Fiscal conservatism used to be about balancing the budget and running a tight ship. Now it’s about keeping taxes low no matter what. But this is well-trod ground. What’s bothered me lately is that I just don’t really understand why fiscal conservatism is so trendy now in the first place. For instance, here’s Andrew Sullivan complaining that Obama is not enough of a deficit hawk:
To coin a phrase, how long, O Lord, how long? We have a divided government, we just had an election in which one side campaigned on too much spending, we have a very pragmatic president able to explain the dangers we face, and a debt that grows every day. But nooo. Let’s get the GOP to lead.
And let’s not fool ourselves. The president has just asked the opposition to do his work for him. He should be careful what he asks for. If the GOP actually proposes cuts in Medicare, real tax reform, and some of the proposals in the Bowles-Simpson report, there will be many independents and fiscal conservatives who will take a second look.
What’s troubling to me about this is that I’m not sure Sullivan has made much of a case for entitlement reform or fiscal conservatism to begin with. It all feels very much like intuition. In fact, I’m not sure anyone claiming to be a fiscal conservative has made that case. The notion that we need to balance the budget and pay down the debt right now is just taken for granted with no real attempt to explain why.
Is inflation out of control? No, not even close. Are our creditors closing our accounts? No, because our creditors know that all we need to do to pay them off is raise taxes or get out of this recession. When growth picks back up deficits will shrink. The deficit is not a problem in the first place. The whole thing is just a ruse.
Meanwhile, unemployment remains sky-high and so do corporate profits. Everything is rosy except for the American worker, and to them fiscal conservatives and pundits like Sullivan say “Austerity Now” like some grotesque mimicry of that Seinfeld episode. All the hand-wringing over structural unemployment and so forth is just cover for supply-side nonsense that’s captured the American psyche from pundit and politician on down. What we are witnessing is a balance-sheet recession and a crisis of demand. Or at least that’s what all the evidence and data points to.
But it’s easier for people who do not have to cash an unemployment check or who will never rely on Social Security to say that what we need now is actually entitlement reform, austerity, and – of course – more tax cuts for corporations and the wealthiest Americans. And we need to stop handing out those unemployment checks too, because why would anyone work if they could just collect a couple hundred bucks free of charge? This is fiscal conservatism. No tax increases allowed. At least Sullivan argues for those (which is enough to write him out of most conservative circles) but for the life of me, I can’t recall ever reading anything he’s written that clearly explains why he’s a fiscal conservative to begin with and, just as importantly, why he thinks now is the appropriate time for us to cut spending and raise the retirement age, or focus on the deficit rather than on jobs.
This could be because Sullivan is only reacting to an appealing narrative about the debt, one which deficit hawks have been working hard to craft over the past two years in order to kill the stimulus and weaken the Obama administration; or it could be because there is no good reason for austerity-now politics in the middle of a demand-side recession where inflation is low and unemployment is high and corporations and banks are sitting on vast piles of cash and not hiring and not spending.
There is a very good reason to take a look at the Big Picture and ask why corporate America is rebounding and the working class is not. I imagine the answer to that riddle will not be the national debt, or Obama’s inability to govern exactly how Andrew Sullivan thinks he ought to govern. Obama may not be the progressive many hoped for and he may not be the socialist bogeyman that many pretend he is, but he’s not a Republican deficit hawk either no matter how much he panders to them. He is not asking “the opposition to do his work for him” he’s playing politics. It’s weird that anyone would be fooled into thinking Obama is actually a fiscal conservative just because he’s cut a few programs and tossed a few bones to the dogs (though why he’s tossing them bones to begin with when nothing will satisfy them is also beyond me).