“Failure Is Not An American Habit”

I’m going to quote at length a passage from President Obama’s speech in Green Bay this morning because it represents his closing pitch to Americans, and, unfortunately, most Americans won’t hear much, if any, of it, only what fits into a short segment on the nightly news or a snippet on radio or cable TV:

Back in 2008, when we talked about change, I told you, I wasn’t just talking about changing presidents, I wasn’t just talking about changing parties, I was talking about changing our politics. I ran because the voices of the American people, your voice, had been shut out of our democracy for way too long, by lobbyists and special interests, politicians who believe that compromise is somehow a dirty word.

By folks who would say anything to win office and do anything to stay there. 

The protectors of the status quo are a powerful force in Washington. And over the last four years, every time we’ve tried to make changes, they fought back with everything they’ve got. They’ve spent millions to stop us from reforming health care and Wall Street and student loans.

And their strategy from the start was to engineer pure gridlock in Congress, refusing to compromise on ideas that both Democrats and Republicans have supported in the past. And what they’re counting on now, Wisconsin, is that the American people will be so worn down by all the squabbling, so tired of all the dysfunction, that you’ll actually reward obstruction and put people back in charge who advocate the very policies that got us into this mess.

In other words, their bet is on cynicism.

But, Wisconsin, my bet is on you. My bet is on the decency and good sense of the American people. Because despite all the resistance, despite all the setbacks, we’ve won some great fights. And I’ve never lost sight of the vision we share. That you would have a voice, that there would be somebody at the table fighting every single day for middle-class Americans who work hard. 

You know, sometimes Republicans in Congress have worked with me to meet our goals, to cut taxes for small businesses and families like yours, to open new markets for American goods, or finally repeal Don’t Ask, Don’t Tell.

And sometimes we’ve had big fights, fights that were worth having. 

Like when we forced the banks to stop overcharging for student loans and make college more affordable for millions. 

Like when we forced Wall Street to abide by the toughest rules since the 1930s. 

Like when we stopped insurance companies from discriminating against Americans with pre-existing conditions like cancer or diabetes, so that nobody in America goes bankrupt just because they get sick. 

I didn’t fight those fights for any partisan advantage. I’ve shown my willingness to work with anybody of any party to move this country forward. And if you want to break the gridlock in Congress, you’ll vote for leaders, whether they are Democrats, Republicans, or Independents, who feel the same way. 

But if the price of peace in Washington is cutting deals that will kick students off financial aid, or get rid of funding for Planned Parenthood, or eliminate health care for millions on Medicaid who are poor or elderly or disabled, just to give a millionaire a tax cut, I’m not having it. 

That’s not a deal worth having. That’s not bipartisanship, that’s not change. That’s surrender to the same status quo that has hurt middle-class families for way too long. But I’m not ready to give up on that fight. I hope you aren’t either, Wisconsin. I hope you aren’t either.

See, the folks at the very top in this country don’t need another champion in Washington. They’ll always have a seat at the table. They’ll always have access and influence. The people who need a champion are the Americans whose letters I read late at night, the men and women I meet on the campaign trail every day.

The laid off furniture worker who’s retraining at the age of 55 for a career in biotechnology, she needs a champion. 

The small restaurant owner who needs a loan to expand after the bank turned him down, he needs a champion.

The cooks, the waiters, the cleaning staff, working overtime at a Vegas hotel, trying to save enough to buy a first home or send their kid to college, they need a champion.

The auto worker who is back on the job, filled with pride and dignity because he’s building a great car, he needs a champion.

The young teacher, doing her best in an over-crowded classroom, with outdated textbooks, she needs a champion. 

All those kids in inner cities and small farm towns, in the valleys of Ohio, or rolling Virginia hills, or right here in Green Bay, kids dreaming of becoming scientists or doctors, engineers or entrepreneurs, diplomats, or even a president, they need a champion in Washington. They need a champion.

They need a champion because the future will never have as many lobbyists as the past, but it’s the dreams of those children that will be our saving grace. That’s why I need you, Wisconsin. To make sure their voices are heard, to make sure your voices are heard.

