Posts

The Problem with Purportedly Apolitical Policy Wonks: Their Faulty Logic

/16 Comments/in /by

Peter Orszag opines from the politically sheltered comfort of his gig at Citigroup that we have too much democracy.

I’ll say more about specific claims he makes below, but first, let me point out a fundamental problem with his argument. He suggests we need to establish institutions insulated from our so-called polarization to tackle the important issues facing this country. That argument is all premised on the assumption that policy wonks sheltered from politics, as he now is, make the right decisions. But not only is his own logic faulty in several ways–for example, he never proves that polarization (and not, say, money in politics or crappy political journalism or a number of other potential causes) is the problem. More importantly, he never once explains why the Fed–that archetypal independent policy institution–hasn’t been more effective at counteracting our economic problems.

If the Fed doesn’t work–and it arguably has not and at the very least has ignored the full employment half of its dual mandate–then there’s no reason to think Orszag’s proposed solution of taking policy out of the political arena would work.

Here’s Orszag’s initial claim that polarization is dooming our country.

During my recent stint in the Obama administration as director of the Office of Management and Budget, it was clear to me that the country’s political polarization was growing worse—harming Washington’s ability to do the basic, necessary work of governing. If you need confirmation of this, look no further than the recent debt-limit debacle, which clearly showed that we are becoming two nations governed by a single Congress—and that paralyzing gridlock is the result.

There are a couple of problems with this. First, in response to the debt limit charade, voter approval of Congress and the President pretty much tanked. And while we don’t know how voters will act on their disgust with Congress’ (and the President’s) inaction, polling at least suggests that Congress will pay for the debt limit fiasco. It also suggests that support for the Tea Party, the architect of that fiasco, continues to decline. Which seems to suggest that democracy is working, it will end up punishing elected representatives for playing games with our country’s future, it will have precisely the result you’d want for such idiocy.

Add in the fact that Orszag later points to the automatic triggers that that flawed political process put in place.

Beyond automatic stabilizers, we also need more backstop rules: events that take place if Congress doesn’t act. In this sense, the fiscal trigger created as part of the debt-limit negotiations is a good step forward. It leads to automatic spending reductions if Congress doesn’t enact measures to reduce the deficit; in other words, it changes the default from inaction to action.

In other words, Orszag points to the debt-limit fiasco (and returns to it in his closing paragraph) as the best example of the problem with politics, but then points to the automatic triggers that resulted from that fiasco as a good thing. I don’t necessarily agree with him on that point, but his own logic doesn’t make any sense. He’s simultaneously saying the debt limit fight was the worst thing ever, but applauding the result.

Curiously, while Orszag tries to claim that the problem with all of Congress is polarization, rather than polarization being a problem in the House and Senate rules being a problem in the Senate (plus, the money in politics and crappy political journalism I mentioned earlier), he makes no mention of the number of centrists in the Senate. Perhaps that’s because the centrists back policy proposals (like immediate cuts) to the right of what Orszag proposes in his piece (which notes that economists advocate holding off on cuts and advocates for progressive taxation). The most likely outcome of more non-partisan or bipartisan commissions, then, are policies that aren’t the ones Orszag champions.

Which means the key to these so-called independent commissions would immediately get us into the question of who chooses them? Peter Orszag cites, among others, former Vice Chair of the Fed, Alan Blinder with approval; but he has been criticized for his own failed independence. Will we use the process that resulted in the selection of Ben Bernanke and the rest of the current Fed, that hasn’t even fulfilled its mandate, much less necessarily made the right decisions on restoring our economy?

In short, Orszag promises that independent wonks will make the right decisions for the country. But in making that argument he shows that even policy wonks sheltered from politics, like him, allow bad logic and personal biases to cloud their decisions.

Addington’s Useful Idiots

/44 Comments/in , /by

KagroX, who just got named one of Politico’s top tweeters yesterday, just asked this question:

Has there ever been a populist movement cheering for default & austerity?

We’ve seen default situations around the world, and austerity programs imposed as a result. But popular political movements in FAVOR of it?

I replied,

Wrong to describe as populist movement calling for austerity. I think it’s partially populist partially astroturf calling for chaos.

Take a look, for example, at who Yochi Dreazen claims is riding herd on the TeaParty ideology at the moment.

Addington has taken on a new role as enforcer of tea party dogma during the intensifying partisan bickering over the debt ceiling. From his perch as the Heritage Foundation’s vice president for domestic and economic policy, Addington is throwing verbal thunderbolts at House Speaker John Boehner’s current debt-ceiling proposal, which he argues will pave the way to tax increases.

The merits of Addington’s arguments about the need to oppose Boehner’s proposals are in some ways less interesting than the simple fact that Addington is the one publicly making them.

And while I’m sympathetic with those who express horror that our torture architect is now whipping the pro-default vote, I think it worth looking more closely at what Addington said to whip the vote.

