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

30 July 2011

Gripping Political Theater

Have the congressional antics of the last three weeks all been political theater? Are we going to have a “miraculous” increase in the debt limit at the final hour, or maybe after a mere “technical” default of a few days, with no bond interest unpaid and no damage done to bondholders?

Quite possibly. The contours of that outcome are now becoming apparent even to our mass media.

Everyone knew that the “Boehner bill” that passed last night after the markets had closed was pure show. Harry Reid had pronounced it “dead on arrival” for several days. The rest of the Senate leadership joined the chorus. Mitch put a good face on it, but his cheerleading was unconvincing. And the President said he would veto it even if, by some miracle, it passed the Senate.

Of course it didn’t. Harry Reid may have negative charisma, but he knows his Senate and its rules and can count votes. The much-vaunted Boehner bill is history.

So why did Boehner introduce it in the first place and work so hard at getting the House to pass it, failing once and then berating his own Tea Party in what may be the only outburst of genuine anger on his record?

There are three reasons. First, Boehner wanted to give his Tea-Party crazies something to take home to their constituents after they (or at least some of them) knuckle under and do what’s needed to avoid a catastrophic US default. Their ridiculous balanced-budget amendment, for which there is no support outside of the extreme right wing, at least gives them talking points. Second, Boehner wanted to show his own party who’s boss in the House, despite his first failure and Eric Cantor’s early back-stabbing. Third, Boehner wanted to try reassure the few sane Republicans still out there that the party hadn’t completely lost its mind. Good luck with that last one!

So we wasted almost an entire week while Democrats—who always had the whip hand in their Senate majority and the presidential veto—let the GOP’s little drama play out. (Procedurally, spending bills must originate in the House.)

But the larger drama still hasn’t finished. Now, it’s the Democrats’ turn. Senate Democrats will now try to get the remaining adults in the Senate to cobble together a bill that can lure at least seven Republican votes, enough to stop a filibuster (along with the Democrats’ 53). Once they do, they will kick the bill over to the House, where Boehner will have to rely on both Democratic and Republican votes to pass it before the clock runs out.

If Boehner fails to get it passed, his will be the last hand holding the hot potato. He and his party will bear the blame, along with his unruly Tea Mob, for the first national default in modern history, and perhaps for the double-dip or depression that will follow. Checkmate Democrats!

Is this outcome certain? No. Nothing in life is but death and taxes. Yet it’s probable, the more so because no pol wants his or her fingerprints on a default.

What makes it probable is that any “compromise” bill will do little more than a clean bill could have done at the outset. Each side has already “won” its most precious point. There won’t be any increase in taxes or revenues, and there won’t be any raiding of Social Security or Medicare.

The Senate bargainers will pick the low-hanging fruit. They will put together a basket of easy cuts, perhaps including some self-evidently outrageous military spending (since the “foot soldiers” of both parties want to see military spending reduced). The Republicans will decline to demagogue the “savings” from exiting our two wars as “gimmicks” because they, too, want the package to look bigger. And Boehner’s House, including its Tea Crazies, will have to laud Congress’ “great work” and declare victory, or have their prints all over a default.

Could it all fall apart at the last minute? Sure. There are enough stubborn ideologues among the GOP, and there are enough Democrats outraged by the GOP’s scorched-earth extortion, to bring a compromise down. But congressional leaders of both parties will have a potent weapon to bring their “troops” to heel. They can threaten, if a default occurs, to leak the names of the folks who caused it, if their names are not already obvious from official voting tallies. No member of Congress wants to be caught in public with bloody hands.

So chances are good that we will avert a default at the last minute. But what does that mean outside the congressional theater, in real life?

There will be several consequences, all but two of them bad. First, the debt reduction will be minimal, and Congress will have kicked the can down the road yet again (albeit until after next year’s elections). Second, this prolonged charade will not fool our trading partners, global bond markets or rising economic powers, including China. It will accelerate pressure to drop the dollar as an international medium of exchange and the basis of oil prices. Third, our borrowing costs will rise as international markets write down our credit rating, whether or not the rating agencies also do so. Finally, and as a result, we will see higher interest rates and greater inflation, which will slow our even-now-ailing economy, perhaps throwing us into a double-dip.

The good consequences are only two. First, voters able to reason will blame the GOP for starting the whole charade off with their extortion attempt. Second, John Boehner will be tarnished for having made the debacle by: (1) thrice walking out of talks with Democrats (including the President), (2) offering a bill for show only, while the clock was nearly running out, and (3), in the end, barely being able to control the loonies in his caucus.

No one in Congress will come out smelling sweet, but Boehner, justifiably, will stink the worst. And if we are lucky, that stench will persist until November 2012 and put him in the minority again, where he belongs.

Yet the good consequences are all political. The bad ones are all real. That’s what you get under government by extortion. The extortion is not over yet: the FAA is still crippled, and Senator Shelby (R., natch!) of Alabama still has over 70 holds on presidential appointments. We still have a President suffering the most outrageous and treasonous hazing since the Confederacy seceded after Lincoln’s first election.

And we still have all the real consequences of that: no forward progress on any issue that matters. In rough order of importance, we still have to address our growing energy insecurity, our crumbling infrastructure, our lagging education, our useless and endless wars, our bloated and wasteful military-industrial-espionage complex, our exploding health-care costs, our bipartisan assault on human rights and civil liberties, and (last but not least) our debt. Oh, and did I mention jobs and our economy, from which this month-long episode of political theater seems to have distracted us?

We are still a completely dysfunctional society, with a strong minority of true believers determined to have their way or bring us down. What they don’t realize is that having their way will also bring us down, perhaps even more rapidly. These folks are great at following Grover Norquist’s little red book with zeal and discipline, but not so great at predicting and avoiding consequences in the real world.

If all goes well as outlined above, we will have spent yet another month on gripping but distracting political theater. The President and the Democrats will have come out the “heroes” of the little drama. But another month will have crept by without any progress whatsoever on anything that really matters. And the 2012 campaign is about to begin in earnest.

Will the rest of the world wait for November 2012? I don’t think so. It will continue to pass us by and make us irrelevant as we slowly and painfully make up our minds to get real.

Footnote: For a brief exchange between left- and right-leaning pundits that explains these prospects for a solution, click here and set the video timer to roughly 5:10. This clip (including the prelude to it) is the best and most succinct explanation of what is going on that I have yet seen or read. And it will increase your respect for Harry Reid.

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28 July 2011

Gang Rule, or Government by Extortion

[For a sample letter to your representatives in Congress to avert default, and the reasons to send it, click here. For a brief comment on Elizabeth Warren’s possible Senate run, click here.]

For several weeks, I have been trying to come up with a pithy and accurate description of what Republicans have become. Recent events have helped me.

They’re no longer a political party. Parties act in the nation’s best interests and compromise for the sake of national progress. They’re not quite an insane asylum, although the Tea-Party wing appears to approach one. They still have some sane but misguided members.

For all his many flaws, even John Boehner appears to have made some effort to accomplish something real in the last two weeks. His closest approach to a “grand bargain” would barely have paid the interest on our national debt. But at least he tried.

The GOP is not a cult. Cults primarily harm themselves. The Jonestown drinkers of poisoned Kool-Aid, for example, killed themselves but no one else.

So what have the GOP become? I think a gang, and an inept and unruly one at that.

You can think of the GOP as a not-too-bright wing of the Mafia. Facing a divided government and the complete failure of their ideology over the past decade—if not the last thirty years—they recently came up with a brilliant plan: extortion.

Do things our way, they say, or we’ll use our control of the House to cause a national default. Do exactly what we say, or we’ll shoot the whole country. As chief GOP apologist David Brooks wrote three weeks ago (it seems like a century!), this makes them “not fit to govern.”

Already they have failed at extortion once, trying to get a “grand bargain” to reduce the debt with all cuts and no revenue. Now, with the nation on the brink of a real default for the first time in modern history, they are at it again. To see how, watch or read Gwen Ifill’s extraordinary interview with Rep. Peter Roskam (R. Ill.) last night. [Scroll down for a transcript.]

Roskam followed presidential adviser David Plouffe, who had reiterated the President’s consistent and principled opposition to any short-term debt-limit increase. As Plouffe noted, a short-term “solution” would force us to go through this whole dangerous and distracting farce again early next year.

When Ifill asked Roskam about the President’s opposition, he just blew it off.
“Ultimately, what's bringing everybody together on all of these votes is the notion that Aug. 2 is a date of consequence that has to be dealt with. So, I wouldn't submit that there's any, you know, political posturing and other nonsense. . . . And that's where I think John Boehner is trying to lead. And I think, ultimately, that [Boehner’ short-term bill] will be a successful effort.”
He completely ignored the President’s threat to veto any such bill, as well as the Senate Majority Leader’s assessment that it would be “dead on arrival” in the Senate.

Roskam predicted that everyone would toe the GOP line, despite the President’s and Senate Majority Leader’s clear statements to the contrary and a Democratic majority in the Senate, far more than needed for a filibuster. In other words, he predicted that in divided government, the boldest extortionist will win.

Roskam seized on the fact that Plouffe had dodged repeating the President’s veto threat in the immediately preceding interview. On this basis, he concluded: “[White House staff] have obviously left the door open because they know this bill is going to end up on President Obama’s desk.”

