Why Washington is Talking about Deficits While the Rest of the Country is Talking About Jobs and the Shrinking Middle Class
Today's Republican Party has three wings: the psychiatric wing, the corporate wing, and the Democrats.
The first wing, the psychiatric wing, is defined by severe psychological and intellectual impairments, exemplified by the inability to read a birth certificate. Sarah Palin's recent foray into American history, replete with her description of Paul Revere as the man who rang alarms, bells, and buzzers to signal his support for the Second Amendment years before there was either a United States or a Bill of Rights, provides an example of the kind of "gaffe" that is, in fact, psychologically meaningful. This level of intellectual dysfunction, equally common in the pronouncements of Michelle Bachmann, once disqualified a candidate for high office. That was until the "lamestream media" decided to turn elections into reality shows, where the only real criterion is celebrity (defined as the state of being or becoming famous), and where commentators may poke occasional fun but no longer communicate to the public the seriousness of intellectual deficits in someone running for high office who would actually have to make decisions in which "facts" occasionally matter. (The dangerousness of that level of media indifference to reality should have been a lesson of George W. Bush's tenure in office, but things have sadly only gotten worse since then.)
This is the wing of the Republican Party that most endangers the party's chances to turn a dismal economy into an electoral victory in 2012, because it is so far to the right of mainstream America that you can see Russia from its porch (even if it locates that porch in Minnesota). The problem for the Republicans is that this wing of the party constitutes such a large percentage of GOP primary voters that it is hard to imagine any nominee emerging from the primaries without having had to produce so many general election campaign ads for the Democrats that President Obama may well defy political gravity and get re-elected no matter how high the unemployment rate drifts.
The second wing is the corporate wing, also known as the wing-tip wing. Once the home of moderate Republicans such as Bob Dole, this wing used to be slightly to the right of the American center. Its advocates held beliefs now seen as "quaint" by modern-day wing-tips (e.g., that humans evolved the same way other animals did, that a fertilized egg does not hold property rights any more than an omelet does, and that cutting the jobs of hundreds of thousands of teachers, police, and firefighters does not reduce unemployment).
Today's wing-tips, in contrast, are defined by three articles of faith.
The first is that whatever ails you (whether budget deficits, unemployment, or kidney failure), the solution is tax cuts for the rich.
The second is the belief (this one true) that whatever ails them can be fixed within any two-year election cycle by an infusion of venture capital from the Chamber of Commerce, Wall Street, Big Oil, the Pharmaceutical lobby, or whosever interests could be served or threatened by some piece of legislation. These venture firms now require a controlling interest of 51 percent of an elected official (whether Republican or Democrat), but the futures market for political votes seems to be the only market that is working efficiently in America today. (Word has it that Larry Summers considers the deregulation of the commodities market for politicians one of his signal achievements, although to give credit where credit is due, he had an assist from the Roberts Court in its Citizens United ruling, which held that money need no longer be exchanged under the table, and reaffirmed that money is speech, making political payoffs a high form of rhetoric.)
The third belief that defines the wing-tips is that deficits present a grave threat to our way of life -- except when Republicans are in power, at which point deficits are deficit-neutral. This deep and abiding concern with deficits (under Democratic administrations) stands in sharp contrast to their relative indifference to unemployment, which they consider a luxury good consumed by people with too much time on their hands (after all, they're unemployed), whose "whining" is really annoying to lawmakers, lobbyists, and Washington pundits who want to get on with the real business of cutting budgets, and who have more important things to worry about than people who, for God's sake, can't even keep a job now, can they.
These are the Paul Ryan and John Boehner Republicans, whose virtue is that they seem genuinely to believe what they are paid to say. Some of them, like Ryan, can even do so with earnest looks on their faces (something Boehner has not mastered, even while smearing his mascara). This is an impressive feat, given that what they have been saying lately is that they would happily throw their own grandmothers under the bus, although they know this will never come to pass because they don't believe in public transportation (hence the absence of buses, ergo the safety of grandmothers).
The Wing of Icarus
And that brings us to the third wing of the Republican Party, the Democrats. Their standard-bearer, President Obama, has proven himself perhaps the strongest potential challenger to Mitt Romney for the Republican nomination if he decides to join the debates, having established his conservative bona fides on a wide range of social and economic issues:
- Deporting more immigrants and breaking up more families than George W. Bush (or to put it in more business-friendly language, increasing U.S. "exports" of poorly documented human capital).
