Krugman > Drezner. As if you need me to tell you that.

Krugthulu snorts at opinionmakers who demanded Bush bills that exploded the deficit, held up Ireland as an economic model and now act like like the budget crisis is some passive-tense disaster that just sort of happened because ordinary people are stupid. Dan Drezner calls that silly because polls supported cutting taxes and invading Iraq. Drum points out that polls always supported those things but, until Bush, nobody actually did them because informed people understood that they were bad policy.

I would add two things.

(1) Popular opinion is not exactly an inexorable force to which politicians swing like algae on a harbor rock. If you have enough money and enough media outlets you can make people care about any damn thing you want.

Do people remember 2003 anymore? The only people thinking hard about Iraq right after 9/11 either worked in the White House or knew personally someone who did. Once Bush and his neocon advisers decided to go to Iraq it took a full-court press by FOX, the internet right, talk radio, nonstop screaming hysteria from the bully pulpit and a healthy dose of processed bullshit fed to pet reporters like Judith “fucking right” Miller. It also took an incredible amount of naked lying. The decayed corpse of Hermann Goering pretty much nailed it.

If you care enough and have enough resources public opinion just doesn’t mean anything. It might be relevant for third rail issues like Medicare and Social Security (that is to say, they have support that no amount of screaming on FOX can budge) and yet Republicans keep taking a tire iron to those anyway. That is nigh inexplicable unless you dismiss the idea that public opinion has even a small influence on the GOP agenda.

If anything the recession is an even more obvious point in Krugman’s favor. The most obviously stupid move in the whole affair came when a bipartisan team of wise men decided late in the Clinton Administration to deregulate the banking industry. In a sense bankers are like algae on a harbor rock: at least collectively they don’t have any complex or hidden motives. They want to get rich and they will follow whatever incentive system government creates (whether it means to or not) to get wealthy as fast as possible. Those bizarre investment decisions of the early aughts make perfect sense if you consider that the people who made them made a fortune and kept it. So their firms caught fire and blew up. Who cares? Those “stupid” bankers are still stupid rich. Unless the rules change and/or a lot of people go to jail, you can bet any money that they will make the same decisions again.

Harder to understand is why a small band of respected leaders such as Phil Gramm, Bob Rubin and Alan Greenspan set out on what amounted to a holy jihad against accountability and transparency in banking. “The public” did not demand banking reform because “the public” had no idea what banking reform is. Alan Greenspan, on the other hand, must have had some idea where his jihad was leading. Uncle Alan represented Charles Keating in 1984.

I will repeat Krugman’s conclusion because the point cannot be made enough.

[T]he larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.


Give The Man One White Chip*

Via the NYT we learn what constitutes “big” to a Republican congressman.  (No, children…don’t go there.)

(Hell.  This is the internet.  Go there if the spirit moves you.)

By now, just about everyone with a pulse and an interest in politics knows that the budget debate produced much more kabuki than actual cuts.  Rather the reverse in fact:

According to a Congressional Budget Office comparison, the bill would produce only $350 million in tangible savings this year, in part because cuts in domestic programs were offset by an increase of about $5 billion for Pentagon programs.


When projected emergency contingency spending overseas is figured in by the budget office, estimated outlays for this year will actually increase by more than $3 billion.

There are longer term effects that restrain spending.  Albert Einstein is said to have said that the only true miracle in the universe is compound  interest.  That’s apocryphal, of course, but it is true that cuts in baseline expenditures in discretionary spending will propagate through the years to come:

The agreement does put the brakes on what had been a steady growth in spending by federal agencies. Future savings would be greater as the cuts took hold — a point Republican aides emphasized by noting that the plan is estimated to cut spending by $312 billion over the next decade.

Sounds like a lot of money.  At least, so says those members of the GOP, who quail before the wrath of the pitchfork brigade that they’ve turned into their base.  Hence nonsense like this:

“Big stuff,” said Representative Tom Price, a Georgia Republican and leading conservative.

Yeah, I know.  A billion here and a billion there and pretty soon you’re talking real money.


Except that $312 billion, for all that it could buy is …


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David Stockman is Shrill

Via TPM:

“It doesn’t address in any serious or courageous way the issue of the near and medium-term deficit,” David Stockman told [Brian Beutler] in a Thursday phone interview. “I think the biggest problem is revenues. It is simply unrealistic to say that raising revenue isn’t part of the solution. It’s a measure of how far off the deep end Republicans have gone with this religious catechism about taxes.”

Stockman is still on the wrong side of critical issues — the architect of the Reagan deficits loves him some entitlement pain…


…but, as Beutler reports, he

…breaks faith over taxes and the GOP’s unwillingness to slash defense spending. And he laughs off the notion that the plan will do anything about unemployment, let alone dramatically reduce it, which Ryan and his plan claim it will. “This isn’t 1980. It’s not morning again in America. it’s late afternoon, or possibly even sunset.”

Oh noes! Someone dares to suggest that America may be exceptional only in the self-inflicted wounds that mark its decline.


As soon as I recover from my attack of neurasthenia, I’ll be sure to bestow some appropriately framed certificate of Moore-ishness upon this miscreant’s head.


Image: Alejo Fernández, The Scourging of Christ, before 1543

Children With Matches, Playing in the Powder Magazine.

…That would be your present-day Republican party.

The just concluded budget skirmish was a mere amuse bouche to the gluttons-for-(other people’s)- punishment that is your modern GOP.   The New York Times reports today on what looks to be the mother of all budget battles to come over the vote to raise the debt limit.

I’m waiting for the chorus of the swaddled commentariat to tell us just how principled are Republican moves like these:

…they will again demand fundamental changes in policy on health care, the environment, abortion rights and more, as the price of their support for raising the debt ceiling

If they don’t get what they want, and actually block the Treasury from raising more obligations, then this is how the Grey Lady (no longer) of 43rd St. rather demurely describes the consequences:

Once the limit is reached, the Treasury Department would not be able to borrow as it does routinely to finance federal operations and roll over existing debt; ultimately it would be unable to pay off maturing debt, putting the United States government — the global standard-setter for creditworthiness — into default.


The repercussions in that event would be as much economic as political, rippling from the bond market into the lives of ordinary citizens through higher interest rates and financial uncertainty of the sort that the economy is only now overcoming, more than three years after the onset of the last recession.

That is:  with still achingly high unemployment; wage stagnation; food and energy cost hikes; the rise (again) of the financial sector’s share of corporate profits nation wide; the increasingly worn safety net and all that, the GOP is threatening to make life worse on just about every economic and social axis imaginable.


The irony is that it may be our last, best hope that the monied class will be able to tame the beast they’ve unleashed.  Here’s Jamie Damon, head of JP Morgan Chase and someone often seen as one of the non-monstrous Wall St. types:

“If anyone wants to push that button, which I think would be catastrophic and unpredictable, I think they’re crazy,” Mr. Dimon said recently at the United States Chamber of Commerce.

But the problem is that this is what he — and the rest of us — have to contend with:

Representative Mick Mulvaney… dismissed warnings about default as “just posturing,” and said Democrats should bear the responsibility for passing any measure to increase the borrowing limit.


“It’s their debt,” he said. “Make them do it. That’s my attitude.”

Except, of course, this “Democrats did it” nonsense is simply false.   Here’s the key part of the Times piece, an all too rare fact-based description of where our current debt comes from:

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They’re Not Even That Consistent

I like the general theme of Sullivan’s bit about the meaninglessness of labels with respect to modern Republicans. However, this is simply wrong.

Income tax rates are now lower than they were under Ronald Reagan and far lower than they were under Eisenhower. And yet it has become a Norquistian non-negotiable that no taxes can be raised at all on anyone[…]

Republicans will gladly increase taxes on poor people. Republicans will annul tax credits that favor the poor even faster.

You cannot predict Republican behavior with any single principle. Full stop. For one example, take Newt Gingrich (please). Or look at the Affordable Care Act. Orrin Hatch cosponsored essentially the same bill in the 90’s and defended it until the week when Obama embraced it as a compromise plan. Now he says it is worse than Hitler. Mitt Romney implemented the plan in Massachussetts, and it’s working great! Just don’t ask Mitt to defend his greatest achievement. He won’t. As another example, take any issue that Mitt Romney ever spoke about more than once.

True, virtually everything they fight for will make the rich more secure or subdue the not-rich, but not always, and certainly not if it means that they agree with something that a Democrat proposed first.

And there, my friends, is the main difference between Republicans today and the people Sullivan used to know and love. Once upon a time the GOP would gladly cross the aisle and work with Democrats to screw the poor. Now even that exalted goal must take a backseat to petty displays of spite by loud, stupid bigots like Richard Shelby, John Kyl and Jim DeMint. What was once a genteel agreement to slowly throttle the working class has devolved into a naked gibbering scramble for the bundle of fasces, and that just won’t do.