Feb 20, 2011

February 20, 2011: Eating The Seed Corn, No Mandate, On the Altar of Greed

Paul Krugman writing an op-ed piece in the New York Times entitled “Eat the Future” correctly pointed out that the Republicans in congress have no mandate to cut spending or reduce the deficit. Citing a survey by the Pew Research Center he pointed out that when Americans were asked they favored “more, not less, spending on most things, including education and Medicare. They’re evenly divided about spending on aid to the unemployed and–surprise–defense”. (1) In fact, says Klugman, the only thing they really want to cut is foreign aid.

When asked how the states should go about dealing with growing deficits, Americans favored neither cutting “education or health care” nor “do they favor tax increases”. “The moral is clear”, said Krugman, “Republicans don’t have a mandate to cut spending; they have a mandate to repeal the laws of arithmetic”. Fitting, it seems to me, for a party that has declared war on science and reason.

When they aren’t engaging in political theatre, as in the recent vote by the house to repeal the Health Care Reform Act, or in trying to strip state employees of the right to bargain collectively, they are voting to deny the Environmental Protection Agency the power to issue regulations on global warming gasses. Is it any wonder, given this record of hopelessly whoring after a political base, that is itself lost in a parallel universe that answers to an entirely different and opposite set of physical laws, that we should find them when in opposition proposing budgets with no numbers; and, when in the majority, crying against deficits whilst voting to give the rich yet another free ride.

This business has been going on for a long time. Ever since Reagan proposed what George the Elder called “Voodoo Economics” in which it was held we could slash taxes, raise defense spending and balance the budget. Later George the Lesser, following the same well-tread path did much the same thing calling Al Gore’s criticisms of this approach “fuzzy math”. It wasn’t “fuzzy math”. It wasn’t the Democrats who can’t cipher, it’s the party of the political pachyderm, the holy warriors who, in the cause of greed, wage a constant war with empiracle reality.

For decades, now, the Cons have been telling the electorate that all we have to do is cut waste, fraud and abuse from the budget and we can bring it into balance; that we can, in effect, have our cake and eat it too. This, coupled with the canard that we can enact massive tax cuts for the rich and that the largesse so bestowed upon our benefactors will “trickle down” to the rest of us, has combined to put us into a fiscal bind that portends very ill for the future.

“Which brings me back to the Republican Dilemma”, writes Krugman. Having promised to cut 100 billion from the federal budget and leaving defense and, for the time being, Medicare out of the mix, the House GOP now faces cutting appropriations for “pregnant mothers, infants and young children, ...578 million from IRS enforcement" (there’s a boon for the rich if I ever saw one, sure to lower future revenues creating larger deficits)..."648 million from nuclear nonproliferation enforcement", cuts in Pell Grants, Home Heating Assistance, High Speed Internet and Rail, Public Transportation and...yes, Big Bird over at PBS.

“In a better world”, says Krugman, “politicians would talk to voters as if they were adults. They would explain that discretionary spending has little to do with the long-run imbalance between spending and revenues. They would have to explain that solving that long term problem requires two main things: reigning in health-care costs and, realistically, increasing taxes to pay for the programs Americans really want”.

That’s not going to happen of course. By whoring after the political fringe–even to the extent of welcoming the John Bircher’s back into the fold–they have boxed themselves into a corner whereby they are now held hostage by the very forces they thought they could manipulate. To suggest serious Health Care Reform would incite a revolt within the ranks–just ask Mitt Romney who has been running as fast as he can from his record in Massachusetts. To suggest raising taxes–any taxes–would invite endless primary challenges. Already the idiot fringe has targeted such persons of reason as Richard Lugar of Indiana and Senator Olympia Snowe of Main. Even such a water-carrier and hopeless apologist like Orrin Hatch of Utah–one of the great supporters of Clarence Thomas–is on their hit list.

The fact is this is the very box the Rescumlicans would have us in, and by agreeing to extend the Bush Tax Cuts the administration bought into the strategem. Because we have created a political environment where we cannot reason with the unreasonable we can now have no compromise. Taxes are off the table, that means that the tax breaks given to those who need it least are going to be paid for by taking milk from babies, making our work force more illiterate and less competitive, and allowing our infrastructure to further deteriorate.

In order to make it possible for old moneybags to give little lord Fauntleroy even greater advantages in life we are now, it appears, willing to eat the seed corn of next year’s crops. We are sacrificing the future on the altar of greed and we cannot now appeal to the electorate as grown adults for the “Generation of Swine”, long since lost in a parallel universe of eternal adolescence, has never grown up.


