Talking With The Congressman About Poetry — Er, Tax Reform

Ever since I moved in 2003 from Barbara Lee’s district in Oakland, CA to Tom Price’s district in suburban Atlanta (Newt Gingrich’s old district), I’ve sort of felt a stepped-up need to interface with my congressperson. In Oakland, I could pretty much rest easy in the knowledge that my congressperson would propose or vote for issues that I myself would support, were I in congress. No politician matches one’s own preferences 100% of the time, but when you’ve got a congressperson as good as Barbara Lee, it’s easy to just sort of let her do the work, since it’s what you’d do anyway.

Not so since moving to the land of God, guns and Gingrich. These days, I tend to bedevil Tom Price on Twitter, and when I see tweets like this one, I feel compelled to act upon them:

So ya want my thoughts on tax reform, eh, Tom? Done…though I’m pretty sure my recommendations aren’t going to be what you were hoping for, given that the responses on Twitter to your solicitation were for idiotic things like the FairTax or banning state taxes altogether and making the corporate rate 2%. So, you’re welcome.

Fiscal NIMBYism

3/2 – see update at bottom*

Pew Research is out with another poll, this time focused on budgetary and financial issues, given the upcoming sequester, and the results are depressingly predictable. The title alone gives away the findings almost completely: As Sequester Deadline Looms, Little Support for Cutting Most Programs (pdf). The key graph is here:

Spending Cuts? Not In MY Backyard!

This is the quandary American politics – no, American policymaking – has found itself in for at least a couple of decades now. We on the left like to chuckle when Republican lawmakers are caught live on air being unable to name any specific projects they’d cut, but one can hardly blame the politicos. Their main job, in our money-driven political system, is to know what it takes to get re-elected. It takes money and it takes votes, in that order. Without money, you can’t attract enough votes, but – as people like Meg Whitman and Mitt Romney prove – without enough support from ordinary voters, no amount of money will get you elected.

What you’re seeing when you see a GOP politician caught stammering on TV, bereft of any answer at all to the question of which specific cuts to which specific programs they’d make is what happens when the interests of those two groups – the high-dollar funders and the voters who have to pull the actual levers to get the politicians elected – collide. It doesn’t happen often; usually the two groups interests are at least not in opposition, if not actually simpatico.

Even in the case of spending cuts, those groups’ interests seem at first to be at least superficially aligned. Starting in the early 1970s, forty-plus years of concerted faux-populist anti-tax rhetoric from a well-funded right wing determined to rise above the nearly permanent minority status it had enjoyed since the Great Depression have rendered the average American conservative certain that cuts must be made because spending is out of control and taxes are too damn high.

Yet ask these same Americans which particular programs they’d like to cut, as Pew did – and by how much, and the graph above shows what happens when well-funded, agenda-driven political propaganda collides with people’s own self-interest. I’m actually strangely heartened by the fact that not even most Republicans, apparently, feel like it’s a good idea to start cutting the benefits they or their loved ones or friends receive. Why? Because, to a greater or lesser degree, they know these programs work. They help pay medical bills and drug costs. They make the food budget go a little farther every month. They keep the bridges safe and the children well-educated. They do lots of things that are vital to the communities in which these poll respondents live. These things are called entitlements because voters – even Republican voters, apparently – feel entitled to them. These things are part of the social contract, what each of us is told our tax money goes to, what we agree to provide for ourselves and each other through the medium of government. Our civilization, in other words. And yes, even most GOP voters feel entitled to these things we’ve agreed upon.

That’s why, when you ask even most Republicans to really think about applying the rhetoric being discussed on their televisions by the pundits and the politicians to their OWN lives – when you ask them to think specifically about which programs they, the voters themselves, would cut, support drops away like support for Larry Craig dropped away among Senate Republicans after the “wide stance” issue.

I call this Fiscal NIMBYism because it represents the direct collision of those forty-plus years of well-funded GOP rhetoric about lower taxes and cutting spending and drowning government in a bathtub with the actual reality of what the lower spending parts mean. These same GOP voters who balk at naming any specific cuts they’d be willing to make were only too eager to accept the lower tax lollipop portion of the GOP rhetoric. They took the Bush tax cuts without hesitation, spent or saved it, and never looked back. It’s only when those same GOP agenda-setters come back to them and say “OK, now it’s time for the spending cuts” that people begin to say “hey, wait a minute…” when they begin to really think about what that’s going to mean in practice. A large deficit sounds bad in the abstract, but the scariness of an outsized debt-to-GDP ratio that Politician X is discussing on TV pales in comparison to the serious consideration of cutting one’s own benefits to bring that deficit down.