We’ve come too far to turn back now. We’ve come too far to let our hearts grow faint. Now’s the time to keep pushing forward. To educate all our kids, and train all our workers, to create new jobs and rebuild our infrastructure, to discover new sources of energy, to broaden opportunity to grow our middle class, to restore our democracy, and to make sure no matter who you are or where you came from or how you started out, you can work to achieve your American Dream.

You know, in the midst of the Great Depression, FDR reminded the country that “failure is not an American habit. And in the strength of great hope we must shoulder our common load.” That’s the strength we need today. That’s the hope I’m asking you to share. That’s the future in our sights. That’s why I’m asking for your vote.

I urge all of you to go here and read the complete text of the speech, given 80 years ago, from which the FDR quote above was taken. It is remarkable.

Roosevelt does a short survey of American economic history, including the Industrial Revolution, including a devastating critique of corporations, how they “threaten the economic freedom of individuals to earn a living,” how “we are steering a steady course towards economic oligarchy, if we are not there already.”

He said the day of the “financial titan” was over, and the “day of enlightened administration has come,” an administration with the task of,

distributing wealth and products more equitably, of adapting existing economic organizations to the service of the people. 

Remarkable. Imagine if Barack Obama said that!

Or this:

As I see it, the task of government in its relation to business is to assist the development of an economic declaration of rights, an economic constitutional order. This is the common task of statesman and business man. It is the minimum requirement of more permanently safe order of things….

The Declaration of Independence discusses the problem in terms of a contract. Government is a relation of give and take, a contract . . . Under such a contract, rulers were accorded power, and the people consented to that power on consideration that they be accorded certain rights. The task of statesmanship has always been the redefinition of these rights in terms of a changing and growing social order. New conditions impose new requirements upon government and those who conduct government . . .

Every man has a right to life, and this means that he also has a right to make a comfortable living. He may by sloth or crime decline to exercise that right, but it may not be denied to him. We have no actual famine or dearth; our industrial and agricultural mechanism can produce enough to spare. Our government formal and informal, political and economic, owes to every one an avenue to possess himself a portion of that plenty sufficient for his needs through his own work….

If, in accord with this principle, we must restrict the operations of the speculator, the manipulator, even the financier, I believe we must accept the restriction as needful not to hamper individualism but to protect it….

If Obama said those words, then Fox “News” commentators would undergo such ideological convulsions that all the drugs in Rush Limbaugh’s medicine chest wouldn’t be enough to calm them down.

The World Economy: A Sickness Unto Death?

The fundamentals of the world economy aren’t, in themselves, all that scary; it’s the almost universal abdication of responsibility that fills me, and many other economists, with a growing sense of dread.”

—Paul Krugman

here has long been a great divide among those who seek to explain both the cause and the duration of the Great Depression. What side you are on almost always says something about your politics: liberals have one view, conservatives tend to have another.

Brad DeLong and Barry Eichengreen have written an interesting new preface to the 40-year anniversary edition of Charles Kindleberger’s The World in Depression 1929-1939. The  book, as Wikipedia deftly summarizes it,

advances an idiosyncratic, internationalist view of the causes and nature of the Great Depression. Blaming the peculiar length and depth of the Depression on the hesitancy of the US in taking over leadership of the world economy when Britain was no longer up to the role after WWI, he concludes that ‘for the world economy to be stabilized, there has to be a stabilizer—one stabilizer’, by which, in the context of the interwar years at least, he means the United States.

In a column yesterday, Paul Krugman—whose latest book is titled, End This Depression Now!—worries that policy makers both in Europe and here in the U.S. are repeating past mistakes and failing to act decisively to rescue the world’s economy from the mess that financial recklessness created.

He took a swipe at the European leaders, who have failed to take meaningful action to bail out Spanish banks (“Forget about Greece, which is pretty much a lost cause; Spain is where the fate of Europe will be decided“), and he jabbed domestic Republicans, “who often seem as if they are deliberately trying to sabotage the economy.”

But since Krugman, like all of us should be, is most concerned about the crippling effects of long-term unemployment, he directed his latest attack squarely at the Federal Reserve:

The Fed has a so-called dual mandate: it’s supposed to seek both price stability and full employment. And last week the Fed released its latest set of economic projections, showing that it expects to fail on both parts of its mandate, with inflation below target and unemployment far above target for years to come.

