Yesterday the House and Senate passed budget bills with no Republican votes whatsoever. Yet even without the GOP the bill passed the House with the biggest majority for a budget in 12 years. Carl Hulse writes for the New York Times,
Democrats said the two budgets, which will have to be reconciled after a two-week Congressional recess, cleared the way for health care, energy and education overhauls pushed by the new president. The Democrats said the budgets reversed what they portrayed as the failed economic approach of the Bush administration and Republican-led Congresses.
Of course, spending on health care, energy, education and other long-neglected matters is vital to any meaningful economic recovery. So what did the GOP offer? Tax cuts for the rich and a domestic spending freeze — during a recession, mind you –which is so breathtakingly wrongheaded one can only assume most congressional Republicans are either extremely stupid or extremely delusional. Or both.
I considered a third alternative, that they are extremely invested in protecting the wealth of the wealthy and don’t care if the rest of the nation turns into a third-world sinkhole. However, I think anyone who doesn’t understand even the wealthy eventually would suffer if the nation turns into a third-world sinkhole is either stupid or delusional.
The passage of the budget is particularly good news because all segments of the House Dems supported it, including many of the Blue Dogs. On the other hand, 38 Republicans voted against the GOP Clown Alternative.
Two Senate Dems voted against the budget — Ben Nelson of Nebraska and Evan Bayh of Indiana. Steve Benen: “Yes, Bayh is the new Lieberman.”
This CNN story has more details on the budget; see also Media Matters. Also note that in many ways passing the budget was the easy part. Crafting the health care, education, energy, etc. programs will be a fight. But maybe the Dems are learning they can, you know, do stuff without worrying about what the GOP thinks.
Which brings me to today’s David (“If I only had a brain”) Brooks column, titled “Greed and Stupidity.” Brooks writes that there are two competing explanations to the crash of the financial sector, which he calls “the greed narrative” and “the stupidity narrative.”
The greed narrative, he says, is explained in Simon Johnson’s Atlantic article “The Quiet Coup,” which many of us read this week. Brooks encapsulates Johnson’s article pretty well. “The U.S. economy got finance-heavy and finance-mad, and finally collapsed,” Brooks writes. (See also Thomas Geoghegan’s â€œInfinite Debt,â€ which you really can read online here.)
But then Brooks says, nah, that can’t be right. It’s more likely the captains of finance were just stupid.
The second and, to me, more persuasive theory revolves around ignorance and uncertainty. The primary problem is not the greed of a giant oligarchy. Itâ€™s that overconfident bankers didnâ€™t know what they were doing. They thought they had these sophisticated tools to reduce risk. But when big events â€” like the rise of China â€” fundamentally altered the world economy, their tools were worse than useless.
Yes, Mr. Brooks, and what made them “overconfident” and “stupid”? To me, it’s obvious much of their hubris came from the fact that they had become such a force of power — a true oligarchy, as Simon Johnson says — that they felt untouchable. And much of the “stupid” was a by-product of greed. They didn’t see how fallible they really were because they didn’t want to see it.
Brooks likes the “stupid” narrative because, he thinks, the stupid problem doesn’t require a big-government regulatory solution, whereas the “greed” problem does. “Instead of rushing off to nationalize the banks, we should nurture and recapitalize whatâ€™s left of functioning markets,” he says. “To my mind, we didnâ€™t get into this crisis because inbred oligarchs grabbed power. We got into it because arrogant traders around the world were playing a high-stakes game they didnâ€™t understand.”
Brooks fails to explain why those causes are mutually exclusive. I say they’re both true.
Update: Reuters on unemployment:
The U.S. unemployment rate soared to 8.5 percent in March, the highest since 1983, as employers slashed 663,000 jobs and cut workers’ hours to the lowest on record, government data showed on Friday.
In a report underscoring the distress in the labor market, the Labor Department also revised its data for January to show job losses of 741,000 that month, the biggest decline since October 1949.
Yes, a domestic spending freeze is just what we need right now. And we can see how much Bush’s tax cuts for the wealthy “trickled down.”