That’s why the only item on Pew’s list of potential funding cuts that even reached plurality support was cutting  aid to the world’s needy. That’s the perfect expression of the ambivalence and NIMBYism I’m referring to: cut someone ELSE’S benefits, but keep your stinkin’ government hands off my Medicare/Medicaid/Social Security/school funding/veteran’s benefits/etc…

To be fair, even cutting aid to the world’s needy didn’t reach actual majority support, probably because enough people realized just how heartless that sounded, as they checked the “don’t cut” box on all their own pet projects. All this may sound like a call for despair, that GOP or perhaps even just regular rank-and-file voters are too hopelessly selfish for redemption of any kind, but I see it as just the opposite. I think the fact that even most GOP voters can still at least recognize what their own self-interest is, is an unqualified good. It means they’re not completely delusional. It means that despite forty-plus years of Ayn Randian “you’re on your own” rhetoric and Reaganite “government IS the problem” rhetoric, not even most Republicans think government is so worthless that they’d be willing to throw away what it provides for them.

And that means there’s a potential wedge there for Democrats to break the lockstep voting of ordinary Republicans for austerity, against their own self-interest.

***UPDATE***

I just got an email from a group whose mailing list I’m on, Operation Homefront. You may already know them; they’re one of the higher-profile groups that provides assistance to military families, especially (but not exclusively) the deployed. They’re a great group doing work that shouldn’t be left to outside organizations but instead should be a part of what our nation guarantees to those men and women who put their lives at risk to defend our country. Nevertheless, due to already-existing shortages in everything from VA benefits to simple cash-flow issues, groups like Operation Homefront have to exist, and they do vital work very well.

This email is titled “Sequestration and Our Military Families,” and the reason I’m mentioning it is not because – or not only because – it’s an example of how the recent failure of congress to act to avoid the blunt instrument of the sequester affects real people in the real economy. The email is certainly that, but it’s also an example of what I just got done talking about in this post: fiscal NIMBYism. The author, OH’s President & CEO Jim Knotts, begins by talking about what sequestration is and how it will negatively affect military families, but then in paragraph four, he gets around to this:

Personally, I fully understand and even support the notion that we need to cut our federal budget to get our national fiscal house in order. What you may not know is that the Department of Defense will bear more than 20% of the total budget cuts under sequestration.

[...]

Many military spouses have jobs as DoD civilians at local installations, which means the budgets of many military families just got a significant cut. Programs on the installations that support families and kids will be cut or curtailed due to staffing gaps. Schools for military kids on the installations have to figure out how they’ll complete the school year.

Knotts goes on to detail numerous other ways in which sequestration’s cutbacks will impact military families, none of which I’m trying to brush aside or take lightly by pointing this out. But it’s a bit of a nutshell summary of the ridiculousness of federal policy as well as current conventional wisdom that even a man in the position Knotts is in, who knows better than most just what kinds of harm funding cuts at this time will do in real terms still believes and agrees with the notion that we need to make cuts.

He’d just prefer they not be in HIS backyard, if at all possible.

IMF (Politely) Confirms: Austerity Doesn’t Work

Wow, it just doesn’t get much more stark than this. Via Paul Krugman:

‘Contractionary Fiscal Policy Is Contractionary’

On Tuesday, the International Monetary Fund came out with a new report which states, albeit in dry, fact-based bureaucratese, that the world’s governments (particularly though not exclusively those in the Eurozone) ought not continue down the path of fiscal consolidation (debt-reduction), lest they risk slowing the world’s economy even further. The importance of this study can hardly be overstated, since it comes from a supra-national NGO like the IMF and not some politically-interested party within a specific country.

