In John Carpenter’s classic 1988 sci-fi movie They Live, a race of evil aliens has secretly taken over the planet. They maintain control by broadcasting stealth radio frequencies that not only makes them look like human members of the ruling class, but encodes subliminal messages into various advertising media to manipulate the populace, commanding them to obey, consume, and reproduce. . .
In Mary Shelley’s classic sci-fi horror novel, Frankenstein or The Modern Prometheus (1818), her protagonist, the brilliant Dr. Viktor Frankenstein, allows his hubris to get the better of him by assuming the powers of the Creator. His monstrous faux human creation, without name or number in the original—let’s call him “Donald” for now– refers to himself initially as “the Adam of …
Lost amid the tidal wave of media coverage over the Boston Marathon bombings this week was the destruction of a foundational argument of the Avatars of Austerity, aka “deficit hawks.”
Thanks to a little fact checking and spreadsheet analysis by a U Mass grad student and his associates, they proved beyond a shadow of a doubt that key economic data used by the Austerians to justify their slash and burn budget prescriptions is full of shit.
The bogus data is enshrined in a paper by two Harvard economists, Reinhart and Rogoff, frequently cited as Holy Writ by everyone form Erskine-Bowles to Paul Ryan to Fux News. Details to follow, but first, an overview.
Following the collapse of the international financial system during the George W. Bush Administration, deficits worldwide exploded as former tax paying workers were laid off in the tens of millions. Instead of putting them to work building infrastructure and the like, the strategy chosen by FDR during the last Great Depression to re-start the economy and thereby raise government revenues, the uber rich offered their own re-cycled remedy of trickle-down economics, with a twist– tax cuts for them and budget cuts for everyone else.
While the subtext of the Austerians’ campaign to slash government budgets, which overwhelmingly disadvantage the poor and middle class, is obvious: the One Percenters resent having to pay taxes that benefit society as a whole (see Willard Romney’s attack on the 47% as parasites demanding “free stuff”); and while the actual real world results of austerity regimes currently in place in Europe have resulted in deeper economic dislocation and misery — Great Britain is in the middle of a triple dip recession despite deep cuts in vital government institutions like the BBC — one would think that the Austerians would accept reality and admit their anti-Keneysian belief system is wrong.
Fat chance. Depression levels of unemployment in Greece, Spain, and Portugal, accompanied by negative GDP, the contagion effect of austerity is being felt in even healthy exporting countries like Germany, to the extent that even the IMF came out this week against austerity. Despite irrefutable facts, the Austerians remain convinced of the rightness of their crusade. Ignoring Einstein’s definition of insanity — doing the same thing over and over again and expecting a different result — they argue for even greater cuts, and more time for them to work their expected magic.
Just what is behind their rationalization, the keystone upon which the Austerians<a href=”http://news.firedoglake.com/2013/04/19/austerity-economics-takes-a-major-blow-as-key-research-paper-discredited/#comments“> base</a> their unshakable faith?
[T]he Rogoff-Reinhart paper entitled Growth In A Time Of Debt became the intellectual backbone for the austerity movement/plutocrats and their apparatchiks in Washington and elsewhere. The big take away was that a high government debt to GDP ratio – past 90% – would hurt economic growth. Hence, the austerity movement’s central claim that cutting government spending is necessary to restore higher growth levels. And if you are following along, you probably realize why this argument does not even work in its own context. Cutting spending does not eliminate debt – which increases perpetually with interest. Nor is debt itself a reflection of spending levels, debt merely represents borrowing. The government can spend as much as possible and avoid high debt to GDP ratios if taxes are levied to pay for the spending. In fact, the highest growth period in the history of America was during one of its highest tax periods. Neither taxes, debt, nor government spending are, in and of themselves, determinative of economic growth.
Sounds reasonable enough on the surface, assuming that the data they used and its analysis reflect reality. But Houston, we have a problem:
Thomas Herndon, a 28-year-old economics grad student at UMass Amherst, just used part of his spring semester to shake the intellectual foundation of the global austerity movement.
Herndon became instantly famous in nerdy economics circles this week as the lead author of a recent paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” that took aim at a massively influential study by two Harvard professors named Carmen Reinhart and Kenneth Rogoff. Herndon found some hidden errors in Reinhart and Rogoff’s data set, then calmly took the entire study out back and slaughtered it.What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.
