The Economist wakes up and smells the crazy

“The vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.”

The two great political facts of the current moment are (1) the takeover of the Republican Party by its lunatic fringe(s) and (2) the failure of mainstream political and journalistic discourse to come to grips with (1). I keep hoping that (2) will change over time as the evidence for (1) continues to mount.

The only silver lining in the debt-ceiling-crisis cloud is that it may help speed the process of recognition. The Economist, generally a reliable ally of the plutocracy, illustrates:

Shame on them … The Republicans are playing a cynical political game with hugely high economic stakes … America’s net indebtedness is a perfectly affordable 65% of GDP, and throughout the past three years of recession and tepid recovery investors have been more than happy to go on lending to the federal government. The current problems, rather, are political .. .the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical. … America’s tax take is at its lowest level for decades …
the closer you look, the more unprincipled the Republicans look. … the blame falls clearly on the Republicans. Independent voters should take note.

On a different level, of course, the notion of either cutting spending or raising taxes in the face of massive unemployment and under-utilization of other economic capacity is also crazy. Surely it shouldn’t be hard to see that we need more stimulus now and better fiscal balance for the future: for example, by committing now to carbon taxes to kick in two or three years from now and rise steadily into the future.

But at least the transatlantic plutocrats have noticed that Republican anti-tax craziness is now at a level that threatens even plutocratic interests. Their counterparts on this side of the Pond tend to be slower learners.

Footnote As Keith points out, “Lexington,” The Economist‘s U.S. political correspondent, had already gone there.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: Markarkleiman-at-gmail.com

14 thoughts on “The Economist wakes up and smells the crazy”

  1. I presume that both the Republican “lunatic fringe” and the corporate news Media, by and large, work for the plutocracy. It is the failure of everyone else to recognize the implications, which worries me. I’m curious about how many posters or commenters here, read Kevin Phillips’ American Theocracy(2006) or Bad Money(2008). American Theocracy lays out very clearly the economics and the politics driving the extremism and the epic fiscal irresponsibility.

    Where’s the reaction, though, from those not part of the plutocracy? Where is even the expectation of a reaction? Where’s the opposition? Where’s resistance? Where’s common sense or an instinct for self-preservation among the non-plutocrats? Why are we, collectively, so passive and so ineffective?

  2. I gave up on the mainstream media completely after the Iraq War. As bad as the Republicans are on the economy they (and The Economist) were worse on Iraq.

  3. To Bruce: There have been plenty of protests, rallies, and direct action organized by people who are not part of the plutocracy (the Wisconsin protests were the most widely reported). But when the media is owned by the same folks who do the governing, it’s very, very difficult to create a real opposition. And that makes it difficult to organize for electoral replacements. It’s why these past few years, all the American people can think to do to try and make a difference is “throw the bums out,” even though the people they’re electing are bums as well.

    I’m becoming more and more cynical about our prospects as a country.

  4. “On a different level, of course, the notion of either cutting spending or raising taxes in the face of massive unemployment and under-utilization of other economic capacity is also crazy. Surely it shouldn’t be hard to see that we need more stimulus now and better fiscal balance for the future….”

    And yet, here we are. Why, when the Democrats had the White House, and majorities in both chambers of Congress for two years? There are ways to skirt a threatened filibuster in the Senate if the majority really wants to. But that’s just it, the Democrats didn’t want to . The president sees the debt/deficit “crisis” as a way to claim the real prize. And he will likely succeed where no Republican could have. (Of course, Obama will frame it all as trying to “save” entitlements.)

    Here’s the thing: Real, actual human beings are experiencing acute economic stress due to the recession and the administration’s unnecessarily anemic response to it. Many of these people will experience even greater pain when the president succeeds in cutting the social safety net. Some will likely die as a direct result. Given that there simply is no urgent need to address Medicare spending right now, and even less so Social Security, the president is displaying not leadership, but bald-faced political opportunism. This is bad policy from the perspective of basic human compassion and it is bad economic policy as well since it will further constrain demand.