Roskam is articulate and personally attractive. He didn’t shout or declaim. But you could say the same about Marlon Brando in his role as Mafia Don in “The Godfather.” Brando’s soft, hoarse voice only accentuated his menace. Neither man shouted or screamed, but both made their extortion threats absolutely clear. Roskam’s message was simply this: our way or national default; take your pick.

Of course neither the Senate nor the President can give in to this bullying. Not only would it replay this entire fiasco in a few short months, with similar effects on our national finances, international confidence, and global markets. It would also embolden the extortionists, who are already holding the FAA hostage, causing a loss of millions of dollars of air-travel tax revenue and the stoppage of construction work at airports around the country. And then there’s Richard Shelby (R., Ala.), the arch-extortionist senator, who has placed over 70 holds on the President’s appointments in order to extract concessions to his right-wing ideology and his backward state.

When dealing with bullies, Rule One is “don’t give in”. Everyone who has faced a bully on the playground as a kid knows that. It’s Bullying 1A.

Yield to extortion once, and the bully’s demands know no end. Stand up and fight, and the bullying stops, even if you lose. And if you’re too small or weak to stand up yourself, you get a few friends and jump the bully after school.

I’m sorry to say it, but that sort of schoolyard strategy is what the GOP have reduced us to. It may be puerile. It may be crazy. It definitely makes us a laughingstock before the world. And whether or not it causes default, it will hasten the day when the world dumps our dollar as a universal currency and the basis for oil prices.

That, of course, means inflation for us as far as the eye can see. But it’s the reality of Republicans’ utter disregard for the nation’s welfare as they seek to magnify their minority power with gangster tactics.

Already the Gang’s back-to-back extortion attempts have damaged the FAA, our credit rating, our international leadership (if any remains), our stock market, global bond markets, and our own confidence in ourselves. If the Senate and the President give in, it will never end. The entire globe will begin to spurn us as irrational, driven by fringe groups and unreliable.

So giving in is unthinkable. If Roskam’s pipe dream somehow comes true, and the Boehner bill comes to the President’s desk, he must veto it. If he cannot bring himself to do that, he might as well resign, for all the power he will have until next November, and for all the good his presidency will do the country.

Avoiding default at all costs cannot be our first national priority, especially now that the GOP’s extended extortion attempts already have caused some of default’s consequences, including a likely lower credit rating. Stopping the Gang before they destroy our country must be our first priority.

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24 July 2011

Watching the Sun Set

[For a brief comment on Elizabeth Warren’s possible Senate run, click here. For a sample letter to your representatives in Congress to avert default, and the reasons to send it, click here.]

Something extraordinary happened during the last week. The sun began to set on American global leadership and rise on China.

There were no signing ceremonies, no speeches, no brass bands. We Yanks might deny it. But at the end of the day, we have less than five percent of the world’s population. China alone has nearly one-quarter.

Here’s what the rest of the world saw in us this dismal week:

1. A country so divided it cannot function;

2. A nation held in thrall by an ideology so extreme, and so devoid of factual and evidentiary support, as to rival Soviet and Chinese Communism in their heydays;

3. A Constitution that allows a relatively small minority—primarily from the least populous, least productive, least developed, and least well educated states—to control our nation’s policy by obstruction and extortion;

4. Mass media avidly reporting the antics of supposed “candidates” for president whose ignorance of world affairs, economics and their own country’s history is appalling;

5. A prime mover behind the economic realism of the World Bank and the International Monetary Fund that won’t follow the same advice that it, through those institutions, imposes on others;

6. A people misled (in large part) by a terrifying propaganda machine, more powerful, more insidious and more effective by far than those of Joseph Goebbels and Josef Stalin (strange that they were both named “Joseph,” not “Rupert”);

7. A once pragmatic and reasonable people whose public face increasingly appears to be ignorant, shouting, and name-calling bullies or pretty but empty heads like Palin’s and Bachmann’s;

8. A rising (but so far not predominant) culture that increasingly looks like Adolph Hitler’s, but which poses only an internal threat, not an external one, and does little scapgegoating of minorities (except for Muslims); and

9. A relatively soft-spoken, chain-smoking, weeping House Majority Leader (Stalin wept, too!), who personifies all that has gone sour and is trying to hold the nation’s economy hostage in an extortion plot worthy of a Mafia gangster.

Of course the President cannot yield to the extortion. He would be America’s own, internal Neville Chamberlain if he did. Yield to bullies once and there will never be an end. With his off-the-scale emotional intelligence, the President knows that.

That’s why he has threatened to veto the GOP’s “kick the can down the road” solution, not just that it would roil markets almost as much as default. If he has to, he must make good on that threat.

But as necessary as is facing down the bullies, it won’t be nearly enough. The damage is already done. The rest of the world sees a great nation held hostage by a lunatic fringe, or a lunatic “fringe” much larger and more powerful than it ought to be.

After this week, no rational person observing us from abroad will ever see us in quite the same light again. The sun is setting on our empire with the same ineluctable force as it sets every day. Unlike King Canute and his clever propaganda, we can’t even seem to hold it back.

If we continue down the path of government-by-extortion that we’re on, we might become a fascist state. But we don’t pose much of a threat to the outside world, only to ourselves. We are going bankrupt, economically and morally, and we are already exhausted by our two endless wars and our interminable internal bickering. We are mostly objects of pity, not fear. But having still the world’s largest economy, we may drag a whole lot of innocent others down with us as we go.

The President doesn’t like to look back. But it’s worthwhile noting that our decline began almost three decades before he took office. It began when we elected a grade-B actor as president and fell under the spell of his seductive charm and simplistic ideology.

China was shaking off an equally simplistic ideology (Communism) at almost exactly the same time. Deng Xaioping took de facto control of China’s Communist party in 1978, two years before Reagan became our president. Deng had once quoted an old Chinese proverb: “Whether a cat is black or white makes no difference. As long as it catches mice, it is a good cat.”

Deng’s rise to power turned China away from the barren ideology of Communism and back to traditional Chinese realism and pragmatism. At the same time, Reagan charmed us with wishful right-wing thinking like the “Laffer curve,” a graph by a previously obscure economist purporting to show that you can raise revenue by lowering taxes.

Everything that’s happened since flowed from those two events. China went from ideology to pragmatism and we the reverse. The rest is history.

Oddly enough, there is another parallel. After the agony of China’s so-called “Cultural Revolution,” Deng charged that its neglecting education and forcing students into ideological straitjackets had produced “an entire generation of mental cripples.” Can anyone reading the myriad of ungrammatical, illogical, entirely ideological comments in any on-line American medium today say that Fox Propaganda and the “Tea Party” revolution have not done the same for us?

President Obama is not our Deng Xiaoping. He has the brains and pragmatism but not the power. That’s why he often seems annoyingly centrist and wishy-washy, at least to those who don’t understand how deep is the hole we are in. We will have to wait, perhaps for years or decades, before our noisy and chaotic democracy can fully accept a leader like Deng. By then, of course, China will be not only the world’s leading economy, but the world’s universally recognized leading nation as well.

We will leave behind only a useful warning: don’t bind yourself with a written constitution that gives irrevocable power to bare land. And don’t ever, ever let small groups or individual local or regional leaders block policy for an entire great nation. With our sorry example and astoundingly rapid decline engraved in history, no new or reforming nation will ever have anything like our Senate, or our inability to recall a failing leader without proving “high Crimes and Misdemeanors.”

We Yanks might feel nostalgic and resentful as our leadership slips away. But we will get over it as we struggle to survive. Britain is still around and often admired, despite losing its empire over half a century ago. And it appears to be expelling the deadly parasites Murdoch faster than we.

The rest of the world won’t miss us for long. There are other democracies that promote individual liberty and freedom of speech. As long as China continues on its traditional path of trade and development, not militarism, the world may ultimately appreciate China’s leadership more than ours.

Whether a cat is Chinese or American makes no difference. As long as it catches mice, it is a good cat. We stopped catching mice and started believing in ideological fairy tales a long time ago. (1, 2 and 3) Now the dark fruits of that true belief are ripening, and we have no one but ourselves to blame.

Run, Elizabeth, Run!

With a story today, the New York Times raised speculation whether Elizabeth Warren, deprived of the chance to run the consumer protection agency that she conceived and set up, will run for Scott Brown’s Senate seat next year. Brown won that seat in a much-watched special election after Ted Kennedy’s death. Apparently Warren is going to take a vacation and think hard before making up her mind.

Warren will have at least three things to consider. First, she will have to decide whether she can tolerate the long hours, tedium, boredom and constant harassment of electoral politics. Second, she will have to think about her tenured professorship at Harvard and its “two-year rule.” Under that rule, a professor on leave for more than two years loses tenure and must petition to get it back. That rule probably applies to her already, and it’s hard to imagine her colleagues not inviting back a person who has done so much for her country.

The third thing to consider is probably most important: an apparent handicap of women running for electoral office in Massachusetts and the need to bone up on—of all vital issues in our rapidly declining society—major league baseball!

But I hope she runs, and I’m confident that if she does she will win. I know of no other person I would rather see in the U.S. Senate, preferably on the Finance Committee. And we desperately need more women in the Senate and in government generally.