This is a terrible prospect, and the Fed knows it. Ben Bernanke, the Fed’s chairman, has warned in particular about the damage being done to America by the unprecedented level of long-term unemployment.

So what does the Fed propose doing about the situation? Almost nothing. True, last week the Fed announced some actions that would supposedly boost the economy. But I think it’s fair to say that everyone at all familiar with the situation regards these actions as pathetically inadequate — the bare minimum the Fed could do to deflect accusations that it is doing nothing at all.

Why won’t the Fed act? My guess is that it’s intimidated by those Congressional Republicans, that it’s afraid to do anything that might be seen as providing political aid to President Obama, that is, anything that might help the economy.

That’s a fairly serious charge, but recall that GOP candidate for president Rick Perry said this about Ben Bernanke and the Federal Reserve:

If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.

That stupidity and attempt at intimidation was endorsed by the likes of Tea Party spokesman Sarah Palin and represents the sentiments of many right-wingers. But no one on that side seems to be concerned at all about the Fed’s lack of aggressiveness in addressing unemployment (not to mention the failure of conservatives in Congress to do anything at all), particularly long-term unemployment.

Look at this graph Krugman has previously presented:

We ignore this at our peril, both here and in Europe. The world economy is sick and trying to heal it with budget austerity is making it sicker. That is the equivalent of prescribing lots of calisthenics for a bedridden patient, and it may, as Krugman and others continue to argue, prove economically lethal.

“We Shall Go Up Or Down Together”

President Obama’s inspirational speech in Kansas, at the place where Teddy Roosevelt talked of a “square deal” and a “New Nationalism,” was essentially about fairness, about what kind of country the people will have:

…what’s at stake is whether this will be a country where working people can earn enough to raise a family, build a modest savings, own a home, secure their retirement.

Is that too much to ask?  Is it too much to ask that those fortunate folks, who are enjoying enormous wealth because of what America is, invest in the scaffolding that holds up the working people who actually made America what it is?  That scaffolding enables those who work hard to move up so they can earn enough to raise that family, build that modest savings, own that home, and secure that retirement.

But the poles and planks that comprise that scaffolding need attention. Some of the scaffolding is in danger of falling down. Indeed, some of it has been purposely dismantled:

Now, just as there was in Teddy Roosevelt’s time, there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes — especially for the wealthy — our economy will grow stronger. Sure, they say, there will be winners and losers. But if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else. And, they argue, even if prosperity doesn’t trickle down, well, that’s the price of liberty.

Well, we know as Mr. Obama said, that the theory behind trickle-down economics “doesn’t work,” and “has never worked.” We have tried it and it has failed our people, at least most of our people:

We simply cannot return to this brand of “you’re on your own” economics if we’re serious about rebuilding the middle class in this country. We know that it doesn’t result in a strong economy. It results in an economy that invests too little in its people and in its future. We know it doesn’t result in a prosperity that trickles down. It results in a prosperity that’s enjoyed by fewer and fewer of our citizens.

Mr. Obama had his statistics to back him up; I have endlessly posted on this blog such statistics. But working Americans don’t need to see those numbers to know that the scaffolding on which they do their work no longer provides the security and mobility enjoyed by post-war workers.  Unions, which helped make the middle class, are diminished, and what is left of them is under constant attack. Wages and benefits are thus falling for those who actually have jobs.

American workers also know there is a growing inequality, “a level that we haven’t seen since the Great Depression,” as the President said. They are “rightly suspicious that the system in Washington is rigged against them, that our elected representatives aren’t looking out for the interests of most Americans.” The promise of a middle class life to those who work hard is becoming an endlessly deferred dream for too many:

It’s heartbreaking enough that there are millions of working families in this country who are now forced to take their children to food banks for a decent meal. But the idea that those children might not have a chance to climb out of that situation and back into the middle class, no matter how hard they work? That’s inexcusable. It is wrong. It flies in the face of everything that we stand for.

