Let’s acknowledge up front that Republicans do not want the economy to improve, at least not until after the mid-term elections, if then. From the moment Obama was in office, they have delayed, watered-down, or stymied every economic initiative from this administration, even if it was something they themselves had proposed earlier, like jobs bills, or pretending that the bank bailout begun under G. W. Bush was actually an Obama Bailout.
Even more malicious is the concerted effort by every Republican office-holder, conservative pundit, and Fox News (their agitprop machine), to convince the American public that Obama’s stimulus has not worked. Constant repetition of a bald-faced lie has served them well in the past, and the Party of Malice, a name every bit as descriptive as “Party of No,” is remarkably proficient now at manipulating public perception so as to create a self-fulfilling prophecy whenever they feel a need. We are being told a “double dip” recession is coming.
Just about every economist agrees that “the market” operates on the public’s assessment of future results, that not only is “irrational exuberance” at the root of every upward trend in stock prices in a bull market, especially in creating “bubbles,” but irrational emotion and fear operate equally well in creating a downtrend, a bear market, a bust; once started, the emotions feed upon themselves. Hoover’s advisors lamented the fact that all it would take to turn around the 1929 market crash was for people to shake off doom and gloom, show confidence, and buy. Then, as now: no confidence, no buying=no recovery…. i.e., no priming of the pump of the economic engine.
Therefore, it was obvious to the subterranean analysts in Republicanland that the first step in plotting a return to power would have to be to keep the Recession going, to hamstring any signs of recovery and, if possible, to deepen the misery. Apparently, they never considered the alternative, that of cooperating with Democrats in fighting the economic collapse, or perhaps of suggesting how to help ameliorate the tribulations of their fellow-Americans, even though doing so might have later garnered many votes for their side, because their party had come up with better ideas.
No, from the first day, the Republican response to the economic collapse (which their policies fundamentally caused) has been, as always, a punitive, angry, stubborn and malicious denial—– the same response they have shown over the years to any problem (whether it be a terrorist attack by a second string bunch of fanatics, a hurricane, or scientific warnings about climate change or environmental collapse). The Republicans are convinced that: If you pummel it hard enough, shock and awe it, and kill a high enough body count, whatever it is that you have defined as an enemy will just Go Away. Oh, wait, what if it’s a domestic situation, and such a scorched earth treatment ends up devastating your own country? Answer: No matter, it is far more important that Republicans take and keep power, and that their primary backers make a profit, than that America as a social whole prosper.
This is not to say that the attacks on Obama and Democrats are not also based on a fairly coherent political philosophy, something more, that is, than the petulant whining of the defeated plutocrats. That Republican philosophy, generally known as Free Market or Friedman economics, is the very same philosophy which set us up for the Wall Street implosion and subsequent global collapse. The elephant house has chosen to deal with that unfortunate fact both by pre-emptive strikes against (a faultily defined) “Keynesian economics” on the assumption that that would be the Democratic answer to the collapse (as it had been under FDR in the 1930’s), and by an elaboration of a particular form of Austrian economics with a thick frosting of libertarianism—- this is a direction in which the post-Reagan Republican Party has been trending anyway, under the increasing influence of dyspeptic radical conservative Big Money Families like Koch, Scaife, Mellon, and Coors, for example.
