth.  If the economy regains its once-upon-a-time growth, the deficit and debt problems we face will go away rather easily.

Currently the private sector is not supporting the economic growth we need.  Demand for what the private sector can supply is low.  Money needs to circulate again in the consumer markets.

We do, however, need investments in infrastructure, research, education, and other public sector projects that will support future economic growth.  This is government’s role — i.e., our role as the people — to invest in these projects.  It is the derided Keynsian approach to economic stewardship and most economists argue it will have long-term benefit.

Relevant…to the GOP.

So why don’t we do it?  Well, once you get through the misinformation from conservative politicians, it all comes down to what you want government to be.  The right wants less of a government that serves the people.  Government for them is the problem, remember?  It is a problem because they don’t like it.  God, knows why, but I have ideas on this…it is an ideological one, primarily a bastardized theological one, leading with SBC corruption, but that’s another story.  The lemmings are about to go over the cliff, regardless of the ideological influences steer them.

Raise some taxes, but focus on stimulus spending, and we’ll save the future and can even save the misguided.

Related articles

• Conservative Leaders Urge Tough Line on Fiscal Cliff (cnsnews.com)
• Do Tax Cuts Lead to Economic Growth? (nytimes.com)
• Starve The Beast:  Fiscal calamity is the GOP’s plan to shrink government (post-gazette.com)
• Grover Norquist Makes a Fool Out of Himself By Demanding Reagan Era Tax Rates (politicususa.com)
• The Top 4 Whoppers Norquist Tells To Keep Republicans From Defecting (kaystreet.wordpress.com)
• Republicans speak loudly about standing up to Grover Norquist’s pledge, but carry a little stick (dailykos.com)
• Grover Norquist: Beware of a second tea party wave (washingtonpost.com)

Government Subsidies and Jobs

A diagram showing an expansion in a production-possibility frontier. 

 

After reading today’s first installment of United States of Subsidies:  How Taxpayers Bankroll Corporations in the New York Times, I think it is time to think out loud.  Read along and see where you agree or disagree.

 

First, we keep hearing the argument that lower taxes for “job creators” — corporations, wealthy individuals, and small businesses — will create jobs.  Never mind the fact that we have cut taxes and went into a recession anyway and that the recovery — still with these tax cuts in place — has been a somewhat jobless one.  The argument prevails.

 

But explain the difference between a tax cut and a subsidy.  These subsidies are almost always tax credits (i.e., a tax cut), but in some cases businesses have a negative tax as an incentive to maintain business operations.  These should be added to the job creators’ opportunities, should they not?

 

In essence the “trickle down” argument  claims that if we give job creators money they’ll spend it creating jobs.  Some how, however, the facts don’t square with the rhetoric.

 

It isn’t any more true to say that a business owner will expand business simply because he has the money to do so than it would be to say I’ll spend money on baby diapers just because I have the money to do so.  There has to be a need — in the case of business, an opportunity — to drive investment and expansion.  In the current economic environment, the opportunity isn’t there because demand is low.  Demand is low because most Americans are economically disadvantaged.

 

And we have a little problem competing in the global labor market — especially in our traditional manufacturing sectors — where labor is cheap (and increasingly smarter and well-trained).

 

The auto industry featured in Sunday’s story has received almost $14 billion from taxpayers since 1985, but that hasn’t prevented auto factories from closing.  There are more cars on the planet today than ever and that number only looks to increase in coming years.  So it isn’t as if there is a decreasing demand for cars.  In this case the subsidies are given largely to offset the higher labor costs of doing business in the United States, but with mixed results.  The economics of these subsidies therefore don’t make sense and likely won’t make sense unless we expect the realities of the global labor market to change in our favor.  The subsidies, therefore, are short-term, incomplete fixes to a larger global labor problem.

 

Still thinking out loud…

 

There also exists the complaint that government doesn’t create jobs.  I’m not sure which side to come down on with this one.  It would seem that government subsidies don’t create jobs, at least not stable ones in dying industries.

