Sunday, December 03, 2017

silver lining and an opportunity

There's a silver lining and an opportunity in what has been happening in Congress.

The big steal effected by the GOP necessitated blowing up the obsolete protocols of the Senate and the House. You remember those protocols from 2009, when we were all told that we couldn't have a nice public option and a much more extensive ACA cause we needed sixty votes to do it in the Senate. As the GOP has shown, if you have the majority, you make the rules. When the Dems are the majority in the House and the Senate, or even just one chamber, they will no longer be able to toss the progressive promises that put them there out cause of 'bi-partisanship", or some fuckwad rule made up in 1980. The GOP has accidentally liberated Congress and made it more democratic. This is a definite huge advance.


The opportunity is for the Dems to get rid of their Herbert Hoover complex. Until the 90s, the one D. advantage was that they understood the business cycle. The GOP, having a religious faith in the market, can't admit to market failure. The D.'s then were the adult party. As adults, they realized that the question about the deficit is when we should have one and what it should do. Among the many "problems" with the Clinton administration was the way it hustled fifty years of experience out there door, passing de-regulatory legislation that was implicitly founded on the impossibility of market failure (hence that piece of TNT, sponsored by Phil Gramm and endorsed by Bill C., called the Commodities Modernization Act of 2000, which basically primed the depression of 2008) and by fetishizing deficit reduction. The latter resulted in the idiotic politics of 2000 - an election year in which the signals were that a recession was here - in which the Clinton policiy of protecting the budget surplus turned into the politics of putting an "iron box" around social security, which was what happens when you lose the justification for a policy and you pick one ad hoc. Bush, proving that a stopped clock is right twice a day, actually addressed the oncoming recession by proposing a tax cut. It was an awful tax cut, and the deficit it caused was a very distant stimulus, but at least it recognized that a stimulus was necessary.


In 2009, Christine Romer, Obama's economic advisor, told him that the stimulus should be twice as big - about 800 billion dollars bigger - to really lift the country out of the depression. There has been talk about whether Larry Summers cut that figure in half, or whether Obama just rejected it - in any case, Obama, taking up the Herbert Hoover cross, allowed the Fed to loan the banks and Wall street much much more than that 800 billion while he introduced and the Congress passed a stimulus of around a trillion dollars. If Romer's advice had been followed, we would have had a much quicker recovery, and we would not have witness wage stagnation for six years for the majority of the working class. In combination with an ACA that was much more like the one O. promised in his presidential campaign, there's a good chance we would have seen D.'s triumph in 2010, instead of failing epically. 


By coincidence, the deficit proposed by the GOP is equivalent to Romer's proposal eight years ago. But it is a deficit that is being unloaded at a time when the economy is near full employment. And it is going to the least likely sector when it comes to economic stimulus. These are the points I am hoping the D.s press. If they press the "deficit! horrors!" button, they really have learned nothing.

No comments: