Austerity is holding back our economy — and that’s the plan. There is simply no other way to explain it. Republicans know voters blame (or credit) the party of the President for the economy, and they are doing everything they can to make things as bad as can be. This new “budget deal,” for example, holds the country in full austerity, with spending lower than even the original “Ryan budget” that shocked everyone.
Austerity kills economies and jobs, and they know it. We know it, they know it, everyone knows it. It is obvious in front of our faces, and Republicans continue to force cuts — with many Democrats going along.
Since the financial collapse government spending has been cut and the results have been terrible for the economy. Under every previous President government spending and hiring propped up the economy until recovery was underway. Republicans as well as Democrats understood this is how it has to be done. Until now.
In Charts: What if Obama spent like Reagan? Ezra Klein explains, “It’s simply a fact that real government spending fell in three of President Obama’s first four years.” Klein compares government spending to Reagan and ‘W’ Bush:
Under Reagan and ‘W’ spending went up. This helped the economy get out of recessions. Under Obama, with a much worse recession, Republicans forced spending to go down.
What was the effect of these cuts? This next chart shows how this is a drag on GDP:
So yes, the spending cuts are obviously hurting the economy.
Paul Krugman’s blog post, Unprecedented Austerity comments on this. He starts with a chart showing what has happened to government spending since Obama took office, writing, “Look at total government spending — federal, state, and local — and correct it for inflation …”
Krugman writes, “You can see that there was a brief, modest spurt in spending associated with the Obama stimulus — but it has long since been outweighed and swamped by a collapse in spending without precedent in the past half century.” He calls this, combined with private-sector deleveraging, “awesomely destructive.”
“Awesomely destructive.” And you can see it.
That “modest spurt in spending associated with the Obama stimulus”? This is the effect the stimulus spending had on jobs:
The stimulus took us from losing more than 800,000 jobs each month to gaining jobs every month since. It completely turned the situation around. But then it stopped and Republicans were able to force austerity and kill off the recovery.
This Budget Deal
So that’s the story of what has happened to government spending as Republicans impose austerity. Down down down. Now we have a “budget deal” (that even leaves out help for the long-term unemployed and doesn’t replace the “Hunger Cliff” $5 billion Thanksgiving Food Stamp cut, etc…) This next chart shows where this budget deal fits with earlier budgets proposals.
This is what is missing from the explanations of this budget “deal:” spending will still go way down. This is not a spending increase, it is less of a destructive, devastating cut than the full “sequester” would be next year. But it is still a cut, and it will still cost us jobs and economic growth. It will still be “awesomely destructive.”
And that is their plan. It will still let them campaign on “Obama’s terrible economy.”
This chart from Calculated Risk shows how government hiring pulled us out of previous recessions, which government firing is holding us in this one.
Key point, Presidents Reagan, GHW Bush, Clinton and ‘W’ all increased public hiring to help get us out of recessions. But under Obama and austerity the public sector has lost 703,000 jobs.
The public sector grew during Mr. Reagan’s terms (up 1,414,000), during Mr. G.H.W. Bush’s term (up 1,127,000), during Mr. Clinton’s terms (up 1,934,000), and during Mr. G.W. Bush’s terms (up 1,748,000 jobs).
However the public sector has declined significantly since Mr. Obama took office (down 703,000 jobs). These job losses have mostly been at the state and local level, but more recently at the Federal level. This has been a significant drag on overall employment.
The 2014 Election
So let’s take bets: do you disagree that Republicans are planning to campaign in 2014 by saying that the terrible economy is Obama’s fault?
PS: Some of these charts are from Three Charts That Show That Republicans Have Won The Budget War by Danny Vinik, who writes that “the fact of the matter is that the GOP has won the budget wars.” Let’s see if they take credit for the economy and terrible human pain they are causing.
There is consensus across the (sane) spectrum that the country absolutely needs to repair and modernize our infrastructure. There is widespread agreement this will help the economy now and in the future, and will create jobs. But Republicans in Congress refuse to allow infrastructure projects to proceed. Why? Because doing so will help the economy now and in the future, and will create jobs. Republicans in Congress are committing economic sabotage, and they know it.
There is a bipartisan consensus — it even includes the Chamber of Commerce! — that the country has fallen behind and must maintain and modernize our infrastructure for the good of our economy.
President Obama talked about infrastructure in Jacksonville in July, saying,
We know strong infrastructure is a key ingredient to a thriving economy. That’s how the United States became the best place in the world to do business.
On the other end of things the Chamber of Commerce’s “Jobs & Growth Agenda” includes a section on “Reliable and Secure Infrastructure.” The Chamber says,
The U.S. Chamber is leading the charge to improve the quality of America’s infrastructure—whether it’s transportation, energy, or water networks—all of which directly impact our ability to compete in the global economy.