Just the thought of her running gives me so much hope that I will make an open pledge on this blog. If Warren runs, I will stop sitting on my wallet and donate $500 toward her campaign, with more to follow if needed.

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23 July 2011

Twelve Republican Stupidities

[For a “fill-in-the-blanks” sample e-mail to your representatives in Congress, click here. For a concise explanation why Uncle Sam’s default would be absolutely catastrophic, click here. For an explanation why even a $4 trillion debt reduction would barely cover interest on the national debt, click here and read the fourth paragraph inside the blue box. If you’re as fed up with Rupert Murdoch’s Evil Empire as I and most of the civilized world are, and if you seek an alternative to WSJ, click here.]

Congress and the President are now entering the final stage of negotiations to determine whether the United States of America will become a banana republic in about ten days. So it’s a good time to review the twelve Republican stupidities that got us where we are today:

1. They thought they could turn what has always been routine and pedestrian congressional action—extending the debt limit—into political extortion on a grand scale. And they thought no one would notice or object.

2. They thought that, in divided government, only one side would have to compromise.

3. They had no fallback plan.

4. When their extortion plan began to fail, they argued that a national default is no big deal. They didn’t notice that no one was or is buying that lie.

5. Although Dubya had inherited a surplus from Bill Clinton and was responsible for the vast majority of our present debt, they thought they could get us to believe that all the debt was President Obama’s or Democrats’ fault.

6. They led us and the world’s lenders to believe that our $14 trillion debt is our gravest national problem. Then they refused ever seriously to consider any reduction over $4 trillion in ten years, which would barely pay the interest on our debt.

7. They thought (and still think) that we can drastically reduce the greatest debt in our national history without increasing revenue in any way.

8. They elevated pledges to an unelected hyperpartisan goon, Grover Norquist, above their responsibility to govern in the people’s and the nation’s interest. And they thought no one would notice.

9. Having made our molehill of debt into a mountain for all the world to see, they are now thinking of a mere half-trillion-dollar reduction—about 3.6%. They fail to realize that such a token gesture will impress no one: not their constituents, not political independents, not the bond markets, not the credit-rating agencies, and not our trading partners, all of whom (including China) are having troubles of their own and making rational, hard, adult choices to resolve them.

10. They were the last to walk out of discussions and thought no one would notice.

11. They fail to understand that all this political theater, plus kicking the can down the road yet again, are almost as damaging to our international prestige, interest rates and the dollar as an actual default.

12. They think the American people are too stupid or brainwashed to blame them for all this.

* * * *

The conditions under which long-time Republican apologist David Brooks pronounced [last two paragraphs] his own GOP “not fit to govern” are now fully satisfied. Do we really want to give these bumbling extortionists the wheel of our car of state when it’s headed for a catastrophic crash?

If you think not, maybe it’s time to e-mail your thoughts to your House member and/or senator. You can use the sample letter appended below. All you have to do is fill in the blanks.

Sample E-mail to your Representatives in Congress:

Hon. [full name of House member or Senator]:

I am writing to complain of the United States’ imminent fiscal default and to urge you to avoid it by raising the debt limit high enough to let the 2012 elections decide how to reduce our national debt.

Up to now, raising the debt limit has been a routine matter. Under presidents of both parties, congresses run by both parties have raised it repeatedly. But this year Republicans have attempted to bulldoze divided government by using the debt limit as a means of national extortion.

That effort has self-evidently failed. There is no serious debt reduction on the table now. Furthermore, the largest amount of debt reduction ever under serious discussion—$4 trillion over ten years—would have done little more than pay the interest on our national debt.

Now that the GOP’s extortion attempt has failed, there is no point in killing the hostage, which would be all of us. A default would be catastrophic and would seal our national fate. A messy scenario in which Congress and the President continued to bicker about debt reduction and its means until late next year would be almost as damaging. It would destroy international confidence in our national finances and our dollar, if not reduce our national credit rating.

The current failed negotiations make absolutely clear that the American people are divided and undecided on (1) how important the national debt is compared to jobs and unemployment and (2) how to reduce the national debt. Only elections can decide these points, and they are less than fourteen months away.

I urge you to increase the debt limit forthwith, with enough leeway to reach the 2012 elections, and let Congress and the President get back to the people’s business, including jobs and our ailing economy.


[your name]

* * * *

P.S. Please feel free to copy, modify, link to, transmit and personalize this sample letter at will. I pledge not to enforce my copyright against anyone who uses this sample letter in any good-faith attempt to help avert national default.

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20 July 2011

America’s Two Crises

[If you’re as fed up with Rupert Murdoch’s Evil Empire as I and most of the civilized world are, and if you seek an alternative to WSJ, click here.]

In Chinese writing, the word “crisis” has characters for “danger” and “opportunity.” What a wonderful description of the concept! If you handle a crisis well, you may succeed beyond present hope. If you handle it poorly, you may not survive.

Much media attention today focuses on the 2012 elections. But we have two crises right now that are far more important. The first has more danger and the second more opportunity. But if we don’t resolve both to our advantage, we may seal our own fate regardless of what happens next year. In fact, the two crises’ outcomes may foretell the results of the 2012 elections.

1. Default by Uncle Sam. The first crisis is perhaps the most difficult to face. As I have explained in detail, a national default would unbalance the global financial system, with both immediate and longer-term catastrophic consequences for US economic leadership.

Some consequences, such as replacing the dollar as the chief international currency and the basis of oil prices, might take some time. But bad effects, including rising interest rates and inflation here at home, would begin immediately and get steadily worse.

And that’s only half of it. There is also a significant probability that a default would kick the US back into recession, a “double dip.” If the default continued for more than a month or two, it might turn into a US depression and global recession.

So a lot of evil would flow from default. You might think that would make the choice easy. Just avoid default at all costs.

But the truth is just the opposite. If the President avoided default by caving in to the extremist ideology of the House GOP Freshman, almost equally awful consequences would ensue.

Foreigners would conclude that the United States is not serious about reducing its debt and deficits because it is unwilling to raise revenue. They would also fear that, by unwinding social safety nets in the middle of a severe recession, we would subject ourselves to vastly increased risk of political instability and even revolution, electoral or otherwise. Foreigners therefore would be more circumspect in dealing with us, and international investors would begin to move money out. Our national reputation as a sober, practical financial problem-solver would be gone forever.

Hard numbers, which can’t be “spun”, corroborate these fears. A $4 trillion reduction in debt was the maximum ever under serious bipartisan discussion. Even if enacted, it would reduce today’s deficit by only 28.6%—barely more than a quarter—in ten years. Moreover, based on this year’s interest figure ($386 billion per year), nearly all of the debt reduction would go towards interest on the national debt. Even without compounding, and without any additional spending, such a “solution” would leave us with over 99% of our current national debt still outstanding in ten years.

No reasonable outside observer could see this proposal as a serious effort to deal with our national debt, especially if achieved at the cost of social and political instability. So to avoid playing the fool to anyone abroad who can reason and do arithmetic, we must, as a nation, decisively repudiate the right wing’s “no tax increase, ever” ideology.

There are some belated signs that national polls and political pressure are causing the GOP House zombies to rethink their pledge to Grover Norquist. If so, an interest-only debt deal with some increases in revenue might portend the beginning of a long, slow period of national renewal.

But, if the “big” interest-only deal fails, the President will have only two ways to move the nation forward. He can negotiate a “small deal” that staves off national default and gets a foot in the door for revenue increases. Or he can allow a default to occur, let the GOP take the well-deserved blame, and try to pick up the pieces and control the damage as quickly as possible. Anything less than these two alternatives will just kick the crisis down the road, allowing our national decline to lengthen and steepen and our foreign credit to weaken.

2. Dismantling Rupert Murdoch’s Empire of Corruption. The second crisis is much less a strategic puzzle than a matter of will. All it requires is diligence and perseverance to solve. And the job is mostly one for our law-enforcement authorities and our remaining independent media.

For almost two generations, an utterly ruthless and unscrupulous man—Rupert Murdoch—has been seizing control of the free media in the English-speaking world. He has bent them to his will, ignoring the rules of objectivity and impartiality in journalism, using free speech as a shield for grossly irresponsible partisanship, and buying, blackmailing or trampling all opposition.

By means that no doubt included bribery and blackmail, he succeed in dominating the news media or their fastest-growing segments in his native Australia, the “Mother Country,” and finally the United States. On the way, he bought himself a British knighthood and US citizenship to speed his plans. The only native-English-speaking nations that remain relatively immune from his all-corrupting influence are Canada and tiny New Zealand.

Not only was Murdoch’s media empire a prime mover in our nation’s greatest foreign-policy error since Vietnam. Not only has it created a political atmosphere in which civil discourse is impossible and national default seems possible for the first time since we rose to global power. It has also contributed to the national mythology that is undermining our government and even our private business every day. And, as if that were not enough, it has thrown all its considerable weight against our reducing our dependence on fossil fuels by ridiculing the science of climate change and hyping the declining abundance and questionable economics of fossil fuels beyond all reason.

In short, Murdoch is more responsible for the declining state of our nation than any individual now alive, with the possible exception of George W. Bush. And “Dubya” never would have gotten close enough to the presidency for the Supreme Court to steal it for him without the grossly partisan propaganda of Murdoch’s media empire.