 

When governments choose to subsidize a business, government essentially is in that business.  (And if you listen to politicians today, you probably don’t want them making important business decisions.)  These subsides, both large and (relatively) small, rarely reflect thoughtful business partnerships today.  Instead they are politically motivated gifts.

Subsidies do make sense in some situations.  Smart subsidies work to reduce the variable costs of production, encouraging (or enabling) business to expand, but this doesn’t always work.  Again, looking at the labor issue in the auto industry, if the American economy cannot compete in the global auto labor market, the subsidy has effect only as long as it covers losses.  When that capacity is exhausted the benefit is gone.  It becomes a gift, not an investment.

 

So why do we subsidize?  The answer appears to be driven by politics, not business sense.  When you hear about state leaders occupying a hotel to beg for the opportunity to give away taxpayer money to an auto maker, for example, it sounds a lot like desperation.  Smart subsidies would be more like smart business investments and not political desperation.

 

On the other hand, dare mention that you might want to hire teachers or repair roads — in other words invest in the future — anti-government critics complain that government doesn’t create jobs.  Aren’t teachers workers?  How about the people working for the construction companies building your roads, are they not workers?  Of course they are workers and what they do are called jobs.  And they deserve our respect.  Even the guy in the funny hat running your parks is a worker with a job.

 

Schools, roads, parks…these are investments in public goods (in a broad, layman’s sense).  They are what they are because the private sector will not or cannot monetize them or perhaps we simply agree that a free and democratic society should provide some basic opportunities to citizens regardless of their ability to pay.  You know…roads, teachers, clean water, a healthy environment, courts, law enforcement.  That sort of stuff.  Free market economies thrive in the certainty and security these public services provide.

(Technically public goods are non-excludable, non-rivalrous so that you accessing them doesn’t interfere with me accessing them.  So, technically, teachers and roads, therefore, don’t count, but they do for my purposes here.  Cf Social Goods.)

 

Nevertheless, we seem hell bent on cutting our way to prosperity, but we don’t bat an eye when we subsidize the private sector, the so-called free market.

 

Still thinking out loud…

 

It seems like there is a question of fairness and maybe even justice at work here, but let’s not go down that road.  Look at common sense instead.  We seemingly have billions of dollars to throw at industry and offer in tax cuts.  (And many billions more to bomb foreigners, but don’t look over there.)  Maybe it is time to ask:  When is America going to start taking care of Americans again?

 

Perhaps we need to start looking at things differently so we don’t make the same mistakes again and again.  Bailing out the auto industry and Wall Street appears to have been the right thing to do under the desperate circumstances of just five years ago.  However we should now look to the future so multi-billion dollar bailouts are not again acts of desperation.

 

If we were thinking the way we think today 100 years ago, we’d still have Acme Buggy Whips suckling at the government teat filling warehouses with a product that might have some demand at an occasional parade or high school skit.  And the CEO of Acme would be installing a car elevator in his ocean front vacation home.

 

Subsidizing industry with a competitive opportunity to grow makes sense.  Let’s say the future is a newly discovered technology — nuclear fusion — and the world is racing to capitalize on it.  Can government lend a hand to build the infrastructure to make America competitive in this new industry?  Yes.  Look, mistakes will be made and some spending will go flat.  There’s no better example than research that goes on at research universities.  But supporting this research is a public good.  The discoveries there can lead to private sector economic growth.

 

So again…what are the differences between subsidies and tax cuts?  Where are the promised jobs that come with money hording at the top of the economic ladder?  If we can invest in subsidies, why can’t we invest in jobs elsewhere, something more long term and necessary like education, infrastructure, research, and new economy technology?

 

Perhaps what we need a new New Deal in this country.  At least in the near future, the dollar is the de facto world currency and the American economy remains the engine of the world.  Our debt is trusted and cheap.  We can afford to deficit spend to increase growth.  Keep in mind that it will be easier to pay down debt after 10 or 20 years of solid economic growth than it will be to make do with less if we continue to flounder for another decade.