Footnotes

1. Krugman, Paul. “Eat The Future”. New York Times, Monday February 14, 2011.
Pg. A23

Feb 11, 2011

February 14, 2011: False Alarms, The Politics of Fear, Stampeding the Great Unwashed



Much has been made by the likes of Ron Paul and his followers in the “Tea-bagger” movement about how the level of our national debt is fast approaching 100% of the annual gross domestic product. This is represented as some kind of ceiling beyond which we cannot go, complete with various doomsday scenarios worthy of revelation.

As the above graph suggests, we have carried high levels of debt relative to the annual gross domestic product several times in our collective history without suffering the kind of doomsday collapse these modern prophets suggest. In fact you will notice that at the end of World War II we accumulated a level of debt equal to about 125% of our GDP or the amount equal to the entire yearly economic output of the country. No one suggested in 1946, as we set about through profligate fornication creating the generation of swine, that we were facing imminent collapse. In fact, judging from the birth rate, the national response was quite the opposite. Debt, in and of itself, even high levels of debt, have no bearing on the state of the national well being.

What differentiates then from now are three salient points. The first is not demonstrated on this graph. In 1946 we owed this debt to ourselves. Today three quarters of the debt is financed from abroad, so interest payment are, in effect, monetary transfers out of the country. The second point is demonstrated by the graph. Close examination reveals a number of interesting points: we emerged from the Revolutionary war with a debt level of about 35% of GDP, high by historical standards. Notice the up-tick in 1860 as we financed the Civil War. Likewise the two world wars of the twentieth century. Notice also how we lowered our debt burden in times of peace–that is until the emergence of Ronald Reagan. Look at the graph from 1980 onward: here you can see the interruption of the upward slope by the Clinton Administration followed by a return to growing deficits. The third point is this: what did we get for all that debt in the last 30 years?
Previously we established our independence and our own economy, we bound up the nation’s wounds, we fought for a new international order bringing in its wake decades of peace and prosperity. The massive debt of the last three decades has produced no such results. Instead we find that our two greatest exports are jobs and capital. I say this by way of pointing out that it is not debt that is at issue here. It is what we are doing with it or, more precisely, what we are not doing with it.


I point this out because one needs to get some perspective on this problem in order to speak reasonably, if not rationally, on the subject. The howlers on the idiot wrong raise this issue so as to create a climate of fear as we approach yet another debt ceiling in which the Congress will have to vote to borrow additional moneys. In order to whipsaw from granting the filthy rich yet another huge tax break, to now cutting 100 billion from domestic spending, paring such programs as Head Start, Pell Grants, and the Home Heating subsidies for the poor, it is necessary to sound yet another false alarm much as Ol Two-Cows would do at the Homeland Security Department in the run up to the 2004 election.

Once again the conservatives resort to the politics of fear in an effort to stampede the great unwashed into gutting the very programs upon which they depend and prevent us from rebuilding our infrastructure and, by so doing, our national economy. It is palpable nonsense.

Footnotes:

The graph depicting the percentage of debt relative to the GDP can be found at:
www.usgovernmentspending.com/federal_debt_chart.html

GDP stands for Gross Domestic Product. This measurement, formerly called GNP for Gross National Product, is the sum (measured in dollars) of the total amount of goods and services produced by the national economy annually.

February 12, 2011: Reagan As Reactionary, Perils of Pure Ideology, A Burden On the System

To say that Reagan was a reactionary is not to dismiss the impact of his political career on western civilization. Indeed the impact was quite extraordinary, for he had picked up where Goldwater began giving impetus to a movement that in it’s most recent manifestations has become more virulent and destructive than ever. As Wilentz (1) points out, the warping of the conservative movement in the wake of Reagan has served to further politicize the judiciary and the justice department; further undermine constitutional safeguards against intrusive government; has further developed the bastard idea–hatched at the Yale Law School–of the “unitary executive” arrogating powers unto the presidency heretofore unheard of; it has further crippled governance through a war on federal regulations, spending cuts on regulatory agencies, and general incompetence; and, perhaps most importantly, it has further eroded the foundations of the republic itself by waging war on the middle class.

It is a war now in its fifth decade. Today incomes remain stagnant or are declining. Official unemployment now hovers around 10%, with estimates of real unemployment ranging from 15-18%. Home foreclosures, down 17% from last year at this time, were lower only because of the paper jamb in the foreclosure mills due to some irregularities in the banking industry. There are some further troubling signs: it was announced briefly on NPR yesterday that the New York Stock Exchange is to be merged with some German outfit foreshadowing the movement of the center of the financial world elsewhere. It was also announced that papers released through Wikileaks reveal that Saudi oil production may have peaked or is about to. Further, also decades before it was about to happen, Social Security outlays will exceed the contributions to the Social Security Trust Fund in this fiscal year.