- Coming out in support of expanded off-shoring drilling just before the BP catastrophe in the Gulf; repeatedly touting production of a mythical substance (seen only, legend has it, by industry executives) as "clean coal" (widely believed to be found in the Fountain of Youth); and calling for the building of more nuclear plants, which the Japanese have shown to be a safe complement to offshore drilling (perhaps with the hope that water contaminated with radioactive materials discharged into the ocean might prove useful as a dispersant for oil).
- Extending the "Hyde Amendment" to allow GOP lawmakers to exclude abortion coverage from even private health insurance.
- Cutting 120 billion in taxes for the rich while proposing billions in cuts to "entitlements," such as home heating subsidies to people who are poor or elderly.
- Making sure the nation's largest banks remained solvent so they could continue to foreclose on the homes of millions of Americans, whose tax dollars supported the multi-million-dollar bonuses of the executives who continue to refuse to renegotiate their mortgages.
- Saying virtually nothing as Republican governors and state legislators around the country attack organized labor (e.g., remaining almost entirely mum on the Wisconsin law stripping workers of the right to negotiate their contracts).
But that's just the president. We can't blame the party whose name he never utters for the actions or inactions of its titular leader, who prefers to remain "post-partisan."
So with nearly 15 million Americans unemployed and millions more working two and three jobs just to get by to feed their family, how are the Democrats saying they're going to solve the problems of ordinary people?
Consider the following five-point statement of conservative economic principles from ABC's This Week a couple of Sundays ago, which concisely describes what conservatives believe the Obama administration should do to solve our nation's economic ills, and how the Democrats responded to it:
- Our effort now ... should be to get the private sector, to help them stand up and lead the recovery. [T]he government is not the central driver of recovery.
- Now, we must live within our means.
- We've got to rely on government policies that are trying to leverage the private sector and give incentives to the private sector to be doing the growth. And ... so ... these tax cuts ... will continue over the rest of this year.
- Put in place this regulatory review in which all of the major agencies are going to go through, find any outmoded regulations, ones that are excessively costly for their benefits, find ways to streamline.
- The free-trade agreements, trying to increase exports, which are rising at 15 percent annual rates.
So there you have all the elements of the ineffectual conservative Republican response to a severe recession bordering on a Depression: let the private sector lead and the government step out of the way; cut the budget, exercise austerity, and "live within our means;" use tax cuts as the primary stimulus to get the economy moving again (because they worked so well under the Bush administration); eliminate excessive regulations on businesses, because we all know that excessive regulations are what threw us into the Great Recession and are what are hindering the business community's ability to create economic growth; and implement free-trade agreements so the sticky fingers of the invisible hand of capitalism can work its wonders across international borders, just as it has done for the millions of Americans who once had manufacturing jobs, but just don't understand the fine points of the theory of comparative advantage in economics (by which countries with the "comparative advantage" of having the 2/3 of the world's workers who are willing to work for less than $2/day get jobs as factories in the U.S. shut their doors).
Surely this was an easy target for a Democratic counter-attack. After all, this is Hoover economics, all of which has been thoroughly discredited, if not by the Great Depression, more recently by the Bush administration and the Great Recession that capped off that glorious eight-year period of economic growth during which we managed to double the national debt and crash the economy at the same time.
So what was the Democrats' response?
Actually, that was the Democrats' response. This statement of conservative economic principles was actually from the Chairman of the president's Council of Economic Advisors, Austan Goolsby.
To his credit, Goolsby, one of the smartest, clearest-headed, plainest-speaking progressive economists around, looked very uncomfortable having to recite Hoover's plan for economic recovery (actually, Hoover was substantially more proactive and progressive in his vision as the economy sank into the abyss), and he announced his decision to resign the next day, I suspect out of a sense of futility and disgust that there's not much he can do with both of Uncle Sam's hands tied behind his back.
Who Misplaced the Democratic Party?
So how did we get to this point, where Democrats in Washington are looking increasingly difficult for the average American to distinguish from Republicans, as the two parties focus with equal fervor on how to find $50-60 billion in budget cuts after passing twice that amount in tax cuts for millionaires and billionaires and then wring their hands that the deficit is out of control ("there's gambling in this establishment!")?
