Fiscal Austerity, the New Fashion of the Day

From an article in the Washington Post by Harold Meyerson:

Liberal Democrats know what they're for: a second stimulus to create more investment and jobs.... Republicans... know what they're against: anything the Democrats are for. That leaves the centrist Blue Dog Democrats, who don't really know what they're for or what they're against. Earlier this year... Blue Dogs... were saying they would welcome an end to the debate over health-care reform so they could turn their attention to jobs, jobs, jobs. But now that President Obama and Democratic legislative leaders have done that, the Blue Dogs have largely turned skittish. Efforts by the leaders in both houses to pass bills that would save the jobs of teachers and police officers, maintain states' ability to make Medicaid payments and extend unemployment insurance have hit not only the expected bumps in the road (unified Republican opposition) but also fresh potholes: Blue Dog resistance to countercyclical spending....

The downside of not passing any further stimulus legislation is clear.... In today's economy, alas, the government remains the only source of significant investment.... [N]onfinancial companies are hoarding cash -- a record-high $1.84 trillion... they are not using it to expand....

Until recently, virtually every Democratic member of Congress could be counted on to support some level of countercyclical spending. That was one of the basic ways Democrats distinguished themselves from the laissez-faire right.... The problem here is that the Blue Dogs, like much of the public, conflate the issues of the nation's long-term fiscal sustainability with the short-term deficits created by the worst downturn since the '30s. Thus the Democratic imperative of creating jobs in 2009 became, earlier this year, one of creating jobs and reducing the deficit, and now, for some Blue Dogs, has become chiefly one of reducing the deficit. In polls, meanwhile, the public rates "jobs" as its chief concern, with the deficit lagging far behind....

[T]he Blue Dogs' short-term deficit hawkery is more than bad economics. It's bad politics, too. Even pragmatic centrists -- especially pragmatic centrists -- have to be in favor of something. The Blue Dogs don't seem to know what exactly that might be.

When I was a kid I was wildly idealistic. I thought I was lucky to be born in the "modern" era when people were educated, learned from the past, used scientific methods to learn about the world around them. I've spent the last 50 years unlearning the illusions of youth. I came of age as the baby boom started to enter the workforce and discovered that policy makers hadn't planned for that event despite the demographics being utterly obvious. I watched innumerable wars fought over supposedly "life and death issues" that looked odd 20 or 30 years later when sworn enemies fell into each other's arms as "dear friends". I saw the waste and folly of war while politicians turned a sharp eye toward expenditures that would aid ordinary people: infrastructure, education, health, scientific research.

I had always puzzled how so many could party through WWII while the soldiers carried the burden of terror and dying. But I've now lived through 50 years of watching the elite party "like there is no tomorrow" while they download the burdens of taxes and responsibility onto the middle and lower classes. I thought George Orwell's book 1984 was a quaint allegory about the foolishness of people for political messages, but I've now lived through 30 years of right wing propaganda where I've had my nose rubbed in the phrase "all animals are equal but some animals are more equal than others". This is the motto of the elite. Yes, we are all democrats now, but don't expect the elites to pay for civilization, as Leona Helmsley famously pointed out "taxes are for the little people".

Anybody who kept their eyes open during an Economics 101 course, and even a guy like me who never darkened the door to an economics class, knows that John Maynard Keynes diagnosed the Great Depression and called for counter-cyclical spending to get the economy out of the rut. Production lost because of a depression is never regained. It isn't a morality play in which 15 million in the US must now be long term unemployed to "atone" for the sins of the profligate. For one thing, the profligate were the ultra-rich, not the working class and the middle class. Why would anybody with a shred of decency expect these classes to suffer in order to "make up for" the sins of Wall Street sharpsters? The mind boggles. But that is exactly what is being prescribed.

I never thought I would live to see such idiocy passed around as "sound" judgement. Mind you, I never thought I would be forced to live through a harrowing 30 year dominance of right wing ideology. Sadly, I have.