Chris Matthews had something of a scoop on MSNBC's Morning Joe program yesterday. He indicated that yet another Democratic leader in Congress has succumbed to the austerity-based political fever that's decimating that party on Capitol Hill.
He didn't put it quite that way, of course, but that's the gist of it. The headline could read something like this:
Yet another Democrat stricken with the dreaded "Simpson Bowles virus." The subhead could be, "Plague claims latest victim during private conversation with broadcaster. Number of cases may reach epidemic proportions, say experts."
Springtime in Washington: You can count on austerity fever to strike this town before the last cherry blossom sheds its petals.
That Matthews Magic
Now, I know that the progressive Internet likes to give Chris Matthews a hard time, and not altogether without reason. But I find the guy very likable, warts and all, so I'm not going to go all ad hominem on him. (Hopefully that's not our style anyway.)
Fact is, Chris was doing great for a while yesterday morning, forcefully and eloquently laying down exactly the kind of advice that President Obama and his party leaders need. Sure, Matthews and the rest off the Joe Scarborough panel slung their fair share of cliches -- "Friday was a game change," that sort of thing -- but Matthews was nailing it.
"This election's going to be about the guy on the mound," he said, noting our lagging growth rate and terrible job numbers. "He's not performing out there," said Matthews, "not the way the voters score this thing. if he can't change the economic numbers, which he can't, he's got to talk about ... what he's up against ... how he's brought back the auto industry, and how he has to do a lot more in public sector investment."
Then Matthews really hit his stride, saying of the President:
I don't understand why he thinks small. Why doesn't he say "Look, we brought back the auto industry. Why don't we bring back the highways? Why don't we do what Eisenhower did -- upgrade what he did in the fifties? Why is Europe ahead of us on fast rail, the chunnel, the bullet trains .... Why is everything falling apart? Why don't we invest in our public sector while interest rates are practically zero and there are all these unemployed people out there?"Matthews added:
This is a good time to do stuff. Instead he has this pusillanimous highway bill up there on the Hill, and this so-called jobs bill that I don't even know what's in it. If they're going to say no to spam, make 'em say no to steak. Have a big program, let Congress say no to it, alongside a good debt reduction program down the road.
Wow, Chris. We don't think you've been reading us, but you're playing our song.
"He doesn't seem to have anything on his plate right now," Matthews added, "and that's his main problem as pitcher. You don't think of him as out there pitching." He even inspired the Republican Scarborough to offer up a riff or two. Scarborough added:
You run straight into the fire, and everywhere you go you say, "You know what. Things aren't great right now. But if we didn't do what we did your ATMs would have stopped working. If we didn't do what we did Detroit would've stopped working"The host concluded with the reasonable observations that "Democrats seem to be afraid to tell people what they believe and what they did." To which Matthews responded, "How about this? (The President) should say 'My way is the highway. We're gonna do it the way Eisenhower did it.'"
I never thought I'd say these words, especially in response to a suggestion that Democrats start kickin' it Eisenhower style, but: Amen, brother. Amen.
The Dream Is Over
Then Matthews pivoted to policy specifics. "You go over the steps," he said. "Why didn't he back Simpson/Bowles?"
Damn it, Chris Matthews! You were doing so well!
The President, said Matthews, could say that Simpson Bowles "does things I hate, but it goes somewhere. Matthews continued:
(The President could say) "It does stuff I don't like. I hate it, I hate it. But we gotta start somewhere. I got eleven votes (for the Simpson Bowles proposal, which failed to pass within the Deficit Commission). I wish I'd gotten fourteen, but damn it, I don't care how many votes you got. You got my vote."He coulda done that."Then came the anonymous Congressional leader, of whom Matthews said:
I talked to a leader in Congress yesterday, a Democrat - a moderate Democrat - and he said "The number one thing we could do for the market, for confidence, for the consumer, for the investor, for the retiree, the about-to-be retiree, is a long-term debt reduction plan agreed to by this government. That means the Republicans in the House, the Democrats in the Senate, and the President agree to a deal that we're going to stick to to reduce the debt.Finally we heard the closer on Matthews' Simpson Bowles pitch:
it seems to me that this would be ... the greatest gong out there, we'd all hear it and say, "Dammit, those guys can do their jobs." I know it's going to be hard before the election. But the President ought to be out there saying 'I'm first, put me down first, I'm John Hancock, I'm signing on." And (he should) lead the way on debt reduction, long term, and short-term job creation. Everybody knows what they want done. They want jobs now, and long-term debt reduction.They do? Let's think about that for a moment.
