Diatribes of Jay

This is a blog of essays on public policy. It shuns ideology and applies facts, logic and math to economic, social and political problems. It has a subject-matter index, a list of recent posts, and permalinks at the ends of posts. Comments are moderated and may take time to appear. Note: Profile updated 4/7/12

22 December 2012

Consequences


Republicans are big on ideology, pledges, and show. They’re not so good at predicting consequences or understanding cause and effect.

Remember Newt’s “contract with America”? Most of us, who weren’t his fans, called it a “contract on America.” But the name and the details don’t matter now. They’re all history.

More properly, they’re in the dustbin of history, where they belong. They’re precisely where Grover Norquist’s extorted pledge of “no tax increases, ever” will be after January 1.

If you haven’t yet seen the writing on the wall, let me read it to you. In ten days, we’re going over the so-called “fiscal cliff.”

Now that the Tea Wing Nuts have rejected even Boehner’s lame offer to raise taxes only on people making over a million a year, that’s inevitable. There’s not enough time left to negotiate a “grand bargain.” Even if there were, the House Wing Nuts wouldn’t pass it. And the President, who holds all the cards now, is not going to negotiate with himself. His veto threats make that crystal clear.

Boehner is now Speaker Eunuch. He can’t deliver his own partisans even for a half-hearted bargain. All he can do is mouth the party line as his ship goes down.

But the ship going down won’t be ours. January 1 won’t be like going over Niagara Falls in a barrel. It will be like Y2K, or the Mayan “end of the world,” which just passed without incident. It will be a complete non-event.

Yet there will be consequences. Remember that little thing called cause and effect? Republicans don’t worry too much about it, because, as Dubya insisted, they make their “own reality.” In their dreams.

Here are the consequences:

1. Taxes on everyone will go up.

2. Military spending will go down.

3. The budget deficit will take a big hit.

4. The sole and single issue (the deficit) for which the GOP has recently proposed any serious solution—let alone a workable one—will be fixed, without any help from the GOP. Guess who will get the credit.

5. Our Yankee sovereign debt will continue to be the strongest in the world. Our credit rating will go up, not down.

6. Interest rates will stay the lowest in decades, and the Fed will find it easier to keep them there.

7. Having let the Dems solve its single issue by themselves, the GOP will no longer have any reasonable ideas or proposals about anything, unless you think it’s reasonable to have more guns in schools and more bashing of gays, peaceful Muslims, immigrants, progressives, and people who don’t worship Fox. The GOP will remain what it has become, a bizarre collection of extremists without a plan, program or unifying theme. More independents and moderates will leave it. Youth will never consider going there.

8. The GOP lost the recent presidential election despite a still-ailing economy, massive residual racism, and relentless bashing of a president who’s half black. None of those circumstances is likely to repeat itself soon, let alone all three. Therefore the GOP will be unlikely to win the presidency in the foreseeable future, unless it undertakes serious substantive reform.

9. Because the GOP was unwilling to increase taxes even on million-dollar earners (most of whom are far beyond millionaires in wealth), it will not likely garner majority middle-class support in the foreseeable future. While it can still make trouble through its engineered, gerrymandered House districts, and with the help of its marketing department Fox, its days as a serious opposition party are numbered, at least outside the South and the big, empty states.

10. The “fiscal cliff’s” hit to the economy will be small or nonexistent, a speed bump on the road to prosperity. On January 2, the vast majority of thinking Americans will wake up to a few percent higher taxes, no more than prevailed under Bill Clinton. Tax deductions from paychecks will be a few percent higher. In the meantime, the US housing market will resurge, as will China, much of the developing world, and American manufacturing.

11. Our military-industrial complex will have to trim itself. For the first time since the Cold War’s end, it will have to make real choices. If it does so intelligently, it will take money mostly from the small, backward states that voted for Mitt, which receive more in federal dollars than they pay in taxes. It will alot more money to the productive states with leading-edge high-technology industries. In other words, the GOP will have shot its own constituency in the foot.

12. It is possible that financial markets will go down for a time. After all, most traders, like Rick Santelli, are extreme short-term thinkers who love Fox. But after a while, when nothing happens and the economy continues to recover, the influx of smart money will overwhelm the bears, many of whom will have lost their shirts shorting.

13. By April or May, with the economy in full resurgent mode, the bears, the GOP and Boehner will have lost completely. (Israel attacking Iran in the interim may delay this schedule, but is unlikely to change the result.) The Pentagon, with Chuck Hagel presiding, will be hard at work getting lean and mean for a twenty-first century far different from the twentieth.

14. GOP “thinkers”—if any member of that party can be so characterized—will slowly realize that they were snookered by their own propaganda. They will understand that what they called the “fiscal cliff” and tried to get Americans to fear is just the Democratic platform by another name. It imposes higher taxes to cut the debt and pay for better infrastructure, and a leaner, soberer, more effective military. Those things will be will be good for the middle class, good for America’s long-term growth, good for the global economy, and good for global peace, stability and security.

15. It may takes a few years, but Boehner and his Wing Nuts will look like fools, and history will record them as such. They will be ranked with the folks who fought Alexander Hamilton over a national bank, the Southern Aristocrats who resisted westward expansion and the pro-slavery Democrats. History won’t laugh at them only because they did us too much damage for levity; but it won’t treat them kindly.

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