The Often Maligned David Brooks Is Correct — “It’s Them Voters” — and My Added Comment about the Utility of Using Reasoned Common Sense to Dissect Political and Economic Camouflage

02 January 2013

Two points

For today’s theme:

(1) It is easy to assail the President and Congress for their laughably inept Fiscal Cliff deal — but the main problem is self-interested, denial-cloaked voters.

(2) Making sense of what should be done economically requires using reasoned common sense — otherwise, we will lose our way in the confusion generated by opposed route prescriptions from:

(a) Keynesians, like Dr. Paul Krugman,

and

(b) pretend deficit hawk (anti-Keynesians), like the Representative Paul Ryan.

Background — what the Fiscal Cliff deal did

From Jim Puzzanghera at the Los Angeles Times:

The deal approved by the House on Tuesday night raises tax revenue by $620 billion over the next 10 years, largely by allowing tax rates to rise on annual income of more than $450,000 for households and $400,000 for individuals.

The legislation averted an income tax increase on all Americans as the George W. Bush-era tax breaks expired. Most economists agreed that such an increase, combined with automatic spending cuts, would have pushed the country back into recession in the first half of the year.

The deal did not address spending, delaying the automatic spending cuts for two months. That did not sit well with groups that have been pushing the government to reduce the growing federal deficit.

And a critical point from Rick Ungar at Forbes:

Not included in the agreement is an extension of the payroll cut meaning that payroll taxes will rise by for 2 percent for all American wage earners.

Thereby screwing with the average working person to benefit those who shield investment income via tax “loopholes.”

Don’t get me started on the President’s cowardly ruse to raise (easily avoidable) tax rates on the “rich,” at the expense of actually remedying America’s insane and plutocrat-favoring tax code.

Ineptness? — By one reckoning, the deal adds $4 trillion (over 10 years) to the deficit

The alternative calculation assumes that the deal averted an economic recession that would have been worse.

But that feel good calculus ignores the fact that the President and Congress created the artificial cliff in the first place — in writing poorly conceived and automatically implemented deficit reductions into law.

First — on the intellectual unremarkability of stupidity avoided

Avoiding an egregious stupidity of one’s own making is neither laudable nor noteworthy.

Except, perhaps, as an addendum to a psychiatric note. A comment that indicates just how far this nation has progressed along the road to unremitting lunacy.

Note

When we hold ourselves up to the rest of the world as an example of “how to be,” I increasingly have difficulty putting a finger on what admirable social trait American government and voters are exemplifying.

Second — let’s leave aside arguments about the tactical wisdom of either political side’s shenanigans — does any of this make sense?

Politically, yes. Otherwise a deal would not have been reached.

Societally, no. Because no real problems were addressed.

Here, I have long held American voters ultimately responsible for the self-destructive nonsense that our political system generates these days. New York Times columnist (moderate Republican) David Brooks agrees:

Whom should we blame for this?

Again, we should not blame Obama and Boehner. In their different ways, they and a number of other people in the Congress are trying to find a politically palatable way to deal with these hard issues. They got what conditions allowed.

Ultimately, we should blame the American voters.

The average Medicare couple pays $109,000 into the program and gets $343,000 in benefits out, according to the Urban Institute. This is $234,000 in free money.

Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren. They have decided they like borrowing up to $1 trillion a year for tax credits, disability payments, defense contracts and the rest.

They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living. They have made it clear that they will destroy any politician who tries to stop them from cost-shifting in this way.

The country either doesn’t know or doesn’t care about the burdens we are placing on our children. No coalition of leaders has successfully confronted the voters, and made them heedful of the ruin they are bringing upon the nation.

The key issue, “Ruin”? — Is Mr. Brooks correct?

The basic economic disagreement is whether America is actually perched atop a precipice of coming economic ruin. The way voters act, in electing gutless and often inept politicians to national office, one would think not.

Indeed, some experts, like Keynesian economist Professor Paul Krugman, like to explain the deficit crisis away by saying that now is not the time to reduce deficits. Government spending will improve economic conditions. Eventually expanded revenues from an enlarged economy will reduce the deficit to manageable levels. For Dr. Krugman, there is no deficit crisis.

Opposing him, are deficit hawks — who are also pretended anti-Keynesians — who claim that overspending is ruining the country’s economic future. This bunch is coincidentally and hypocritically notable for wanting to do most of its spending reductions on the backs of the poor and working middle class.

Who is right?

Does it matter?

If it does not matter who is right, then there’s no problem

Could David Brooks and I be wrong in blaming voters for inept government?

(a) Sometimes it is wise to do nothing, when one is unsure of the wisdom of alternative economic courses.

(b) On the other hand, pretending to be unsure of the way forward is a favored prescription for apathetic disengagement from unpleasant facts.