By modernizing our national infrastructure, we can improve commercial efficiency, increase U.S. competitiveness in the global economy, and create much-needed jobs in the near term.
Here are just a few of the other voices supporting a boost in infrastructure spending:
Fareed Zakaria, Fixing infrastructure would help fix economy
Alliance for American Manufacturing, How Infrastructure Investments Support the U.S. Economy: Employment, Productivity and Growth
Business Insider, STUDY: Every $1 Of Infrastructure Spending Boosts The Economy By $2
Consensus vs. Obstruction
The Chamber of Commerce might say they are “leading the charge” but the Republicans in the Congress are obstructing the troops.
After the President asked for just a bit more infrastructure work, please, the Senate Republican leader responded, “No!” The House Republican leader has said that fixing the infrastructure is “more stimulus spending doomed to fail.”
The kook right (perhaps that should read “Koch right”) that really “leads the charge” for Republicans these days says Infrastructure Spending Is Not the Federal Government’s Business or that infrastructure spending is just more “big government.” Heritage Foundation claims here that government spending on infrastructure “takes money out of the economy”. Some of the (Koch-funded) kooks even actually claim that investing in infrastructure hurts the economy.
Obstruction Agenda Is Sabotage, Not Ideology
Look at this chart from the Financial Times’ FT Alphaville, The collapse of US infrastructure spending, charted:
This looks like lots of other recent charts, like the ones that show consumer confidence plunging in the face of Republican obstruction of everything (and especially their repeated hostage-taking over the debt-ceiling and their shutting down the government.) It is clear all of these things hurt the economy, and they continue to do them.
Maintaining the infrastructure is not about ideology. Even the conservative Chamber of Commerce understands that you have to maintain the roads and bridges, etc., and that it damages the economy if you don’t. And yet we don’t, and the obstruction continues.
So this is about a different agenda. Paul Krugman says it best at his blog,
This kind of behavior — ever-shifting rationales for an unchanging policy (see: Bush tax cuts, invasion of Iraq, etc.) — is a “tell”. It says that something else is really motivating the policy advocacy.
It is past time to argue that the Republican obstruction is hurting the economy, because it just is, and they know it. It is also past time to argue that they are doing this for some kind of ideological reason. Investing in infrastructure is not about ideology. Austerity is not about ideology.
Hurting the economy is not about ideology. There is a different agenda at work here. This is not an argument between differing visions of how best to help our economy. When this much is being done, hurting the economy again and again, and when the results of these actions are clearly that we are all being harmed, and yet it continues, this is not an accident. It is an agenda.
Economic Sabotage — Why?
So it is past time to argue if they are hurting the economy – that is settled. It is economic sabotage. There is no longer any question.
Now it is time to talk about why they are doing this.
Is it to damage Democratic election prospects? Are they betting that by making everyone feel enough pain, and blaming Democrats and President Obama, they can make people forget who got us into this mess? Do they think that economic sabotage will get them votes? That is the most charitable theory. Considering that much of the funding of the apparatus of the right that is behind this is secret, there are worse conclusions that could understandably be reached.
There is a miscalculation at the core of Democratic strategies for ending the shutdown and avoiding default. Democrats keep saying, “They wouldn’t really do that.” But this calculation doesn’t “get it” about who and what the country is dealing with.
Here is the miscalculation: If you listen to right-wing radio, watch FOX News and read their online media and take it seriously (because they do) then you would know that many on the right don’t want to live in a country that has Social Security, Medicare, Obamacare, the minimum wage, Food Stamps, immigration, public schools, infant nutrition programs and the rest of the things government does to make our lives better. And they don’t want anyone else to live in a country that has those things, either.
They are willing to destroy the village to keep the village from having those things. If you don’t “get that” before entering into negotiations, you’re at risk of making a terrible mistake — like the sequester.
Remember what led to the sequester? There was a fundamental miscalculation that led to these terrible economy-killing cuts taking effect. White House negotiators believed the sequester cuts were so terrible and stupid that Republicans wouldn’t really let that happen. So they offered these cuts as an inducement — a worst alternative — to coming to an agreement about taxes and cuts. (Never mind the mistake that any deficit reduction at all right now is economy-killing.) The idea was that the sequester cuts are so terrible and have such a disastrous effect on the country and economy — and people — that “they wouldn’t really do that.”
But they did that. Now many Republicans are celebrating the sequester cuts, calling the sequester an accomplishment. They are celebrating the damage that they have caused to our government.
If you “got it” about who they are then you knew that of course they would do that. Offering the terrible sequester cuts because they were so terrible and stupid that “they wouldn’t really do that” was a fundamental miscalculation of how terrible and stupid — and destructive — their insular ideology has become. It was based on a fundamental misunderestimation of who they are.
