Austerity Doctors Warn: If We Don’t Stop Spending We’ll Go Blind!

I have seen and heard countless Democrats, including President Obama, make the case that allowing sequestration to happen next week is bad for the country, from jeopardizing our military readiness to damaging our ability to conduct medical research.

However, none of the scary stories that Democrats tell reporters, who then tell the public, are working to change the minds of Republicans, many of whom have actually decided that sequestration is the best cure for what ails the country.

Haley Barbour, former governor of Mississippi and a man who once chaired the Republican National Committee, is one of those Republicans—let’s call them “austerity doctors”—who want to fix the patient by hurting the patient.

National Review.com reported yesterday:

...Haley Barbour says he expects the GOP to allow sequestration to occur, and that the party should see it as an important step toward fiscal responsibility. “I hope and believe that Republicans will allow the sequestration to go into effect, so that we can start down a path of trying to get control of spending and reduce the deficit,” Barbour explained on Fox Business Network’s Cavuto…

These austerity doctors are so worried about the deficit that they are willing to do almost anything to get Americans to stop what Republicans see as our bad habit of pleasuring ourselves with federal dollars.

All of which reminds me of another doctor who tried to do what he thought was right by using rather strange techniques to get Americans to stop pleasuring themselves.

John Harvey Kellogg is most famous for co-inventing the breakfast cereal Corn Flakes in 1895. But he also had a medical degree and ran a sanitarium in Battle Creek, Michigan, owned by the Seventh-day Adventist Church. And he also held what we regard today as bizarre opinions about, well, I’ll let Wikipedia say it:

He was an especially zealous campaigner against masturbation.

Self-pleasure, according to the theologically-minded doctor, was self-destructive:

Kellogg strongly warned against the habit in his own words, claiming of masturbation-related deaths “such a victim literally dies by his own hand,” among other condemnations. He felt that masturbation destroyed not only physical and mental health, but the moral health of individuals as well.

Dr. Kellogg thought that masturbation caused cancer, epilepsy, insanity, and, according to Wikipedia, “dimness of vision.” Yep. Keep it up and you’ll go blind.

Given the doctor’s views, something had to be done to fix things:

Kellogg worked on the rehabilitation of masturbators, often employing extreme measures, even mutilation, on both sexes. He was an advocate of circumcising young boys to curb masturbation and applying phenol (carbolic acid) to a young woman’s clitoris.

He also creatively applied “one or more silver sutures” to the penis in order to make erections “impossible,” therefore,

the slight irritation thus produced acts as a most powerful means of overcoming the disposition to resort to the practice.

This guy was serious:

He also recommended, to prevent children from this “solitary vice”, bandaging or tying their hands, covering their genitals with patented cages and electrical shock.

In his Ladies’ Guide in Health and Disease, for nymphomania, he recommended “Cool sitz baths; the cool enema; a spare diet; the application of blisters and other irritants to the sensitive parts of the sexual organs, the removal of the clitoris and nymphae…

In Teaching America About Sex: Marriage Guides and Sex Manuals from the Late Victorians to Dr. Ruth , the authors, M.E. Melody and Linda Peterson, try to explain Dr. Kellogg’s work:

Kellogg certainly was not deluded. Part of the American tradition includes a view of a righteous God who punishes moral transgressions. In Kellogg’s view, these transgressions are acts of treason against divine governance and, hence, call for decisive responses. Though his teaching about masturbation seems extreme, the act must be understood as rebellion against divine governance, an ostensibly minor event that can, if amplified, cause the destruction of nations.

Masturbation can cause “the destruction of nations”? I remind you that Speaker John Boehner told a gathering of religious broadcasters two years ago:

Yes, this debt is a mortal threat to our country.

If all this is a little too much for you, good. It’s too much for me too. I share with you Dr. Kellogg’s zeal against onanism because I see a similar zeal among Republicans regarding, as I said, what they see as our national bad habit of pleasuring ourselves with federal dollars. They want to stop it, and if it means using the fiscal equivalents of silver sutures and carbolic acid and cool enemas and a spare diet—the sequester—then so be it.

Meanwhile, economist Paul Krugman—who has been under fire from the austerity doctors on TV and radio and in print—has exactly the right take on the sequestration mess:

The right policy would be to forget about the whole thing. America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon. Meanwhile, we have a weak economy that is recovering far too slowly from the recession that began in 2007. And, as Janet Yellen, the vice chairwoman of the Federal Reserve, recently emphasized, one main reason for the sluggish recovery is that government spending has been far weaker in this business cycle than in the past. We should be spending more, not less, until we’re close to full employment; the sequester is exactly what the doctor didn’t order.

“The Original Welfare State” Versus America

About three years ago I was in Boston and I chatted with a couple of German salesmen who were staying at our hotel.  They were in the city on behalf of a German manufacturer of lab equipment, and they had an appointment at Harvard.