Oopsie. Paul Krugman in his Friday column asks the logical, resulting gobsmacking question:
So, did an Excel coding error destroy the economies of the Western world?
Informed of the mathematical mistake that undergirded his and his BFF Alan Simpson’s whole austerity thesis, Democrat deficit hawk Erskine Bowles in essence replied that he didn’t care–he still believes in its viability, the facts be damned.
“I have obviously read the report and have referenced it a number of times,” Bowles said. “I know they had a worksheet error in the report and my understanding is that does make a difference.”
“But what it doesn’t change is the common sense and my own personal experience in both the public and private sector that when any organization has too much debt that is an enormous risk factor and your risks go up then people lending you money will want more money for their money,” Bowles said.
Translation: “Pay no attention to that man behind the curtain!”
So, Bowles is reduced to playing the “common sense” card so popular among conservatives these days when one of their pet ideologically driven crusades fails an objective analysis of its underlying facts. Sure, there is evidence that debt in excess of 90% of GDP retards economic growth by a measurable percentage. But it doesn’t drive it down anywhere near the level the Austerians maintain, making their Chicken Little The Sky Is Falling routine absurd on its face.
(Reminds me of the cognitive dissonance I used to see operating inside the criminal justice system. As advocacy groups like the Innocence Project has shown, not everyone convicted of a crime is guilty, as post-hoc DNA tests regularly show. You’d think that the original police investigators and prosecutors would eat a little humble pie for being proven wrong, but you’d be wrong. Like chest thumping politicians, they are geniuses at rationalization, maintaining that the victim was guilty for some other reason, because, well, just because. After all, they are professionals, experts who know their stuff.)
Other problems with R&R’s analyses includes the counterfactual case of England, which despite violating the 90% threshold for 19 continuous years, still maintained positive economic growth; and worse, cancelling its influence on the overall data set by giving it equal weight with a single year of severe negative economic growth in New Zealand in the early 1950s. Furthermore, economic conditions change over the decades, and when one analyzes R&R’s data from the beginning of the 21st century forward, the presumed relationship between the 90% level of economic stagnation becomes even more tenuous.
The question now is whether this cold slap of mathematical reality will be enough to end the hysteria of debt obsession that has the Serious People is D.C. so enthralled, and whether the far more critical and economically productive emphasis on job creation is once again the subject of serious policy debate.
I wouldn’t bet on it, since this isn’t a debate about economics but politics. Just as the Ryan Budget, which cited as its only academic justification the now discredited R&R paper, isn’t about deficit reduction but an ideological crusade to roll back the New Deal. As DSWRight over at the Lake <a href=”http://news.firedoglake.com/2013/04/19/austerity-economics-takes-a-major-blow-as-key-research-paper-discredited/#comments“>puts it</a>:
Democratic accountability has been sucked out of the nation-state system and deposited into the hands of a planetary bureaucracy of transnational corporations and central bankers. And from their perspective there is no crisis, at least not anymore, just a continued redistribution of wealth up and the necessity of building a police state to protect it. Austerity forever.
As the Master of Disaster W. once said: “Fool me once, shame on, shame on, you. Fool me–you can’t get fooled again!”
Liz Cheney sets the way back machine to 1961 to explain the Grand Obstructionist Party’s response to health care reform
In his NY Times column Monday, Paul Krugman asks a question whose subtext subsumes its substance:
How many Americans will be denied essential health care in the name of freedom?
In case you haven’t noticed, the response to every critical policy issue proffered by the plutocratic funded Teabagger, Libertarian dominated GOP is a non-answer: no can-do, because, you know, freedom. An easy, bumper sticker slogan that appeals to the low information voter and propagandists alike.
Rational gun safety laws? Farmer Fred might have to drive 30 miles to town to record a transfer of his shotgun to his grandson. (Maybe he could combine it with one of his regular town trips, or like, when he has to register the transfer of a vehicle.) Financial regulation? As the banksters are fond of saying: the invisible hand of capitalism is regulator enough, thank you very much. Pollution controls? That costs jobs and all the freedom that goes with ’em. Immigration reform? Employers should be free to hire whomever they want, at whatever pay the market will bear. That’s the free market, baby.
Krugman drills down on the healthcare issue:
“I’m referring, of course, to the question of how many Republican governors will reject the Medicaid expansion that is a key part of Obamacare. What does that have to do with freedom? In reality, nothing. But when it comes to politics, it’s a different story.