What you are looking at in the above graph is a plotting of the change in GDP of various Eurozone countries against those same countries’ fiscal consolidation. In other words: for each country, how did their attempts (if any) at debt reduction fare in terms of their GDP? The results aren’t pretty (if you’re an Austrian/Austerian debt-scold: virtually every country on the list attempted some form of debt reduction recently. Some had it forced upon them by necessity and/or other countries within the Eurozone (see: Greece, Spain) while others undertook debt reduction on their own initiative based upon political leaders’ belief they were doing the economically prudent thing (read: Britain). But in every case, the larger the fiscal consolidation, the greater the loss of GDP.

This suggests that not only are Keynesian contractionary effects real, but their multipliers and effects may be even greater than previously supposed. And it also suggests the converse, as professor Krugman points out:

So one thing I haven’t seen pointed out is that this directly contradicts current GOP doctrine. To the extent that the GOP has a theory of recession-fighting…it was embodied in the Joint Economic Committee manifesto “Spend Less, Owe Less, Grow the Economy,” which declared that

In the short term, fiscal consolidation programs that rely predominately or entirely on spending reductions have expansionary “non-Keynesian” effects that may offset the contractionary Keynesian reduction in aggregate demand.

In some cases, “non-Keynesian” effects may be strong enough to make fiscal consolidation programs expansionary in the short term.

As Krugman concludes after plotting the above graph: “tell that to the Greeks.” Yet another dose of deficit-cutting fiscal austerity is nevertheless exactly what Republicans in America like Paul Ryan and Mitt Romney would have us do here, despite the fact that, as Krugman and the IMF show conclusively, it’s the fiscal equivalent of prescribing leeches for illness.

Grand Old Marxists

What Timothy Snyder said.

Magnificent And Depressing

This got posted up while I was on vacation in San Francisco, so I missed it. Luckily, someone in my Twitter stream was still posting it up today, so it didn’t completely pass me by. It’s a graph from Pew Social Trends Report by way of The Atlantic, of the last sixty years of economic activity in America.

All of it.

Of course, any graph that tries to represent such an incredibly large amount of data is going to be pretty broad-brush. There’d be no comprehensible way to really do a thorough, deep dive on every facet of all the economic activity since the end of WWII until now — there’s just too much to say about it. But oftentimes, graphs which purport to cover very big-picture views of, well, anything, tend to not just use broad brushstrokes of necessity, but are also insufficiently focused in what they do try to represent as to be nearly-useless.

This one isn’t (click for larger version at Atlantic web site):

As the article at The Atlantic puts it:

Here’s the arc it captures: In the immediate postwar period, America’s rapid growth favored the middle and lower classes. The poorest fifth of all households, in fact, fared best. Then, in the 1970s, amid two oil crises and awful inflation, things ground to a halt. The country backed off the postwar, center-left consensus — captured by Richard Nixon’s comment that “we’re all Keynesians now” — and tried Reaganism instead. We cut taxes. Technology and competition from abroad started whittling away at blue collar jobs and pay. The stock market took off. And so when growth returned, it favored the investment class — the top 20 percent, and especially the top 5 percent (and, though it’s not on this chart, the top 1 percent more than anybody).

They ruefully conclude: “And then it all fell apart. The aughts were a lost decade for families, and it’s not clear how much better they’ll fare in the next.”

And that’s exactly it. This is what we’re up against, those of us who favor the immediate-postwar pattern of continued prosperity for all hardworking Americans, not just the richest and/or luckiest of us. This is what’s been lost, and what must be rebuilt.

Bill Moyers, Matt Taibbi and Yves Smith On Financial Fraudsters

The utterly indispensable Bill Moyers spends a lengthy segment on his excellent show talking to two of the sharpest minds who’ve been following the financial crisis since 2008 and before, Matt Taibbi of Rolling Stone and Yves Smith of Naked Capitalism:

Why Zero Hedge Will Always Be Correctly Viewed As Cranks

The men and women (though, in truth, it’s nearly exclusively men) at Zero Hedge seem always very concerned with being right, especially if/when they perceive others as being wrong. Their output as observers of the financial scene is comparatively quite prodigious – and I know this because I monitor a fair number of econ/trading sites: Zero Hedge consistently produces far more posts-per-day than other such sites. And they can usually be counted to be among the first, if not THE first, with any new financial news. I’ve learned of many new developments on Zero Hedge’s site before other sites had them. I obviously don’t know for sure, but I’d bet the principals of ZH all have Bloomberg terminals in their offices (perhaps even in their bedrooms, for all I know, judging from the time-stamp of some of the posts they write). And they certainly don’t suffer from an overabundance of respect for the financial elites of this country – or this world. Sometimes, you can find cogent, Cassandra-like financial analysis at Zero Hedge that’s difficult if not impossible to find anywhere else. All of that can be quite worthwhile.