All of this can be laid at the foot of Reagan and his Republican cohorts. Failure to reign in on the housing market as the real estate bubble began developing in the early part of the last decade is a singular example. Here confronted with the fact that from 2003-2007 the economy was annually building 25% more housing units than for which there existed a market, the administration–always finding regulations and controls abhorrent–failed to act. Greenspan, at the Federal Reserve, acting as the acolyte of Ayn Rand that he is, had full faith that the “markets would correct themselves”. The result, given western man’s long history with such bubbles was wholly predictable. Nevertheless the ideological imperative–always measured against the Reagan “legacy” of pure ideology–won out.
So we had another crash.

Today, nearly 4 years into it, the end of mass foreclosures are nowhere in sight.

Then there is the example Reagan set by removing the solar panels from the White House roof, and beginning the movement to undo Carter’s efforts to cut our use of foreign oil. Carter had cut our imports of oil by 50% in 4 years, a trend that was speedily reversed under Reagan as thermostats were reset, speed limits were raised, CAFÉ guidelines for the auto industry were relaxed and abandoned, and subsidies for alternative energy were cut.

Similarly the lingering unemployment rate. In my youth unemployment as a so-called “lagging indicator” would follow the movement of the economy by about six months. Today we are well into the first year of recovery and no end of high unemployment in sight. Why? Because, among other things, capital is now sitting on an estimated 2 trillion dollars and refusing to hire anyone. What expansion is occurring is taking place overseas.

The reason that we have this skewing of the economic balloon is that at the beginning of this administration a robust jobs bill was sacrificed to the conservative “mantra” of cutting taxes. Almost two thirds of the nearly trillion dollar outlay went to tax cuts with business getting the lions share. Cuts for median incomes would amount to about a pizza a week. Instead of building things...like roads, rails, and internet we parceled it out in such a way as to have minimum impact on employment. The result is that we are further behind technologically and, for all that TARP money, we have nothing to show for it except the return of fat-cat bonuses on Wall Street.

By failing to take the money and put it into construction, we failed to increase demands for building products and labor necessary to rebuild America. The result has been an extraordinarily high unemployment rate for an extraordinarily long period of time. This serves to reduce revenues while increasing demand for services creating huge deficits. It also means less money going into Social Security and the wholesale retirement of aging “boomers” who–much against their proclivity and far too soon–are leaving the workforce and becoming a burden on the system.

And, of course, lets not forget that it was ‘Ol’ Two-Cows Bush who, following the Gipper’s example, famously raided the Social Security Lock Box and drained the accounts of every last dollar leaving only a stack of IOU’s reaching nearly to the moon. Oh how much different it would have been had not the Supreme Court elected that fool from Texas back in 2000. Social Security would have been rock solid and the entire federal debt would have been erased from the books.


Footnotes:

Wilentz, Sean. “The Age of Reagan, A History, 1974-2008" Harper Collins, New
York, 2008. 564 pages.

Feb 10, 2011

February 7, 2011: One For The Gipper, More Lucky than Good, Legacy as Psychosis

“It was not a revolution but a reaction”—on the Presidency of Ronald Reagan
—From “The quotations of Chairman Joe”


Yesterday ended a week-long series of remembrance, marking what would have been the 100th birthday of Ronald Wilson Reagan, USA Today featured a banner headline “Reagan Revolution” with a large picture of our 40th president on the front page.

It was not a revolution. It was a reaction.

What the festivities demonstrated more than anything else is the selective memory or, if you will, the selective amnesia that pervades this country; as if the 8 long years of his administration had made it, as depicted in a bit of 1984 campaign propaganda, truly “morning in America”. Such a reading, as with all things conservative, simply cannot withstand the harsh scrutiny of the historical record.

The historical record that belies the political career of Ronald Reagan began, of course in California. Upon election as Governor he promised a 10% across the board tax cut (sound familiar) but responding to pressing reality quickly reduced it to 6 per cent.

“Even with these ‘economies;” wrote Lewis Chester, Godfrey Hodgson and Bruce Page in their seminal “An American Melodrama The Presidential Campaign of 1968", there is no way to stop the cost of running California from going up. Too many people arrive every day to overload the state’s already tautly stretched services. In the summer of 1967, Reagan found himself obliged to ask the legislature for a billion-dollar tax increase
to finance a record five-billion-plus budget.” (1) A bit more than a year in office Reagan would set a pattern that he would follow throughout his public life: after initially reducing taxes he would then pivot 180 degrees and begin a long series of tax increases to repair the damage. Taxes that, unfortunately, would be not progressive but regressive in nature; that is, taxes that would fall disproportionately on the middle classes.

