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Friday, December 03, 2010

A new era begins

The almost complete disconnect between the machinations of Washington, D. C. and what is actually happening in the United States at large has seldom been more apparent. Conservative Republicans, of course, claim that the Tea Party movement and the new Republican majority in the House will close that gap, but this is the reverse of the truth, because the Tea Party has even less of substance to offer than corporate-dominated establishment Republicans and Democrats. Today's Republican Party presents a remarkable paradox. It commands impressive financial resources and has a 24/7 profit-making propaganda machine with no parallel in history on Clear Channel and Fox News. It has determination, affect, emotional commitment, and a strong and identifiable ideology. But it has nothing positive to offer in the sphere of government. It now also has to deal with its revolutionary Tea Party minority, which is dreaming, yet again, of remaking Washington and returning the country to some pastoral paradox that actually never existed. As the lame duck session goes to work, it is becoming clear how they may use their new power.

Several stories in the last few days' papers illustrate this point and paint a frightening picture of what is to come in the next few months. Senate leaders Mitch McConnell and Jim DeMint have made it clear from early 2009 that their priority was Obama's defeat in 2012. To make it happen they practiced maximum obstructionism for two years, fought effective measures to deal with the recession, and rode economic distress to success in the recent elections. They have emphasized the deficit among all our ills but their first act is going to be to insist upon keeping the Bush tax cuts, which are responsible for a very large portion of it, in place. And because every Democratic political consultant seems to accept the idea that the Republicans have successfully defined the terms of the public debate, Barack Obama is not, apparently, going to try to stop them. The Constitution gives him the trump card: he could veto any extension of the tax cuts, or any extension that does not restore the Clinton-era rates on the highest bracket, thus bringing a great deal more money into the Treasury without hurting anyone who is currently unemployed. But he is not going to do so. Truly responsible action has been ruled out by thirty years of hysterical anti-tax propaganda. Instead, an excellent Washington Post story yesterday suggested that Obama's price will be more tax breaks for the working poor--a noble goal, surely, but one which will help make the deficit even bigger. Are we totally out of responsible politicians?

The same story had an interesting footnote introducing some subtlety into the McConnell-DeMint strategy, and heralding a Republican split. Every Republican Senator signed a letter the other day promising to stop consideration of any legislation (as Senate rules allow them to do) until both the extension of the tax cuts and an increase in the debt limit is passed. What slipped by was that they want to make the debt limit increase big enough to let the government keep operating until next October. McConnell is old enough to remember the government shutdown in the second half of Clinton's first term, which discredited Newt Gingrich and the Republicans badly, and he wants to stop militant Tea Party House Republicans from pulling the same trick. Today reports say the Administration wants to get a huge appropriations bill through as part of the price as well to tie the new Congress's hands until the fiscal 2012 budget has to be prepared. Curioser and curioser.

The Republicans are obviously in an uncompromising mood, and Barack Obama, as Paul Krugman rather angrily pointed out yesterday, seems to be in a yielding one. But the Republicans have nothing to offer--neither relief for the unemployed, which costs money they will not spend, nor real deficit reduction, which means cuts in programs upon which their older voters rely, or higher taxes to which they will never agree. Thus, as I suggested last week, a move towards a new "center"--one which half a century ago would have represented the right--still seems more likely than anything else. The President is also busy touting the war in Afghanistan, a trip which I have to admit reminds me of Johnson and Nixon's excursions to Vietnam.

Meanwhile, in the real America--the one the average population inhabits--things are getting worse once again. Unemployment rose last month by .2 per cent. The New York Times story on this reports that the public sector (which will now be starved more than ever) lost ground while private sector job growth was extremely modest. Corporate profits have been going up, but what the story does not explicitly say is that corporate profits now tend to correlate negatively, not positively, without growth--instead of pushing companies to hire more workers, they reflect shedding workers. The bulk of those hired have been temporaries, who do not receive benefits. This in turn suggests that we have already reached the point President Obama was warning us about when he introduced the health care reform bill: health care in the United States is too expensive for corporations to hire workers. That is why the only real cure was a public option, but it dropped out of the bill because it did not command the support of Ben Nelson and Joe Lieberman, who for two years were the most powerful men in America. Another story, a brilliant piece of reporting by op-ed columnist Gail Collins, also relates to health care. In its rush to cut the budget, the Arizona legislature stripped certain transplants from Medicaid coverage, and now a laid-off 32-year old truck driver with four children named Francisco Felix has been denied a liver transplant he needs to survive because he does not have a $200,000 deposit. Senator John McCain's office declined to comment on the situation and Governor Jan Brewer, the scourge of illegal immigrants, refuses to take some federal stimulus money and put it into medicaid funding. It will be interesting to see if Collins' story has any results.

