Tuesday, July 12, 2011

Why Deficits and Not Jobs Has Galvanized Washington

Paul Krugman has a post on his NY Times blog that makes sense of the crazy drama over debt in Washington:
Jonathan Chait is puzzled by the behavior of the anti-deficit lobby, which persists in blaming Democrats for the failure of Republicans to act responsibly:
The anti-deficit lobby is a powerful force in American political life. The lobby consists of a loosely aligned network of think-tanks, institutions (many funded by Pete Peterson), and allied journalists. Of course, the anti-deficit lobby does not always win — indeed, it usually loses,as its basic mission runs in opposition to the general tendency of politicians to avoid unpopular choices as well as the specific ideology of the modern Republican Party (“Reagan proved deficits don’t matter”), which refuses to accept the notion that revenue levels ought to bear any relation to spending. The anti-deficit lobby has had extraordinary success, though, in making the deficit the top item on the Washington agenda.

But this strange analytical tic is perfectly reflective of the anti-deficit lobby’s style. You have one side embracing its proposal, and the other side rejecting it, and the instinct of the anti-deficit lobbyist is… to urge the former to embrace its position. Aside from the bizarre disconnect from political reality, this simply highlights a huge problem with the incentive structure. Aren’t you supposed to reward politicians who agree with you, and impose some cost on those who oppose you?
As he says, it makes no sense — unless you consider the possibility that the anti-deficit lobby doesn’t really care about deficits. If you believe that its real agenda (not always consciously) is to dismantle the welfare state, with deficit fears as the excuse, then the seemingly bizarre positioning makes perfect sense. Democrats trying to preserve the essence of the New Deal and the Great Society are always deemed insufficiently committed, never mind the numbers, while Republicans eager to tear the whole thing down are serious people, never mind their obsession with budget-busting tax cuts.

You can’t make any sense of American political discourse if you give everyone credit for really wanting what they claim to want. My sense is that there are very few true deficit hawks; the vast majority of those who claim that title are really just using the deficit to pursue the goal of a more unequal society.
I find that Paul Krugman is the best informed, most honest, most sensible commentator on the crazy politics of Washington. He isn't an extremist. He is a sensible guy who wants the country to regain the solid economic growth of the golden 1950s and 1960s (read his book Conscience of a Liberal). Sadly, Krugman is on the outside looking in. All the "experts" in Washington ignore him. But the "experts" are invariably wrong about everything, but they keep their cold dead hands firmly clutching power and guiding the US from mistake to mistake. Tragic.

Polls show that 80% of Americans are concerned about jobs and less than 30% are even mildly concerned about deficits. But the politicians who are elected to "represent" their constituents ignore the real issues while they play games with debts and deficits as part of a bigger ideological struggle. The really cruel joke is that they very may well drive the ship of state over a waterfall and crash on the rocks below. They are so intensely caught up in the political games that the bigger picture, the needs of the country, have been lost.

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