This man, after all, championed two unfunded wars. In fact, as he and his boss were putting the final touches on the lies that would justify the second, illegal war, his boss overrode the Treasury Secretary’s fiscal concerns about one of several tax cuts, stating, “Reagan proved deficits don’t matter.” And that guy–one of the guys involved in blowing up the deficit with wars and tax cuts–had this to say:

The government has racked up $14.294 trillion in debt — thought of by no-one as a little credit card debt.  The spend-tax-and-borrow crowd, currently headed by President Obama, has been in charge in Washington too long.  They have mortgaged the futures of our children and grandchildren.  Our government is so deep in debt that the share of debt of a baby born today is $45,000.

It is time for the spend-tax-and-borrow crowd to stop.  As the President indicated, conservatives want deep spending cuts.  In contrast, President Obama wants more taxes, a terrible idea.  First, the government already takes too much money from the pockets of Americans in taxes.  Second, if Americans give the government more money in taxes, the government will just find ways to spend it, rather than using it to pay off the public debt.  Third,  raising taxes reduces investment, which cuts economic growth and kills jobs.

So the Heritage Foundation, which of course first invented the legislation–health care reform–that ultimately set off the TeaParty, pays the guy who said, “We’re one bomb away from getting rid of that obnoxious [FISA] court,” the guy who wielded his pocket Constitution like a sword as he did battle to shred it, to attack those who “spend-tax-and-borrow,” ignoring all the time that the folks who have been in Washington too long are those who “spend-cut-and-borrow.” Addington’s own people.

Meanwhile, the grassroots part of this? They mustered about 50 people for a rally in DC yesterday, one which many of the TeaParty members of Congress attended. And yet as a desperate John Boehner tried to wield what weapons he had to win votes (the TeaPartiers already led him to get rid of the all-important pork he might have used to persuade the TeaPartiers, and Boehner seems to have given up his former ways of distributing checks on the floor of Congress as bribes), one after another TeaPartier refused to budge, even in the absence of any remaining grassroots movement.

In other words, the TeaParty grassroots movement that used to exist is just the excuse, at this point, for those trying to finish the job they started in 2001 redefining our government.

With the chaos that default will cause, think how much easier it will be to convince voters they need a unitary executive?

Preserving the Fabric of Our Society as They Roll Out the Shock Doctrine

/48 Comments/in /by

The economist Milton Friedman, along with F. Hayek, is one of the villains of Naomi  Klein’s book. According to her, Friedman has stated that “only a crisis — actual or  perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.” Friedman believes that during a  crisis, we only have a brief window of opportunity before society slips back into the “tyranny of the status quo,” and that we need to use this opportunity or lose it.

This is actually sound advice and in my view the strategy Western survivalists should follow. When I first started writing as Fjordman I focused on how to “fix the system.” I’ve gradually come to the conclusion that the system cannot be fixed. Not only does it have too many enemies; it also contains too many internal contradictions. If we define the “system” as mass immigration from alien cultures, Globalism, multiculturalism and suppression of free speech in the name of “tolerance,” then this is going to collapse. It’s
inevitable.

The goal of European and Western survivalists — and that’s what we are, it is our very survival that is at stake — should not be to “fix the system,” but to be mentally and physically prepared for its collapse, and to develop coherent answers to what went wrong and prepare to implement the necessary remedies when the time comes. We need to seize the window of opportunity, and in order to do so, we need to define clearly what we want to achieve. What went wrong with our civilisation, and how can we survive and hopefully regenerate, despite being an increasingly vulnerable minority in an often hostile world?

— Anders Behring Breivik’s Manifesto, speaking of Naomi Klein’s Shock Doctrine

I suggested the other day that there’s a more fundamental lesson we ought to take in the face of inexplicable violence, rather than just what ideology the perpetrator adhered to. That is, guns and explosives, mixed with a threat to a person’s dignity, can have catastrophic results, regardless of ideology.

But there is an area where ideology is critical: staving off the collapse of the fabric of our society.

Since I left FireDogLake, I’ve been reading more books than I have in years. Partly as a result, I’ve had a curious distance from the negotiations on the debt limit. It has been like watching a really ugly train wreck from 1,000 feet in the air, seeing in advance it’d be ugly, but sustaining a sick curiosity about whether it would be merely horrible, or really, really horrible.

Because (as Paul Krugman has suggested) what our elected representatives in DC are arguing over, really, is whether we’re going to willingly and deliberately launch further into a Depression gradually, or with real gusto.

Meanwhile, the other thing that has been coming slowly into view at my imagined 1,000 foot perch is the ideology of Anders Behring Breivik, the Norwegian terrorist. For a summary, go here or here (added: or here or here). But as you can see, he–like some others–embraces the idea of using crises to change society, in his case, in radical, terrible ways.

As it happens, two of the books I’ve been reading use different approaches to show what a mess the US is already in. One–still in manuscript–continues the Kevin Phillips tradition, contextualizing shadow economic stats within a narrative of how, over the last 35 years, America has been gutted.