Misunderestimating Who They Are
Are enough Democrats listening to right-wing radio, watching FOX, reading the right’s online media? Are they taking what they see and hear seriously? We listen to Rush Limbaugh and laugh. But they listen to Rush Limbaugh and believe.
Are Democrats and the President making a fundamental miscalculation by assuming the right-wingers of the Republican Party don’t want the country to default, and the terrible economic destruction that would bring? A strategy based on the idea that movement conservatives will yield rather than do that much harm to the country and economy and people, like the sequester strategy, is a fundamental miscalculation, fundamentally misunderestimating who they are: They do want things to be that bad!
Don’t Give In
The strategy of offering terrible and stupid cuts to an opposition that is bent on destruction only led to terrible and stupid cuts becoming the ongoing baseline, with them celebrating the sequester as a victory. Trying to scare and shame them with the terrible specter of the destruction from default could be offering them just what they want.
I am certainly not saying here that Democrats should give in to avoid the destruction Republicans are willing to cause. Giving in — or miscalculating and accidentally handing them what they want (like the sequester) — means they will just escalate the destruction — as they have done each time. That has been their game and will be their game. It’s just time to realize this and change strategies.
It is late in the game, much harm has been done, much harm is being done, but it is time for a shift from “get along” strategies to reach “bipartisan compromise” to instead realizing this crowd fundamentally opposes and seeks to dismantle the very things that most of us treasure about our country.
Let’s say it’s the 1970s and you’re a foreign power of one sort or another – Soviet Union, China, Arab oil interests, secret cabal of billionaires, whatever – and you want to dominate the world. But the US is in your way…
Let’s say you do a comprehensive analysis of all the things that make the US a world power (for better or worse). Let’s say you develop a plan to infiltrate, undermine, weaken, fracture and ultimately dismantle each the institutions that made America so strong.
Looking back today, can anyone offer anything that could have been more effective at accomplishing this plan than funding America’s conservative movement?
The parents of the Republican Party are away for the summer and the Tea-nagers are ransacking the House. But is it really a surprise that people who hate government itself would act to destroy government itself?
Shut The Government Vs. Global Meltdown
There are more and more indications that Republicans might either shut down the government or “breach” the debt ceiling when they return to DC from the summer recess. Bill Scher’s Republicans Flinch Again, captures the essence of what this means,
A government shutdown would dent the American economy, inconvenience millions and generally make Republicans look like children. But preventing the government from paying its bills would wreck the full faith and credit of the government and spark a global economic meltdown.
Terrifying Scenario Developing
If you read this morning’s Progressive Breakfast (and you always should), you see a terrifying scenario emerging in DC. The Tea Party is working itself up into a full destruction tantrum, and it is hard to see a way around it. Remember that they left town for the summer after refusing to pass the “THUD” bill. This was the Transportation, Housing and Urban Development bill that tried to line up with the Republican-mandated “Ryan Budget” spending cuts that drastically reduces the things government does to help make We the People’s lives better — also called “government spending.” The cuts were too much for some Republicans to swallow, and not enough for others. So they gave up and went home without doing anything at all. (And of course they never took up a jobs bill at all.)
Now they are getting ready to return, and the early indications are that there will be more of the same. There will be no governing in the House, just more of the same: posturing and destroying,
“Flirting With A Fail”
Politico, Eve of Destruction, “Republicans are in jeopardy of convincing voters they simply cannot govern.”
Republicans are all flirting with a fall that could see influential party voices threatening to default on the debt or shut down the government — and therefore ending all hopes of proving they are not insane when it comes to governance.
The NY Times digs a bit deeper into the problems, in Puzzle Awaits the Capital: How to Solve 3 Fiscal Rifts,
On the endgame for the budget showdown looming in Washington this fall, only this is clear: President Obama thinks Republicans cannot risk another debt crisis or government shutdown, and Republican leaders agree.
[. . .] Speaker John A. Boehner of Ohio has reiterated that Republicans will not raise the debt limit without offsetting spending cuts. … But Mr. Obama, burned by the downgrade of the United States debt rating after those 2011 negotiations, insists he will not negotiate on the issue this time.
Meanwhile the Republican “base” is demanding a shutdown over Obamacare. Erick Erickson at Redstate today,
Stay focused. Show up and confront your Congressman. Tell him if he votes to fund Obamacare, he cannot really say he is fighting against it.
Heritage Foundation has a campaign to shut the government over Obamacare. They are pushing the idea that a shutdown “won’t hurt” the Republicans (with no mention of, or concern over, the millions of Americans who will be hurt).