So if you want to pick the single living individual most responsible for our national decline and the disappearance of the American Dream, it’s Rupert Murdoch. The question is, what will we do about him?

After decades of serf-like acquiescence to his predations, we have an opening, brought to us by events in the Mother Country. Independent reporters in the British (aptly named) Guardian and later the New York Times have turned over a few stones and exposed some maggots in Rupert’s empire. Not only have these miscreants hacked the phones of dead children and prime ministers. They have deliberately tried to instill Mafia culture [search for “Carlucci”] in an organization supposedly dedicated to truth.

Now the tide of public opinion is turning, and the proper course of action is clear. We must strike while the iron is hot. We Yanks cannot let the British so-called “scandals” that have eroded Murdoch’s power across the Pond go to waste.

Independent journalists here must redouble their digging, on every aspect of the Murdoch Empire in every one of its vassal states, including ours. Prosecutors must start investigating and prosecuting every whiff of a crime.

There are several laws that Rupert or his minions here may have violated. They include the Foreign Corrupt Practices Act, the Racketeer Influenced and Corrupt Organizations Act, the Computer Fraud and Abuse Act, the Electronic Communications and Privacy Act, and the privacy provisions of the Patriot Act. If half the allegations in the newspapers are fact, there should be enough there to put key executives away for decades, if not Rupert himself.

In addition, antitrust authorities here in the US, plus their counterparts in the EU, should use every violation of law they can find to dismantle Murdoch’s media empire and subject it not just to the scorching light of real journalism, but to the fire of honest competition.

That is not all. We must revisit and re-enact two sets of laws that, if still in force, might have limited Rupert to a minor tabloid empire, something like the old, now defunct National Enquirer.

Before the reign of Ronald Reagan, mass broadcast media could not attack public figures without giving them a chance to respond, on air and for free. This rule, the “Fairness Doctrine,” was ruled constitutional in a case called Red Lion Broadcasting Co. v. FCC. Reagan’s FCC repealed the rule, opening our mass media to lies mislabeled as “fair and balanced news.”

Once we also had strong rules against media cross-ownership, which prevented dangerous mergers consolidating media power in a few hands. Rupert used his corrupt influence to weaken them and bought US citizenship, by a special act of Congress, to subvert them.

Much has changed in technology and media since these two laws originally came to be. But two things are clear. First, we must have some means for public figures attacked in the mass media to make a response as effective, and with an audience as wide, as the attack. Second, we cannot allow owners of media to become powerful enough, as Murdoch has done, to control even a significant fraction of our mass media. Monopoly of media markets by a single, self-interested individual is no more conducive to the “marketplace of ideas” that our First Amendment is supposed to protect than is the government censorship that our Founders feared most.

How we bring the monster Murdoch down and re-establish free and rational markets for political discourse may be our most important step in saving our nation from irreversible decline. It is much more important than prosecuting the few remaining terrorists, especially now that bin Laden is dead. For Rupert Murdoch and his twisted media empire have done more harm to this nation than all the terrorists in our history.

Our prosecutors and antitrust authorities should declare war against them and make that war their top priority. Unlike the war in Iraq and even Afghanistan, this is a war we must win if we are to restore our democracy and recover freedom of speech that works in practice, not just in theory.

As authoritarian nations like China and Russia look at our recent history, they must be laughing. They still control their own mass media, but they have learned much from their disastrous flirtation with Communism. They would never let things get so out of hand that some fifth of their entire population believed in economic fairy tales told by media controlled by a single private person.

If English-speaking democracy—and perhaps democracy itself!—is not to become extinct like the dodo, and if China’s and Russia’s brands of rule by a self-selected meritocratic elite is not to become the leading model for the rest of the world, we’re going to have to do at least half as well in suppressing idiocy spewed by people like Murdoch and their minions. (As you read this, Murdoch has India’s chaotic democracy next on his target list.)

We now have a chance to act. There are cracks in the castle walls of corruption. All we have to do is get our battering rams pounding the walls 24/7/365 and keep pushing and banging until the they come tumbling down. Once we can see the monsters inside and the maggots under rubble in full daylight, we still may be able to save English-speaking democracy and, with it, our way of life.

Can Bloomberg.com succeed the Wall Street Journal Now That It’s Dead?

The full realization of Rupert Murdoch’s unmatched role in our national decline has led me to question my own actions. Have I unwittingly supported his global power? I canceled my cable TV subscriptions once I retired, and I never watched Fox anyway. But did I unwittingly support him in another way?

I’ve subscribed to the Wall Street Journal for about thirty years, since a mentor recommended that I read it to learn more about business. It taught me much of what I know about business and investing, and some of what I know about economics.

When I first subscribed, and for much of the ensuing three decades, the Wall Street Journal was a great newspaper, comparable in quality to the New York Times, the Washington Post, and the Los Angeles Times in its heyday. The old Journal confined its right-wing slant on politics to the editorial pages and gave its reporters leeway to report the news.

But all things change. In 2007, the Bancroft family, who then owned the Journal, decided to sell it, and its parent, Dow Jones, to Murdoch’s News Corp. Like many others, I opposed the sale. I wrote an essay to that effect, to no avail. The rest is history.

In my 2007 essay, I compared Murdoch with William Randolph Hearst in some detail. The resemblance is uncanny. It extends from their mutual imperialism and jingoism and the tragic consequences, through their influence on (if not control of) national politics, to their tendencies toward lordly aristocracy, as exemplified by Hearst’s grand castle at San Simeon.

But both men’s worst feature was deliberately distorting the news, both for sensationalism and to achieve ideological objectives. As I put it then, “What’s true of civilization generally is true of journalism in a microcosm. We don’t need folks who make their own reality. We need folks who take care to understand and inform us accurately of the reality that exists.”

I’ve continued to read what’s now the “WSJ” on line. I’ve done so, I’m now ashamed to say, out of sheer inertia and misplaced brand loyalty. But I needed (and still need) a reliable source of business news to manage my investments and stay aware of the world, in which—for the first time in my 66 years—the private sector now reigns supreme, virtually worldwide except for China, Iran, North Korea and Zimbabwe.

Unfortunately, WSJ is no longer a reliable source of news. The fault begins with the headlines, which often prove misleading summaries of the stories that follow. Not surprisingly, the discrepancy always leans toward jingoism abroad, lower taxes and no regulation here at home, and a constant drumbeat of express and implied criticism of Democrats in general and the President in particular.

Once you get past the misleading headlines (with which Murdoch himself once meddled), the stories are no better. There are obvious factual inaccuracies that any trained business reporter, let alone a more experienced editor, should have identified and caught. There are persistent and widespread attempts to bury facts favorable to government or Democrats in the middle or at the end of stories. As a result, organization is universally poor, for it serves as a tool of propaganda, not explication. And the WSJ’s reporters apparently failed to ask obvious, burning practical questions more times than I could count.

WSJ's bias extends not just to domestic politics, but to global affairs and our part in them. Stories about successes elsewhere in the world, especially in China or Russia, often have portions or companion stories, having nothing to do with current events, purporting to show just how bad things are there and/or how much better they are here.

As readers will recognize when I drop my anonymity, I have more than passing experience with Russia. Among other things, I used to read the Soviet house organ Pravda.

WSJ now has come to display the same sort of chip-on-the-shoulder, sour grapes jingoism that Pravda once made famous. If someone else does something good, it can’t be that good, and anyway we do it better and our system is better. WSJ, just like Pravda in Soviet times, takes that puerile approach to many positive developments abroad.

In that respect, WSJ often reminds me of a resentful teenage boy trying to show that his father, despite obvious flaws, is the best on the block. So do the numerous ungrammatical, poorly written, poorly organized, illogical and endlessly repetitive comments on any story with the slightest political implications. These invariably bash the President, the Democrats, “liberals,” and “socialists,” in the tone that teenage boys use to provoke a fistfight. Maybe teenage sons of subscribers actually write most of them. But I have a suspicion that a fifth column of frustrated real journalists writes at least some of them, as parodies of what a grand old newspaper has become.

Of course a “news” empire that calls itself “fair and balanced” would adopt the same transparent Orwellian marketing ploy as the Soviet mouthpiece, whose name means “truth” in Russian. At least Rupert changed the on-line name to “WSJ” to give us helpful notice that it’s not the same newspaper it once was. The old Wall Street Journal is indeed dead and gone, although its name and agonized ghost still inhabit a version printed on dead trees.

Rupert already has my money for a year’s online subscription. But I’ve decided to let it lapse when it expires this October. Henceforth I will redouble my efforts not to contribute so much as a nickel to his Evil Empire.

There is, however, a small problem. I still need business news to manage my investments and stay abreast of business, commerce, industry and finance. Where can I get it?

My initial thought was to turn to the Brits. Apart from their gaudy tabloids and their lack of a first amendment, they seem to have a better grip on what news is and how it works with democracy than we do. So I thought I’d renew my subscription to the Economist and maybe get one to the Financial Times. I still may.

But the British publications just don’t offer the breadth, depth or currency of news on American business that I need. I am, after all, a Yank. So I started looking at Bloomberg.com as a WSJ substitute. After two days of comparison, here’s what I found.

