EconomistMom.com
…because I’m an economist and a mom–that’s why!

EconomistMom.com

AC and Fareed Expose Why We’re “Toast”

November 5th, 2010 . by economistmom

Now that the election’s over we’re just waiting to hear about how the new Congress and a humbled (or “shellacked”) President are actually going to fix our economic problems.  CNN’s Fareed Zakaria offers a lot of wisdom to the question “Can Obama and the GOP really cut the deficit?” (emphasis added):

“I think frankly things look very bad in terms of America’s ability to solve some of its problems,” Zakaria told CNN. “We have very serious problems that are going to require a kind of set of comprehensive solutions. There are compromises out there to be made, Republicans have to concede some on taxes, the Democrats have to concede some on spending, and you could put together a package, in which both sides would get something, but not everything.

“The problem is the political system right now doesn’t seem to function in a way where either side can accept compromise. If that produces gridlock and paralysis the problem is we really move into a fairly unsustainable fiscal situation.”

The author and host of CNN’s “Fareed Zakaria GPS” spoke to CNN on Thursday. Here is an edited transcript:

CNN: In your column for TIME, you raise the question of whether the Republicans are serious about cutting the deficit this time after earlier failed attempts to do so. What do you think?

Fareed Zakaria: I think it’s going to be pretty doubtful; the reality here is that the American people want a certain level of government. It’s something of a fantasy to believe that they really want a radically smaller government than the one we have.

The American government, the federal government, has roughly been between 20, 21, 22 percent of GDP [Gross Domestic Product]. That includes Social Security and Medicare and the interest deduction on mortgages and all that stuff — it costs a lot of money. The money is all in the big popular programs and Americans seem to want them and there seems to be very little appetite for cutting them.

What Americans seem to want is to have this very large government but also to have even lower taxes then we have now, or very low taxes in general. That’s the part that’s very difficult to make work. I mean that’s the part where they are asking for magic because you can’t have the size of government they seem to want with the level of taxes they want. We’ve pretended otherwise for a generation and the result is nearly $14 trillion in debt.

Fareed gives Paul Ryan credit for putting together a plan that makes some tough choices, even though he doesn’t think Americans or even other Republicans can support it:

The whole thing [the Ryan "Road Map" plan] may be too revolutionary to take place and it may also short-shrift seniors on health care, so I have some concerns about it. But basically it gets us thinking about how do you create a more rational, more simplified tax and entitlement structure that is sustainable in a world in which you have many, many more retirees then you had when this whole system was set up. But, the key is there are no Republicans who support it. Paul Ryan is pretty much out there on his own.

And he doesn’t sugar-coat the fact that Democrats don’t even have a plan:

CNN: What about on the Democratic side? Is there any likelihood that we will see some innovative proposals from the White House or Democratic leadership?

Zakaria: I doubt it, I think the Democrats, if the past is to be any guide, will tend to cling to the idea of preserving Social Security, preserving Medicare, and sort of try to paint the Republicans as the cruel heartless people who want to cut all this stuff. So if the Republicans are frankly, totally in a stubborn fantasy land on taxes where they simply cannot conceive of any possibility in which they would need to raise taxes to raise revenues, the Democrats are in a stubborn fantasy on cutting entitlement spending.

Watching the Anderson Cooper story (above) about the wild claims about the cost of the President’s upcoming trip to India (brought up, oddly, in response to a question about how the Republicans propose to bring Medicare spending under control), you might conclude we are “toast” when it comes to compromising for the sake of deficit reduction and fiscal responsibility in general.  (For more clips the AC360 show came up with to highlight the lack of specifics in the spending cut proposals, see this video.)

Incidentally, the deficit adds about $4 billion per day to our national debt, or double the “wildly inflated” or even “comical” claimed total cost of the President’s trip.  But our debt trip just goes on and on.

Skidding Past Center, Again

November 3rd, 2010 . by economistmom

I’ve been trying to take in just some of the analyses of what happened in yesterday’s midterm elections and speculation about what this will mean for policy making going forward, and I see/hear a lot of these words:  anger, discontent, polarization, ideology, rhetoric, obstructionism, entrenchment, defection, desertion…insanity!  Not good words.

The same pundits claim that what Americans are saying they want is what Jon Stewart was trying to say we want:  some civility, cooperation, compromise, coming to the center, working together for the common good…some reasonable, sane behavior.

Yet running away from politicians and policies that seem too far off center is no guarantee that we’ll now move closer towards the center.  I don’t know exactly why I have this visual image, but I picture American voters as like a marble in a tube that has a very shallow indentation in the middle and solid caps at both ends.  Trying to roll that marble from one end to land and stay just perfectly in that center point is hard; we tend to skid past the center and roll to the opposite end instead.  And now that many Blue Dog Democrats have lost their reelection bids, that already hard-to-settle-in center point has just gotten shallower.