 

Just for fun, let’s “waste” the taxpayer’s money on something he needs:  Growth.

 

Related articles

 

• What Republicans Can Do to Adapt (But Probably Won’t) – Bloomberg (bloomberg.com)
• As Companies Seek Tax Deals, Governments Pay High Price (nytimes.com)
• How on Earth Is a 401(k) a Government Subsidy? (reason.com)
• Navigating the US’s Politicized Economy (theburningplatform.com)
• How Much Are You Paying a Year to Subsidize Washington’s Businesses? $349! (slog.thestranger.com)

 

Politicians and the Fiscal Cliff

A story in today’s Star Tribune about looming “fiscal cliff” says it all about where the blame lies.  If Republicans — not Congress, but Republicans — fail to reach a budget deal we are in big trouble.

It is time to stop being bi-partisan when explaining our nation’s woes.  Unless Republicans show some sincere effort to recognize that they do not represent 100% of the ideas and people in this county and begin to work on an overall solution that involves compromise, they are to blame.  Period.

Look at the positions.  Obama is cited saying “I refuse to accept any approach which isn’t balanced.”  Senator Amy Klobuchar says “This is a time for grownups to get things done.”

Meanwhile the paper cites Michele Bachman who claims “I pledge to continue to work everyday to create jobs.”  Speaker John Boehner warns that “raising the top [tax] rates would destroy nearly 700,000 jobs in our country.”

Do you see a difference?  The difference is stubborn delusion from the right.  Obama simply states a condition, not a firm, single position, such as a rigid no new taxes pledge.  He taking a position that sounds open to negotiation and option, but wants it to be balanced, i.e., fair.

Bachmann, on the other hand, claims she is working every day to create jobs.  For much of the last two years the only job she seemed focused on was her own.  And if she were indeed working  for creating jobs for all Americans, then based on her own assessment of today’s American job market, she hasn’t much to show for her efforts.

Boehner, on the other hand, is crying about losing 700,000 jobs if taxes on the very wealthiest are raised to help recover from decades of underfunding government.  If these magical tax cuts and unbalanced tax rates really were going to create jobs, where are they now?

Meanwhile, real experts at the Congressional Budget Office, not partisan hacks, warn that failing to avoid the “fiscal cliff” will cost 2 million jobs and result in as much as a four percent drop in GDP which equals another recession.

So let’s say Boehner knows what he is talking about.  Just pretend for a minute.  Isn’t it better to lose 700,000 jobs and avoid a recession while cleaning up our fiscal mess or is it best to lose 2 million jobs and make our situation worse?  Seems like an easy question to answer, even if half of the question isn’t based in fact. If we can trust people like Boehner to have their facts right, which is the better option?

Sadly, as we saw last Tuesday, tens of millions of Americans buy the irrational arguments of the conservative right.  Paying attention to simple arguments should sort out the choices we face, but people seem unable — or unwilling — to figure it out.  It is an absurdity.  As we see here, even if Republicans have the facts, they still don’t have the winning argument.

So why do they keep pushing?

Conservatives don’t like government.  They want to dismantle as much of it that they can.  They all believe, rich and poor alike, that they are wealthy landowners living in colonial Virginia centuries removed from reality.  I have no idea.  But the stupidity on the right, not on the left (sorry), owns the overwhelming burden of our current failures.

Prove otherwise.  Explain how we got to where we are today.  We have the job-creating tax cuts, we’ve privatized more and more of our government, we are fighting wars for freedom, we have cut government investments…where is the prosperity?

Related articles

• How the Fiscal Cliff Would Hit the Economy (vpr.net)
• Fiscal cliff: Compromise or hope for the best (upi.com)
• Are We About to Fall Off the Fiscal Cliff? – Patch.com (santacruz.patch.com)
• Boehner Tells House G.O.P. to Fall in Line (nytimes.com)
• ‘Fiscal cliff’ showdown begins as Obama and Boehner claim mandates on tax issue (guardian.co.uk)
• RPT-US Congress created this cliff and may now plunge off it – Reuters (reuters.com)
• John Boehner Goes After Bachmann’s Clinton Aide/Muslom Brotherhood Remarks:  ”Pretty Dangerous”  (mediate.com)

The King Gets the Head, the Queen Gets the Tail

Let me bring your attention to Moby Dick, Chapter 90, Head or Tails, “De balena vero sufficit, si rex habeat caput, et regina caudam.”

