I thought I was fairly savvy about most items of a political or economic bent; I read a great deal about the topics from a wide array of sources, and I try to keep up with the math. But I just can’t fathom what’s going on right now that has so many people in such a snit. For the better part of five years, I have read op/eds, watched the Sunday sit-arounds, and listened to the nearly nightly ablutions of the Very Serious People, all centered on the the absolute screaming necessity of:
Getting this spending under control, and practicing a little fiscal discipline!!
Now I know that Republicans, for three consecutive sessions of Congress (they controlled the House, Senate, and White House during that time), spent money like the proverbial profligate sailors…that much is clear. Republicans diverged from Democrats under Obama (who saw tax revenues fall due to job losses, and automatic spending raise as the newly jobless put their kids on Medicaid, and registered for unemployment and food stamps.) For the years between 2000 and 2007, conservatives intentionally poured money into their favorite pet defense programs, and intentionally lowered revenues in two giveaways called, collectively, the “Bush Tax Cuts”, giveaways that largely benefited Americans in the upper third of income earners.
The archetypal American politician works the rope lines at small town parades, shaking hands and kissing babies. Politicians also like to give out tokens of their appreciation to the constituency, party favors and earmarks usually go over well. This is a time-honored ritual that is not without redeeming qualities. Representatives serve at the pleasure, and for the benefit, of the citizens in their districts. Good constituent service, and the ability to remember someone’s name, go along way with the average voter.
Other redeeming qualities long appreciated, have fallen under scrutiny in these volatile times. Earmarks, as an example, used to be a measuring stick for the effectiveness of a member of Congress. The items now derisively referred to as pork-barrel spending are nothing more or less than targeted line items; projects in the district that allow federal taxes harvested from the area to return to the area. Having spent some time looking at earmarks myself, I have seen some crazy ones. But most voters would be surprised at the rather mundane and mostly reasonable list of projects completed with federal tax dollars. Far from the vagaries of the main body of the federal budget, earmarks represent transparent spending that is easy to track and evaluate.
For years, America has been treated to a steady attack on poor people. When bad things happened over hill and dell, you could bet that poor people were the cause. White poor people in Appalachia, brown poor people in the Southwest, and black poor people everywhere; where there was crime, despair, or peeling picket fences, there was poor people. Poor people, it seemed, were poor because they didn’t like work. Poor people were poor because they were lazy. As with many arguments, there were, and are, nuggets of truth to the claims. Some percentage of the poor, perhaps even a significant percentage, were and are lazy. But much of the focus on the poor was of a political nature.
Democrats, starting in the 1960′s, began to specialize in getting the poor vote. Republicans, beginning with the Reagan Democrats in 1980, started drafting working class Americans to vote against programs perceived as catering to the poor. Class division, after all, is such a wonderful tool for creating electoral momentum. But we have moved past the poor in today’s America. Much of the architecture set up to ensure help for the poor has fallen by the wayside; even our education system is being pushed out of relevance. Nowadays, the political powers that be have picked out a new target; the working class.
Political guru James Carville famously wrote “It’s the economy, stupid” on the wall at Clinton headquarters during the 1992 presidential campaign. The logic is simple: when people have jobs that pay enough to cover the bills and provide for some entertainment, they are happy. If the voters aren’t happy, they will generally view the current administration as the cause of their distress, and take out their frustration on incumbents. This little nugget of political wisdom is amplified by the general lack of understanding amongst regular voters about real economics.
Economic indicators generally lag; Reagan and the Republicans were hammered in the 1982 mid-terms for sky-high inflation that was the sum total of government policy and central bank strategy from the 1970′s. Although he was the V.P. during the Reagan years and bore some culpability, George H.W. Bush was punished in 1992 for a recession spurred on largely by Reaganomics and a fairly normal inventory cycle downturn. In all likelihood, President Obama and the Democrats will be punished for an economy defined by failed policies from the Bush Administration, Clinton Administration, and the Greenspan/Bernanke Fed.
I have a quick note today on populism and economics in the aftermath of the Senate’s passage of financial reform. The reform law, as an aside, is stronger than I thought it would be, but still weaker than the structures in place through the mid-1990′s. The reason we the people did not get real reform of the financial marketplace is because of our general confusion. See if you can follow this logic:
- The government deregulates much of Wall Street, and fails to enforce the regulations left
- As a consequence, Wall Street takes actions that threaten survival of nation
- President Bush pushes for and gets Congressional actions necessary to save the nation
- President Obama distributes the second half of the bailout under stricter conditions for payback than originally passed
- People take to the street to protest the “Obama Bailouts” and “Socialism”
- People take to the streets to protest government involvement in the markets designed to prevent all of the above from happening again (i.e. stricter regulations)
We the people need to have a discussion about what financial steps are in our best interests, and which ones serve only to enrich a select few. While some steps serve both Wall Street and Main Street, most do not.