    Knowing this, as Obama certainly does, how can his maneuverings best be characterized? I’m thinking as “economically illiterate and disgracefully cynical”.

  5. @Bruce Wilder

    “….Where’s the reaction, ….. expectation ….opposition….. resistance……. common sense….. instinct for self-preservation……?”
    *******************************************************************************************************

    While the American Public has rightfully earned the sad description of being “apathetic” towards their responsibilities as citizens, they did make an unmistakeable statement with the election of Barack Obama followed by an emphatic punctuation mark with the Congressional election two years hence. The tragic fact that Obama revealed himself as being a “double agent” doesn’t detract from the attempt of the voters to institute real “change.” If anything, much of the blame resides with the Democratic “leadership” that was in a much better position to expose the duplicity of candidate Obama.

  6. MK: On a different level, of course, the notion of either cutting spending or raising taxes in the face of massive unemployment and under-utilization of other economic capacity is also crazy.

    Even more stunning it’s not even good politics. This from Frank Rich’s brilliant piece:

    Obama soon retreated into the tea-party mantra of fiscal austerity. Short-term spending cuts when spending is needed to create jobs make no sense economically. But they also make no sense politically. The deficit has never been a top voter priority, no matter how loudly the right claims it is. At Obama’s inaugural, Gallup found that 11 percent of voters ranked unemployment as their top priority while only 2 percent did the deficit. Unemployment has remained a stable public priority over the deficit ever since, usually by at least a 2-to-1 ratio. In a CBS poll immediately after the Democrats’ “shellacking” of last November—a debacle supposedly precipitated by the tea party’s debt jihad—the question “What should Congress concentrate on in January?” yielded 56 percent for “economy/jobs” and 4 percent for “deficit reduction.”

    So how is it that the austerity Gods dominate and get to slurp $350 dollar bottles of Pinot Noir too?

    Because the people aren’t picking up pitch-forks or bricks. They aren’t noisy enough to rock the pillars…
    And because we are living deep in the heart of the Era of Billionaires&trademark; and their crony pols.
    In a sentence: Millionaire Senators and Congressman doing the bidding of their Billionaire masters.

    This is the 30 year trend. Even the Great Black Hope couldn’t swim against this tide. Although credit where credit is due: He has begun to speak up (twice now). And it is not his fault that his most brilliant paragraphs on the rich getting richer and the poor getting poorer where swallowed up with the Left’s obsession over whether or not he flipped on gay marriage. (TPM was particularly offensively dumb on this point.) But Obama is not a real fighter. He was one vote in the Senate shy from getting a GW bill to the floor. He did not get out in front of the American people and push it (Gore is right again). Did not ask the public to step and up and be heard…

    So you can’t count on Obama to elevate or energize the masses. That dog don’t bark. And of course there will be no third party solution. The only way this changes in when the people get truly fed up…
    Like what happened to Murdoch in England. Hard boiled left wing and center-wing rage…

    But….

    Everyone has their asses up their Facebooks.
    Which is all to say their is a new Opiate wafting in the wireless air…

    So I say…

    It will have to get much worse before it gets better.
    Peak crazy is still a ways away…

  7. I’m as upset as I’ve ever been about what’s going on politically in our country. But I also have less idea what to do about it than I ever did. Back in the 1960s-late 1990s, people protested. It seemed (almost) to work. But protest doesn’t seem effective now, because a) the political class has figured out how to innoculate against it, b) they simply ignore it, and c) those who might have protested in the past are too obsessed with status updates and Twitter accounts, and with commenting on forums like this one. Comments such as these give us a false sense of having done something about an issue. Even non-profit activist organizations almost seem to put more energy into various social media than into grassroots organizing.

    Per Anonymous above, I don’t think Obama is at all a double agent. He just sees more value in a transactional politics than an ideological politics (i.e. it’s more important to “work it out” with the Republicans than to get ideological social policy passed.) I don’t agree with his approach, but I do see him as a progressive who is trying, with futility, to reason with the right wing and compromise. And this has led him to shift rightward and make some ill-advised policy decisions.