I have returned several times during the last year to the analogy between Weimar Germany, which became ungovernable in the midst of a depression, and the contemporary United States. The "conservative" Republican movement and the Tea Party, I have said again and again, are not really like the National Socialists--but in a sense, one could argue, that is actually unfortunate. Adolf Hitler had horrifying plans for the future which cost humanity tens of millions of lives, but in the short he realized that the depression had brought him into power and that he had to get the German people back to work. He did not undo the public works programs that previous governments had already begun--he expanded them massively, building the autobahns, and, of course, ramped up rearmament. The German economy had very serious problems throughout the 1930s, including shortages of food, but it was the only advanced economy in the world without unemployment. The Tea Party's policies are designed, in effect, to make our economic mess worse. Next week, I hope to discuss why the Democrats have failed so utterly not only to offer convincing policy alternatives, but also to connect with the American people.


Bozon said...

Many thanks professor, for this excellent commentary. Preaching, at least, to this portion of the choir, perhaps.

This part has been going on for a long time now; great that you point it out here:

"Corporate profits have been going up, but what the story does not explicitly say is that corporate profits now tend to correlate negatively, not positively, without growth--instead of pushing companies to hire more workers, they reflect shedding workers." And offshored labor, and capital, etc.

All the best

Anonymous said...

Dr. Kaiser -- I've always been very sceptical of the "Great Turning" historical cycles that you believe in. It's your observations that keep me coming back here.

However, Bruce Wilder's excellent "Coming Perfect Storm" blog has a very interesting post about a 72 year political cycle. What's most intriguing about Wilder's hunch (at least, in an American context) is how it's rooted in **institutional** intervals, namely, four year election cycles.

Anyway, you can find it at:


I think you'll enjoy it.
-- sglover

tortoise said...

I too thought it was interesting commentary, although I didn't expect some of the angles.

"Arizona legislature stripped certain transplants from Medicaid coverage, and now a laid-off 32-year old truck driver with four children named Francisco Felix has been denied a liver transplant he needs to survive because he does not have a $200,000 deposit."

This statement is tragic on many fronts. Certainly from the point of Francisco, for he now knows that his days are numbered. Perhaps Francisco should have purchased life insurance if he couldn't afford health insurance. My grandfather didn't have insurance and neither did his father.

Perhaps that is uncivilized? Well, I think that civilization based on theft isn't very civilized.

Theft? Yes, either from other citizens, or more accurately, from future generations. The "greatest generation" did a lot for this country -- but it also leveraged our future and our children's future for their own well being.

Programs such as social security have been stretched so much that you wouldn't recognize them as "safety nets" anymore. Socialized medicine affords everyone the right to make someone else pay the bill - what an advancement.

Social security is now considered a retirement program. It is a terrible waste and a poor investment -- unless you are the proverbial grasshopper who lived every day as if it were his last and now believes it is unfair to suffer when so many have so much around him.

Those who believe in entitlement are basically covetous people. They see what others have and rationalize why it is OK to take it for themselves. Redistribution isn't charity because it isn't given of the heart - it is stolen by the point of the sword.

I don't think there is any law against running an insurance agency as a non-profit, so why don't socially minded people do so? Why do they immediately demand that others fund the goals they deem worthwhile?

Why doesn't government pass legislation that would allow doctors to practice with protection against lawsuits - so long as the patient signed a waiver? Doctors could then charge a reasonable fee for their poor clients - they would not have to pay outrageous insurance premiums - and lawyers couldn't sue.

This idea wouldn't be prudent for a neurologist, but a family practitioner could support his/her family while mercifully serving the poor.

I'm younger than you professor, but I grew up believing that corporations were loyal to their workers as well. They had a civic mindedness that certainly affected their bottom line. They didn't necessarily seek to maximize profits, but be profitable and a visible leader in the community.

Yes, things are changing - and they're not changing for the better. No matter which way you look at it.