Bloomberg.com is a free, online, comprehensive source of business news. Its coverage is a bit narrower than WSJ’s, but there’s plenty of overlap. Where the coverage differs, Bloomberg.com’s extra stories tend to give more depth, especially in matters of finance, while WSJ’s extra stories tend to support its pervasive ideology. I have to confess, however, that WSJ does have some “scoops” that Bloomberg.com appears to have missed.

Where stories overlap, there is no comparison. The stories in Bloomberg.com have much better depth, are more complete, and have more useful numerical information more logically presented. They are also better organized, perhaps because reporters and editors are not using organization as lawyers do, as tools of ideological persuasion. On stories that matter to the economy, such as the current danger of a national default and negotiations to avoid it, Bloomberg’s stories are simply better in every way—more full of fact, less full of speculation, and less slanted.

The WSJ does have a slight technological edge. Its online format is more pleasing and readable, and its photos and graphics are better and better integrated with text. Bloomberg.com needs to hire some gifted layout editors and present more economic data graphically.

But, based on my brief first look, I conclude that Bloomberg.com has far better content and organization. And Bloomberg.com does have one technical advantage over WSJ: a “Queue It” feature that let’s you save stories that interest you, read or unread, in your account “in the cloud,” where presumably they will be available forever. That’s a valuable service for this blogger, who spends a lot of time tracking down old stories (in grossly overloaded sets of bookmarks on two computers) and re-inventing the wheel.

In the final analysis, what matters most in news is credibility. By links in this blog, I’ve cited the Wall Street Journal many times, simply because its more-than-century-old brand once had enormous prestige in business and finance. But WSJ has outlived that prestige and no longer merits it. In time, I think, independent, non-ideological sources of news like Bloomberg.com will fill the gap that Murdoch’s ownership has created and justify credible citations now that the tarnished brand no longer can.

The small price of a WSJ subscription is negligible to me, especially compared to the money that prompt and accurate investment information can help me make. So the fact that Bloomberg.com is free of charge and WSJ charges for complete stories makes little difference. What makes the difference is relative freedom from errors and bias. With Bloomberg.com, I will save the mental strain and effort of extracting the real meaning from badly organized, hastily written stories and compensating for bias.

So beginning this week or next, I will start to link business and financial information on this blog to Bloomberg.com, rather than WSJ. Once my subscription to WSJ expires in October, I will no longer have access to complete stories and will stop linking to that source.

The switch will have a signal benefit to readers. You will no longer have to have a WSJ subscription or trial subscription to read linked stories in their entirety. The thought that my links on this site may have impelled even a single reader to subscribe to Murdoch’s Evil Empire truly gives me pangs of conscience.

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17 July 2011

The Double-Dip Scenario

From the Middle Ages’ Christian Crusaders to the Taliban today, true believers have always caused trouble. So it is with the GOP House Freshman.

As a New York Times article today reports, some are quite prepared to throw the nation into default in order to push their “debt is killing us” ideology. Whether they’re also prepared to destroy their political party in the process, the Times reporters apparently weren’t smart enough to ask. But since the GOP House Freshmen seem to focus far more on abstract ideological goals than the probable consequences of their actions, it’s fair to assume that party seppuku, too, would be no obstacle to acting on their true beliefs.

So it seems a good time to spin out—a little more than I did in a previous essay—the probable consequences of a national default. In that essay, I concentrated on fiscal and financial consequences, including: (1) Uncle Sam’s increasing inability to finance his operations, (2) rising interest rates, (3) money-market funds “breaking the buck” or freezing, (4) capital flight from the US, (5) a falling dollar, and (6) a frenzy of financial gambling and swindling, perhaps leading to another 2008-style derivatives meltdown, this time with no more federal money to bail anyone out.

But there will also be macroeconomic consequences, which I didn’t discuss. As David Leonhardt of the Times reported today, the American consumer is spent. Among the evidence he adduced are the following facts: (1) fewer cars will sell this year than ten years ago, when we were in recession; (2) sales of ovens and stoves are at their lowest level since 1992; (3) home sales have regressed to their lowest post-crisis level; and (4) a recent New York Fed study reported a fall in discretionary spending of 7%, as compared to a maximum fall of 3% in every previous recession.

The causes of this deep retrenchment in consumer spending are obvious. Over fourteen million Americans don’t have jobs. Around about 26 million are unemployed, underemployed or no longer looking for work. Many millions more are afraid of losing their jobs and therefore saving for a rainy day. Still more millions are saving to reduce the debt that supported their pre-2008 consumption binge. And tens of millions have houses that are losing equity or “under water” and so can’t rely on home equity for spending or financial security.

Now, think what would happen upon a default. Millions of households would stop receiving Social Security, military pay, Medicare and Medicaid assistance, and other federal assistance. What would they do? They would stop spending on anything discretionary and would focus on absolute necessities. The drop in discretionary spending would impact businesses almost immediately, causing many to delay hiring or lay off workers, making more people unemployed and reducing aggregate discretionary spending still further.

This vicious circle would be bad enough if it just lasted a month or two, while Congress came to its senses. But suppose the new GOP House members stuck to their extremist ideology and insisted on drastic cuts in Social Security and Medicare—without any increase in tax rates or any reduction in tax loopholes and subsidies—as ransom for saving the nation. Discretionary spending would nosedive for the two, three or more months that it took posturing politicians to patch together some agreement and extend the debt limit.

Some businesses might have the guts to keep a steady course, on the theory that sanity would eventually have to return. But many would not. They would cease hiring, and many would lay off employees to better weather the storm. The resulting vicious circle would almost certainly throw us into another recession.

Now think of what will happen on the upswing, when the crisis at last ends. What will people already living on the margins do, after being deprived of all income for several months, when the money tap suddenly turns on again? Will they spend on manufactured items, on things, discretionary or not?

Hardly. They will first bring their rent or mortgage up to date so they still have a home. Next they will pay past-due utility bills, so their lighting and heating (or air conditioning, it it’s still late summer) won’t stop. Then they will replenish their larders and their nutrition. Many old folks will switch back from dog food to people food. Finally, if they have any money left over, they will spend it on long-neglected medical and dental care. Consumer “discretionary” spending on such things as cars, clothing, and manufactured items won’t revive for months, maybe even a year. By that time unemployment will have soared from its present dismal state.

So there is a good chance that a default, in additional to destroying the global financial system, will throw the US into a real depression, as bad or worse than the Great Depression. And as the US goes, so (unfortunately) goes the rest of the world, possibly even including China.

As you fall asleep tonight, dream of Michelle the Moron (Bachmann, not Obama!) saying that a default won’t be all that big a deal. And try not to have nightmares.

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15 July 2011

Underestimating the Task and the President (or Krugman At It Again)

Does the difference between analytical and emotional intelligence confuse you? Then read Paul Krugman’s piece today. It explains perfectly, albeit inadvertently.

Entitled “Getting to Crazy,” it’s a column-long scold. It takes Republicans, Republican sympathizers, and even insufficiently proactive neutrals to task for allowing one of our two ruling parties to stray from reason and common sense.

As a matter of analysis and economics, the column is factual and accurate. It reiterates the “extraordinary concessions” in the President’s best debt-reduction offer—a deal “overwhelmingly of spending cuts, [with] draconian cuts in key social programs, up to and including a rise in the age of Medicare eligibility.” It describes this offer as “far to the right of what the average American voter prefers” and even “what the average Republican voter prefers.” Then it notes that “the modern G.O.P. fundamentally does not accept the legitimacy of a Democratic presidency—any Democratic presidency[,]” citing both the Clinton and Obama experiences.

Next Krugman’s piece notes that the GOP would have considered rejected Democratic offers on health care and Social Security a “conservative triumph” if pushed through by Republicans. Finally, it debunks, for the umpteenth time, Reagan’s supply-side voodoo economics (that tax cuts pay for themselves).

All these things are true, accurate and not without insight. They put Krugman’s high analytical intelligence on routine display.

But then comes the column’s tone. It epitomizes the frustrated professor wagging his finger in a slow student’s face.

Right in the title, Krugman calls the GOP crazy. He writes of the “culpability of those who are only now facing up to the G.O.P.’s craziness.” He chides Republicans for their “fanaticism.” And he concludes that, if “you’re surprised” by the general failure to pressure Republicans “to show any kind of responsibility . . . you were part of the problem.”

Now, imagine you are arguing with someone face to face. You desperately want to convince that person that his political ideology and/or lack of understanding is destroying the country you both love.

Do you start off by calling him crazy, a fanatic? Do you accuse him, willy nilly, of being responsible for what crazies did because he either (1) wasn’t smart enough or (2) didn’t pay enough attention?

I don’t think so. You don’t win an independent, free voter to your side by name-calling, blaming, and scolding.

That’s where emotional intelligence comes in. Krugman’s high analytical intelligence lets him see causes, effects and consequences that might escape others. But his apparent complete lack of emotional intelligence may explain why lesser minds than his (Summers and Geithner) ended up in charge of the Obama Administration’s economic policy.

In a recent essay, I called this low emotional intelligence Krugman’s “blind spot.” His piece today makes that a fair description, beyond cavil.

Why spend so much ink on a single pundit’s foibles? Three reasons. First, Krugman has a huge megaphone. With Bob Herbert and Frank Rich gone, he is the pre-eminent voice on the left in the mainstream media today. Second, with his Nobel Prize, he is, by far, the pundit most able to skewer economic lies and myths with panache and credibility.