Melville explains how a group of poor fishermen must give up a prize whale they have captured and brought ashore to a wealthy duke.  The laws of England establish the King as “Honorary Grand Harpooner.”  Because the whale is an animal of “superior excellence”  it must by right belong to the king.

As the fishermen enjoy their good luck and dream of their profits, a delegate from the duke claims the whale.  The fisherman ask who is making the claim:

“The Duke.”

“But the duke had nothing to do with taking this fish?”

“It is his.”

And that seems to be that.  The fishermen press:

“We have been at great trouble, and peril, and some expense, and is all that to go to the Duke’s benefit; we getting nothing at all for our pains but our blisters?”

“It is his.”

“Is the Duke so very poor as to be forced to this desperate mode of getting a livelihood?”

“It is his.”

“I thought to relieve my old bed-ridden mother by part of my share of this whale.”

“It is his.”

“Won’t the Duke be content with a quarter or a half?”

“It is his.”

Melville, of course, writes in the 19th century, but alas how much this short chapter seems to show how little things have changed.

The king is entitled by law to riches of the land and ”coercing alms of beggars” is de rigueur.  In this story, the king gives the whale to the Duke, he benefits from work and riches of the “poor sun-burnt mariners” who haven’t any legal claim on the accomplishments of their work.  (See any modern parallels?)  Is the duke impoverished and can in someway justify this theft?  No, not at all.  It simply is the way it is.

Is that the way it is?  Don’t we live today in a society that increasingly expects more from the poor and gives more to the rich?  It is hard to be self-sufficient — a favorite call from conservatives — when you make less and keep less of what you make.  Lower wages, higher costs, higher tax rates.  Do these seem fair?

If you don’t think poor, bare-footed workers suffer today to enrich those who hardly work at all, read another book.  Take a look at Days of Destruction, Days of Revolt, by Chris Hedges and Joe Sacco.   See how desperately poor and disadvantaged more and more people here in the United States live.

In reality we have enjoyed less than a 100 years of share relative prosperity in this country.  Only a generation or two ago even American students were taught about the Magna Carta , almost in a mocking way, to show how different the democratic and free society of the United States was from the lingering injustices of monarchy and birthright.

Today we are devolving back into a economic and political plutocracy that is emerging as a firm aristocracy that by any objective measure is inconsistent with the principles of a government of the people, by the people, and for the people.

Herman Melville’s classic is more than just a story of a man and a whale.  It is a history, too.  We can’t become numb to nuance, we can’t be blind to facts.  Simply said, we have far too many honorary grand harpooners eager to steal your catch.

Related articles

• The Pequod Sails…Poem by Fred Voss (silverbirchpress.wordpress.com)
• Reading Moby Dick (alittletourinyellow.wordpress.com)
• Moby-Dick Big Read (metafilter.com)

Unqualified Romney

Let’s presume Mitt Romney’s statements about national and public events are sincere, that he isn’t being deceptive and rhetorically bombastic.  Is this a guy you want for President?

Take his comments yesterday about the Federal Reserve pledge to launch a third phase of quantitative easing.  Romney argues that this proves that Obama’s strategies are not working.  If he is being honest, Romney’s statement is stunning for its simple-minded grasp of the situation.  Six-month old puppies understand facts and consequences better.  I’m not sure a man with the reasoning intellect of a puppy is the man you want in the White House.

Or near our foreign policy and military.  But let’s stick to Romney’s Federal Reserve faux pas.

First off, President Barak Obama is not telling everyone that the work on the economy is finished.  Obama hasn’t put his feet up on the desk and popped a bottle of Champagne (French of course) and he hasn’t hung a Mission Accomplished banner on the White House.  Just the opposite.  Obama — along with the Democrats — has consistently argued that more time, work, and smart policy is needed to assist the economic recovery.

