Seething Over the Economy
Dean Baker writes today about "several center-left blogger/columnists" — that's me! — who have suggested that "progressives should be happy to cut a deal now on Social Security and other issues related to the budget." But he says that's wrong. The real problem is that we need to rescue the economy today:
More than 25 million people are unemployed, underemployed, or have given up looking for work altogether. For most of these people, every day is a struggle to support their family and hold onto their home. The projections do not show any substantial improvement in this situation for years.
The priority for policy must be getting people back to work....Remember, these people are unemployed not because they did anything wrong, but because people like Alan Greenspan, Ben Bernanke and others in policymaking positions messed up on their jobs.
Following directly off this point, it is amazing how right in front of our own eyes, the Wall Street gang has managed to divert the public's attention from the wreckage caused by their greed and incompetence to the "entitlement problem" (i.e. Social Security and Medicare). This is the moment where we should be looking to restructure and downsize the financial industry.
I agree almost entirely. My main disagreement is over Social Security, where I wish I could persuade progressives that a deal to shore up its finances now — while privatization is largely off the table — would be good both for Social Security itself and for the liberal project more generally. But in today's atmosphere I can understand why that's a hard sell.
But here's the thing on Dean's broader point. I've been a registered Democrat since I was 18. And I completely agree that our economic priority right now ought to be a huge dose of fiscal stimulus. Unfortunately, it seems pointless to waste my breath on that argument. We have a Democrat in the White House and he's not making that argument. The Democratic leadership in Congress isn't making it either. If they were, the Blue Dogs in my party wouldn't support higher spending anyway and it would die. And even if the Blue Dogs came around, Republicans would block it.
So should I keep screaming into the void about fiscal stimulus even though it's obviously not going to happen? Probably. But without help from anyone in the party I call home, it's pretty hard to maintain the energy for endless amounts of quixotic blogging.
In other words, I'm frustrated. No. That's not nearly strong enough. I spend most of my time just seething whenever I think about this. Especially because of what Dean says in the final paragraph I quoted: we're where we are because Republicans put us here. But no one cares. We're still letting them call the shots.
The facts of the past decade are pretty clear, after all. George Bush inherited an uncommonly vigorous economy from Bill Clinton: growth was high, business was booming, wages were growing, and the federal government was running a surplus. This ended in 2001, but it ended with one of the mildest and shortest recessions on record and provided Bush with a chance to fully apply Republican orthodoxy to the economy: multiple rounds of tax cuts, light regulation, and the most business friendly atmosphere from the White House imaginable. The result was catastrophic. The Republican expansion from 2001 through 2007 was the weakest since World War II: productivity and GDP gains were mediocre, employment growth was weak, and wages were stagnant. Only corporate profits prospered. And this period of historically weak growth was ended by a financial disaster worse than any since the Great Depression. That's the Republican legacy of the aughts: a strong economy turned first anemic and then completely crippled. Welcome to Washington, President Obama.
It simply beggars imagination that Republicans and the business community have managed to make everyone forget this so soon. But they have. And so instead of talking about how big a stimulus package we should pass, we're talking about cutting off unemployment benefits, reducing federal spending, insisting that states tighten their belts, retaining tax cuts for the rich, and halting the scourge of "regulatory uncertainty." It's just mind boggling.
And yet, that's where we are. And I'm really not sure what to do about it.