The Watcher Cat

The Watcher Cat

Friday, June 15, 2012

What Lies Beneath

David Brooks is normally one of my least favorite columnists. But today's column seems to be an exercise of partial truth-telling on Brooks's part, albeit the truth is an ugly one:
I guess I’d say Republicans don’t have an illness; they have a viewpoint. Let me describe it this way: In the 1950s, Dwight Eisenhower reconciled Republicans to the 20th-century welfare state. Between Ike and George W. Bush, Republican leaders basically accepted that model.


America’s economic stagnation is just more gradual. In the decades after World War II, the U.S. economy grew by well over 3 percent a year, on average. But, since then, it has failed to keep pace with changing realities. The average growth was a paltry 1.7 percent annually between 2000 and 2009. It averaged 0.6 percent growth between 2009 and 2011. Wages have failed to keep up with productivity. Family net worth is back at the same level it was at 20 years ago.


The welfare model favors security over risk, comfort over effort, stability over innovation. Money that could go to schools and innovation must now go to pensions and health care. This model, which once offered insurance from the disasters inherent in capitalism, has now become a giant machine for redistributing money from the future to the elderly.
I think Brooks is accurately reflecting the GOP world view here, and I think it opens up a vista into the cognitive dissonance that typifies it, even as he tries to make it sound reasonable.

First, note the years of decline picked by Brooks: 2000-2009. Years of Republican dominance, in which GOP majorities in Congress, set the agenda, making decisions as a result of which, as Nobel laureate Joseph Stiglitz has compellingly argued, "our grandchildren will still be living with, and struggling with, the economic consequences of Mr. Bush." (Stiglitz's detailed analysis is worth reading).

In other words, Republicans blame the "welfare state" (didn't know we had one after welfare reform) for the consequences of Republican decisions taken under Republican leadership.

Their prescription: Having cut taxes on the wealthy to their lowest level since Eisenhower was president, we should cut them to the level of the Hoover years, while raising them on low-income working families. Also, we should lower government spending to 16% of GDP, "by 2050 under Ryan’s budget path, a target specifically included in the Ryan budget resolution. This would be the lowest level since 1950, when Medicare, Medicaid, most federal funding for education, highways, and environmental protection, and various other significant federal activities did not exist." As the CBPP further explains, "[t]he Ryan budget would start down this path immediately, with severe cuts in non-defense discretionary programs over the next ten years. It would cut funding for these programs by nearly $1.2 trillion below the austere funding caps that Congress enactedlast August (by 2021, funding would be more than 22 percent below what it would be under the cap) — and by $800 billion below the level to which non-defense discretionary funding would be shrunk if sequestration were allowed to take effect." (Their italics, not mine).

What would fill the gap created by this disinvesting the GOP argues for in services, infrastructure, the elderly, health care, and, y'know, pretty much everything the government does?


The wonderful magic of the Invisible Hand.

In essence, the GOP is advocating a doubling down on the policy decisions, based on a theology of markets, not on empirical analysis or real world experience, of the Second Bush Administration, with the avowed goal of shrinking government to its size and scope in the Lochner Era. To do this, Republicans need to persuade us that the New Deal and post-World War II reforms, which fueled the creation of the strongest middle class in America's history, are disastrous, using as evidence the harm that eventuated on their own watch.

I don't mean to suggest that the Great Recession is entirely the fault of the GOP; there's plenty of blame to go around as Democrats caught the deregulation bug in the 1990s, and both parties didn't conduct follow-up oversight as to the amount of risk in the system. And the bad decision-making by private actors, business and consumer alike, was the sine qua non for the crash. But ultimately, the GOP fostered policies which greatly sapped our ability to respond to the crash while furthering deregulation as if it were a good in itself, and not a tool which is appropriate in instances where regulation exercises a smothering effect of economic growth. And, ultimately, it wasn't FDR or Ike, or JFK or LBJ--or even Richard Nixon--who crashed the economy. It was us, under GOP principles, playing in the casino with the nest egg.

(Edited for clarity)

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