This pattern would be repeated. Upon assuming the Presidency in 1981 he quickly passed a series of tax cuts, cutting the marginal rates on the wealthiest Americans from 72% down to 35, then, briefly, down to 29%. What followed was long series of tax increases–11 such increases during Reagan’s own terms, followed by the famous tax increase under “Pappy” Bush (for which Bush was to pay a steep political price), and another under Clinton before the damage to the federal budget could be undone. The damage to the country, leading as it did to the acceleration of the concentrations of wealth and the hollowing out of the middle class, has yet to be rectified.

Secondly, his apologists also fail to own up to the fact that neither the size of the federal government nor the level of federal spending went down under Reagan. The record demonstrates, as does his earlier record as Governor of California precisely the opposite. It would take Jerry Brown in California and Bill Clinton in Washington (both Democrats) to reign in on the growth of government largesse.

Third, Reagan’s legacy in foreign affairs bears little resemblance to the historical record. In fact any such similarities between how he is now remembered and the actual events that occurred are pure coincidence. Today he is seen by his apologists as a Sabre-rattling warrior who stood up to our adversaries. The events in Lebanon, Nicaragua, San Salvador, demonstrate otherwise. Sure he took on such military powers as Granada, but his record as an actor in foreign policy is spotty at best. The famous rapproachment with the old Soviet Union is a case in point. Beginning his presidency with strident warnings of the “evil empire” and adopting a hard-line approach he was brought, by the end of his administration to precisely the opposite positions of “trust but verify”. What brought this about was not the military build-up causing the Soviet Union to collapse under the strain of maintaining the arms race, rather it was the internal collapse of the Soviet economy which was occurring in any case. Reagan simply happened to have the good fortune of presiding at the time of the collapse. In fact this scenario was predicted as early as the late 1940's by the diplomat George Kennan who as deputy Ambassador to the Soviet Union under Averill Harriman, outlined precisely this outcome as he put forward what would become America’s “Containment” policy: the blueprint for our Cold War strategy.(2) Citing Fred Chernoff in an article in “International Affairs 67" (1991) Sean Wilentz in his book “The Age of Reagan” said that “reliable estimates show that the Soviet Union’s annual rate of increase in procurements [for the military] fell from an average of 7.02 percent between 1977 and 1982 to 5.94 percent over the next two years. The change appears to have begun in 1980. The figures contradict some of Reagan’s assertions at the time–and they contradict the arguments that Reagan’s buildup won the cold war by damaging the soviet economy” Indeed Wilentz concludes that the decline of Soviet arms spending and the state of the Soviet economy began before the Reagan rearmament programs or the construction of SDI otherwise known as “star wars”. (3)

In fact, it could more reasonably be argued, the decline of the Soviet economy and the unraveling of the Soviet Empire began under Jimmy Carter.

Reagan, as always, was more lucky than good. It wasn’t his particular posture that brought the results but were the consequences of a generation-long foreign policy begun under Truman and followed by every succeeding administration, plus–as Kennan predicted so presciently decades earlier–the Soviet Union’s own internal contradictions.
Reagan was there to pick up the pieces. Clearly seeing what his advisor’s did not –that the Soviet Union was now, for economic reasons, desperate to negotiate–Reagan found himself opposite an adversary in the person of Mikhail Gorbachev who was more realist than ideologue.

This leads us, by degrees, to the fourth consideration of the Reagan Legacy: his ideological purity. Years before he became President, not yet 2 years into his governorship of California, the British journalists Chester, Hodgson and Page, had this to say about Ronald Reagan:

To see Reagan as the “Crown Prince of Goldwaterism” is to “see Reagan as something other than he is. He is a public-relations man, not a policy maker. Many actors feel the need to break out of role-playing and take possession of the action, but Reagan apparently felt no such yearning in his long acting career. He was not director material. Nor is he a politician. His is willingly at the mercy of experts and interests backing him. He can sell the policy, but he cannot make it. If taxes have to be raised, he will raise them and make it look as palatable as possible by blaming his predecessors’ “spendthrift” policies, just as easily as he can promise in a campaign to trim government action to the bone.” (4)

“The total phenomenon is a recognizable one. In Reagan’s mind there is no contradiction between his personal sense of righteousness, his antiquated small-town philosophy, and his response to the pressures of the moment. It would not strike him as essentially bizarre that he should turn down a request to inspect the state’s mental institutions more closely while making himself available for out-of-state fundraising jamborees. So he cannot be explained as a primitive, or a cynic, or a smart aleck. He is less sinister, but much more dangerous, than any of these. What resolves the contradictions is the realization that Reagan is totally devoid of any concept of objective morality. In short, he has no imagination. And so, to ask whether Reagan is good or bad is, in a sense, an irrelevant question. He is a force–whether for good or ill depending entirely on which direction he is pointed in and who is at the controls.” (5)


This was the assessment of three British reporters covering the presidential election of 1968, a contest in which Reagan, albeit briefly, was a candidate. Analyzing the ‘actors’ in the great American Melodrama, these men viewing American politics from the outside and, perhaps, more objectively were able to tellingly apprise the strengths and the weaknesses of what was later to become the Reagan Era.

Reagan went into politics, in large part, to cut his own personal taxes. Beyond that, as the analysis here suggests, there was not much of a political compass. A former New Deal Democrat turned Republican because of his tax bracket, he could easily adopt any role. On becoming Governor of the State of California in 1967, a reporter asked him what kind of governor he would make. “ I don’t know”, replied the affable actor, “I’ve never played the part of governor before”.


“He is a force–whether for good or ill depending entirely on which direction he is pointed and who is at the controls.”

Under the influence of Bud McFarlane, Oliver North, Donald Regan and several emerging Neocons like Elliot Abrams and Jean Kilpatrick, Reagan–taking the hard line could rattle the sabres. He could, following the lead of McFarlane, North, Regan and Abrams and over the objections of Secretary of State Schultz and Secretary of Defense Weinberger, begin a straight arms for hostages deal with the Iranians and in the process divert the proceeds to illegally funnel money to a terrorist organization in an effort to destabilize the elected government of Nicaragua. The “Iran-Contra” affair would nearly topple his presidency, saved from impeachment by a Democratic Congress that had no stomach for another impeachment proceeding and, in any case, did not want to elevate George W. Bush to the presidency. Once again, Reagan was more lucky than good.

Writing of the political climate of 1968, the three British reporters made a salient observation. “All nations have their myths”, they wrote, “and there is some merit in them as the bond of unity and the spur to effort. The danger, for a nation as for an individual, comes when the gap between rhetoric and reality becomes too wide. In an individual, such a gap between self-perception and reality is known as psychosis. A nation that indulges in too much self-glorifying rhetoric while unable to win a small war or to prevent the deterioration of its social fabric is unlikely to be able to heal its real distempers”.(6)

If anything, the Reagan Legacy presenting as it did the face of ideological purity, limited government, lower taxes, a strong posture on national defense, a belief in small-town family values and a “strict construction” of the constitution did little to heal the emerging American psychosis. In fact it materially contributed to it enlarging what in 1968 was then called the “credibility gap”. For in practice Reagan’s policies, represented in large measure, the exact opposite. This served only to greatly increase the alienation and cynicism of the citizenry, adding to the National Psychosis, so clearly evident in the emerging “Reagan Legacy” and greatly increasing paranoia as that ‘legacy’ fades in the light of stark reality. A paranoia for which America was already widely famous.

The fact is that Ronald Reagan was not a revolutionary, he was a reactionary. It was the difference between the ‘revolutionary’ rhetoric posing as a populist movement in defense of main street America, and his reactionary ‘corporatist’ actions which favored Wall street and savaged Main Street, that made the beleaguered middle class feel as though it were under assault. It is in response to this assault–so greatly accelerated by the Reagan administration–that the middle class feels so persecuted, so alienated, so angry. It is through the misleading of the country that Ronald Reagan materially contributed to the psychosis that today finds expression in the nonsense on the idiot right, further dividing the country, creating in its wake paranoia and political paralysis.

At his worst, when he was led by the counsel of the emerging Neo-cons, he would produce a legacy of law-breaking, coverup, and scandal. At his best, when he recognized the changes that were occurring in the Soviet Union and began serious arms reduction negotiations, he was led in that direction by his wife Nancy who had moved to replace the ideologues in the White House with more sane, more moderate men. Fortunately, for the aging actor, it was just in time to save his embattled presidency.

What kind of President would Ronald Reagan be? That was the question following the election of 1980. The answer would depend on who would, at any given time, be writing the script.


Footnotes:


1. Chester, Lewis, Hodgson, Godfrey, and Page, Bruce. “An American Melodrama, The Presidential Campaign of 1968". The Viking Press, New York. Page 195


2. Wilentz, Sean “The Age of Reagan, A History 1974-2008" Harper Collins
New York, 2008. Pp245-287


3. Wilentz, page 247

4. Chester, et.al. Page 195
5. Chester, et.al., Pp.196-97

6. Chester, et.al., page 44