I was interested in their standard of living and the effects of reunification and they explained to be the differences between the former West German states and those in the East, and how those in the East were not as “productive” as elsewhere and it would take much time to integrate them into their way of life.

I thought about those two gentlemen yesterday, when on The Dylan Ratigan Show I saw some amazing graphics that compared the relative economies and economic policies of Germany and the United States.  It turns out that David Leonhardt, economics columnist for The New York Times, had previously covered this ground.  He pointed out that both liberals and conservatives have used Germany as an example to support a) stimulus and b) austerity as a way out of our economic mess.  But, he said:

the full story is more interesting than any caricature. In the last decade, Germany has succeeded in some important ways that the United States has not. The lessons aren’t simply liberal or conservative. They are both…

The brief story is that, despite its reputation for austerity, Germany has been far more willing than the United States to use the power of government to help its economy. Yet it has also been more ruthless about cutting wasteful parts of government.

The German economy has outperformed ours since the middle of the last decade, Leonhardt says, and in the process, “most Germans have fared much better than most Americans, because the bounty of their growth has not been concentrated among a small slice of the affluent.” Here are a couple of the charts used on The Dylan Ratigan Show:

And here’s the unemployment rate comparison:

Leonhardt noted that the Germans have made cuts to unemployment benefits and have reduced early-retirement incentives, as well as attempted to “move the long-term unemployed into the labor force.” These are the things that you hear conservatives in the media talk about, as they argue for drastic budget cuts here at home. But the truth is that in terms of safety-net benefits here in the United States, the German system is still relatively generous.

The real point, and the real difference between the United States and Germany, though, is this:

But the German story is not merely about making government more efficient. It’s also about understanding the unique role that government must play in a market economy.

That role starts with serious regulation. American regulators stood idle as the housing bubble inflated. German banks often required a down payment of 40 percent.

Unlike what happened here, German laws and regulators have also prevented the decimation of their labor unions. The clout of German unions, at individual companies and in the political system, is one reason the middle class there has fared decently in recent decades. In fact, middle-class pay has risen at roughly the same rate as top incomes.

Labor unions.  Dirty words here in the United States, thanks to Republican meme-making and legislation, but not in Germany. From Wikipedia:

German industrial relations are characterized by a high degree of employee participation up to co-determination in companies’ boards (“Aufsichtsrat”), where trade unionists and works councils elected by employees have full voting rights. Local trade union representatives are democratically elected by union members and formally largely autonomous. Central boards of directors (“Vorstand”) are elected by delegates.

Trade unions in Germany define themselves as being more than a “collective bargaining machine,” but as important political player for social, economical and also environmental subjects, especially also for labor market policy and professional education.

Hmm.

And we’ve all witnessed the war on collective bargaining waged by Republican governors and legislators here in the U.S., but in Germany most workers are covered by a collective bargaining agreement:

The relative friendliness of the German government to labor unions and collective bargaining is perhaps the best reason to explain the following eye-popping income-disparity graphic from Ratigan’s show:

That graphic is difficult to fathom, and should be even more difficult to accept. The top 1% of wage earners here in America are cleaning up, while in Germany, the wealthy, while still doing well, are earning income at the same rate as 40 years ago.  Stunning.

Finally, Leonhardt says, there is the issue of taxes:

Germany does not have a smaller budget deficit because it spends less. Germany, you’ll recall, is the original welfare state. It has a smaller deficit because it is more willing to match the benefits it wants with the needed taxes. The current deficit-reduction plan includes about 60 percent spending cuts and 40 percent tax increases…

Here’s the chart: 

As Leonhardt says, no one is advocating “that the United States should want to become Germany.”  We are richer and still attract immigrants by, unfortunately, the truckload. But in our weakened condition we should be willing to deal with our weaknesses.  But we are not, at least in terms of the political parties cooperating with one another to address them.

Leonhardt:

Some Democrats say Social Security and Medicare must remain unchanged. Most Republicans refuse to consider returning tax rates even to their 1990s levels. Republican leaders also want to make deep cuts in the sort of antipoverty programs that have helped Germany withstand the recession even in the absence of big new stimulus legislation.

I resist the implicit “both sides are equally too blame” in that statement.  I don’t know many Democrats, if any, who say “Social Security and Medicare must remain unchanged.”  But there is a point to be made that Democrats must be willing to explain how those programs can be adjusted to keep them solvent in the future.

In the mean time, Republicans continue to insist that our problems should be solved on the backs of the poor, the disabled, and the soon-to-be elderly, as well as on the backs of our education-challenged children.  And they insist on these things while advocating even more tax relief for the wealthy.

