Climax of the Crisis?
For the last twenty years or so, the Republican Party has been a coalition of groups that hate the federal government and want to undo the role that it assumed, under the leadership of the northeastern, upper midwestern and Californian elite that dominated our politics during the middle third of the century. The coalition began with some--not all--businessmen who were never reconciled to government regulation or to the labor movement, and whose blueprint was written in the early 1970s by future Supreme Court Justice Lewis Powell, as recently described in a book by Hedrick Smith. They made enormous progress, first, by steadily moving manufacturing into non-union areas in the South and West, and then out of the country altogether, reducing the labor movement to near insignificance. Then in the 1990s the action shifted to the financial community, which successfully undid the most important regulations of the New Deal era. Meanwhile, the coalition added the white south, which, I am sorry to say, never seems to have gotten over its resentment of government mandated integration, and which developed a renewed aversion to all forms of government as soon as black citizens could vote and benefit equally from government services. That coalition elected and re-elected George W. Bush in 2000 and 2004 (with the help of the manipulation of the Florida election in 2000 and the Supreme Court), and created a permanent, large federal government budget deficit, a credit crisis, and unemployment not seen since the 1930s. That was the situation with which Barack Obama had to deal when he came into office--albeit with working Democratic majorities in both the House and the Senate.
As I have argued here many times, Obama did not use those majorities as wisely as he might have. He should have realized, I think, as FDR obviously did in 1933, that he simply had to bring about a measurable improvement in the lives of Americans hit by the housing crash and unemployment within the next two years, or face an electoral catastrophe. As it happened, he backed off somewhat from his stimulus plan, including too many tax cuts and too few jobs, and he spent most of his political capital on the health care law, which was not popular and which would not even go into effect for years to come. He failed to mobilize his constituency for the 2010 elections and the Republicans swept into control of the House. They immediately began using that power to threaten to shut down the government. The result, as detailed in this morning's New York Times, was the sequester. It was proposed, ironically, by Jacob Lew, the new Treasury Secretary, because it was similar to a trigger embedded in the Gramm-Rudman Act of the late 1980s, which did bring about meaningful deficit reduction in the second Reagan Administration. That, however, was an era in which grown-ups ruled the Congress. The sequester will do exactly what the Tea Party Republicans want: it will force the federal government to take a huge hit, which for them is, in principle, a good thing, regardless of the consequences for public school systems (in which many of them do not believe), meat inspection (which they would gladly dispense with altogether), and our defense posture (which they care about much less than traditional Republicans of all stripes did.) There seems to be no prospect of a deal this year.
Back at my old employer, the Naval War College, civilian employees, including faculty, have been ordered to prepare for furloughs that could take them out of the classroom. (I know my former colleagues would work without pay, but in the last, very brief government shutdown in the 1990s we were not allowed to do that.) Friends of mine in school systems report that the cuts will be devastating--not right now, but next fall. Tens of thousands of jobs will be lost, exactly the disastrous effect that we do not need as we are struggling to keep the economy going. It will be an exact replay of 1937-8, this time imposed by the legislative branch rather than the executive. (Roosevelt, who had fiscally conservative instincts, thought after four years of recovery that it was time to cut back on government spending. He was wrong and he played a huge price for it in the 1938 elections.)
I pointed out in several posts last year that the Republican Party since the 1990s has been engaged in a form of what Vietnamese revolutionaries called dau tranh, or struggle: an endless, multi-front attack on the existing order of things, using extreme rhetoric and leveraging every scrap of power within existing institutions to make their agenda prevail. The attacks on Chuck Hagel and the Republicans' endless obsession with Benghazi are further examples of dau tranh in action. I also pointed out that they did not shrink from creating budget deficits or economic crisis, since they invariably blamed these problems on Democrats. And in fact, it occurs to me that their incentives for pursuing that strategy have now grown even greater. President Obama won the election based largely on the issues of immigration, women's rights, and gay rights. The better the economy does, the more attention we have to focus on such issues. The tanking economy led to the Republican victory in 2010 and they may be betting that another recession will regain the Senate for them in 2014. Karl Rove has just suggested that the Republicans "compromise" on the sequester by insisting upon the cuts but leaving the decision on exactly what to cut entirely in the hands of the executive, so that the Obama Administration can take the blame for every cut that ensues. It is interesting, by the way, to compare the Republican use of the sequester to Obama's use of his opportunity, both in late 2010 and late 2012, to let all the Bush tax cuts expire. He compromised. They will not. That is because he believes in government, and they do not. Government programs, they are convinced, help only the undeserving, and increase the Democratic vote.
Obama's recurring fantasy is that Democratic electoral success will turn the Republicans into compromisers, and that he will secure political capital by being reasonable. It has not happened and it will not happen. In retrospect, he might have made the election a referendum on the sequester, or he might have insisted on undoing it as part of the bargain struck in the lame-duck session. He didn't. A new recession will mark a frightening stage in the new crisis. The odds at this moment seem to be in favor of it.