What we stand for is, of course, always subject to change. The building of our “more perfect union” is not inevitable. It can be stopped, it can be altered, it can be redesigned.  The Great Recession has given us a chance to rethink just what a more perfect union means, what it will mean for the future, and by what means we will build it.

If it gets built.

But our President has faith:

…we have grown and we’ve changed in many ways since Roosevelt’s time. The world is faster and the playing field is larger and the challenges are more complex. But what hasn’t changed—what  can never change—are the values that got us this far. We still have a stake in each other’s success. We still believe that this should be a place where you can make it if you try. And we still believe, in the words of the man who called for a New Nationalism all those years ago, “The fundamental rule of our national life,” he said, “the rule which underlies all others — is that, on the whole, and in the long run, we shall go up or down together.” And I believe America is on the way up.

Let us all hope he is right. Better still, let us all fight to make sure he is.

The Social Gardener, Part 1

Nearly every day I hear some conservative argue for “free markets” in one form or another.  “Get government off the backs of bidness,” they say. “Free markets are more efficient.” “The Free Market Does It Better.”

George Will recently wrote a scathing piece on liberalism, which ended with this:

Society — hundreds of millions of people making billions of decisions daily — is a marvel of spontaneous order among individuals in voluntary cooperation. Government facilitates this cooperation with roads, schools, police, etc. — and by getting out of its way. This is a sensible, dynamic, prosperous society’s “underlying social contract.”

Okay. That sounds good, on first reading. But let’s look at a part of American life that unquestionably commands the attention of a large majority of the population: sports.

Baseball games, football games, games of all sorts, are managed competitions, not free-for-alls in which anything goes. It is the fact that they are managed competitions that makes them so popular.  If the New England Patriots won every game they played and thus won the Super Bowl every year, football would die.

It’s not just that NFL owners provide the venue  and the equipment (society’s “roads, schools, police,” as Will put it) to play the game. There are elaborate rules and regulations, salary caps, revenue sharing and other managed aspects of the sport, which far from undermining the benefits of competition, actually serve to make competition more beneficial—and more rewarding for everyone involved: owners, players, and in terms of enjoyment, the fans.

This is contrary to the assertion made by laissez-faire advocates, whose voices never tire of telling us that government regulation and intervention stymies creativity and growth and wealth-creation in the larger economy. But the enormous popularity of the highly regulated National Football League disproves the general idea that managing and supervising competition is bad for us.

Now, all of that is relatively easy to understand. We can see it every Sunday this time of year.

What is harder to understand is why the idea continues to thrive in some very visible and noisy sectors that unregulated or nearly unregulated economies are superior to managed economies, despite the empirical evidence against that idea.

There is, of course, the Great Depression, which should have settled the matter forever. But more recently we have the evidence of the Great Recession and its continuing effects, which even laissez-faire high priest Alan Greenspan admitted put him into “a state of shocked disbelief.” Why? The New York Times expressed it this way back in October of 2008:

…as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.

A copy of The Road to Serfdom, by Friedrich Hayek, sits on or near my desk all the time. Hayek’s name is invoked often by free-marketeers, but those folks should actually read what Hayek wrote. He wasn’t exactly a believer in laissez-faire, as this passage from the book makes clear (note: I substituted the word “libertarian” for “liberal” in this passage, to make the meaning clearer to contemporary readers):

The fundamental principle that in the ordering of our affairs we should make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion, is capable of an infinite variety of applications. There is, in particular, all the difference between deliberately creating a system within which competition will work as beneficially as possible and passively accepting institutions as they are. Probably nothing has done so much harm to the [libertarian] cause as the wooden insistence of some [libertarians] on certain rough rules of thumb, above all the principle of laissez faire.

Uh-oh. Did he really mean to say that? Yep:

The attitude of the [libertarian] toward society is like that of a gardener who tends a plant and, in order to create the conditions most favorable to its growth, must know as much as possible about its structure and the way it functions.

That sounds exactly like what I, as a liberal today, believe. We should “make as much use as possible of the spontaneous forces of society, and resort as little as possible to coercion.” And we should “create the conditions most favorable” to the growth of society.