At first it looked as if the Democrats were graciously going to accept Paul Ryan's gift (Medicare cuts that poll about as well as Wall Street bankers, particularly with a voting public of which 40 percent are age 55 and older, who punished the Democrats in large numbers in 2010 for helping finance health care reform with promises of cutting hundreds of billions of cuts in Medicare "waste." Ryan and his party's insistence on a draconian form of "austerity" for older voters, the majority of whom live on less than $20,000 a year, would have placed the differences between the parties in stark relief -- and might well have won the Democrats back the House. Now, however, for reasons that are impossible to fathom, Democrats are unilaterally disarming in advance of negotiations again, making clear that they plan to let the Republicans off the hook by "putting Medicare on the table," as if seniors will either understand or care which party seems to be selling them out more (or more efficiently) in what will become a he said-she said that is completely avoidable.
One could point to many factors that have led the Democrats to occupy the center-right wing of the GOP, but three are among the most important.
First, apologists for the president and the Democrats rightly claim that their hands are tied: the Republicans just won't let them pass any legislation that might move the economy forward, so their only tools are ineffectual ones such as tax cuts and exhortations to the business community to invest.
But what this account leaves out is that this state of affairs is entirely of the Democrats' creation. Had the White House and the supermajorities the president started out with for two years simply done what the voters asked them to do -- and what the House actually did do with remarkable speed in 2009 -- the Democrats' hands would not be tied today.
Voters were terrified when the president took office, and they were looking for him to do something dramatic -- anything -- that might turn things around, just as voters had done with FDR 75 years earlier. The economy was hemorrhaging ¾ of a million jobs a month, the Dow had dropped by over half, and credit was impossible to obtain.
Had the White House not chosen to cut the stimulus package almost in half from the size suggested by virtually all competent economists and then larded it up with $300 billion in tax cuts they already knew were inert because they had been the staple of Bush economics for the last eight years, and had the president simply foreshadowed to the American people that it might take two or three more shocks from the paddles of deficit spending to get the blood circulating again in an economy whose heart had stopped, the president and his party might not have led the average American to conclude (with a little help from some unanswered creative story-telling from the other side) that the stimulus was a failure (instead of having to argue the counterfactual that had they not half-stimulated the economy with their half-stimulus we would likely have gone into a second Great Depression).
Second, by running scared and adopting Republican talking points on economics, Democrats have created a self-fulfilling prophecy. Listening to the same pollster-industrial complex that advised them in 2002 to support George W. Bush's trillion-dollar unfunded bloodbath in Iraq, Democrats have joined with Republicans in offering massive giveaways to millionaires and billionaires and then telling working and middle class Americans that the sky is falling and we (they) have to tighten our (their) belts. Democrats inside the tightened beltway (with the exception of a strong contingent in the House and a dozen or two Senators) appear to have become convinced by the new conventional wisdom in Washington, that Americans aren't really concerned as much about jobs as they are about the deficit.
If you stop and think about it for a moment, that notion is absurd on the face of it. Is it really possible that Americans who have lost their jobs or fear losing them are more worried about an abstraction -- the budget deficit in Washington -- than about the realities of their lives -- that they face a budget deficit around their own kitchen table at the end of every month when they're trying to pay their rent or make their mortgage payment on their rapidly depreciating home?
And as it turns out, this view is as mistaken empirically as it is intuitively.
Can a pollster who believes or wants to show that Americans are as or more concerned about the national debt than jobs or the economic insecurity they face every day write questions in such a way as to get what he or she is looking for? Sure. Does this reflect what working and middle class Americans feel as they watch their economic security disappear? Not in a million years.
Consider the following statement about budget deficits, which began a message that beat a tough deficit-focused, budget-cutting message taken straight from the mouth of John Boehner with a large national sample by over 30 points with the general electorate and by an even larger margin with swing voters: "The best way to reduce the deficit is to put Americans back to work. There are 14 million Americans who've lost their jobs through no fault of their own, and they'd be happy to be paying taxes again instead of drawing unemployment insurance."
Put this way, there is nothing the other side can say that can beat this message. And that's on an issue -- budget deficits -- that's supposed to be the Achilles heel of Democrats and progressives.
What we have witnessed in the last several months is a phenomenon described in a classic book nearly 20 years ago by the political scientist John Zaller. What Zaller discovered is that public opinion tends to follow the lead of party leaders and pundits, as partisans turn to their own leaders and trusted sources for cues on what they should think and feel about the central questions of the day. Normally, when the two sides offer competing views, the 40-45 percent of voters on each side follow the lead of the "opinion leaders" on their side of the aisle.