The AP’s Liz Sidoti offered her analysis last night, summed up in her article’s title “United but divided” (emphasis added):

WASHINGTON — America is united in its frustration over the economy, over Washington, over where the country is heading.

But it’s deeply split about how to fix some of the nation’s biggest woes - a ballooning federal debt, near 10 percent joblessness and a sluggish recovery.

And, now that a divided government is certain, President Barack Obama and ascendent Republicans face only two options: compromise or stalemate.

Can this new power structure - one with different ideological philosophies to fix increasingly complex problems - actually lead a sharply polarized country that can’t agree on where it wants to go? Will the politicians even try?…

An Associated Press analysis of preliminary exit poll results showed that most voters agreed that they were dissatisfied with Obama and the Congress. And they didn’t have a favorable view of either the Democratic or Republican parties. They also were intensely frustrated with the way the federal government is working. And most thought the country was seriously on the wrong track.

But three equal segments of voters picked different top priorities for the next Congress: tackling the budget deficit, spending money to create jobs and cutting taxes. They also differed on whether to extend broad tax cuts enacted under George W. Bush or change the health care overhaul enacted this year.

There was majority agreement that the economy was the top concern. Yet again, solutions differed dramatically: A third apiece thought the government’s $814 billion stimulus program helped the economy, hurt the economy or made no difference.

An ailing America took out its economic anger on the party in power

In other words, we voters were running away from what we didn’t like, rather than running toward anything we do like (or even know we dislike less).  That means we’re running pretty chaotically, without purpose (and screaming with arms flailing).

As the Washington Post’s Dan Balz contemplates, this is by no means any guarantee we will land in that sensible, but elusive, “center” (emphasis added):

Independents didn’t just defect from the Democrats. They deserted them in droves. If there is one number from all the exit polls that leaps out, it is from Ohio, where independents went for Rob Portman, who won the Senate race, by a staggering margin of 39 percentage points. In the governor’s race there, independents backed winner John Kasich by 16 points. Overall, independents voted Tuesday for Republicans by a margin of 18 points. Two years ago, Democrats won them by eight points.

Independents continue to swing back and forth. Obama may hope they will be back in his column by 2012, if the economy has recovered. Perhaps. But the message from independents was not only unhappiness with the results of Obama’s economic and domestic agenda, but also with the agenda itself. According to exit polls, 57 percent of independent voters said Obama’s policies would hurt the country in the long run. Just 38 percent said they would help…

House Minority Leader John Boehner (Ohio) and other GOP leaders have sought in the early hours after their victory to assure people that they do not regard the results as a genuine affirmation of the Republican brand. But if history is any guide, hubris could quickly set in, in which case they will have trouble avoiding the conclusion that this election was a sweeping endorsement of their agenda.

Senate Republican leader Mitch McConnell (Ky.) said as much when he suggested Democrats hadn’t gotten the message of Tuesday’s results. “We’re determined to stop the agenda Americans have rejected and to turn the ship around,” he said.

But voters still view Republicans with distrust. Independents who so soundly backed Republican candidates Tuesday are as disdainful of the GOP as they are of the Democrats. According to the exit polls, 58 percent of independents said they view the Democrats unfavorably and 57 percent said they view Republicans unfavorably.

Republicans have challenged Obama by arguing that he has governed from the left while the country is center right. But will Republicans interpret Tuesday’s results by lurching too far to the right? They may look at the exit polls and see that 41 percent of voters called themselves conservatives, a high watermark, and say the country has shifted dramatically.

The party’s center of gravity has certainly shifted, but has the entire country? Republicans now have a hard-right base in what is still a country that prefers its politics closer to the center. Pleasing the base and the newly elected conservatives, while staying focused on the middle, is the leadership’s first task…

That doesn’t diminish the historic nature of what Republicans accomplished Tuesday, but it is a reminder that this country remains in pain and unsettled politically - highly polarized but unsettled in the center. That’s why misreading Tuesday’s results is dangerous for both sides.

That ability to achieve political compromise and find the “sensible center” will be tested immediately with the issue of the expiring Bush tax cuts.  The Washington Post’s Lori Montgomery suggests that the President and congressional Democrats will be more likely to cave on at least temporary extension of all of the Bush tax cuts, and that the newly emboldened Republicans will be even less likely to acknowledge the economic tradeoffs involved with deficit-financed tax cuts:

With so much at stake, lobbyists and other congressional analysts expect lawmakers to approve a quick-fix measure that would extend the most critical provisions - including all the Bush-administration tax breaks for individuals - at least through next year.

Republican leaders have signaled that they are open to such a move. On Wednesday, a chastened President Obama signaled that he, too, is open to such a compromise, despite his earlier pledge to let the portion of the Bush tax cuts that benefit the wealthy disappear from the tax code at midnight Dec. 31.

Obama said he would sit down “in the next few weeks” with the Republicans who have reclaimed the House and made big gains in the Senate and “see where we can move forward in a way that, first of all, does no harm.