Second, the Federal Reserve said essentially the same thing in its announcement yesterday.  The economy is improving, but not improving at a satisfactory rate.  The economy still lacks demand that would give the private sector reason to increase capacity.  The “job creators” are sitting on record cash reserves.  Keeping interest rates low is intended to spur spending to increase demand which would then incent the private sector to get off its cash.

All of this is a process, something Republicans seem to be inherently unable to understand.  Out of sight, out of mind with them.  Is that the sort of intellect you want leading a great nation?  Of course it isn’t.  And one has to wonder how sincere Mitt Romney really is…about anything.

Anyone who can so skillfully enrich himself with other people’s money must have some capacity for seeing beyond the moment.  He has to be smarter than a dog.  But Romney presumes that the American people are not.  Shame on Mitt Romney for this, but shame on the American people who buy these short-sighted and misleading assessments.  With smarter voters — people voting for their own bests interests (where is Ayn Rand when you need her?) — we would not have today’s Republican Party.  We certainly would not have a Ryan/Romney ticket.

We are indeed better off today than we were four years ago, much better.  And to criticize Obama for all the faults lingering today is nonsense.  Generally you can not take all the credit for the success, too, but the Republicans have made it a matter of policy to block Obama at every opportunity.  It is hard to see how Republicans have contributed anything but blame to the current political discourse.  Again, is that what you want for leadership?  Whiners are not leaders.

It should be easy to defeat Republicans.  They have no record to stand on, they have no solutions, and they show either a basic lack of intellect or an overwhelming display of deceit.  These are horrible qualities for leadership.  But Americans are not paying attention.  Sometimes things are black and white.

 

Related articles

• Polls Show Obama Builds Modest Lead Over Romney (voanews.com)
• From Jack Ryan to Mitt Romney: Obama’s foes tend to self-destruct (thegrio.com)
• Romney returns to criticizing Obama on economy (cnsnews.com)
• Obama Responds to Romney Statement (politicalwire.com)
• Barney Frank Bashes Republican Fed Complaints (huffingtonpost.com)

Preparing to Live In Post-Democratic America

I have offered a few tips here on A Little Tour in Yellow — mostly dealing with food and this one is more of the same – about how to live in a post-democratic America.  And I don’t mean to sound nihilistic,  but should Romney win and also get a Congress dominated by conservatives…well, think things are bad now?  We’re toast.

Among the biggest concerns that no one talks about is the courts.  We have it bad now with the Devil’s lazy henchmen currently serving in the Federal courts  – yes, I am talking about you Scalia, Thomas, et al – but a rookie like Romney might nominate a loon like Michele Bachmann to a federal court!  Or maybe Mary Pawlenty, wife of poor little Tim.  In fact you can count on Mary Pawlenty being appointed.  Bet the farm.

Yes, things look bad now, but they would be much, much worse.

Of course we would lose more than our rights and our government, we would lose the economic battle as well.  Conservatives, like liberals, might — and I mean might — know a little something about business — maybe we can give them that — but they don’t understand economics, especially macroeconomics, and business and economics are two different things.

The economic winners in places like China will demand more and more of the world’s resources and with us getting less and less it will become necessary to learn to live with less.  So I am preparing now.

Today I stopped at a grocery store and shopped as if I were in the post-democratic future.  First I limited my shopping to $10 and tried to get enough for a couple days.  My basked was half-filled with off-brand products of things like potato flakes, canned vegetables, and some macaroni and cheese.  There were some tempting “meat products”, but I was a long way from home and didn’t want the soy and wheat to sprout before I got to a freezer.

Tonight I enjoyed a mix of potato flakes and corn.  You know…it wasn’t bad.  I splurged with some butter, however, which might be cheating and not fully living the post-democratic American dream.  In any case, it is a good idea to start eating this way, because … well, you never know.  And don’t think it can’t happen.  Ask millions who already know.