What Hayek was referencing was the growth of our understanding of “social forces and the conditions most favorable to their working in a desirable manner.” In other words, the wise social gardener will learn—and continue to learn—what he can about how society, including our capitalist system, works and improve conditions that will help it grow.

What’s wrong with that?

How To Talk To The Tea Party

Here’s the way some future historian might describe our times:

Millions were still unemployed; lavish government expenditures had not restored prosperity; the budget was unbalanced, and the national debt was mounting; taxes and government restrictions alarmed businessmen; many conservatives saw constitutional government in danger.  There were signs also of restiveness in Congress.

That future historian was Eugene Roseboom writing in 1957about the 1936 presidential election, which essentially was a referendum on the New Deal and the form of democratic socialism that it represented.

And for the record, still in the midst of the Great Depression, the unemployment rate in 1936—after three and a half years of Franklin Roosevelt’s first administration—was a staggering 16.9%.  Think about that.

Roseboom included in his brief analysis of that first post-Social Security election a look at  the Republican Party platform of 1936, which began:

America is in peril. The welfare of American men and women and the future of our youth are at stake. We dedicate ourselves to the preservation of their political liberty, their individual opportunity and their character as free citizens, which today for the first time are threatened by Government itself.

Here are some of the charges leveled in the platform against FDR and his administration:

♦ “The rights and liberties of American citizens have been violated.”

♦ “It has insisted on the passage of laws contrary to the Constitution.”

♦ “It has dishonored our country by repudiating its most sacred obligations.”

♦ “It has bred fear and hesitation in commerce and industry, thus discouraging new enterprises, preventing employment and prolonging the depression.”

♦ “It has destroyed the morale of our people and made them dependent upon government.”

♦ “Appeals to passion and class prejudice have replaced reason and tolerance.”

♦ “The New Deal Administration has been characterized by shameful waste, and general financial irresponsibility. It has piled deficit upon deficit. It threatens national bankruptcy… We pledge ourselves to: Stop the folly of uncontrolled spending. Balance the budget—not by increasing taxes but by cutting expenditures, drastically and immediately.”

If that doesn’t sound familiar, you haven’t been paying attention.

For his part, FDR didn’t shrink from the fight with the reactionaries. If Mr. Obama and 2012 Democrats want to know how to talk to the country, how to defend government from the Tea Party hordes, they could do no better than heed the 1936 Roosevelt—”the resolute enemy within our gates is ever ready to beat down our words unless in greater courage we will fight for them“—as he accepted the Democratic Party nomination.

Roosevelt said:

…government in a modern civilization has certain inescapable obligations to its citizens, among which are protection of the family and the home, the establishment of a democracy of opportunity, and aid to those overtaken by disaster…

And:

Governments can err, presidents do make mistakes, but the immortal Dante tells us that Divine justice weighs the sins of the cold-blooded and the sins of the warm-hearted on different scales.

Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.

It’s no accident that the leading candidate in today’s Republican primary is a man named Rick Perry, whose icy indifference to the value of Social Security in particular and government programs in general is stunning, though not surprising or new. 

Perry recently said he will “work every day to make Washington, D.C., as inconsequential in your life as I can.” Such would-be presidential philosophy, which the other GOP candidates obviously share—is rooted in or at least resonates with the reactionary Republican response to Social Security and the New Deal in 1936.

The antithesis of that philosophy, as Roosevelt bellowed in Philadelphia loud enough for us to hear these 75 years later, amounts to this:

For too many of us the political equality we once had won was meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor – other people’s lives…

Against economic tyranny such as this, the American citizen could appeal only to the organized power of government… The royalists of the economic order have…maintained that economic slavery was nobody’s business. They granted that the government could protect the citizen in his right to vote, but they denied that the government could do anything to protect the citizen in his right to work and his right to live…

These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power.

That’s what government does on behalf of the ordinary American citizen: takes away the power of those who would enslave us, whether abroad or at home.

The 2012 election cycle, which is upon us, will be President Obama’s last chance to become a truly transformative president.  He must not only defend his first term accomplishments—from averting an economic meltdown to health care reform to financial reform to a dead bin Laden—but much more important he must vigorously and vociferously defend the role of government in the lives of ordinary people. 