It goes without saying that Republicans oppose any expansion of programs that help the less fortunate — along with tax cuts for the wealthy, such opposition is pretty much what defines modern conservatism. But they seem to be having more trouble than in the past defending their opposition without simply coming across as big meanies.
Specifically, the time-honored practice of attacking beneficiaries of government programs as undeserving malingerers doesn’t play the way it used to. When Ronald Reagan spoke about welfare queens driving Cadillacs, it resonated with many voters. When Mitt Romney was caught on tape sneering at the 47 percent, not so much.
There is, however, an alternative. From the enthusiastic reception American conservatives gave Friedrich Hayek’s “Road to Serfdom,” to Reagan, to the governors now standing in the way of Medicaid expansion, the U.S. right has sought to portray its position not as a matter of comforting the comfortable while afflicting the afflicted, but as a courageous defense of freedom.”
Yup, the Romney Revelation required a reboot— blaming the victim can only take you so far, especially when the victims are so close at hand. So, time to step into the Cheney time machine to make old things appear new again.
“Conservatives love, for example, to quote from a stirring speech Reagan gave in 1961, in which he warned of a grim future unless patriots took a stand. (Liz Cheney used it in a Wall Street Journal op-ed article just a few days ago.) “If you and I don’t do this,” Reagan declared, “then you and I may well spend our sunset years telling our children and our children’s children what it once was like in America when men were free.” What you might not guess from the lofty language is that “this” — the heroic act Reagan was calling on his listeners to perform — was a concerted effort to block the enactment of Medicare.”
So, it’s back to the future, where the right wing antediluvians think they can pour old wine into new wine skins. Their conception of freedom is truncated into the freedom from formulation— freedom from government, which is to say, society as a whole. The other formulation of freedom, freedom to, was long ago perverted into license— license to do whatever the hell somebody with means wants, ignoring the generations of collective effort that made their self-centered notions of freedom possible.
When but a sophomore in high school, I had the good fortune to encounter the writings of the noted psychologist, Erich Fromm, who made clear to me the nuanced differences between freedom from and freedom to. (As a horny teenager, I picked up his classic The Art of Loving, thinking it was a sex manual of some sort, but got hooked instead on his philosophical approach to life.) As long as we are doing a little time traveling, let’s go back another twenty years, to the publication of Fromm’s Escape From Freedom in 1941 (during the height of The Third Reich). From the WikiP entry:
Fromm distinguishes between ‘freedom from’ (negative freedom) and ‘freedom to’ (positive freedom). The former refers to emancipation from restrictions such as social conventions placed on individuals by other people or institutions. This is the kind of freedom typified by the Existentialism of Sartre, and has often been fought for historically, but according to Fromm, on its own it can be a destructive force unless accompanied by a creative element, ‘freedom to’ the use of freedom to employ spontaneously the total integrated personality in creative acts. This, he argues, necessarily implies a true connectedness with others that goes beyond the superficial bonds of conventional social intercourse: “…in the spontaneous realization of the self, man unites himself anew with the world…”
A world unobtainable to the selfish and the cruel. What else explains their desire to destroy a society which they reject, from which they have chosen to ex-communicate themselves? Better its destruction than a constant reminder of their own dysfunction.
WikiP concludes its review with this (italic emphasis mine):
Fromm examines democracy and freedom. Modern democracy and the industrialised nation are models he praises but it is stressed that the kind of external freedom provided by this kind of society can never be utilised to the full without an equivalent inner freedom. Fromm suggests that though we are free from obvious authoritarian influence, we are still dominated in our thinking and behaviour by ideas of ‘common sense’, the advice of experts and the influence of advertising. The way to become truly free in an individual sense is to become spontaneous in our self-expression and behaviour and respond truthfully to our genuine feelings. This is crystallised in his existential statement “there is only one meaning of life: the act of living it“. Fromm counters suggestions that this might lead to social chaos by claiming that being truly in touch with our humanity is to be truly in touch with the needs of those with whom we share the world. This is the meaning of a truly social democracy and the realisation of the positive ‘freedom to’ that arises when people escape the malign influence of totalising political orders.
I heard Senator Pat Toomey (R-Pa.) play the “common sense” card yesterday, trying to explain his support for the watered down gun safety agreement he reached with his Democratic counterpart, Joe Manchin (D-W.VA). “Common sense” is the mantra conservatives are using these days to oppose government regulation of any sort. “The advice of experts” is what fuels the whole deferential beltway pundit mentality. And the advertising industry is exactly the foundation of the modern day political propaganda machine.