  8. The madness isn’t driven by the plutocracy (as the Economist article demonstrates, the plutocracy don’t want an economic crisis any more than the middle class). The madness (particularly about the debt ceiling) is driven by crotchety old guys who know their own SS and Medicare are off the table for cuts.

    This isn’t necessarily irrational – retirees benefit from tight money (which protects the value of pensions) and loose labour markets (beause they don’t work, but do need to consume other people’s labour).

  9. Mark, I disagree. IMHO, the Economist is what it has always been, an advocate for increasing the wealth of the elites as much as possible, with their rhetoric tempered only by the possibility that openly stating their goals would be politically non-productive.

    What’s happening now (and as seen in US-based propagandists such as David Brooks) is that they feel the need to rein in their attack dogs juuuuuuuuuuuuust enough to cut an advantageous deal, and not have them cause a non-profitable crisis.

    Which leads to the question – why do you look at a single statement made by some people who have iron-clad beliefs, and conclude that they have changed?

  10. What Barry said. This is how empires fall. The indicators are there. The negative slope of our decline is increasing in front of our eyes. In my view, we try to ensure a soft landing for the political decline. We need to ensure a soft landing for the natural resources fall as well, which complicates matters greatly. But the political fall is much easier to address, and we can start any time. Any time now. Annnnnnyyyyyyy time…

  11. Notable silence from Mr. Bellmore. I suppose there is really nothing for him to say in light of the Economist’s remarks.

  12. I can almost envision a neo-feudal order emerging, as our globabilizing elite solves the global resource constraint by impoverishing the masses of the developed world. Greek, Japanese, American, British . . . it doesn’t matter; we little people are no longer needed in the post-industrial age, and we must be ground down. Wars can be conducted by smart bombs and robots and remote-controlled aircraft, while the mass-production of i-pods can be accomplished in a few factories in China, and the distribution of music and books and movies can all be centralized into a control room with a few hundred people running “the show”.

    The old economy is just an opportunity to steal the funds from Social Security; the new economy is the opportunity to tax thought and culture, with Intellectual Property rights.

    And, in this brave new world, control is cheap — really, really, cheap — for the first time in human history. Centralization need know no limit. One Microsoft, One Google, One Apple, One Facebook . . . to rule the World!

    “The Crazy” isn’t just Jonathan Moore’s “crotchety old guys” — it is everyone, who doesn’t want change, who clings to a vision of a cheap-gas, suburban economy, amid denial of climate change, peak oil and resource constraint, not to mention denial about what financialization is doing to our economy and what plutocracy is doing to our politics. Among the masses of people, the inability to do anything is rooted in the mass unwillingness to do anything. And, that feeds the elite unwillingness to do anything, but loot.

    I don’t like to “psychologize” Obama. The objective truth is that, whatever his motivations or private calculations, he acts as if he is the reliable and effective agent of a malevolent plutocracy. But, I think a case can be made that he is responsive to the American People. This is what responsive looks like, when the mass of the American People are so unwilling to embrace change, that the body politic appears to have assumed savasana (Yoga’s corpse pose).

    I can almost envision a neo-feudal order emerging, as our globabilizing elite solves the global resource constraint by impoverishing the masses of the developed world. Greek, Japanese, American, British . . . it doesn’t matter; we little people are no longer needed in the post-industrial age, and we must be ground down. Wars can be conducted by smart bombs and robots and remote-controlled aircraft, while the mass-production of i-pods can be accomplished in a few factories in China, and the distribution of music and books and movies can all be centralized into a control room with a few hundred people running “the show”.

    The old economy is just an opportunity to steal the funds from Social Security; the new economy is the opportunity to tax thought and culture, with Intellectual Property rights.

    And, in this brave new world, control is cheap — really, really, cheap — for the first time in human history. Centralization need know no limit. One Microsoft, One Google, One Apple, One Facebook . . . to rule the World!

  13. Let’s not let ourselves off too lightly.

    Any academic economists read this blog? Why don’t you get some of your friends together and write a petition? Someday you’re going to get asked what you did in the war.

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