He must demonstrate that he is outraged by what the leaders of the patron party of the moneyed class have done to the country, as a consequence of their hatred for him. Of that party and of that moneyed class, FDR famously said in October of 1936:

We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.

Despite two and a half years of deliberate and constant obstruction of  his efforts to fix the economy—sabotage by any other name—despite the attempt to gain politically from such citizen-damaging obstruction, we have yet to see Mr. Obama express appropriate outrage at what has happened, at what is happening still.

Despite constant attacks that he is destroying the country and undermining our system, Mr. Obama has largely ignored the damaging criticism.  A Republican presidential candidate said during the last debate:

We know that President Obama stole over $500 billion out of Medicare to switch it over to Obamacare.

Where’s the outrage over that?  Stole? When faced with similar lies, lies which undermine public confidence in our system, Roosevelt didn’t mince words about the people who perpetrated them:

…they attack the integrity and honor of American Government itself. Those who suggest that, are already aliens to the spirit of American democracy. Let them emigrate and try their lot under some foreign flag in which they have more confidence.

Can anyone imagine Mr. Obama saying that?

No, and that’s the point.

[Obama as Roosevelt image from Time magazine, Nov, 2008]

Spare-A-Dime Shift?

They used to tell me I was building a dream, and so I followed the mob,
When there was earth to plow, or guns to bear, I was always there right on the job.
They used to tell me I was building a dream, with peace and glory ahead,
Why should I be standing in line, just waiting for bread?

Brother, Can You Spare a Dime?  Harburg and Gorney, 1931

I heard Michael Steele, former chairman of the Republican National Committee, say last night that because of the Republican victory in the contrived crisis over the debt ceiling, which was initially led by Tea Party types but consummated by the GOP establishment, there has been a “paradigm shift” in American politics.

I thought about that.  A paradigm shift is essentially a revolution in thinking, or “a radical change in underlying beliefs or theory.”  And what follows the change in underlying beliefs is a change in subsequent actions.

In the case of American politics, it can only mean a dramatic change in assumptions about how America should be governed, what kind of society should result from that governance, and who should be the governors.

Two popular versions of one of the great songs of the Great Depression, Brother, Can You Spare a Dime? by Bing Crosby and Rudy Vallee, were released in 1932, just before the election of Franklin Roosevelt, whose ascent to the White House certainly represented a paradigm shift in American politics.

That song, as Wikipedia summarizes it,

asks why the men who built the nation – built the railroads, built the skyscrapers – who fought in the war (World War I), who tilled the earth, who did what their nation asked of them should, now that the work is done and their labor no longer necessary, find themselves abandoned, in bread lines.

Roosevelt’s answer, of course, was that such men should not find themselves abandoned. Thus, the New Deal began in 1933 with the lofty goals of helping the poor and those without jobs, fixing the broken economy, and reforming the financial system that had let so many Americans down.

If those lofty goals sound familiar to post-2008 crash ears, what doesn’t jibe with history, as we battle the continuing economic slump, is the response from today’s Republican Party, which essentially distills to,

No, brother, we can’t spare a dime.

In that sense, Mr. Steele is right. There has been a revolution in the character of today’s Republican Party, a collection of extremists that the putative Father of the teapartiers, Ronald Reagan, wouldn’t even recognize.

But have the wider assumptions about American governance that have prevailed since 1933 suddenly disappeared?  Has there been a mainstream paradigm shift?

No.

There has been, since the election of President Reagan in 1980, certain abstract and ambiguous ideas buzzing about the American electorate that government has grown “too big” and taxes are “too high.” 

But a noisy schizophrenia has always accompanied those comfortingly vague ideas: A swath of Americans hold that they want smaller government and lower taxes but they don’t want to cut down the pillars of the New Deal or its child, the Great Society.

Poll after poll demonstrate that Americans refuse to part with cherished programs, no matter what their abstract ideas about the size of government may be.  A CNN/ORC poll recently asked Americans if they would favor or oppose the following as a way to reduce the deficit:

                                 Favor cutting              Oppose cutting

Social Security:             16                           84 (81% of Republicans)

Medicare:                      12                           87 (85% of Republicans)

Medicaid:                       22                           77 (64% of Republicans)

Given numbers like these, the uninitiated might ask: How have budget-cutting and New Deal-threatening Republicans managed to be so successful?