As US News reported in March, "A Harris Poll found only 12 percent of the public want to see a cut in Social Security, 21 said they want to cut federal aid to education and 22 said they favor cuts federal healthcare programs."
Simpson Bowles would do all three.
An April poll showed that 79 percent of voters thought it was important to address the jobs crisis, as opposed to 73 percent who thought the deficits were important. And more importantly, when asked by Gallup in January what worried them most, only 16 percent said the deficit. 26 percent said jobs, 10 percent said our continuing economic decline, 6 percent said outsourcing, and 3 percent said Medicare and Medicaid.
When asked in March what they worry about "a great deal," 71 percent said the economy, 60 percent said the availability and affordability of healthcare, 55 percent said unemployment, and 48 percent said the Social Security system. 60 percent said "Federal spending and the government deficit."
When you stack up Simpson Bowles against the things it would hurry, that's 60 percent in favor and 234 against. "Everybody knows what they want done," all right, and Simpson Bowles ain't it.
Strange Medicine
The fact is, the Simpson Bowles plan does nothing to build jobs except delay its draconian cuts by ten months. There's no stimulus spending in it. And what kind of political naiveté would lead insiders like Matthews and his unnamed House leader (probably Steny Hoyer) to think that Republicans will back any kind of job creation plan?
In practical terms, a sentence like "jobs in the short-term, deficits cuts in the long term" is meaningless when applied to Simpson Bowles. That plan would briefly avoid any direct action to cost the country more jobs, but then would begin to trigger a wave of increased unemployment.
Saying "jobs now, then Simpson Bowles" is like saying, "We'll fix your broken leg today and then amputate it tomorrow." It makes no sense.
Let Us Count the Ways
Matthews quoted his unnamed Congressional Democrat as saying, "The number one thing we could do for the market, for confidence, for the consumer, for the investor, for the retiree, the about-to-be retiree, is a long-term debt reduction plan." How would that work out for the parties he listed?
The Market: In a little-noted (except by us) development, the stock market actually tanked the last time there was deficit reduction deal. Why? Because government cuts means a smaller GDP and therefore less consumer spending. And less consumer spending means less profits -- unless you're a bank.
The Consumer: Conservative economists believe in a theory which says that government debt discourages spending, because people know that those debts will someday lead to higher taxes so they'd better save their money. But for some reason they don't believe that people will hold on to their money once they realize the government plans to cut their Social Security and Medicare, which is deeply embedded in the Simpson Bowles proposal.
And they don't think that consumers will be discouraged from spending, or have their confidence shaken, by the adoption of a plan which will cost the economy a projected 4 million jobs.
The Investor: People are seeing their 401k's get hammered because there's no consumer confidence. People aren't spending -- either because they don't have jobs, or because they're in an underwater home, or because their wages have stagnated, or because they're fearful for the future. Often it's a case of "all of the above."
As we noted earlier, investors got the living daylights beaten out of them after the last deficit deal. They'd get hurt just as badly when this one was announced, too -- and every time another jobs report came out after that.
Retirees and soon-to-be retirees: Simpson Bowles proposes radical cuts to Medicare, and insists on cutting Social Security rather than contemplate raising taxes on the wealthy. Think this'll turn 'em on? Talk about a Social Security deal, along with the Medicare reimbursement cuts, help the Democrats lose Congress in 2010.
If this plan becomes law, will people really say, "Dammit, these guys can do their jobs"? Or with they say, "Dammit, I just lost mine"?
The Wrong Problem
"Long-term debt reduction" isn't our most urgent problem. Our government debt's been this high before (as a percentage of GDP) -- specifically, it was higher during the World War II and postwar years. Those are the years that finally ended the Depression, and paved the way for those Eisenhower accomplishments that had Chris Matthews waxing so lyrical.
And you know what's even crazier? Right now they're paying the federal government for the privilege of lending it money. That's right: The federal government can borrow at negative interest rates, because the world's investors have so much confidence in the security of an investment in the US Treasury. So why aren't we borrowing the money we need to rebuild our crumbling infrastructure, educating our kids, and pull ourselves out of this economic quagmire?
We can pivot to debt concerns once our economy's moving again, and once they've stopped paying our government to borrow.