The third point follows from the first two. Krugman’ tremendous influence over so many still-rational minds brings with it corresponding responsibility. His repeated failure to acknowledge the extraordinary difficulty of the President’s task and the President’s extraordinary emotional intelligence could deprive the President of the support he needs to bring our nation home.

The President’s task is not to show the right way, which Krugman has done brilliantly and many others (perhaps less so), time after time. The President’s task is to get people brainwashed to the wrong way to change their minds. He can’t do it with guns or force. We tried that once, and we are still fighting our Civil War 146 years after the guns fell silent at Appomattox.

Nor can the President (or Krugman) do it with scolding, berating and name-calling. If they worked, we’d be home already. Ever since the 2007-2008 primaries, both parties and their internal factions have had an orgy of such indulgences, with the GOP and its unprecedented propaganda machine leading the way. As Sarah Palin might ask, “How’s that scoldy, name-callin’ thing workin’ out for ya?”

It isn’t and it won’t. Analytically, Krugman is quite right in calling the GOP’s right wing “crazy” and “fanatical.” But saying the obvious won’t help. And saying it to the people who minds need changing will only hurt. Something real has to jar the true believers out of their spell and their complacency.

At the moment, there seem to be only two alternatives. Either the President’s brilliant but subtle exposure of the GOP plans as lies, extortion and misplaced priorities (making the rich richer) will change enough minds to change our politics. Or some catastrophe, such as an actual default or a double-dip, will have to do the job.

As an educator, Krugman should know this. It’s called “experiential learning.”

Thirty years of highly effective propaganda have convinced around a third of our people that government is the problem, not the solution. As I’ve pointed out, that calumny is contrary to most people’s own personal experience, certainly my own. But they just don’t see. If default comes and their pension, disability and health care stop cold, it may suddenly dawn on them that government is not the evil force they have been brainwashed to think it for thirty years. That’s experiential learning.

Whether it will take that or something less drastic remains to be seen. But only someone with the President’s off-the-scale emotional intelligence can make that call. Analytical intelligence simply won’t do the job, as Krugman’s column today amply (but inadvertently) demonstrates.

I would not trust myself to make the call, far less Krugman. If we try to teach the crazies the old-fashioned way, with daily lessons, scolding and finger-wagging, we will have become a banana republic long before the lessons have concluded. That’s why I will support the President even into the economic maelstrom of default. For as bad as that result will be (and I know exactly how bad), I cannot foresee it as worse than continuing to let one-third of our population worship false economic gods, including Grover Norquist, and block any sensible action of government.

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13 July 2011

Mitch’s Desperate Gambit

[For an update on Mitch’s candor on his loyalties, click here. For an upate on Palin’s rejection of Mitch’s desperate gambit, click here.]

As we watch the debt-default political theater, the GOP’s last clear electoral advantage is evaporating before our eyes.

The great wag Will Rogers once quipped: “I’m not a member of any organized political party. I’m a Democrat.” Republicans have always been better organized and more monolithic in their thinking.

Why is that so? Because they represent the business ruling class. Their most consistent and highest priorities are the goals of bankers, CEOs and hedge-fund managers, who all want much the same things: lower taxes, less regulation, more freedom from government, and more ability to sequester outsized incomes from taxes and pubic scrutiny. Their last real crusader for economic reform was Teddy Roosevelt, who left office well over a century ago.

But the class of bankers, CEOs and financial gamblers is not big enough to enjoy honest and democratic political power. As individuals, they are too few. Somehow, they have to dupe or buy enough ordinary people (their natural enemies) to win elections.

This they managed to do in the 2010 midterms. Yet, as it turns out, that was a pyrrhic victory. Their crude and short-sighted attempt to build a “big tent” based on ever-more-outrageous lies, fear and hate is reaching its logical conclusion: disorder within the party’s own ranks.

The 2010 GOP victory had four pillars. In rough order of importance, they were: (1) bald lies, promulgated by the greatest propaganda machine in human history, Fox and its talk-radio counterparts; (2) an aging Southern Strategy based on racial and ethnic prejudice and “red-state” provincialism; (3) fear arising from economic uncertainty and the 9/11 attacks; and (4) the myth of GOP “competence”: that CEO types without social conscience are better than others at doing anything, including guiding our Republic, no matter how monomaniacal their ideas and how little their relevant experience.

All these pillars are now crumbling at once. Even Rupert Murdoch’s propaganda mill is under siege. On both sides of the Atlantic, the public now sees the evil old man for what he is: the wizened remains of eight-year-old boy who never stopped pulling the wings off flies, just to see how they would die.

Murdoch got rich enough to buy himself US citizenship, exemptions from US media-ownership rules, and a British knighthood. But now that his empire has started pulling the wings off deceased children and prime ministers, his fortunes have changed. The star of this would-be right-wing Stalin is descending rapidly, and with it the power of his media empire. Civilized people are just fed up with him.

There are many other reasons for the GOP’s decay, but one is absolutely predominant. In building a “coalition” based on lies, fear and hate, the Masters of Propaganda created a monster they cannot control.

Tea Party extremists have taken over the right wing of the party. Through the “strategies” of their intellectual “leaders”—college dropout Karl and C-grade actors Rush, Glenn, Sarah and now Michelle—that wing now so predominates that it has blown most moderates and independents away. Mitch and the three “Johns” (Boehner, Cornyn and Jon Kyl) are just that wing’s unthinking enforcers. Besides them, all that is left of the Grand Old Party is a desiccated husk of true believers, unreasoning, angry and uncontrollable.

The foreseeable consequences of allowing “Get your government hands off my Medicare!” morons to take control are now playing out before our eyes, against the background of a possible catastrophic default by Uncle Sam.

A few days ago, the GOP had a chance to make a reasonable compromise and reduce the federal debt by as much as 4 trillion dollars over ten years. Hit by an apparent sudden lightning bolt of Reason, John Boehner almost came around. But then he counted votes and the pitchforks of his rabble and recanted.

Lacking a majority in this own chamber, Mitch McConnell suggested a desperate ploy. He offered to give the President authority to raise the debt ceiling, but only with offsetting spending cuts in every case.

While that gambit might appease the GOP rabble temporarily, it will never become law, for three reasons. First of all, it’s probably unconstitutional. The very first two clauses enumerating the powers of Congress in Art. I, Section 8 of our Constitution include the powers to “pay the Debts . . . of the United States” and “borrow Money on the credit of the United States[.]” The Supreme Court won’t let Congress delegate its fundamental powers to the Executive. And no one—least of all either party—wants to punt that question to the Supreme Court while markets and the global economy implode.

Second, even if constitutional, this is an offer the President and his party can and should refuse. By putting the power to cut spending, but not to raise taxes, in the President’s hands, the GOP could insure an unfair allocation of pain at least until the 2012 elections. More important, it could blame the President for every cut and failure to cut. The proposal is a transparent attempt to abdicate constitutional power and arrogate blame to the President, solely for purposes of electoral advantage. It would turn Congress, or the GOP part of it, into an adjunct of Fox Propaganda, with no power to act but plenty of power to complain. The President is far too intelligent to bite that rotten apple.

Third and most important, the Tea Party monster would not accept Mitch’s desperate gambit in any case, and that monster rules the House. Given carte blanche to cut, the President might do what many Democrats (including this one) would urge him to do: cut selectively every benefit, special project and earmark in every red state. In so doing, the President could both wreak revenge on his no-hold-barred opponents and give the rabble some experiential learning in the benefits of government. The Tea Mob will fear this possible revenge and run from it like the plague.

Mitch’s gambit is the sort of thoughtless gesture that could only come from a man who, with days to prepare, found himself caught flat-footed in a PBS interview, forgetting that both Reagan and Clinton, whose mantles he tried to claim, had raised taxes. A fool makes a fool’s proposals.

So what now? Are we back to square one? Not exactly. We’re back to where we were before Eric Cantor walked out of Joe Biden’s negotiations last week. We’re back to arguing over spending cuts to reduce the debt by $ 2 to $ 2.4 trillion (barely more than half the interest on the national debt), with no tax loophole closures or tax-rate increases. Thus the GOP which (contrary to the nearly unanimous opinion of economists) sees debt as an existential threat, will kick the can down the road to the 2012 election.

But for political purposes, the most vital thing is the overwhelming stench of decay arising from Republican quarters.

By these various acts of political theater, the GOP has shown four things beyond cavil. First, it is no longer the only organized political party; it has put itself at the mercy of a faction of extremists. Second, it is in no position to bargain seriously about anything because it cannot control its own members. Third, it has shown itself a party of hypocrites, by demagoguing the deficits and debt so relentlessly and then settling for a “solution” that doesn’t even dent the interest on the national debt. Finally, it will have demonstrated in the starkest possible way its greatest and most overriding priority: preserving the tax loopholes and low tax rates of the richest among us.

Anyone who thinks this is a recipe for GOP success in 2012 is not thinking clearly. Part of this theater is no doubt a creature of the President’s clever political positioning. But most is simply the consequence of a once great party building the foundation for its future on the shifting sands of lies, fear, and hate. The chickens are indeed coming home to roost, not just for Murdoch, but for all demagogues.

Where Mitch McConnell’s Loyalties Lie

Is Mitch McConnell coming apart at the seams under the pressure of an impending political defeat? Or is he simply revealing at last how uncaring about our country he really is?