The other, Someplace Like America: Tales from the New Great Depression, tells the stories–with narratives and images–of what the collapse of America looks like at the individual level (I highly, highly recommend it). The authors–reporter Dale Maharidge and photographer Michael Williamson–describe what it means for the $7 earned from giving blood to be a big deal. They describe a lot of hunger. And they describe more and more people who used to live “in the house on the hill” falling into such straits.

There’s one story that really hit home as I watched the debt crisis and Breivik’s ideology play out. It dates to a reporting trip Maharidge and Williamson made in the early Reagan years, their first effort to chronicle the collapse of America.They spent a day at a work camp in Texas run by a “foundation” that picks up down and out men and induces them to sign up for a month at the work camp as a way to get them off the street (and also as a way to make $1,000/day off of their unpaid labor). Maharidge describes the thinking of one of the guys who was about to willingly stay past his 30 day commitment.

“Okay weasels,” Foxface announced, “now fill it back up.”

We set to work regarding the reloading the truck by hand, forming teams that passed debris.

“I hate this shit,” Jay said.

It was a contradiction I couldn’t understand. Jay felt enmity, but he was terrified of what he called “the outside.”

“But don’t you fell they are ripping you off?” I asked.

Jay scratched at the hard ground with a foot, scraping at the dust. When he looked back up, he said, “No-o-o.” He paused.” “No.”

I shut up.

I realized what I was seeing: this was a man who had given up, utterly.

[snip]

He had arrived here a destroyed man, beaten by life and the vagaries of the economy. Now he seemed brainwashed, like the cult members I’d written about for the newspaper. Like a cult, the foundation was exploiting his weakened state of mind in order to manipulate him. The work camp practiced classic sleep deprivation: it worked men hard and then roused them after just a few hours’ sleep to do it all over again, seven days a week. Jay said this was how it had been for the previous thirty days.

One must be defeated to be controlled.

That was 30 years ago. But if anything, our society has embraced such approaches to social control in more and more areas of life. It’s certainly the kind of thing we can expect to see more of, as this Depression gets worse. Particularly given the way Republicans and many Democrats have refused to offer an alternative.

And to some degree, this is where our focus needs to be. Progressives have been pretty impotent trying to combat the Depression-embracing policies of DC’s politicians. Saving Social Security and Medicare (maybe) may be our only win on this train wreck. And while in the medium term, I think Progressives can shift the way our society thinks about taxes–and specifically, taxing the really rich, and while I think if the corporatists don’t succeed in entirely shutting down elections, we might vote a lot of them out next year, there’s not much we can do politically at the moment.

Meanwhile, those aiming to take advantage of crisis have gotten their wish and they’ve been preparing–whether far right or “just” neoliberal–a range of policies to capitalize. Yet, if this front page article in the hometown of one of the guys most active in pushing this crisis is any indication, folks aren’t necessarily going to fall for it. Even in West Michigan, people know when they’re being looted.

But to get there–to make it through this crisis without the Breiviks of the world getting their way–we’re going to have to limit the number of people who end up like Jay, quite literally embracing his slavery. Americans are pissed off and are beginning to fight back–but we have to make sure they fight, and fight in constructive ways, rather than give up.

The Chief of Staff from JP Morgan

/25 Comments/in /by

Joe Subday has a post focusing on Bill Daley’s role in the serial capitulation Obama is making to the debt hostage-takers.

Politico’s David Rogers and Carrie Budoff Brown report on the $3 trillion deal under discussion between Obama and Boehner. And, despite denials, it appears that Obama and Boehner are negotiating and the number is $3 trillion, mostly in spending cuts. Towards the end of the article is this nugget:

At the same time, the White House’s tactics in this situation most infuriate Senate Democrats, who complain that the president’s chief of staff, Bill Daley, is too quick to make concessions to Boehner, even at the party’s expense.

Yes, they are quick to make concessions at the White House. Like everyone, I’ve been trying to figure out what’s really going on. One trusted source told me that one problem is definitely Daley:

Bill Daley is behind the White House’s capitulation. He’s the Democrat’s Neville Chamberlain. It’s dominoes of caving — one cave leads to another. They are so desperate for a deal that they’ll take anything at any price. They won’t fight for anything.

Now, of course, Daley works for Obama. He hired Daley, who used to be on the Board of Third Way, the group always willing to sell out on Democratic principle. And, that’s what Daley is doing on Obama’s behalf.

Now, Joe’s right: Daley ostensibly works for Obama, and so Obama is ultimately responsible for those capitulations.

But is Obama the only one Daley’s working for?

Daley was hired, after all, because the banksters had convinced Obama that seemingly endless supplies of free money wasn’t enough for them; they also needed a bankster in the White House.

And so here we have an unelected bankster in a key role at a moment of crisis. And every time Boehner asks, Daley reportedly offers up yet more austerity in the hopes that he can prevent uncertainty in Jamie Dimon’s world.

It’s funny. Unlike Obama, Daley men aren’t exactly known for their poor negotiating skills. But this one sure seems to be acting helpless in the face of a bunch of demands for more. And ultimately, it won’t be the TeaPartiers who benefit from that process. It will be Jamie Dimon.