The Sting
When the Simpson Bowles proposal isn't serving the interests of the wealthy with crackpot logic, it stoops to outright fraud. Its much-vaunted "tax increases," for example, involve eliminating the kinds of tax breaks that are keeping many middle-class families afloat (like employer health and mortgage interest deductions).
The Simpson Bowles plan to "save Social Security" involves cutting benefits for recipients in 2080 as much as they'd be cut if Congress did nothing at all. Why? To deflect the idea of eliminating the payroll tax cap. (Simpson Bowles merely raises the cap slowly until it reaches 90 percent of all US income -- a level it had reached twenty years ago, before income inequality put most of our economic growth above the cap's reach.)
The Simpson Bowles plan doesn't increase taxes for the wealthy -- unless you believe that Congress will cut unnamed "loopholes" so much that it more than makes up for SB's most outrageous feature: It actually lowers the top tax rate for wealthy individuals and corporations.
Simpson Bowles offers only bogus "savings" measures for Medicare. Its only concrete proposal is to cap spending growth at GDP plus 1 percent -- an artificial formula that would soon have seniors stripped of medical care under current health inflation rates. Why didn't they offer concrete cost-cutting proposals? Because those would require limiting the runaway corporate profits that are devastating our health economy.
Like we were saying: fraud.
A Party Under the Influence
How did Chris Matthews and his unnamed friend get it so wrong? Self-perpetuating Clinton-era economic blunders are a big part of it. The half-billion dollars that Pete Peterson has spent promoting ideas like this in the last three years along can't have hurt either. That pays for a lot of ideologically-driven economists -- many of them with Democratic pedigrees -- peddling nonsense at a lot of seminars, "summits," and dinner parties.
That's how the world ends: Not with a bang, but with a whimper -- and plenty of hors d'ouevres.
Whatever its source, the Fantasyland Democrats are inhabiting will soon collide with reality -- just as it did in 2010, when Republicans ran to their left with a bogus "Seniors' Bill of Rights."
Chris Matthews had a scoop, all right: Democratic leaders on the Hill have come down with the same contagious self-deception that's sabotaged their party so many times before. Once again, the fever's running high along the Potomac. The folks on the Hill are dropping like flies.
And, frankly, Chris old friend, although we sorta love ya, you're looking a little peaked there yourself.
Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future and the host of The Breakdown, broadcast Saturday nights from 7-9 pm on WeAct Radio, AM 1480 in Washington DC.
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
They have their retirement wrapped up with pretty bows and their retirement medical care taken care of, if not by the taxpayer then by the millions they have earned bashing programs that would be good and decent for the average person like Social Secuirty and Medicare.
The stinger is that JP Morgan now dispenses Food Stamps. At first JP sent the food stamp jobs overseas but too many here became angry. I suppose JP Morgan will be on the government dole when they retire since they will have worked for the government. I wonder who gets the most money, those who get the food stamps or those who dispense them?
Why give the food stamp job to the overpaid minimum wage guy when it can be done by the underpaid maximum wage guy?
Who's interests do you think they're looking out for?
Hint: It ain't you and me.
Or were you then in the Cheney "Deficits don't matter." camp?
You also have confused the idea of deficit--a shortfall in a given year--and the debt which is the total amount owed. If the deficit were 200 percent of GDP then the deficit would be something like $30,000,000 million.
Here is what austerity means:
1. A less educated, less competitive workforce in the future.
2. A less competitive country because with spending on maintaining and upgrading our infrastructure means less capacity to produce goods and the inability to move goods in the marketplace.
3. It means higher unemployment today. Consider this: the occupations that have been shedding jobs recently have not been in the private sector but rather teachers, police officers and fire fighters.
4. In the short run it means more hunger, more homelessness and more crime.
5. In the long run it means a smaller less competitive economy.
And finally, anyone who claims they are concerned about the deficit but also is advocating cutting taxes is someone who is NOT actually trying to deal with the deficit.
Sacrificing the future to deal with something that could be manageable today is hardly conservative but that is exactly what austerity does.
This is what a truly conservative economic policy looks like http://en.wikipedia.org/wiki/American_School_(economics)
They say we can buy a plane ticket and still save a fortune by having some operations done overseas.
I am not completely familiar with it, but to answer my own question, maybe it was because of the "austerity" within Simpson - Bowles that it was found unacceptable... just a guess.