Saturday, November 13, 2010

Investments

Marshall Auerback on New Deal 2.0, lays into the Catfood Commission's disingenuous calls for sacrifice:
This latter development has now gathered pace and found its fullest expression through the US National Commission on Fiscal Responsibility and Reform (an Orwellian title if ever there was one) established by President Obama. The Commission has proposed a $3.8 trillion deficit cutting plan that would trim Social Security and Medicare, reduce income-tax rates and eliminate tax breaks, including the mortgage-interest deduction. Yes, there are token cuts in Defense spending in the interests of “fairness”, but the cuts are heavily skewed toward middle class entitlements. (Which is a deceiving word because it implies that we’re just a bunch of weak supplicants, dependent on the graces of the government. Why don’t we call these programs “enablements”?) The priorities laid out by the Commission are truly symptomatic of the degeneracy of our governing class compared to the days of the Great Depression. Grand projects started then are still delivering value to communities and private business interests some 80 years after their completion.

The general criticism of the class bias in how the commission weighted the sacrifices (most for the little people, few  for the monied elite) has been done by other commenters, so I'd like to focus on the last, rather amazing sentence in the above quote. The work of the New Deal is delivering value and providing economic security almost a century after it was done. It is an investment that continues to pay out.

Consider that at least 30 of those 80 years have occurred while a political party explicitly opposed to the New Deal has been in power, and that it has been under fire from that same faction since the early 1960s, more than half its life. We're talking some institutional resilience. When a program provides material benefits to large portions of the population with little overhead and minimal intrusiveness, it's going to be a winner. This is deep strength of Social Security and Medicare - they deliver. [There's also the incredible infrastructure investments of the WPA that continue to deliver, but those are less easy to identify as a personal benefit.]

This is why the attacks on them have failed thus far. Main Street can see the benefit these programs deliver. Main Street in this case is not just families, but also small business. Cost efficiencies for business is also a reason why these programs persist.  How many small business owners can provide a retiree pension or medical insurance system with the cost efficiency as SS and Medicare, for example? People also see that these New Deal programs are about the only thing still delivering to them in the face of 35 years of continual and deliberate economic degradation:
...American families have spent the past several years facing tough choices in their own lives because the market system failed. This was all due to lax government regulation and dishonest, irresponsible, and indeed fraudulent behavior on the part of the private sector, notably the financial sector, which stands to benefit from any attempt to privatize Social Security.

The deteriorating position of most American families has been exacerbated by the failure of fiscal policy to ensure there was enough spending to support their jobs and, hence, generate increased revenues (which would REDUCE the budget deficit). There are no consequences for the people who helped drive us into the ditch that the President loves to talk about. In fact, to extend the President’s metaphor, the very car that veered off into the ditch has run over the people trying to climb out of it. Those victims, in turn, are being blamed for having dug the ditch in the first place.
The rejection of Obama is not so much a rejection of him personally as it is rejection of the failure of his administration and the Congress sent there to support it to deliver more to Main Street in combination with the eager delivery of moremoremore to Wall Street. He was given the power and the direction to "git 'er done" and bring back some semblance of reasonable economic goods allocation, and there isn't even an effort to hand wave in the direction of Main Street. We just need to sacrifice and expect pain. Those of us who paid attention to his rhetoric all along were not surprised when he turned out to be the incarnation of the worst parts of Big Dog's economic policy missteps (mostly because we assumed he was telling the truth), but I must admit to a certain amazement at just how cavalier the Obamacan regime has been on the messaging. Even Reagan knew how to deliver the message so it sounded like you were being romanced instead of merely fucked over.

For all the bitching Americans do about government power (right back to the original Tea Party), we're a practical lot in the main. We can see when we're getting something good, even if we're not always clear on why the goodness is being delivered. The Right has done excellent messaging on "welfare" and "socialism", but even rank and file who staunchly oppose those two evils are pretty cool with Social Security and Medicare. Those are materially beneficial to themselves and are clearly understood for what they are - payout for having paid in, a return on their investment. They can also see the big picture that they are getting screwed while the people who caused the mess are doing just dandy:
Even on today’s payouts, the vast majority of people will have almost nothing but Social Security with which to support themselves on retirement. The value of their homes has declined, their 401(k)s have been decimated, many have lost their jobs. Yet these are the very people being called upon to make sacrifices to preserve our “national solvency”, even as the people largely responsible for this crisis sustain their jobs and lifestyle on the back of huge government bailouts. It is a mark of the degeneracy of our political and economic system that it looks set to succumb to the maniacal protests of the deficit hawks, who urge yet more destructive public spending reductions ..., which will drive millions more workers out of jobs.
The majority do not want to see the programs that materially benefit them get cut back. Like, duh. By the same coin, the monied elite who have no more need of those programs want to see the resources redistributed for their benefit. Like, duh again.

I don't harbor any illusions about the eventual outcome. Wall Street is going to win this round because the Democrats have set themselves up for failure, starting with the retrograde fiscal legislation pushed through by the Republican Congress in the late 90s and going right through the current administration. They will, with a serious expression and a clean conscience (we're being fiscally responsible!) damage these programs by destroying their return on investment - pay in huge amounts, die before you get anything. The Democrats will suffer more electoral losses and the monied class will hop onto the new Republican steed, riding it until the next "throw the bums out" wave hits DC.

Anglachel

1 comment:

Dhyana said...

When there's wealth to be shared, the middle class is not invited to the feast, but when there's need to sacrifice, we're asked to come to the table to donate more blood. For 30 years the middle class has been bled and decimated. We're too few and we don't have any more blood to give.