Ron Paul joins the chorus of free market Republicans who don’t get it. According to CNN Paul posted a video on Youtube in which he “agrees that the economy needs to be stimulated but doesn’t think the federal government should be doing it.”
“Sure, we want more spending,” Paul said. “We need a lot more spending in the economy, but it has to be done by market forces, by individuals, by businesses making proper decisions.”
Help me. The problem is that businesses and individuals ARE making proper decisions. It makes a ton of sense for individuals to stop spending money in very uncertain times like this. It makes a ton of sense for businesses to stop investment and lay off workers when they don’t have enough customers. These are “proper decisions” by individuals and businesses. But the consequence of their proper decisions is a devastating feedback loop that leads to recession or depression. That’s why the government has to step in and spend. No one else will.
Economists call this a market failure. Zombie Republicans deny the existence of market failure. It’s Devil Worship. Devil Worship, I tell you!!
My commenter links to an excellent GOP zombie photo:
Here’s Mitch McConnell on why we can’t spend our way out of a recession:
“…we know for sure that the big spending programs of the New Deal did not work. In 1940, unemployment was still 15%. And, it’s widely agreed among economists, that what got us out of the doldrums that we were in during the Depression was the beginning of World War II.”
A Senate Republican strays from the Capitalist Way
I heard Rush Limbaugh make exactly the same point last week, not to mention Joe the Plumber in the post below. The self-contradiction is pretty obvious, isn’t it? WWII was a big spending project, much bigger than anything FDR undertook under the New Deal. Conclusion: yes we can spend our way out of a recession. FDR’s New Deal spending just wasn’t big enough.
Another conclusion is pretty obvious too. Republicans would be delighted to get us out of our economic problems right now if they could find an Adolph Hitler to fight. But, lacking one, they would prefer to wait years, decades if necessary, for the economy to completely deflate, then recover on it’s own. They would prefer that hundreds of thousands of workers sit idle, perhaps for years, witness the permanent loss of trillions of dollars of economic output, the further deterioration of roads, bridges, docks; the consignment of millions more to poverty, many of them children. All of this they would endure because the spectacle of government solving a problem, other than fighting a war, interferes with their cult-like devotion to the free market.
Obama has made a point of taking on far right talkers like Hannity and Limbaugh to a certain extent. During the campaign he said that “hardcore Sean Hannity fans probably wouldn’t want to have a beer with me“. And the other day he told GOP leaders that “you can’t just listen to Rush Limbaugh and get things done”. Hannity and Limbaugh love this stuff, of course, because going eyeball to eyeball with Obama boosts their ratings.
So, from that perspective, I’m not sure it makes sense for Obama to mention them by name and risk increasing their visibility. On the other hand, Limbaugh wingnuttism has been around now for years, so Obama isn’t exactly giving a national stage to a start-up movement; they say Limbaugh has 20 million listeners. By now that’s probably his max and it’s a lot, but it’s not enough people to win a national election. And I would argue that Limbaugh wingnuttism drives off a lot of folks too. He’s one reason there are zero GOP congressmen in the northeast. So to the extent Obama can identify the GOP with Limbaugh/Hannity he can solidify the Democrats as the more centrist party and keep winning elections as the GOP becomes an ever more regional party.
I think Obama knows what he’s doing.
By the way, a liberal group is tagging along on this idea. They are running radio ads in three states asking, effectively “whose side is our Senator on in the vote for a stimulus package: Rush Limbaugh or President Obama?” The states are Nevada, Pennsylvania, and Ohio and they all have a GOP senator. They are all states Obama won.
I understand that Alan Colmes is gone now from the Hannity and Colmes Show , but I don’t think it’s going to make a lot of difference. I watched the beginning of the show a few weeks ago. My goodness. A little one sided, perhaps? First Hannity does the entire voice-over introducing the show. Then Hannity introduces the first guest and they talk about Jeremiah Wright for several minutes. Then the camera pulls back to reveal Alan Colmes sitting at the other end of the table. Yikes. We are 10 minutes into the show and the liberal makes his first appearance.
In any event Colmes is gone now, and Hannity has apparently decided to take his show into a total wingnut echo chamber. Last night he interviewed Rush Limbaugh. A few excerpts below. Obama is taking the country the way of the Soviet Union, Rush? Really? Also, I like the look on Limbaugh’s face when he says “if they get national healthcare, it’s over Sean. We’re done.”
In his New York Times column today entitled “Confidence Surplus” David Brooks worries about Obama’s big stimulus program. He thinks it’s is too big and ambitious. Can government really do all this stuff? Can it be done in time?
I don’t know, and realistically no one knows. But here’s the deal: Obama isn’t proposing massive government spending and huge deficits because he’s feeling super confidant and thinks he and the government can do it all. He’s proposing this stuff out of desperation. He’s looking at economic activity coming to a standstill, and a Fed with no ammunition left—short term interest rates are essentially zero. Economists across the political spectrum are all proposing government deficit spending.
Obama is inheriting an economic disaster without precedent (at least since FDR). In my opinion this disaster could have been avoided if the country hadn’t been convinced to follow the laissez-faire economic theories of Milton Friedman et al over the past decades, but that’s irrelevant now. I wish Obama didn’t have to borrow tons of money and launch massive government spending programs in a fire drill atmosphere, but he doesn’t have a lot of options.
Incidentally, Brooks also seems to favor that old GOP favorite, tax cuts. That’s unlikely to help. People are already refusing to spend or invest their excess cash. That’s why the federal government can borrow money at zero percent interest. People are throwing money at the US Treasury because they think that’s the only safe place for their savings. Only tax cuts directed at the very lowest wage earners would likely be spent. That doesn’t stop the GOP from proposing tax cuts, though. Here’s a chart of Mitch McConnell’s recent proposal to stimulate the economy—a tax cut aimed at the very rich:
If you think the country’s in a mess now, what if the GOP were set to run the country for the next four years?
You could make a pretty good case that the current meltdown of the world economy could have been prevented if American regulators hadn’t been asleep at the wheel. The Fed, the SEC, and the Office of Thrift Supervision come to mind as parties that could have, in different ways, put the brakes on the housing bubble, limited the spread of derivatives, and put the cuffs on outlaws like Bernard Madoff–before all hell broke loose.
The question arises: what other disasters are regulators failing to prevent?
Michael Pollan directs our attention to the fructose scandal:
“We’re subsidizing the least healthy calories in the supermarket — high fructose corn syrup and hydrogenated soy oil, and we’re doing very little for farmers trying to grow real food”
Why in the world do we tolerate a public policy that encourages obesity? Human suffering aside, a huge group of people getting overweight and developing all sorts of weight-related heath problems costs us all a lot of money and diverts resources from you name it: education, energy development, innovation. It seems that we should be discouraging obesity.
Why did we allow this to happen? I’m sure the corn lobby had something to do with it. But I’d give equal measure of blame to cult of the market championed by Milton Friedman, Ronald Reagan, and many others. For years Friedman promoted the idea that markets would police themselves–no need for agencies like the Food and Drug Administration. It’s in people’s self-interest to not get fat, I can hear him saying, and if they do that’s their problem.
Well, the problem is, it’s not ALL their problem. And, by the way, have you ever heard of human nature? Does it seem conceivable that people bombarded with slick advertising for cheap Big Gulps from Day One of their lives might start drinking them? Particularly when the consequences develop much later?
Massive health problems in the US. Another victim of conservative economics and the failure of the American regulators.