If it does not matter who is actually right about differing economic paths to government spending, then Mr. Brooks and I are wrong in blaming voters for the alleged mess the country is in.

But if it does matter which course the nation takes, then Mr. Brooks may be correct when he writes that, “They have found that the original Keynesian rationale for these deficits provides a perfect cover for permanent deficit-living.”

A subtle aspect to Keynesianism and anti-Keynesianism that David Brooks appears to miss

In my mind, economic terminology masks the real battle, which has nothing to do with economic sectarianism and everything to do with who gets the largest chunk of the Wealth Pie.

American Keynesian economics have paradoxically bought us:

“bread and circuses” to keep the “masses” from revolting — in the form of Social Security, Medicare and Medicaid

and

a masked transfer of “the People’s” wealth to America’s plutocratic and corporate elite — both of which now run the democratic institutions, which divvy up the spoils that come from profligate government spending and reduced revenue-taking.

Our preoccupation with labels has us arguing about the wrong things. This is not ultimately an argument about economic stimulus and growth enhancement. It is, instead, a disagreement about which population subsets should benefit from government and how much.

As David Brooks implies, Keynesian economics is everyone’s favorite excuse for what reasoned common sense would call over-spending and under-taxing. When the overages favor whatever self-interested group has the pulpit, no one in that constituency complains. When the overages go to some other group, the newly deprived complain.

Voiceless, of course, are our children and their unborn, both of whom will someday have to pay for these excesses in one way or another.

Given America’s preoccupation with meaningless “isms,” the basic “who gets what” argument is camouflaged beneath umbrella economic terms (like Keynesianism) that most voters do not really understand.

For example, today, Republicans pretend to be anti-Keynesians. But they aren’t really. Instead, these folk are concerned about the potential negative impact of too much government largesse directed toward people, whom they see as economic “non-producers.”

The alleged non-producers are the equivalent of “scum folk,” who take too much money (directly or indirectly) out of the Party’s political sponsors’ pockets. Recall presidential candidate Mitt Romney’s insulting allegations about “The 47 Percent?”

The Democratic versus Republican political argument really has nothing to do with Keynesianism per se. The history of both political parties has proven that they favor (arguably) excessive government spending that keeps each in office and benefits influential political donors.

Consequently, when Dr. Krugman writes his column, “The Conscience of a Liberal,” he is not ultimately speaking about economic theories and impenetrable jargon. He is instead addressing basic social structures and (again arguably) elemental human fairness.

The Keynesian label that people like to attach to Professor Krugman misleads them (often by politically motivated design) into thinking that the man is a disciple of some curiously un-American system of government. When, in fact, Dr. Krugman’s approach to government spending has been the quintessential Democratic and Republican way of American governance for eighty years.

So, if the Keynesian versus anti-Keynesian argument is not the basic economic issue what is?

And how does this relate to the economic ineptness of the Fiscal Cliff Deal?

Economy and governance — reasoned common sense to the rescue

When in a tangle of jargon and conflicting expertise, it often helps to think about where we are trying to go.

Most Americans agree that things would be great, if everyone were rich. Since we all know — usually in regard to “them” and not “us” — that this is not possible, most of us would settle for being comfortable. The more rational among us know that even such a compromise is not likely, so we would settle for keeping the struggle for survival (among the lowest socioeconomic class) to a “reasonable” minimum.

How one does this is the ultimate politico-economic argument. This is where overly soft-hearted (and often equivalently headed) Democrats disagree with overly cold-hearted (and equally dumb) Republicans.

What is clear — regardless of the proportions of one’s designated Ideal, as to wealth distribution — is that one cannot ultimately spend more than one takes in, over the long term. That is, if one wants to keep one’s house intact. Reasoned common sense makes this clear on an individual economic basis and History makes it clear on a societal one. Think back to all the faded world empires.

That’s why David Brooks is upset with American voters. If they keep ignoring the obvious, they will continue to squander America’s prospects for a socially equitable future. Even according to his less than egalitarian Republican view of economic justice.

The moral? — The Fiscal Cliff Deal reveals both (i) a lack of American political leadership and (ii) an absence of intelligence and self-discipline among the electorate

We get what we deserve. Complaining about President Obama’s negotiating style and our “do nothing” Congress misses the point. If we continue to vote as we do now, History’s going to squash the metaphorical “us.”

What happens figuratively tomorrow will depend on how many of us actually expand “us” to include:

(i) our children,

(ii) their children,

and

(iii) the United States’ unwritten future.

It may be that national wealth breeds weak soul and indiscipline.

PeteFree.com

The Often Maligned David Brooks Is Correct — “It’s Them Voters” — and My Added Comment about the Utility of Using Reasoned Common Sense to Dissect Political and Economic Camouflage