So here it comes people. In a short time we find out whether the Republicans are going to close the government they hate or destroy the “full faith and credit” of the United States, which would destroy the government they have along with the economy of the world.
“The appeal for each Moral Monday has been the same: urging legislators to govern for the good of the whole, rather than for the wealthy.”
— Rev. William Barber.
Since April, North Carolina citizens have been gathering at the state capital in Raleigh for “Moral Monday” rallies and acts of civil disobedience to protest the the cruel things Republican legislators are doing to the people of the state. This week, despite tornado warnings, more than 1,400 protesters gathered for the sixth week’s protests, and more than 80 were arrested, including one reporter clearly wearing news credentials. A week ago Monday, 151 were arrested. Arrests for this and recent Moral Mondays now total 388.
This video is from the June 3 Moral Monday rally:
A Republican who is claiming that the government was behind the Boston bombings says there is proof — that victim in the photo we all saw, who lost both legs, was “not in pain.”
Tremblay also praised a YouTube video featuring a man who says he’s retired Army Lt. Col. Roy Potter, claiming the federal government was behind the attack. Tremblay said Potter looks honest when he asserts the bombing motive was to divert attention from a pending indictment of President Barack Obama and former President George W. Bush for war crimes, along with a drop in the price of gold and government dysfunction.
Potter says on the video that the federal government had planned to pin the marathon bombing on a “right wing extremist helped by al Qaeda,” but dropped the plan after being discovered.
Lets get these people away from power, please.
There is no better way to understand what is happening to us than to read The Shock Doctrine. Shock-Doctrine tactics are why we have so many “manufactured crises” and why the right and Wall Street seem to come out on top from each one.
The “deficit” is entirely a manufactured crisis. The “sequester” is a manufactured crisis, like the :debt ceiling” crisis and the “fiscal cliff” crisis and the other crises again and again. People around Reagan said the tax cuts (combined with dooubling the military budget) were a strategy to cause deficits that would force spending cuts. It was called “strategic deficits.”
George W Bush said the shift from surpluses to deficits after his tax cuts was “incredibly positive news” because it would bring 99on a deficit crisis that would stampede opeople into accepting cuts.
This is the Shock Doctrine at work. Create a crisis, terrify people, then force “reforms” that shift the wealth upwards to the billionaires.
Many of us fought hard to reform the filibuster and fight the Republican obstruction that is blocking everything the country needs to get done. And I do mean everything. We said please just “make them talk,” which is what the public already thinks the filibuster is anyway. But they reached a “gentleman’s agreement” instead. Those Republican “gentlemen” just filibustered a Defense Secretary nomination — the first such filibuster in history. We told you so.
Filibuster Reform Blocked
For months a coalition of labor and progressive-aligned organizations worked to build support for reforming the filibuster. The hope was that the Senate would change its rules and return the filibuster to the form that the public understands: “Make them talk.” This preserves the ability of the minority to delay bills long enough to rally public support (or not) when they feel that the rights of the minority are being smothered.
At the last minute Harry Reid blocked the reform effort, reaching a “gentleman’s agreement” with Minority Leader Mitch McConnell. Reid explained,
“I’m not personally, at this stage, ready to get rid of the 60-vote threshold,” Reid said in an interview Thursday with The Washington Post’s Wonkblog.
Chris Cillizza, writing in the Washington Post in Why filibuster reform didn’t happen explained,
The news of an agreement that skirts around the edge of reforming Senate filibusters without actually, you know, reforming the filibuster will disappoint liberal Democrats and leave old Senate hands saying “I told you so.”
Bloggers have learned some hard lessons about engaging with right-wing nutcases who leave nasty comments: “Don’t feed the trolls.” Starve them of the attention they seek. Ignore them and move on. This advice also applies to the right-wing nutcases threatening to bring down our economy by refusing to raise the debt-ceiling limit. They won’t get any traction on this unless Democrats engage with them. So ignore them, isolate them and scorn them but do not engage with them. Their billionaire & Wall Street funders will stop them and the pubic will see them for what they are, but only if we all just leave them alone. They aren’t really going to hold their breath until we all die.
And if they actually did take down the economy (they won’t), the country will be better off in the long run because it means the end of the radical right as a force in our politics.
So let them hold their breath until the country turns blue.
Pay attention to what is happening in Michigan, because it will add downward even more pressure to your wages and benefits, wherever you live and work. Republicans in the Michigan legislature have rammed through anti-union “right-to-work” laws making union dues voluntary even as unions a required by law to provide services to members and non-members. They say this will make Michigan more “business-friendly” by driving down wages and benefits, thereby stealing jobs from states where working people have rights. The actual intent is to get rid of the unions altogether, and their ability to fight for the 99% in the ongoing class war with the 1%.