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

10 October 2013

Doing Exactly the Wrong Thing

How do you tell the difference between persuasion and extortion? Actually, it’s pretty easy.

When someone tries to get you to do something that he thinks may be good for you, that’s persuasion. When someone tries to get you to do something that he wants done, and uses means to “convince” you that are bad for you, that’s extortion.

Take the Mafia hit man, for example. When he tells a small business owner to pay him protection money, that’s not exactly a benefit.

And how does he go about “convincing” the owner to pay? He says he will break the owner’s kneecaps or have his goons break up the shop. These things are not exactly benefits. They are threats.

So in order to distinguish persuasion from extortion, you have to look at two things: the promised “benefit” and the means of convincing.

What is John Boehner doing? Is he trying to persuade or extort us? Let’s look at the promised “benefit” and the means.

The promised “benefit,” Boehner now says, is relief from debt. That’s interesting. Just a couple of weeks ago, he was saying (repeatedly) that it was relief from so-called “Obamacare.”

Now “Obamacare” is health insurance. Debt is, presumably, the national debt. You don’t have to be a genius to tell them apart. They are different. Apparently Boehner thinks we all have short memories.

Let’s leave aside the fact that President Obama already got our national deficit down from over 10% of GDP to about 4% by the end of this September. That is, the President cut our deficit more than in half, already. Further cuts will come automatically as our struggling economy gathers steam. Will shutting down the government and defaulting accelerate that encouraging trend? I don’t think so.

So Boehner, in just a few weeks, has tried to convince us of two very different “benefits” from kow-towing to a tiny minority in the House: his so-called Tea Party. I say “so-called” because virtually none of its members are from Massachusetts, and none has anything whatsoever to do with Paul Revere or our American Revolution of 237 years ago. They are mostly from today’s South and our rural outback, and they are all today’s Republican extremists. The vast majority of their rank and file would have great trouble describing what our original Tea Party was, let alone why it happened.

Anyway, John Boehner is not exactly sure what “benefit” he is going to give us by letting this tiny, extreme, mostly Southern minority rule us. He’s just throwing the plate of spaghetti against the wall to see what sticks.

Now let’s look at means. Those are as clear as the “benefits” to us are uncertain, waffling and inconsistent. Boehner is trying to convince us to accept his dubious “benefits” by threatening us with two bludgeons. The first is a government shutdown, already under way. The second is a national default, coming up next week.

Today Boehner made what his PR folk term a big “concession.” What that “concession” was, is not entirely clear. But viewed in its best light, it looked like two things. First, Boehner offered to stop bludgeoning us with national default for six weeks. But second, he said nothing about stopping cudgeling us with the shutdown.

How would a genuine “concession” differ, such as a diplomat or sincere business person might make in real bargaining? I’m glad you asked.

Boehner might offer something that the President, Democrats and perhaps even ordinary people actually want—something they, without too much stretching, might consider a “benefit.” It might be, for example, an increase in taxes in exchange for spending cuts, a restoration of the food stamps for 2.3 million people that the House has tried to cut, or some long path to citizenship for a few of our eleven million undocumented immigrants, in exchange for an increase in border enforcers. He might even restrict the offer of future citizenship to the best of our undocumented immigrants, the ones that the business people who back his own party want here most.

Is what he did instead real bargaining? It is only if you think like a Mafia hit man. It’s precisely analogous to saying, “I won’t crack your kneecaps or have my goons trash your store for six weeks while you make up your mind.” Even Fox is going to have trouble getting common-sense people to see the difference.

Some extremists (mostly in Texas) may think that shutting down the federal government is a good idea. But most of us don’t. And as the days without government pass by and the benefits and support we get from our federal government every day dry up, most of us are wising up fast.

The shit will really hit the fan when Social Security payments stop to millions of retired seniors. That day could be less than a couple of weeks away, especially if the debt ceiling doesn’t get raised.

Nearly all of our seniors (who aren’t suffering from dementia) pay attention and vote. Perhaps Boehner thinks he can run right up to the brink where their payments stop, and they will all miraculously realize how benevolent he is.

But national default is coming up fast. According to Treasury Secretary Jack Lew, it will begin next week, at least in small and temporary ways, unless the President accepts the six-week cudgeling recess. Is that a benefit?

To answer that question, you have to know a bit of recent history. Just a little over five years ago, we Yanks caused a global financial collapse when a cockamamie scheme of financial derivatives cooked up by our big investment banks collapsed like a house of cards. The whole world, including us, suffered for what our bankers did.