The more things change the more they stay the same.
The barn door has closed on yet another episode of CPAC’s Wingnut Woodstock, the annual conclave of conservaschism‘s most extreme proponents. (See our archives for previous entries.)
Among the 70+ speakers were the party’s last two failed GOP Veep candidates, Rep. Paul Ryan (R- Gault’s Gulch), who couldn’t be bothered to even mention his former running mate, Mitt Romney, who was also there; and Sarah Palin (R-Alaskan Quitter), who couldn’t resist sucking up some sugar water poison from a Big Gulp and throwing some red meat to the Birthers while attacking Karl Rove:
“If these experts who keep losin’ elections and keep gettin’ rehired and gettin’ millions — if they feel that strong about who gets to run in this party, then they should buck-up or stay in the truck.”
Rand Paul, who won the presidential straw poll beating Marco Rubio, 25%-23%, also implicitly took a shot at Rove and the establishment wing of the party, calling it “stale and moss covered,” in need of a complete do-over. Rubio took the opposite tack, saying that the party just needed better packaging, everything else is just fine… except maybe their attitude toward immigration, a word that curiously never passed his lips. Ted Cruz responded politely to GOP’s “grey eminence” John McCain, after McCain called him a “whackobird” for supporting Paul’s 13 hour filibuster against extra-judicial targeted killings, ala drone strikes.
All told, over 70 speeches were given. And while Donald Trump said nothing of substance, he will be remembered for making a further investment in self-parody, talking to a room full of empty chairs after tweeting enthusiastically about how the sponsors were expecting a standing room only crowd for the pleasure of his company.
Squint real hard and you might see Trump holding court for a handful of starstruck suckups
Noticeable for their absence were Past GOP luminaries New Jersey Governor Chris Christie and Virgina Governor Bob McDonnell weren’t invited this year because they had committed the unforgivable sin of, you know, actual governance, an activity antithetical to the overriding mission of modern conservatism— the wholesale dismantling of the US government (except as it benefits the 1%).
Which brings us to the substance of Paul Ryan’s speech, his proposed 2014 budget confabulation. The zombie eyed granny starver once again tried to disguise his Ayn Randian flavored social Darwinism as deficit reduction, framing his argument as the only rational approach to a country teetering on the edge of the apocalypse:
Unless we change course, we will have a debt crisis. Pressed for cash, the government will take the easy way out: It will crank up the printing presses. The final stage of this intergenerational theft will be the debasement of our currency. Government will cheat us of our just rewards. Our finances will collapse. The economy will stall. The safety net will unravel. And the most vulnerable will suffer.
But it’s not too late. This budget provides an exit ramp from the current mess— and an entry ramp to a better future. Unlike the President’s last budget, which never balanced, this budget achieves balance within ten years.
Washington Post and MSNBC economic policy wonk Ezra Klein comments:
These are tremendously important paragraphs. They’re emphasized a few pages later, in the first real section of the budget, which is entitled “The Debt Crisis Ahead.” These paragraphs matter because they serve as Ryan’s justification for his budget. They are why we need to throw 35 million people off health insurance. They are why we need to cut deep into education and infrastructure and food stamps and housing assistance. They are why this budget is an act of mercy rather than cruelty — because if this future is the only alternative, then this budget is painful but necessary medicine.
But it’s not. Ryan’s nightmare scenario isn’t likely even in the absence of new policy. A reasonable assumption of future debt is about 112 percent of GDP come 2037 — and that’s assuming the repeal of the sequester. That’s too high for comfort, and there’s some evidence that debt at that level could harm the economy. But there’s no evidence that it would create the kind of Mad Max-style scenario Ryan paints.
Ryan’s GOP budget takes a meat ax to the social safety net for the old, poor, and infirm, all the while sparing the military/medical/prison/financial industrial complex or any other corporate interest group from any sacrifice whatsoever. Ryan ignores deficit expanding tax expenditures that overwhelmingly favor the wealthy, which in 2009 cost the federal government a cool trillion; says nothing about eliminating tens of billions of dollars in direct taxpayer subsidies to hugely profitable industries like the oil companies and Big Ag, many of whom don’t even pay any income tax thanks to lobbyist provided loopholes; and lowers tax rates across the board, which again, overwhelmingly favors the rich.MORE. . .“Mad To The Max: Paul Ryan, Beyond Blunderdome”