You judge. Following is a direct quote from Mitch, as reported by the New York Times today in connection with efforts to resolve the default crisis:
“[After a default, the President] will say Republicans are making the economy worse[.] . . . It is an argument that he could have a good chance of winning, and all of the sudden we have co-ownership of the economy. That is a very bad position going into the election.”

So Mitch is worried about the effect of a default on his party. And he’s equally worried that voters might assign “co-ownership” of our bad economy to the party whose misguided ideology for thirty years caused it and whose last president bequeathed Obama the Crash of 2008. Mitch didn’t even mention the American people, the full faith and credit of the United States, the millions of savers and investors who would be hurt by inflation and higher interest rates, and the millions of troops, seniors and disabled people who would stop receiving their checks a short time after any default.

Just after the President’s election, Mitch said that limiting the President to one term would be his first priority. Now it’s beginning to look like the only one.

How many times does he have to say that before ordinary people get the message that this man is not on their side? He doesn’t care about jobs or our infrastructure. All he cares about is his party winning, so it can preserve low tax rates and tax loopholes for the rich. And he’s willing to let our American credit go down the tubes and millions suffer in pursuit of that overriding priority. As GOP pundit David Brooks wrote recently, Mitch’s perverse priorities make him and his followers “not fit to govern.”

Anyway, save this quotation and the link. It’s sure to be a staple in partisan politics for the next eighteen months. Expect Mitch to try to wiggle out of its obvious meaning in a myriad of ways, each slimier and less plausible than the last.

UPDATE: 7/14/11: It’s nice to have your analysis confirmed in less than 24 hours. According to the Wall Street Journal, Sarah Palin has rejected Mitch’s gambit out of hand. The unelected, self-appointed and uneducated spokeswoman for the Tea Party had this to say about it: “This plan of McConnell’s, I think, makes no sense because it does cede power to our president.”

So it looks as if Mitch’s gambit is dead on arrival, in his own party no less. (Recall that the GOP’s Tea Party faction controls the House, which is the chamber leading the charge toward national oblivion.) And that’s not even considering the plan’s likely unconstitutionality and reasonable Democratic objections to it, outlined above.

The possibility of default is moving ever closer. The primary reason is Grover Norquist and his “pledge,” which so many elected GOP representatives have signed, never to raise taxes and (according to the extremist guru’s own interpretation) never even to reduce tax breaks or subsidies for the likes of oil companies swimming in profit, rich farmers paid not to grow, and hedge-fund managers.

Norquist is an easy man to hate, especially for youth. Isn’t it about time that Democrats started reminding voters (every day!) of his entirely negative role in debt negotiations? And isn’t it time at least to raise the question whether a man who “pledges” legislators to a course of action that contradicts their oath to uphold the Constitution and our “general welfare” is committing treason?

At long last, the President began to show some anger and impatience at fruitless negotiations today. The GOP has no idea what our leader is capable of, and how subtle and smart he can be. Let the President go to the people as he promised and threatened, and let the hardball begin!

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08 July 2011

Krugman, Reason and Culture

UPDATE: Boehner Backs Down

Today, Sunday July 10, 2011, John Boehner backed down. He reportedly decided not to seek a significant debt reduction of $4 trillion or more, but instead to accept a less-than-$2 trillion reduction. That’s essentially what was already on the table when House Majority Leader Eric Cantor walked out last week.

What does this mean? Three things. First, the Boehner Bunch are not so stupid or crazy as to hit the “nuclear button“ of a US default. Perhaps the only remaining sane GOP pundit, David Brooks, pushed them into this reasonable position when he pronounced them “not fit to govern” if they did. Here Brooks has performed a signal duty for country and economic sanity.

Second, by backing down, the Boehner Bunch and the GOP generally have revealed themselves as hypocrites. For nearly a year they have been banging the only unbroken drum they could find in the GOP’s empty shed of ideas: the notion that our national deficits and debt are the two greatest threats to our collective future. Now, when the chips are down and they have a real chance to make a more-than-token reduction, they balk.

Two trillion dollars over ten years is $200 billion per year. That’s just a little over half of the interest on our national debt, which this year will amount to $385 billion. So by today’s standards, a reduction $200 billion per year is less than a serious effort to address a supposedly existential problem.

The third point is the clincher. The Boehner Bunch have revealed their real priorities plain as day. They had a chance to make a really serious reduction in our deficit and debt. No deal. They even had a chance to negotiate reductions in spending on Social Security and Medicare, which they claim are bankrupting us. No deal.

The deal breaker was this: the Boehner Bunch were just not prepared to accept anything that would even look like a tax increase, such as eliminating tax loopholes and unfair tax subsidies. As it turns out, keeping taxes low on the richest Americans and the corporations they control—even on the very least deserving, like oil companies swimming in profits, rich farmers who get paid for not farming, and hedge-fund managers—is the GOP’s number-one priority.

Watch what they do, not what they say. The Boehner Bunch have now shown by deeds what their real goal is. In so doing, they gave the lie to all their high-flown rhetoric about “living within one’s means” and avoiding so-called “generational theft.” Their sole priority is now self-evident: keeping taxes low on those who can most afford to pay them.

Sooner or later, even the slowest Fox zombie will figure that out. The likelihood of that happening in eighteen months entirely justifies my conclusions about the President’s political skill in the essay below.

Once again (see 1, 2, 3 and 4), I find myself at odds with a man whom I admire. With Bob Herbert and Frank Rich gone, Paul Krugman may be the last remaining reliable voice of reason on the New York Times’ opinion pages. His biweekly column is the one I now read first, and the only one I read regularly.

Not only is Krugman a Nobel laureate in economics and a brilliant analytic thinker. He is also a superb writer. He has a rare ability, unmatched in the mainstream media, to cut to the heart of an issue and explain complex economic theory in simple, common-sense terms.

But he has a blind spot. The blind spot, I believe, has led him to profound error in assessing the President’s performance, capabilities and motivation. Although he has made the same error often before, it and its source are most apparent in his column today.

Krugman is not alone. Many others have replicated his error, with and without his leadership and encouragement. But if it continues, its practical consequences could be catastrophic.

Krugman’s blind spot is easy to describe, for it is also his most attractive quality. He is a man of reason.

A gifted economic scientist, he knows what’s right and wrong in economic policy. Over and over, he has reminded us that we need jobs, not debt reduction, a stronger safety net, not a weaker one, and more stimulus, not less. He has also explained that “trickle down” doesn’t work and never will, that you can’t raise revenue by lowering tax rates, and that Social Security and Medicare are not the source of our national debt.

In all these things, he is right as rain. Who would know better than he? Who can explain it better? And who has a bigger and more vocal coterie of admirers than his army of like-minded readers of the New York Times?

Based on his own experience, Krugman naturally concludes that the President could do likewise. If only the President would use his own refined skills of reason and persuasion on the nation, he could convince the electorate, if not the opposition, of the error of its ways and set our nation aright.

That fact that the President has not done so, Krugman infers, suggests a weakness of will, a failure of strategy, an inability to bargain, or even a sellout. The vast majority of commenters to Krugman’s several columns on this same theme agree.

But the nation’s leaders and voters are neither Krugman’s elite students at Princeton nor the generally erudite readers of the Times. They include people like John Boehner, Mitch McConnell, Jon Kyl, John Cornyn, the Tea Mob, and the millions of Fox zombies who support them.

You can express the difference in several ways. You can say that the President’s opponents rely on faith, not reason. You can say they trust in ideology, not facts or evidence. You can say that dealing with them requires emotional, not analytical, intelligence. You can say that they have been brainwashed.

All these things are true. But for me the most helpful meme in seeing the blind spot is that of culture.

For most people, and especially ordinary voters, culture trumps reason every time. Increasingly, it is trumping law and even our Constitution.

Everyone grows up and is educated in a unseen sea of culture. For us Americans, culture includes the notions that we are “exceptional,” that all the world looks to our “city on the hill” for inspiration and leadership, that our Constitution is the acme of law and government not just for past human history, but until the end of time, and that our industry, innovation and health care are second to none. Whether or not we shout “USA! USA! USA!” at football games, we all live surrounded by these memes in virtually every waking moment, from our birth. And since 9/11, our culture also includes harsh elements of fear and self-doubt.

That’s our culture. These memes permeate our education, our upbringing and our reflection of ourselves in all our public media, from the Internet to the Times itself.

For some of us, education, reason, healthy skepticism and a probing curiosity manage to overcome these memes and mute this self-congratulation as we mature. But for most of us they do not. For most of us these things are matters of faith that we no more question than Catholics do the divinity of Christ or the virginity of Mary.

And that in truth is the best analogy: religion. If you’ve ever tried to convince a Christian fundamentalist (or a member of the Taliban) that there is no God, or that the scripture he holds dear (the Bible or the Qu’ran) is not the literal and absolute truth, you know what I mean.

Some things are beyond reason. Unfortunately, today they include not just fundamentalist religion but Republican ideology as well.

That may seem surprising, but it shouldn’t be. Our national culture has experienced an astoundingly profound decline in my lifetime alone. When I was a child, Albert Einstein and J. Robert Oppenheimer had just saved our nation in war by applying reason and science. They were national heroes. A now unknown author, George Gamow, explained their obscure theories, plus a bit of higher mathematics, to laypeople in simple terms. His books were best sellers. One of them had the title, “One, Two, Three . . . Infinity.”