When that sort of thing happened in Argentina or Thailand, as it did in just the last two decades or so, investors sold off those countries’ bonds and currencies, causing massive fiscal difficulties and high local inflation. Why didn’t they do that to us after the Crash?

They didn’t because of our good payment record. Except for a few moments early in our history, and except for a few odd “technical” and temporary defaults over the years, we have always paid our debts. On time. In full.

So when the global economy collapsed, investors worldwide actually bought our Treasury bonds, notes and bills, not sold them. They did so even though our own private bankers had caused the Crash.

Why did global investors do that? Because they were (and are) smarter than our Republicans in three ways.

First, they recognized the difference between our federal government and the private banks whose greed and stupidity caused the Crash. Second, they saw that, in the financial maelstrom that ensued, the credit of the government of the United States of America was the strongest and most reliable in the world. Third, they put their money where their mouths were. They bought, not sold, our Treasuries, allowing us to emerge from the Crash our own bankers had created with the world’s still-strongest economy. Argentina and Thailand, not to mention most of Europe, ate their hearts out.

So is threatening to destroy that credit, which just helped pull us out of a terrible, privately caused financial Crash, a benefit? You decide.

In just one lifetime (mine), we Yanks have done some pretty stupid things. We invaded and tried to occupy Vietnam, losing 50,000 Americans and sowing large tracts of land with a defoliant poison called Agent Orange, which also poisoned our own troops. We invaded and occupied Iraq to control or destroy weapons of mass destruction that did not exist. We invaded and occupied a whole country (Afghanistan) to capture, kill, or neutralize a few hundred terrorists who, unlike the vast majority of Afghans, had their sights on us. And we allowed our rogue bankers to create and prolong the biggest financial disaster since the Great Depression. We still haven’t brought them fully under control.

But for all our faults, we Yanks have two things going for us. First, the whole world knows we have always paid our debts. Second, the world also knows that, though we have the world’s most sophisticated and accurate arsenal of nukes, we will never use them without overwhelmingly good reasons.

We Yanks invented nukes, and we used them only to end history’s most horrible war. Since then, we have never used them in anger. We have never even threatened to use them. We only made implicit threats during the Cold War, in order to deter aggression, defend our Homeland and (in cases of extreme aggression) our allies. We have never even hinted that we might use them to dominate mere disputes over policy, let alone for conquest. Even The Little Kim’s dangerous tantrums haven't provoked nuclear threats from us.

In contrast, John Boehner is willing to shut down our government and threaten national default to advance the agenda of a tiny minority of his own political party—an even tinier minority of the American people. Imagine how much higher real tension would be in the world if a man like that had his finger on the button.

Few, if any, of us Yanks (including this writer) are oblivious to our federal deficits. We differ on how to reduce them, when to do so, and how urgent the task is. So do expert economists.

Instead of reasoning with us, Boehner and his Teas want their way or the highway. They want not just one club, but two, to beat rest of us with. And so they have caused a partial federal shutdown and are threatening national default, asserting (moronically) that it won’t be so bad. They are willing to kneecap not just their political opponents, but themselves and their constituents, just to win their political point. Stalin, Hitler and Al Capone would be impressed.

Boehner is a uniquely American strongman, uniquely unsuited to our democratic and permissive culture. He would have been more at home—much more—in the Soviet Union in its heyday. He tries hard to sound reasonable, but he fails every time.

Why? Because at the end of the day, he offers nothing but what he sees as his trump card, threats. He has neither the skill nor the knowledge of economics to make his points by persuasion. And he hasn’t even the common sense of the old rock’n’roll song, which says, “You’ve got to give a little, take a little . . .”

All Boehner can do is make non-negotiable demands: no new taxes, no cuts in farm subsidies (but plenty in food stamps), no “Obamacare,” and now, no government. Then he bludgeons us and uses his gravelly voice like a weapon, hoping that as many of us as possible will react to him instinctively as to a stern, authoritarian father, and so hear and obey.

Right now, as your children or grandchildren sleep or play, John Boehner is third in line for the presidency. As you tuck them into bed at night, think about that. Imagine just how much more insecure their lives and futures would be if this man inherited the Oval Office.

Then imagine how foreigners, unused to our contact sport of Yankee politics, would react to Boehner’s brand of “persuasion.” If you want to see our nation, and the world, spin out of control and into chaos with astonishing rapidity, just keep him where he is in 2014.

John Boehner ought to be at the very top of every thinking person’s list of targets for dis-election next year. It would be a beautiful act of poetic justice if a challenge from the Tea Party itself helped take away his seat. Whether or not that happens, the mess that he has got us in makes it unlikely that the GOP, let alone the Tea Party, will own the Speakership at the end of next year.



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