Generalities.  They speak in generalities about the size of government and high taxes and the strange liberal man in the White’s House that wants to steal your freedom and take all your money and give it to the undeserving.

That’s how they do it.

But hopefully—now that President Obama and the Democrats perhaps finally understand the nature of the Tea Party beast they are confronting—they will use the tactics and budget votes of Republicans against them.  Tactics and votes that seriously threaten to kill the New Deal—which, if successful, would be a real paradigm shift.

The Republican Economic Plan: More Hole

Austan Goolsbee, chairman of President Obama’s Council of Economic Advisers,  appeared on ABC’s This Week on Sunday.

He gamely pointed out that, despite the disappointing jobs numbers released on Friday, during the last six months, “we’ve added a million jobs in the private sector.” He mentioned that the longer trend is more important—”over the last 15 months, we’ve added more than 2 million jobs in the private sector“— than a single month’s data and that there were “stiff headwinds” affecting this past month’s data, including “gas prices,” “the Japanese earthquake,” and “some of the events in Europe.”

Fair enough.  He’s right about all that.  He’s also right about the government putting more than $1000 in the pockets of 150 million American workers this year, through a reduced payroll tax, which was designed to stimulate the economy.  And he’s right about this:

Well, look, what we know is that we have moved a long way from when the economy is in a rescue mode, the private sector’s in freefall, and the government is the only thing standing between us and falling into another Great Depression. We were losing 780,000 jobs a month when the president comes into office. Fast-forward to now: We’ve added 1 million jobs over the last six months.

It’s easy to forget all that, isn’t it?  It’s easy to forget the hole we were in, that our government stepped in to prevent another catastrophe.

Right now, in the moment, unemployment seems to be invincible.  In fact, there is a powerful idea out there that gets tossed around on television by the pundits.  You hear from time to time that this present recovery is a “jobless recovery.” Christiane Amanpour tried promoting that idea but Goolsbee wouldn’t have it:

AMANPOUR: So are you — are you not worried — well, I mean, a report that’s about to come out is saying that this is the longest jobless recovery, it’s going to come out this month, that’ll it take more than 60 months…

GOOLSBEE: It’s not a jobless recovery.

AMANPOUR: … of GDP recovered. It’ll take until 2016.

GOOLSBEE: It’s not a jobless recovery. That is an incorrect phrase. After the last recession, in this comparable period, post-recession, we had lost 100,000 jobs. We’ve added more than 2 million jobs. There’s a major difference between a jobless recovery and a very deep hole that we’re climbing our way out of, and that is what — the position we’re in.

The point is that Goolsbee is right about what he said on ABC’s This Week.  We were in an almost unprecedented economic hole and we are climbing out. But no matter how right he is about the technicalities, about the “deep hole,” the truth is that this recovery seems way too slow and way too weak for most Americans, and that is why Obama and the Democrats, despite Republican extremists handing them some winning national issues, are still vulnerable to Republican demagoguery on the economy. 

Thus the sluggish economic recovery, just like in the 2010 elections, is the Democrats’ biggest political enemy.

Unfortunately, there is exactly zero chance of the government doing what it needs to do to get the economy moving faster: more stimulus.  As Paul Krugman said, on the same program,

If you ask, why are businesses not growing? Businesses aren’t expanding because consumer demand isn’t there, and consumer demand isn’t there because of a combination of high consumer debt and low incomes. So what we really need, in an ideal world — Austan dodged that question — but we really need a new stimulus. We need more move from the Fed. We need — we need to really boot this economy up, not just sort of say, well, we’re getting our house in order and expect it to fix itself.

Krugman knows, of course, that his stimulus fix will never materialize.  Republicans would laugh at any attempt to aid the recovering economy.

And so the economy will likely continue to slowly grow, employment will continue to slowly increase, and those same Republicans who refuse to “boot this economy up,” will continue to complain that Obama and the Democrats are failing and that the answer is the same answer they always offer: lower taxes and less regulation and less government.

You know, more hole.

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