Believe it or not, these three people then were celebrities. They were universally admired and constantly sought for interviews in the mass media. Today, their counterparts are Sarah Palin, Donald Trump, and a slew of actors and actresses, some good, most not so much.

The only similarly profound shift in culture of which I’m aware is the advent of Nazism in Germany. In the early years of the twentieth century, Germany was at the absolute pinnacle of human civilization. It was supreme in music (Beethoven, Brahms, and Mahler), literature and poetry (Goethe, Heine, and Schiller), science (Einstein, Schroedinger, Planck) and mathematics (Euler, Gauss, and Lorenz). Yet in less than two generations, Nazi storm troopers were marching in goose-step and shouting “Sieg Heil” at Nuremberg.

I do not mean to say we have or will become fascists, although that terrible outcome is possible. But in two generations we Americans have gone from a “can do” culture imbued with respect for education, facts, evidence and science to a culture in which scant few of us can write a coherent paragraph, follow a simple flow of logic, or do simple arithmetic. And few of us even care.

Krugman would know this better if he had time to read the many daily comments to articles and editorials in the Wall Street Journal. There he would find an alternative universe to the one he inhabits at Princeton and the Times. There on-line commenters know beyond question that rich people paying low or no taxes create jobs, that government stimulus is wasted and never works, that government, not private greed, caused the Crash of 2008, that the lowest and meanest petit bourgeois is superior in character and intelligence to the most highly educated and distinguished government doctor or scientist, and that the President is a fraud, an “empty suit,” and a socialist who wants to take their hard-earned money and give it to freeloaders, mostly blacks and Hispanics.

These memes are not simply mistakes in arithmetic, like an error in calculating a sum of money due. There are not to be dispelled by facts or logical argument. They reflect a fundamental world view and deeply engrained elements of a sick modern culture, for which their owners will argue and, if it comes to that, probably fight to the death. They have been deliberately inculcated by human history’s most horribly effective propaganda machine, Fox and its talk-radio counterparts. They are reinforced by our mass media—sometimes even including the Times—every day. Think of the South and its engrained culture of white racial superiority and you get a faint idea.

The fact that this perverted culture was born and grew to encompass a substantial minority of Americans in the mere 31 years since Ronald Reagan came to office is fascinating and terrifying, but of little consequence today. The rapidity of its rise is not the issue before us. Its strength is. And if you look around with open eyes and get off your high horse of Reason, you will recognize its strength as both self-evident and terrifying.

So the problem before the President is not which economic theory or course of action is best to pursue. Of course he knows. In his very first speech on health care as a candidate, long before his election, for example, he confessed a predilection for single-payer but recognized its political impossibility.

The problem is not, as was said in an iconic Paul Newman movie, the President’s “failure to communicate.” The problem is that a sizable minority of our entire population, including many members of Congress and powerful business leaders, don’t want to listen because they have firmly and irrevocably made up their minds. They stand adamantly and unreasoningly in his way.

The President can solve this problem only with emotional intelligence, not analysis. He has to cajole, entice, inveigle, startle, scare or cow the huge minority of Fox zombies into awakening from their cultural blindness. He cannot persuade them directly because they are immune to reason and evidence.

To say this task is not easy is an understatement worthy of the President himself. Many observers, myself included, think it may take an economic catastrophe, such as Uncle Sam’s default or a full-blown economic depression, to do the trick. The best American analogy that I can conjure up is trying to persuade the South to give up slavery before the Civil War.

So when Krugman complains of the President adopting counterfactual GOP rhetoric in “bargaining” over a potential default, he is missing the point. It is impossible, at least for me, to believe that the President actually credits the substance of that rhetoric. He is simply not that stupid or ill informed.

So what is he up to?

It’s hard to know precisely unless your own emotional and political intelligence is as high as the President’s. I know mine is not. He’s been two or three steps ahead of me ever since he announced his presidential campaign.

But a few possibilities come readily to mind. One is that independents and undecided voters might see the President’s willingness to compromise and look from the other side’s point of view as good traits, sympathize, and reluctantly support him and his policies. A second is that the President fears a default caused by GOP intransigence and wants to be sure the GOP will get the blame as fully as it deserves. So he wants to come as close to its position as he can without bending over backwards, in order that no one blame his own intransigence for the coming catastrophe.

A third possibility is that, when the inevitable catastrophe comes—whether in the form of another derivatives debacle, another oil-price shock, another crash worse than 2008, or Uncle Sam’s own default—he can sympathize and empathize with the idiots, saying “gee, we were wrong, weren’t we?” With his high emotional intelligence, he knows he’s not going to get these sworn enemies on his side by preaching to them, lecturing them, or saying “I told you so!”

A fourth possibility is that, by using a bit of the enemy’s own rhetoric and still losing their support, the President wants to demonstrate that they are driven by hatred and unreason and so get normal, rational people to abandon them in disgust. He seems to have gotten GOP pundit David Brooks to go almost that far. So this approach may have merit.

What other choice has he got? To expect reason to change minds stuck in concrete, or even to change enough still-open minds (are there any?) to make a difference, is folly. There is nothing reasonable about the Tea Party or the economic fairy tales that the GOP has been telling itself for thirty years. They are part of our culture, just as extreme Islam is part of the culture in Afghanistan and Pakistan. In short, they are matters of politics, not economics, and therefore outside Krugman’s expertise.

It is hard to overstate how bad a hand the President was dealt when he took office. Not only did he have two unnecessary wars, which he didn’t start, to wind down. Not only did he have to save the nation and the world from the greatest economic catastrophe since the Great Depression, with which he had nothing to do. Not only did he have to reassure the world that our “city on the hill” was not devolving into a gunslinger’s tavern in West Texas. He had to do all these things over the figurative dead bodies of millions of people inculcated with a culture of extreme disrespect for progressive ideas, for people who look like the President, and for facts, evidence, education, expertise and reason themselves.

The Tea Party, after all, is nothing really new. It is just the reductio ad absurdum and culmination of a process of deep cultural putrefaction that has been going on for thirty years.

That’s why Krugman’s implications that the President has “sold out” are so dangerous. Our country is as close to civil war or dissolution as I have ever seen it in my 66 years. And I lived through every month of the Vietnam War as an adult. For at least two years now, the extreme right has been talking about its “Second-Amendment solution.” The left blithely ignores this trend, but it could be as dangerous as Hitler’s Brown Shirts. The right has all the guns in this country, at least the private ones.

Even in the halls of Congress, unreason prevails. The right’s small minds from small states can block any legislation in the Senate through mere threatened filibusters and Senate holds, and they now own a majority in the House.

Analogies to Lincoln are increasingly apt. A recent PBS feature on Lincoln reminded us just how much his lot then resembled the President’s today. Before his election as president and the Civil War, much of Lincoln’s own North hated him because he refused to support outright abolition in the slave states. The most he would support seemed tepid: refusing to give new territories a chance to vote whether to be slave or free. That fact alone was a clear signal how he felt about slavery as an institution: even democratic choice itself could not purge its stench of sin. The South understood well and, immediately after his close election in a split field, seceded and triggered our Civil War. But both sides continued to misunderstand Lincoln’s “centrism” and its motivation, even after the War’s end.

Like Krugman, I’m a professor. Like him, I take pride in analytical intelligence and reason. But I can see that analytical intelligence is helpless here, at least for the foreseeable future. The only thing that can bring us home is emotional intelligence—some trick of psychic jujitsu that gets the fools to feel what they cannot see. They must feel the error of their ways in their gut, not what’s left of their minds. If reason alone could do the job, Krugman’s own brilliant columns would already have gotten us halfway there.

Only politics, not reason, has a chance of finding a solution before our national decline becomes exponentially steep, or before we experience another catastrophe, like a national default, from which we may not soon recover. Avoiding those twin pitfalls will require finesse, skill, indirection, and perhaps deceit and trickery. A successful gambit may not be apparent until after it succeeds, especially to folks like us professors inculcated with reason.

The President is no stranger to such gambits. He has pulled the rabbit out of the hat at least three times already. An African-American, he won the Presidency when no one, including the most hardened and experienced African-American political leaders, gave him a chance. He beat the Clinton Dynasty despite its solid record of job creation and fiscal surplus, Bill’s still enormous popularity, and the unfulfilled desire of a clear majority of the nation’s electorate for a female chief executive. And he got a form of near-universal health care passed where his predecessors had tried and failed for almost a century.

So if anyone can make a political miracle, the President can. But the divisions are so deep and the GOP’s perverted culture so strong that even his odds are probably less than fifty-fifty. That’s why all his supporters, reluctant or otherwise, need to chill out. We should know that his task is far harder than a simple matter of communication, or using his “bully pulpit.”

We must give him all the support we can. The odds against him are long, many powerful forces and people want him to fail, and nothing less than our future as a nation is at stake.

Just to be clear, I should say that I, like most economists, do not consider our deficit or debt to be anywhere near our most important national problem, especially in the near term. There will be plenty of time to address deficits and debt once we get our economy moving again, for example, by investing massively in national infrastructure and alternative energy and the good, non-outsourceable jobs that go with them.

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