Browsing the blog archivesfor the day Saturday, December 4th, 2010.


Next, the Whimper

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Obama Administration

This is the way the world ends
Not with a bang but a whimper.
–T.S. Eliot

… except, I think the world will go on. I see little hope that America will pull out of its nosedive, however.

The creatures about to re-infest the House will hasten the deterioration of the U.S. economy. On issue after issue, what Republicans want to do is exactly the wrong thing, and nobody seems willing to stop them. What the economy sorely needs — to raise taxes on the very well off; to extend unemployment benefits; more stimulus spending to get the economy moving; and health care reform — will be blocked.

Republican economy theory boils down to this — what’s good for rich people is the right thing to do. And kicking the less fortunate in the teeth is an even better thing to do.

Senate Republicans blocked a vote on extending only middle-class tax cuts; it’s all or nothing, they said. Meanwhile, the best thing one can say about the deficit commission recommendations is that they probably won’t go anywhere.

Still, the recommendations regarding Social Security won’t die. Of all the Big Budget issues we’re facing now, Social Security is the least problematic, yet that’s the one people want to talk about. Why? Paul Krugman writes,

The answer, I suspect, has to do with class.

When medical expenses are big, they’re big; even the very affluent are grateful when Medicare pays the bills for their mother-in-laws bypass or dialysis. The importance of Medicare, in short, is obvious to all but the very rich.

Social Security, by contrast, is something that matters enormously to the bottom half of the income distribution, but no so much to people in the 250K-plus club. A 30 percent cut in benefits would represent disaster for tens of millions of Americans, but a barely noticeable inconvenience for VSPs and everyone they know. A rise in the retirement age would be a vast hardship for people who do manual labor, but if anything a gift to VSPs, who don’t want to step aside in any case. And so on down the line.

So going after Social Security is a way to seem tough and serious — but entirely at the expense of people you don’t know.

Matt Bai has an piece on the deficit commission in the New York Times that misses a lot of points, but I want to point to his definition of “American exceptionalism” —

It isn’t simply that America, by virtue of symbolizing liberty, has a unique responsibility to shape the affairs of humankind. It’s also the belief that free markets can create a kind of endless prosperity, driving an economic and military dominance that exempts Americans from having to accept constraints or trade-offs.

This fantasy is what’s killing us. Bai continues,

For much of the Industrial Age, and especially between World War II and the oil crises of the 1970s, this was, in fact, reality. Wages and profits rose, the social safety net and the nation’s military reach both expanded, and government lived largely within its means. College education, suburban lawns, good pensions and blissful security all became part of the pact with the middle class, as much a part of the constellation of entitlements as Medicare and Medicaid.

That was the legacy of the big government spending program called “World War II.” That and the entitlements given to veterans after, such as the GI Bill and mortgage assistance, was the foundation of the prosperity enjoyed by the Greatest Generation. They spent their childhood in the Depression but retired to luxury condos in Florida.

And the good life began to stall in 1972, at the point the white middle class was in full revolt against “welfare” and “tax and spend liberals.” And life in America has gotten tougher and tougher ever since, and “liberals” continue to be blamed for it, even though Washington hasn’t been genuinely “liberal” since the 1960s. But the worse things get, the more American voters embrace the very policies that are making things worse.

Bai doesn’t make that connection, and he doesn’t seem to consider that many of the “sacrifices” recommended by the Catfood Commission would take us further down the road to ruin. They are Very Serious People, after all, so they must know what they’re talking about.

I don’t hear any whimpering yet, although that may be because we don’t hear the voices of the very poor and the growing number of formerly self-sufficient workers who have been dumped by the economy. Yes, some sacrifices need to be made, but not by the people who are being forced to make them. The ones who should be sacrificing have exempted themselves, because they have the power to do so.

So, I have little hope that the state of the nation won’t get a lot, lot worse, and it will get so much worse that “better” will be only a relative term.

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