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Krugman on the Debt Debate: Cults, Centrists and Balance

6:31 pm in Uncategorized by Scarecrow

Paul Krugman laments on his blog that the nation is suffering from “the destructive influence of a cult that has really poisoned our political system.” The cult he identifies is not the right-wing crazies in the Tea-GOP, though they’re bad enough, but the media’s unthinking assumption that the “center” between opposing positions is the responsible position.

Here’s Krugman on The Cult that is destroying America:

No, the cult that I see as reflecting a true moral failure is the cult of balance, of centrism.

Think about what’s happening right now. We have a crisis in which the right is making insane demands, while the president and Democrats in Congress are bending over backward to be accommodating — offering plans that are all spending cuts and no taxes, plans that are far to the right of public opinion.

So what do most news reports say? They portray it as a situation in which both sides are equally partisan, equally intransigent — because news reports always do that. And we have influential pundits calling out for a new centrist party, a new centrist president, to get us away from the evils of partisanship.

Krugman goes on to note this media habit means there’s no penalty for extreme behavior, so we get crazier and crazier results. I agree with that, but I think a related problem here is how the media is allowing Mr. Obama and others to define the responsible center.

In the debt reduction negotiations, the President keeps arguing for a “balanced” approach that includes both spending cuts and revenue increases. He wants the media to regard that definition of “balance” as the responsible centrist approach, and I think some have bought that view (eg, see this NYT editorial).

But the country’s actual center does not agree. As Jon Walker and David Dayen’s posts on polling results keep telling us, nothing the President and Democratic leaders (let alone the Republicans) are proposing is close to the political center.

All the polls show Americans strongly oppose cutting Social Security, Medicare and other programs/benefits for the poor and middle class. Instead of (and not in addition to) cuts, they support increased revenues, making the rich and large corporations pay more in taxes if needed to help lower deficits. Somewhere between 60 and 80 percent of Americans, including both parties and independents, consistently support those views. The Administration’s proposals are extremist.

Nor does Mr. Obama have coherent definitions of “balance” or “shared sacrifice.” He defines debt reduction “balance” as requiring the rich to give up a little something — a few tax breaks — so that the non-rich — students, the elderly, the poor, etc — don’t have to carry as much of the burden of deficit reduction. But there’s no logical connection between these two categories.

It’s either fair or not fair to cut student loans, or food stamps, or health and safety agencies, or Social Security or Medicare benefits for the elderly. For example, since [all Women and Children's program beneficiaries and] most Social Security/Medicare recipients depend heavily on those benefits to avoid poverty, there is no credible argument for cutting or delaying their benefits. If anything, we should be increasing those benefits and providing them earlier.

That fairness has nothing to do with whether or not hedge fund advisers get a tax break or corporate jets get different deductions. There’s no level of increased taxes on millionaires or hedge fund owners that would make it okay to punish seniors or to reduce benefits for women and children on the edge of poverty.

So Mr. Obama is talking cruel nonsense when he argues for “balance.” These elements don’t “balance” each other.

The current federal budget is not balanced, but this imbalance is not how Washington understands it. A balanced budget would pursue the level of federal spending we need to move the economy strongly towards full employment. By that measure, we need to be spending more.

[Seen in this light, state budgets are not "balanced" when they lay off tens of thousands of workers and close essential state services. They are extremely underfunded, primarily because the federal government is failing its responsibility to make up for declining revenues and higher safety net spending resulting for a national "lesser depression."] Many other government programs warrant either more or less spending, depending on their importance and efficacy in furthering the public interest.

When is the last time you heard a reporter ask the President or Congress how their spending proposals met these needs?

[To be sure, we need to reform taxes,] but it would be helpful to consider the severely unequal distribution of wealth and income that has allowed almost all of the increase in national wealth over the last two or three decades to be captured by a tiny fraction, the richest people in the country. The percentage of wealth and income left to the poor, middle class and average workers has been virtually stagnant or worse.

Why aren’t reporters asking politicians whether their notions of “shared sacrifice” would reverse or exacerbate that egregious maldistribution? If they examine these proposals, they’d report that all of those under consideration — from Simpson Bowles through Harry Reid’s surrender proposal to Boehner’s predator enabling — would make matters worse. That’s not “shared sacrifice.” It’s legalized theft, systematically transferring more wealth from the poor and middle class to the wealthy.

So it’s not just the media’s cultish addiction to some perverted “centrist” view. It’s also the media’s unwillingness to explain that when the President and Congress use terms like “balanced” or “shared sacrifice,” they don’t mean what you think they mean.

[Wed. a.m. edits]

What Is Mr. Obama’s Principle on Recreating Slaves?

6:21 pm in Economy, Politics, Uncategorized by Scarecrow

Abraham Lincoln

"Abraham Lincoln" from onlinewoman on flickr

The President of the United States is not a descendant of former slaves, which may make it easier for him to draw analogies to what President Lincoln once said — see David Dayen’s post on Obama’s last lecture — about his willingness to make compromises about freeing slaves to advance his goal of preserving the Union.

Let’s recall what Lincoln actually wrote in his letter of 1862 to Horace Greeley in which he explained his Emancipation policy as it related to saving the Union:

. . . I would save the Union. I would save it the shortest way under the Constitution. The sooner the national authority can be restored the nearer the Union will be “the Union as it was.” If there be those who would not save the Union unless they could at the same time save Slavery, I do not agree with them. If there be those who would not save the Union unless they could at the same time destroy Slavery, I do not agree with them. My paramount object in this struggle is to save the Union, and is not either to save or destroy Slavery. If I could save the Union without freeing any slave, I would do it, and if I could save it by freeing all the slaves, I would do it, and if I could save it by freeing some and leaving others alone, I would also do that. What I do about Slavery and the colored race, I do because I believe it helps to save this Union, and what I forbear, I forbear because I do not believe it would help to save the Union. . . . Read the rest of this entry →