Why, just the other day, one of their most viable, “adult” presidential candidates, Tim Pawlenty, came out with a budget proposal that would lower tax rates for both the wealthy and corporations to cartoonish levels.

And it would be as funny as a cartoon, if our economic troubles were merely part of a Looney Tunes script. But they are not, and the Germans seem to understand that.

While We Were Away, Republicans Were Trying to Kill The Economy

While the mess in Wisconsin drags on, the economic recovery remains fragile and anemic.

And the Republicans in Congress—almost unnoticed—are doing everything they can to exacerbate its fragility and deprive it of much-needed iron—government spending.

Most every economist this side of Rush Limbaugh understands that there is a deficiency in demand in our economy.  That’s one reason (but not the only one) why American businesses are sitting on a Chris Christie-size pile of cash.   But what to do about the demand problem is the issue.

The Republican answer is austerity.  Crippling austerity, it turns out.  Last week, Speaker Boehner famously said he doesn’t much care (“so be it”) if the GOP spending cuts kill jobs, because they would be government jobs.

But yesterday, the Financial Times published a story indicating that it won’t just be government workers who take a hit from Republican budget-cutting hysteria. The headline was:

Goldman sees danger in US budget cuts

The story began:

The Republican plan to slash government spending by $61bn in 2011 could reduce US economic growth by 1.5 to 2 percentage points in the second and third quarters of the year, a Goldman Sachs economist has warned.

Even if—to avoid a government shutdown—Democrats managed to whittle down the budget cuts in a compromise deal with Republicans, say, to $25 billion, that will still “lead to a smaller drag on growth of 1 percentage point in the second quarter.”

Mark Zandi, chief economist at Moody’s Analytics, and former John McCain campaign adviser, concurs:

The betting is that we’ll see cuts somewhere close to $25-, $30 billion that take affect beginning in the second quarter of this year. And that could shave growth by as much as a percentage point. So it would weigh on growth. It would have longer lasting affects, but near-term it would be a negative.

Kudos to at least one Senate Democrat Chuck Schumer, who said,

This nonpartisan study proves that the House Republicans’ proposal is a recipe for a double-dip recession. Just as the economy is beginning to pick up a little steam, the Republican budget would snuff out any chance of recovery. This analysis puts a dagger through the heart of their ‘cut-and-grow’ fantasy.

Unfortunately, the cut-and-grow fantasy is not that easy to kill.

Paul Krugman, wrote a few days ago:

It’s amazing how this whole crisis has been fiscalized; deficits, which are overwhelmingly the result of the crisis, have been retroactively deemed its cause. And at the same time, influential people around the world have seized on the idea of expansionary austerity, becoming ever more adamant about it as the alleged historical evidence has collapsed.

Since the fall of 2008, there has emerged two diametrically opposed approaches to solving our (and the world’s) economic predicament:

(1) Stimulate the economy through government (deficit) spending until consumer demand picks up sufficiently to sustain a strong recovery

(2) Drastically cut government spending because deficits are a drag on the economy

It appears to me that the balance of economic opinion—from real economists—agrees with (1).  But Republicans—energized by anti-government deficit-phobes in the Tea Party movement—have successfully changed the debate from nurturing the economy back to health and creating jobs to killing labor unions, dismantling government programs, and making draconian cuts in government spending.

It’s fair to ask: What does killing Big Bird and collective bargaining have to do with lowering the unemployment rate?

Mark Thoma, Professor of Economics at the University of Oregon, wrote in The Economist:

Policymakers are not taking proper account of the risk of an extended period of stagnation. We should be pursuing additional fiscal stimulus along with quantitative easing as insurance against a stagnant economy that persists into the future, in fact this should have happened months ago.

He wrote that in October of 2010.

But Thoma is a real economist.  He doesn’t just play one on TV or radio.  And as Krugman said,

From where I sit, it looks as if the ascendant doctrines in our policy/political debate are coming precisely from people who don’t know and don’t care about technical economics. The revival of goldbuggy sentiment, the fear of hyperinflation in the face of high unemployment, the continuing force of the notion that tax cuts don’t increase the deficit, aren’t coming from some subtle battle among mathematical modelers; they’re coming from the same people who reject evolution, climate science, and more. They don’t need no stinking technical analysis. The truth is that the economics profession is proving far less relevant to public debate, even in the face of economic crisis, than was dreamed of in our philosophy.

Now, whether you think it good or ill that professional economists have lost their clout, the fact remains that in their place have come fiscal and monetary policy geniuses like Michele Bachmann and Glenn Beck and, God forbid, Ozark Billy Long.  People like these three have more to do with how we are fighting this crisis than those who have spent a lifetime studying economics.

And if that doesn’t scare you, then you must be a wealthy Republican.

[J.S. Applewhite / AP (left, center); Cliff Owen / AP]
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