Unfortunately, even more frequently, what you find at Zero Hedge is a chronic – bordering on terminal – sort of wisecracking insider’s myopia. The same willingness to offend the world’s fiscal and political elites with fearless criticism begins, after a while, to more closely resemble not fearless truth-telling, but a sort of Blackboard Jungle-delinquent’s need to offend. And that’s what makes so much of Zero Hedge’s analysis suspect and tinny sounding: it’s not the reflexive Ron Paul fixation (though lord knows, there’s more than enough of that on display at ZH), it’s not the glassy-eyed goldbug zealotry (though, again, there’s plenty of that). It’s pieces like this one from today, in which the authors, in their seemingly reflexive need to be the coolest/savviest guys in the room, subtly (or, often, not-so-subtly) attempt to pretend reality is different than what it is so they can once again slam their usual suspects list of perceived bad actors on the economic stage.

Cordray Nomination Frozen But Not Dead – Will Obama Act?

Dave Dayen at FireDogLake says everything that needs to be said about the Cordray nomination as it currently stands:

Describing the blockade of Richard Cordray to run the Consumer Financial Protection Bureau as a form of nullification sounds accurate to me. Cordray is almost an afterthought to this issue. Republicans disagree with the concept of a federal agency that looks out for consumers. So they plan to stop any effort to staff the agency with a director, which has the added benefit in this case of holding off consumer protection regulation of non-bank financial institutions, unless it is gutted.

[...]

Democrats and the President have an option here. They can simply force a recess appointment. The President has all the tools at his disposal to get a director in place, whether by forcing Congress to adjourn, or using the inter-session period as a recess to use his appointment power.

But the most important bit of Dayen’s post – and indeed, about the Cordray nomination and the entire tawdry fight over the CFPB itself – is this:

These [actions] may seem like power plays, but as power plays go they pale in comparison to Senate Republicans hijacking an entire agency and blocking anyone from serving as its director until their demands are met. In other words, a recess appointment would be a proportional response at this point. And Republicans would grumble about it, but I don’t see why anyone should care about that. Putting a greater spotlight on their intentions here should be the goal.

So yes, Republicans are using a nullification strategy. But it cannot be successful without Democratic toothlessness, a form of complicity. Democrats could have Cordray in place by the end of the year.

Exactly the situation, as it stands today. If either a banker-stooge nominee is substituted for Cordray, or the agency itself is neutered (as Republicans have stated is their real goal), it will have been entirely, ENTIRELY because Democrats chose not to pursue readily available, workable options to get Cordray installed. Yes, any such recess appointment would only last until the expiration of the current congress – far less than the current five year term the Director of the CFPB is supposed to hold. But once consumers and the media get a sense of what a fully-empowered CFPB can do, there won’t be any question they’ll want a strong consumer advocate helming it. The GOP know this. That’s why they’re going all-out to stop it NOW, before the horse is out of the barn. President Obama has the tools to foil them. It’s up to him – entirely – to choose to use them.

Rubber, Meet Road

As expected, Senate Republicans have voted in a united bloc (with the exception of occasional pseudo-moderate Olympia Snowe, who voted “present”) to filibuster President Obama’s nomination of Richard Cordray. Not voted against the nomination itself, voted (as they do customarily these days) to filibuster it. If you aren’t familiar with the difference, see Filibuster 101, and how it’s being abused by Senate Republicans. Essentially, the GOP voted procedurally to not allow the Senate to even vote on Cordray’s nomination – because the Republican leadership understands that there are enough Democrats and independents in the Senate to confirm Cordray…so they won’t even allow a vote. An abuse of process? Yes. Unexpected? Not at all: it is how the GOP does business these days. The question is what to do now. And it’s not a question you or I can really have much of an effect on; this question goes directly to President Obama. So here’s what amounts to an open letter:

OK, Mr. President – now, right now, would be an excellent time for you to show us that your brilliant speech in Osowatomie on Tuesday wasn’t just pretty words. You have in front of you a perfect opportunity for you to do something concrete to advance the agenda you laid out in your speech. In fact, it is nearly THE perfect opportunity, one not likely to be repeated soon with the lines so clearly drawn, since it doesn’t require you to work with or depend upon any of the other branches of government. Political calculations need not be made in this instance; there is no quid-pro-quo.

As Jared Bernstein put it in the post I linked to in my previous post, you have begun speaking a language that is resonating with voters and citizens…and now, with the GOP’s rejection of Cordray’s nomination, you have an opportunity to also act in a way that would resonate with them. You can do so in a way that is unfettered by considerations of having to give up something to get votes, or worry about what the Supreme Court might do. Almost like a murder investigation’s steps of means, motive and opportunity, you have the opportunity to do this now (or at least soon), completely on your own. The House cannot keep the Senate in session without recess forever. You have the means: the constitution explicitly gives the President the authority to recess-appoint on his own initiative, unilaterally. The only remaining question – literally – is: do you truly have the motive to match your actions to your words?

Tuesday, in Kansas, you told the American people:

Every day we go without a consumer watchdog is another day when a student, or a senior citizen, or a member of our Armed Forces — because they are very vulnerable to some of this stuff — could be tricked into a loan that they can’t afford — something that happens all the time. And the fact is that financial institutions have plenty of lobbyists looking out for their interests. Consumers deserve to have someone whose job it is to look out for them. (Applause.) And I intend to make sure they do.

You bet consumers deserve that. And you have the means and the opportunity to see that they get it. Now, the time for words is over. It is time for you to show the people who took time out of their busy lives to come see you speak on Tuesday, and the millions more who heard it live on TV or radio, or heard or read about it later that day in the news, that you meant what you said. Show them that you also have the motive you said you had in your speech. The voters are watching, and as I said in my previous post, comparing yourself to Teddy Roosevelt, no matter how eloquently done, will simply not resonate with them if you aren’t willing to break out TR’s “big stick.”

You chose these terms and these images, used this language. Now show us they weren’t just a pretty speech. Give struggling Americans what you said they deserved. Recess appoint Richard Cordray at the earliest opportunity.

Jared Bernstein and Two Presidents

President Obama Wows 'Em in Kansas, 12-6-11 (image courtesy of LA Times)

The two Presidents in question being Obama (of course) and Theodore Roosevelt.

Over at his blog, the fantastic economist (and Joe Biden’s former top economic adviser) Jared Bernstein has a post up called O goes YOYO. A little bit of explanation. “YOYO” is the term coined by Bernstein himself to describe economic policies and doctrine of post-’80s Republicans; the trickle-down, supply-side, “you’re on your own” (hence: “YOYO) idea of economics that has bedeviled us for at least three decades now. He seems happy that the President is talking in such explicitly confrontational terms about the Republicans’ failed economic ideas. I am, too. It was a typically excellent speech on Obama’s part. And it was significant beyond the usual because it represented a much-closer embrace by the President of the themes of Occupy Wall Street (even though, as usual, the President tried to split the difference and find the “middle” by trying to downplay or deny at one point the Occupiers’ central theme of 99% vs 1%).

Bernstein loved it, and took the opportunity to point out much that is wrong with the “YOYO” economics of the right wing. He’s entirely correct, too. But Prof. Bernstein closed with the following sentences: “For now, I think the President is speaking to the American people in a way that is extremely resonant to them.  He’s right about this stuff, and people know it.”

I agree, the President IS right, and people DO know it. But there’s an additional, glaring problem Bernstein didn’t address in his overview. I began a reply at his site, but quickly realized it would be longer than his word-limit on replies allowed, so I’m posting it here:

Yep, great speech – again. You’re absolutely correct in stating that the President is “speaking to the American people in a way that is extremely resonant to them.”

Only, it would have resonated with the public to an even greater degree back in ’09, in the immediate wake of the utter collapse of the economic theories underpinning YOYO economics (as well as the economy itself). People were not just ready to have a serious conversation about making fundamental changes to the way our economic system is setup (or, rather, has been steadily perverted by the YOYOs over the last three decades), they were near-desperate to have that conversation.

But that conversation didn’t happen then, and we’ve been stuck in neutral (at best) ever since as a result.