And of course I sound like an ass.  I hope I do.  This isn’t supposed to be funny.  Many millions of people in the United States are grateful for even my paltry make-believe pantry.  For them it is not make believe.  Keep in mind that the poverty rate in the United States is going up, not down.  The yuppies of the past are being replaced by older Americans – and not so old for those who won’t even get a chance — who are learning to do more with less.

Is it government’s job to fix this?  You know, to some extent, the answer is yes.

We don’t have to keep punching holes in a sinking ship.  Government has policy tools it can use to stimulate economic growth.  The United States has the Federal Reserve, assigned to manage these things from a monetary angle.  Today they did what they need to do — they did the right thing — and pushed some money into the system.

Overall government can and should support programs and infrastructure that put a foundation beneath its citizens (i.e., workers) and business (i.e., job creators).  Government can also hire talented people to administer these programs, build the infrastructure, and maintain the business of government.  Public jobs should not be a disgrace.  In these key ways, government has a positive role serving the economic interests of the country.

In my (perhaps cynical) post-Democratic America (I should be more fair), do we expect further investment in the common good?  Come on!  Fat chance.  Even in this country’s relatively strong years (cf. the Clinton years) we cut and didn’t reinvest our good fortune.  In good times and in bad we have been dismantling our shared, public investments in our common assets.

The race to the bottom will end somewhere and I’m not sure why we should look forward to where that ends up to be.  If we continue to disinvest in our common assets, don’t expect the same standard of living that raised today’s conservatives.  No, the good schools, functioning infrastructure, sound regulation, and so forth required a public investment that people today seem unable and unwilling to understand.  And the private sector won’t pick up the slack.  These investments are called public goods for a reason.

So as our rights dwindle, our economy tanks, and our treasure flows increasingly overseas, I simply think it is a good idea to look at a bleak future with eyes wide open.  Practice, prepare, and practice some more.  Maybe less will feel like more and we can celebrate with a swig of victory gin.

Potato flakes and corn.  Or…how about this?…we could stop voting against our best interests!

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Republican or Democrat…What is Difficult About This Question?

We had things going pretty well here in the United States.  It wasn’t a long run — forty years, fifty? — but it was a good run.  The world changed though and we zigged when we should have zagged.

The rise of populist conservativism infected us all, even liberals, to greater or lesser degrees.  Times were good, after all, why not reward our success and heat it up?

Alas the idea that tax and regulation cuts — especially for the so-called “job creators” — would trickle down and bless us all proved to be a failed argument.   If populist conservativism would benefit everyone, why is such an elite few reaping the benefits?

Billions of dollars of tax cuts didn’t go into job creation, those dollars went into bank accounts.  Conservatives ran with it anyway and fostered a general distrust of government.  The era of doing more with more met its match.  We would spend decades chasing the lie that we can do more with less.

That’s fine if you have already reached the top.  Forget the ethics of taking yours and abandoning those who helped you get there.  Say we are all best served when we purse our self interests, then why would the masses — that populist conservativism — support programs that have given us the growing disparities we have today?   If only the people who benefited from the GOP platform voted Republican, not only would we not have much to worry about, but we would have a fringe party wallowing in the shadows of success.

The fact is most people are not in the top one percent.  They’re not even in the top 10 percent.  Or top forty.  Math has never been our strong suit, has it?  And it is true that we will never all be the top ten percent, that’s true by definition.  That’s ok.  No one should argue that everyone should be exactly the same, whether that is a bounty of plenty or the misfortune of need.

But it isn’t only the “job creators” who need gains.  Aren’t we all better when the middle substantively improves?  When the least fortunate of us improves his lot, we are all better.   America’s tremendous economic growth and opportunity rose on the shoulders of a growing and strengthening middle class, not an increasingly exclusive economic and political elite.   We didn’t become what we were by looking up to beneficent job creators to “build it” for us.  And conservatives know that…

How many of today’s conservatives come from middle class families that got a start from veteran higher education grants?  Or look at rural America, what would that part of our society look like if we did not protect our environment and support rural communities?  And everyone, fortunate and poor alike, benefit from clean water, safe streets, food safety, functioning infrastructure, and so on and so on.

