One of them is economist James Galbraith, a quiet protester, but he knows his stuff.
Give the Republicans credit for clarity: they oppose spending for people who don't vote Republican.
Nothing new there. What's new are the tactical decisions and those are very effectively implemented by shallow, credulous media. The bullhorn is enormous; the brains behind it are small and malevolent.
While Speaker Boehner protected a $450 million made-in-Ohio fighter engine that the Pentagon doesn't want, his cuts would fall on food, education, heating oil, health, police, roads and sewer systems throughout urban, low-income and Democratic America.
Galbraith who, like many of us, had some hope for Obama. Obama's performance on the debt and deficit fronts seems to have finished that off.
The White House also has just one goal: re-election. So it chose a few big cruel cuts – such as low income heating assistance -- as a political sacrifice (call it Obama's Ricky Ray Rector moment). And then it proposes a great many smaller cuts, and some worthy increases. In this way the president looks both “serious” and “reasonable” – just the formula for winning the propaganda war.
The merits plainly don't matter. No one's asking, for instance, should we clean up the Great Lakes? That program – and many others – are the pure victims of the mid-term election and rightward shift in the political winds.
What many see as the Republicans' weak understanding of how the economy works isn't the whole story. It isn't just a coincidence that the timing of "austerity," if it manages to slow down the economy (as economists believe it will), has the primary purpose of making sure Obama will take the hit in 2012.
On no theory will the cuts strengthen the economy. And in the real world, they won't much reduce the deficit either. Indeed if the cuts go through, the economy will weaken, tax revenues will fall, and the deficit will not improve by much – if at all.
We're looking at stupidity, venality and irony. The demise of the Great Lakes cleanup is one of those ironies. Letting pollution continue in the Great Lake ultimately hurts the whole country, but the most brutal hits will be felt by the states bordering the lakes. With the exception of Illinois, they have all taken a hard-right turn.
It's like watching a man as he tries to hand-crank himself through a meat grinder.
So what about the deficits? Just ignore them? I think that if Americans really understood how an economy works in a sovereign nation in the 21st century, they might avoid being so easily fooled by the Republican "austerity" cant.
Quoting from Galbraith again:
To put things crudely, there are two ways to get the increase in total spending that we call "economic growth." One way is for government to spend. The other is for banks to lend. Leaving aside short-term adjustments like increased net exports or financial innovation, that's basically all there is. Governments and banks are the two entities with the power to create something from nothing. If total spending power is to grow, one or the other of these two great financial motors--public deficits or private loans--has to be in action.
For ordinary people, public budget deficits, despite their bad reputation, are much better than private loans. Deficits put money in private pockets. Private households get more cash. They own that cash free and clear, and they can spend it as they like. If they wish, they can also convert it into interest-earning government bonds or they can repay their debts. This is called an increase in "net financial wealth." Ordinary people benefit, but there is nothing in it for banks.
And this, in the simplest terms, explains the deficit phobia of Wall Street, the corporate media and the right-wing economists. Bankers don't like budget deficits because they compete with bank loans as a source of growth. When a bank makes a loan, cash balances in private hands also go up. But now the cash is not owned free and clear. There is a contractual obligation to pay interest and to repay principal. If the enterprise defaults, there may be an asset left over--a house or factory or company--that will then become the property of the bank. It's easy to see why bankers love private credit but hate public deficits.
All of this should be painfully obvious, but it is deeply obscure.
Obscure largely because we've been conned into believing so much bullpucky over the past three decades that whole generations are being taught the equivalent of day is night and night is day.
It's possible, of course, that all the deficit hysteria is intended to divert attention from the dysfunctions of private banking, and so to help thwart calls for financial reform. Is that giving them too much credit? Maybe. Maybe not.
Maybe that guy with his head in the meat grinder is sane compared to most Americans.