Thus the public discourse has been inexorably turned by Republicans to 1) Austrian economists’ concerns about excessive printing of “fiat money,” the rise of the national debt and/or the national deficit—- all portrayed as Obama’s “fault”—- and 2) libertarian concerns about the growth of big government and “socialism.” Here is part of the gloomy narrative spouted daily by GOP hacks and pundits:
The United States, indeed the entire Western system is inexorably in decline; Obama/Democratic policies have failed, and that includes the so-called stimulus; the dollar as the world’s reserve currency will be replaced by the yuan/other currency; everyone should buy gold because of coming hyper-inflation, and the inevitable sovereign default by major Western nations, including the US; our children and grandchildren will stumble and fail under the overburden of huge government debt; social security and entitlements are part of the problem and must be privatized; the environmental concerns and the climate change ideas are at best questionable but more likely are not true at all, and efforts to deal with these imaginary problems are job killers; regulations and attempts to make big international companies accountable and more transparent are unnecessary and inhibit innovation; free and unregulated markets solve all problems, the collapse was due to government intference and regulation; all taxation is a form of theft, perpetrated by whiney losers against productive good people; blah, blah, blah
Given that these toxins (some of which do, indeed, have at least a tenuous attachment to a shady fact here or there) are circulating in the blood of every Republican out there, poisoning the body politic and crushing any honest effort at economic recovery, it is clear that Republicans need outside intervention, a dialysis to soak up the toxins and clear the blood of the body politic. What would that dialysis look like, pray tell?
*Immediately pass a second stimulus, especially spending on unemployment benefits and aid to state governments because these two forms of spending provide the “biggest bang for the buck.” The first $787 stimulus was, say some, too small, too slow. Nevertheless, says Laura Tyson in The New York Times on 28 August, it is working; without it, unemployment would be over 11.5 percent, but as it is, it added 3 million jobs. The noisy worries about size of government have obscured the fact that “stimulus spending has helped stabilize the economy,” says Laura Tyson; the stimulus must be extended, especially to education because, the more Americans become educated, the more both cyclical and structural unemployment are reduced. We need more stimulus spending on our infrastructure as well, because such improvements are not only long overdue, but because of the multiplier effect of such expenditures. Under present circumstances those famous market forces will never do what is necessary.
It took government subsidies to extend the transcontinental railroad network in the 1800’s, by the way, so what’s wrong with doing the same thing now? The temporary increase in the deficit caused by a second stimulus will not be as dangerous as continued economic decline; besides, won’t it be offset and paid for by the resulting growth?
*Acknowledge that war is not good for the economy. It is Republican dogma that it was not FDR’s “socialist government spending” that stimulated the US out of the Great Depression, but rather it was World War II. This has been proven totally false, according to an article in The New York Times which pointed out that GDP growth during World War II has been greatly exaggerated, and that “five-sixths of the decline of the decline in output relative to the trend that occurred during the Depression had been made up before 1942.” When it comes to today’s mis-named War on Terror, Admiral Mullen, Chairman of the Joint Chiefs of Staff, has warned that the national debt is a greater threat to US security than terrorism, because, he says, by 2012 American taxpayers will be paying $600 billion interest annually on the national debt, and that amounts to “one year’s worth of defense budgets.” Others have pointed out that the Iraq-Afghanistan Wars account for at least one-third of the budget deficits because they were unfunded. So much for depending on war to restore economic health. Therefore, *End military adventurism overseas.
*Finally, kill Free Market economics. Continuing to rely on the undiluted and currently exaggerated tenets of Friedman economics as a frame for developing economic policy is simply doing the same thing over and over and expecting a different result. In other words, crazy. Getting rid of it will not, repeat not, kill capitalism, nor will it result in socialism, communism, fascism, or hemorrhoids. The theory has failed repeatedly; its adherents sound like the ancient warlocks who, when one of their incantations or potions failed to produce the promised result, always blamed the recipient for “not believing strongly enough.” Dumping this failed frame frees us to mix and match the best parts of several different theories, and invent new ones. Doing so will reduce the power of entrenched oligopolies which have profited at our expense under the rule of the Free Market.
*PS: The best therapy of all will be to defeat and remove every Republican office holder across the country in November 2010. This will completely short-circuit the reproduction of their vile toxins, and enable honest brokers with the best interests of the country (instead of a political party) to start the healing. At least, it would be a start, and might encourage the late, great, Republican Party to change its modus operandi so Republicans try to help the country instead of “destroying it in order to save it.”
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