We shouldn’t be surprised that we have less and have gone broke getting less.  This has been part of conservative strategy since the 1980s.  Starve the beast.  Underfund programs and use the financial crisis that it creates just justify cuts.  Very simple and the results have been disastrous.  

You don’t have to be a genius to understand this — although it seems you have to be a shade brighter than a typical modern conservative — blaming government has given us less, not more.  It has made us weaker, not stronger.  And it has depressed the outlook for our future.

 

 

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Romney Can Turn the Economy Around?

Mitt Romney (Photo credit: Wikipedia)

On the eve of the Republican National Committee convention in Tampa, Florida, the message Republicans hope to send is clear.  Romney, they will claim, is the right guy to fix our nation’s economic woes.  But for all the reasons they make this argument are exactly and correctly the real reasons why he is, in fact, absolutely not the right person for the job.

Very simply, Romney is a businessman through and through.  He appears incapable of seeing the wold beyond the scope of business models.  This is bad news for a man who wants to be president of the United States for the very simple reason that a country is not a business.

At a very common sense level this should be obvious.  Businesses are about generating profits.  The goods and services they sell are not in essence the final goal of a business.  They merely are part of the profit-generating system.

Government has different goals.  Profit is not the goal.  Instead the goods and services it provides are the goal.   Moreover, governments operate in a closed system.  Compare this with a business which operates entirely differently.  A business, for example, can move or even shut down. In fact, Mitt Romney‘s career as a businessman is one that takes advantage of the open opportunities that a business enjoys.  He routinely moved or closed businesses for economic gain.  You cannot move a country.  And you cannot fire its citizens.

At an economic level, Romney, like most conservatives today, is terribly unprepared to manage the United States economy.  First of all business finance is not the same as macroeconomic policy.  There are questions of balance of trade, monetary policy, and deficits that conservatives seem inherently unable to grasp.  Government plays a very different role in our economy than a business does.  In fact you can look at what applying businesses best practices to government policy has done to our economy so far.

The era of austerity is failing our economy.  Deregulation and lower taxes has failed to stimulate economic growth.  And the profit motive has sent more and more of America’s wealth up the economic ladder, and not down to the benefit of most Americans as promised.  Why, one has to ask, would you ask for even more of these failing policies and not less?

Of course at the root of all of this is a basic difference in how conservatives and progressives see government.  Conservatives are not afraid to gut social safety nets, schools, environmental regulation all the rest that does not involve wars, guns, and prisons because they believe in a so-called merit system.  If you live a good life, you should be able to send your kid to school, pay your medical bills and so on.  Of course economists see this differently.  A good job for you comes at the cost of a job for someone else, for example.  Not everyone can have a million dollar income or a million dollar will have no value.

There is a whole argument about public goods that should be made, but we’re way beyond that now.  However it is indeed important to understand how investing in the common good serves us all, rich and poor alike.  A healthier,  better-educated population is a safer and more productive society.  Challenge these so-called individualists to move to Somalia and start up a business and achieve their American standard of living.

Even in today’s paper, my friend Tim Pawlenty was again mentioned as an attractive Republican politician because of his success from humble roots.  But it is hard to see how the policies guys like Tim Pawlenty and Mitt Romney promote would let the son of a delivery truck driver attain the sort of success and opportunity Tim has enjoyed.  Can a delivery truck driver own a nice home and support a family today?  Seems less and less likely.

…if you are really concerned about your children’s future.

Very simply these guys don’t get it and, as much as I hate to say it, it isn’t entirely their fault.  They don’t believe in government, don’t understand how it works, and are ignorant of economics.  Why should we expect them to propose sound and appropriate public policy?

The real fault lies with the voters who nominate and elect these politicians.  A poorly-informed and unsophisticated electorate is the real risk to democracy.  And it certainly looks like we are in the thick of it now.

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