“How that negotiation works is too early to say,” Obama said. But “we all have an interest in growing the economy. We’re not going to play brinksmanship.”

Congressional Democrats, however, are deeply divided over tax policy. Some liberals say that extending tax breaks for the rich for even one more year would amount to a betrayal of Obama’s promise, while many moderates say the weak economy argues against raising taxes for anyone.

On Wednesday, Senate Majority Leader Harry M. Reid (D-Nev.) said he supports Obama’s plan to let taxes rise for the wealthiest 2 percent of taxpayers, but “I’m not bullheaded.” He added that he plans to meet with Senate Democrats before deciding how to move forward.

Republicans, for their part, say they have no incentive to compromise on the tax cuts, citing a mandate from voters to keep taxes low and to begin whacking at a federal budget bloated by spending on what the GOP views as Obama’s failed economic policies.

“We should not allow any tax increases, period, because it’s going to slow the economy down,” said Rep. Paul D. Ryan (R-Wis.), who is in line to chair the House Budget Committee. “If you want to get this deficit down, you need two things: economic growth and spending cuts.”

My hunch is that passing a temporary extension of the full complement of the Bush tax cuts, even for just a year, is not really a compromise at all.  It just makes it more likely that the full complement of the Bush (now Obama) tax cuts will become permanent and permanently deficit-financed.  It is in this way that voting the Democrats out of Congress will not prove to be a way to move policies closer to center and reduce budget deficits.  We’ll just be skidding past the center, again.  In running away screaming from the status quo, we’ll ironically make it less likely to land in a different and better place.

Jon Stewart As Therapist Comedian

November 1st, 2010 . by economistmom
Rally to Restore Sanity and/or Fear
Jon Stewart - Moment of Sincerity
www.comedycentral.com
Rally to Restore Sainty and/or Fear The Daily Show The Colbert Report

If you’re wondering what the intended purpose of the Comedy Central “Rally to Restore Sanity (and/or Fear)” was, take a look/listen at Jon Stewart’s “Moment of Sincerity” above. I managed to get down to the Mall for about 15 minutes of the rally during a lunch break from a yoga workshop I was attending (a surprisingly “synergistic” experience!), and a few things struck me: the wonderful diversity of faces in the crowd, the very many witty signs, for sure, but also that this seemed to be more about poking fun of the bad behavior of politicians and extremists and any other polarizing personalities who get all the airtime in the media, rather than modeling how we can actually start to “just get along” well with each other and then get things done.

As Jon himself says in his “moment” above, “sanity will always be in the eye of the beholder.”  Will ridiculing and making fun of the insanity get rid of it?  Probably not.  As with other types of “insanity,” having “sane” people tell the “insane” that they’re “insane” (or just plain wrong) is only likely to make the “insane” person more paranoid, defensive, and entrenched in denial.  I suppose the rally was a necessary start though–an “intervention” of sorts.  From Jon’s explanation, I think what the rally might have done to combat the “insanity” was to call a “time out” and point out that what’s needed is some pausing and self-reflection–to encourage the reasonableness in people to reemerge from within rather than being forced from without.  When people are thinking and feeling unhealthy thoughts, they need to heal from inside themselves before they can be expected to interact well with others.

This might sound a bit like psychotherapy babble-talk to you, but I think there are lots of useful analogies here, between the dysfunction of troubled people and that of troubled politicians or their constituents (our whole political process).  In therapy we learn that we cannot spend all our time pointing to the “villains” and playing the helpless “victim.”  It’s not always someone else’s fault.  We are told to be wise enough to recognize our own part in bad relationships and outcomes, and told to be brave enough to pursue changes that are within our own control, rather than wailing about things completely beyond our control.  The “serenity prayer” comes to mind.

That’s probably a lot like what our country needs to get back to reasonable and civilized policy making.  We can’t shout at each other to “bully” each other into seeing our world view.  We have to first be able to see ourselves  clearly and understand our own priorities and ask ourselves if our proclaimed “world view” and any associated negativity we spew is consistent with what we really want for ourselves and those we care about, or if our own behavior–our own part in all this–actually is making things worse.  Only then we can start to take personal responsibility, be willing to talk and listen to each other constructively, and truly compromise and cooperate for the good of all, and significantly, for our own good!

In this respect I think the Rally transformed the National Mall into an enormous therapist’s couch that the surely millions of people who followed it (whether they were right there in person or not) were lying on.  Some of the people attending had clearly already begun this therapeutic journey, as they were carrying signs that made fun of themselves (and their heretofore political apathy, perhaps) even more than the extremist positions they were rallying against.  So, the “Rally to Restore Sanity and/or Fear” was like a giant wake-up call and therapy session, with Jon Stewart playing the role of therapist comedian–even more than comedian “pundit.”

(But finally, I cannot resist sharing two of my favorite signs from the rally, below.  And, no, I did not make the sign that the Uncle Sam guy is carrying.)

rally-sign-obama-cut-taxes

rally-sign-bowel-movement

Next Entries »