I think we could all use a good story about what made this country great. It never gets old. Play on minstrel man, play us one of the old melodies of freedom and hardship that is never far behind. For hardship is the other side of the coin of a free society.

Budi Murjiyanto said...

nice Article Mate ...

See you Later Again

Martin Meenagh said...

I'm new to the blog, so please excuse me for not being familiar with your views. I do agree with them, and am here because of your fine book on 'The Road to Dallas'. Do not assume that I am a nutter, though I will glady admit to your eventual right to do so!

Surely things go back some time?

I think that we must acknowledge the palace of delusion and narcissism that we have been living in before we can escape the consequences of wallowing there.

The west must now compete for resources with a self-sustaining non-western world. Asian demand seems strong within a long bubble which is yet to pop, with an Africa and South America which is no longer debt dependent.

We did that once before. Western savings and innovation swerved during the late sixties and early seventies, leading to the stagflation which threatened to continue indefinitely.

The addition of women to the workplace and credit ultimately based on derivatives disguised the fact, and postponed the crisis--even giving it the appearance of a boom. A self-righteous moral economy of personal libertarianism and high octane economic individualism which only really benefitted big companies was attached to it by the children of those who had effected civil rights change.

Meantime, governments were hawked to the charms of bondholders and the Bretton Woods system replaced with the global market--which appeared to benefit us and gave people the temporary reality of equity in a bank-owned house and cheap food based on oil and economies of scale. Communications technology, instead of being the nexus of participatory democracy as the 1968 generation had hoped, actually became the mechanism of participatory stupefaction.

Successive governments benefitted from this, and hid from their responsibility; indeed they embraced a lack of it when they refused to face the debt issue, except for a brief period in the nineties. That brief moment did not last. A stolen election and two unwinnable wars set everything back on track.

At all of these moments, with a very few exceptions, the vast bulk of the Republican party and a large group of the leaders of the Democrat party aided and abetted the socialicide, the loss of values, profits, savings and commitment which went with the idea of no-limits narcissism.

So how on earth can the lineal descendants of these people do anything other than accelerate the dive?

With increasing pace, I think, we are heading for a crash into a world which will force the west to abandon its delusions. I wonder if it can or should be stopped. I certainly do not expect anyone in the political-media class, which is what you seem to really be talking about, to sober up for long enough to even see how to do so.

Tom Olson said...

"Senate leaders Mitch McConnell and Jim DeMint have made it clear from early 2009 that their priority was Obama's defeat in 2012. To make it happen they practiced maximum obstructionism for two years, fought effective measures to deal with the recession, and rode economic distress to success in the recent elections. They have emphasized the deficit among all our ills..."

Sounds familiar...it sounds to me like the Dem's agenda concerning Pres. Bush's post 9/11 approval ratings.

As for the Bush Tax cuts being to blame...ummm...better to blame that then all the historic bailouts, highly questionable distribution of the bailouts and fears of future huge taxes along with huge taxes I guess, and far better then asking the Govt to show at least a little common sense and restraint in spending the tax payer dollars. Of course they should have all the enormous benefits for the rest of their lives.

Not trying to say the Republicans have all the answers and they have their own agendas, but the Dems are not doing anything other then self serving agendas as well.

What was it Wallace once said, there is not a plugged nickel's worth of difference between the two parties.

tlsparkman said...

"But it (Tea Party) has nothing positive to offer in the sphere of government."

I find this a very interesting statement, when the very point of the Tea Party is a demand that government be limited to/returned to constitutional authority, and be ultimately accountable to the people and not any particular political party. Do you consider this "nothing positive"?

David Kaiser said...

To tlsparkman:

Yes, I consider that nothing positive. It's an irresponsible fantasy, utterly incapable of achievement. Modern societies need large and effective governments. It's sad we're going to undergo so much pain and suffering to find out why yet again.


Unknown said...

Adam Smith published a lesser known book titled The theory of Moral Sentiments. He told us that at some point we must realize that getting more and more is not in society's best interest. At the same time giving 'handouts' to those people who are able-bodied and able-minded may not be successful move either (Gerald Chertavian founder of Year Up) It may be a stretch but its almost like our major political entities are in a nash equilibrium. Perhaps a little 'unpolitical' bipartisanship is in order. We need responsible politicians as you have so eloquently stated.