But when leaders on one side are voicing a strong opinion -- in this case, the Republicans arguing that the sky is falling on the economy because of deficits, tax and spend liberalism, and over-regulation of business -- and the other side is either silent or echoing GOP talking points -- the average voter hears what sounds like a consensus and starts to mouth it.
Then pollsters start to pick up in their polls precisely the view they have been promulgating and elites have been putting into the minds and mouths of ordinary citizens, rendering elected officials all the more afraid of bucking what is now the conventional wisdom. And the result is a self-fulfilling prophecy.
So now both the president and Congressional Democrats are making the same mistake Democrats chronically make: When the going gets rough, adopt GOP talking points. Unfortunately, that's bad politics and bad policy. It's bad politics because no one is going to believe that a Democrat is as serious as a Republican about cutting spending, especially the kind of "discretionary spending" (a term that if Frank Luntz didn't make it up, he should have) that disproportionately hits working and middle class people and the most vulnerable. It's bad policy because, as Nobel-Prize-winning economist after economist has told us, GOP plans for "economic growth" will kill hundreds of thousands of jobs, and if you really want to restore "business confidence," the best place to start is by putting Americans back to work and restoring consumer confidence.
You can't create robust growth by frightening or impoverishing everyone but the upper 1 percent, who spend the smallest percent of their income, if you want to sustain demand.
Americans need a choice again between two parties, not between two strains of Hoover Republicanism. The more Democrats offer them the latter, the more they will both sink the economy and blur any distinctions left between the parties. Frankly, if the question is, "Who can do the better job slashing programs to finance tax breaks for the rich?" I would vote Republican. If you want trickle down, vote for people who really believe in it, not the ones who say they believe in it when they are too frightened to say what they really believe.
Three Wings, One Air Supply
That brings us to the third reason so many Democrats have created a third wing of the Republican Party: because they're competing for the same corporate money, which leads them to support the same policies. The major difference between Republicans and Democrats is that virtually all of the Republicans are quite comfortable being bought because it fits their ideology, whereas most of the Democrats who are beholden to one industry or another are conflicted about it -- but not conflicted enough to pass a fair elections bill when they had the chance last year that might have taken away some of the advantages of incumbency but restored integrity to our electoral system.
From the standpoint of voters across the political spectrum, who overwhelmingly endorse statements such as, "It's time we returned to government of, by, and for the people, not government of, bought, and paid for by big corporations," or (in reference to the tax cuts to the rich), "In tough times like these, rich people ought to be giving to charity, not getting it," they have no idea where to turn, because neither party seems to be standing up anymore for working and middle class Americans, let alone for least fortunate among us. What they hear from Democrats are talking points like the following from a Senate press release, which is indistinguishable from the disingenuous pabulum coming from the other side, and does little more than reinforce the conservative economic message: "It's time for Republicans to join Democrats to cut spending in a smart, responsible way that reduces our deficit while creating American jobs, not destroying them."
In other words, let's cut our way to growth.
Somewhere Ronald Reagan is smiling.
The Democrats are at a crossroads. They can continue to populate the third wing of the Republican Party, fundamentally accepting the premises of Reagan's narrative about government the way Republicans from Eisenhower through Ford accepted the premises of Roosevelt's New Deal. If they choose that course, they will continue to marginalize, antagonize, and demoralize not only their base but the vast majority of swing voters, who don't give one whit about ideology but simply want someone to represent their interests and values -- most importantly, the idea that America ought to work again for people who work for a living.
Alternatively, they can return to progressive principles, starting by articulating for themselves as well as the American people what those principles are. (Personally, I have no idea what it means to be a Democrat anymore, other than to "talk about jobs," as if talking about them will somehow magically create them, while searching for compromises with Republicans at each successive "budget crisis" -- this time the debt ceiling -- that will endanger even more jobs.)
If they choose to endorse progressive principles again, they will need to hammer home the distinction between the party that cares first and foremost about working and middle class Americans, those who want to join the ranks of the shrinking middle class, and the small businesses that create two-thirds of all new private sector jobs for working Americans; and the party that cares first and foremost about the rich and well-connected, the big corporations that ship American jobs overseas and rake in massive profits without sharing that prosperity with their workers, and CEOs, Wall Street bankers, and their bloated bonuses.
That would be a change we can believe in. But the Democrats would have to mean it this time.