Defending the New Deal Watch

After the Great Depression, a large portion of our population understood that FDR’s policies of government spending to stimulate the economy actually worked. It was Keynesian economics, in which the government in times of economic downturn becomes the employer of last resort. FDR created programs to put people to work, building infrastructure (dams, roads, electric power plants and grids) and doing just about every other damn thing under the sun. Painting murals. Maintaining hiking paths. Halting soil erosion.

From the beginning, the business and moneyed interests in this country hated the New Deal and its works programs. They began and continue to this day to employ a disinformation campaign that has left the current American public of today not knowing if the New Deal was a good thing. This ignorance never would have worked on the public in the 40s and 50s, when people understood exactly what the stakes were to Hoover’s “continue to do nothing” strategy (there are still idiots in the same mode today). They understood because FDR explained it to them. He told them that his programs were going to end the Depression, and that his opponents had done nothing and didn’t care about them. How horribly rude and partisan his speeches seem in today’s climate, when merely giving the GOP the richly deserved blame for the financial crisis gives our media the vapors.

Any analysis of economic health from the era shows that the recovery was slow, but after a few years the economy was back about where it was when the downturn began during Hoover’s administration. But the economy didn’t start to boom until WWII. The difference was that before the war, FDR didn’t have the political capital to really spend and employ his way out of the Depression the way he wanted to. His opponents watered down his spending proposals, demanded that he try to balance the budget, hindered him. When it comes to killing people, though, no expense is too large for the US of A. (and, to be fair, Japan and Germany did present a real risk to our nation and to our European allies). Once in the war, the government could deficit spend to its heart’s content, put people to work, etc. And it worked like magic.

Today people say “the New Deal didn’t work” or they say that the New Deal failed and it was only WWII that worked to really end the Depression. I’ve even heard people say that FDR’s policies actually prolonged the Depression and that Hoover’s “do nothing” strategy would have worked faster. But the proof is in the pudding: the government employing people on a massive scale really boosts the economy.

But, I hear you object, that was the war, not the New Deal. Pretending that there is some qualitative difference to war spending and other stimulative spending is the real fallacy.

Corporatists and conservatives weep and gnash their teeth about the government paying people to paint murals or build roads (in the current go-round, the GOP has objected strenuously to money for the Park Service to maintain the National Mall). And so they pretend to scrutinize every penny to judge its stimulative effect. The truth is, anything that employs someone to do anything is stimulative, and highly so.

In the Keynesian spending to fight WWII, we employed a huge number of people to build battleships, fighters and bombers, munitions, aircraft carriers, supplies,etc. And where did all of that stuff go? Most of it is at the bottom of the sea, rusting and poisoning the environment. Yet, the stimulative effect was very high. We could have had people building ships and sending them to the bottom of the sea ourselves in the absence of Japan, and it would have had the same effect. What’s the difference? Just that in the case of making weapons everyone can see that it is a smart thing to do when you have an enemy.

So, you can employ people to do anything and boost the economy doing it if you employ enough of them. The smart thing is to have them do something useful, or beautiful, or necessary, or leaving you with something valuable afterwards, like a greatly improved infrastructure. But WHAT they do isn’t what boosts the economy, as the GOP wise men who rub their chins now like they know something would like to pretend. Only THAT they do it, and get paid, and get that money circulating.

My advice for the Obama team? Fashion a bill that employs a huge number of people, spending a vast amount of money on our infrastructure, and EXPLAIN what you are doing to the American people, so that they aren’t left wondering if more tax cuts (god forbid) would have been better.

Waiting for Presidential Jujitsu Watch

Well, Obama managed to pull it off and get himself elected despite having to run against a clearly mentally inferior Republican, a disadvantage which defeated both Gore and Kerry. Hooray USA. It seems that a small group of Democrats decided to actually pay attention to how campaigns could be won and lost, used a lot of very smart media buys, innovated in fundraising, followed Howard Dean's gameplan for competing in all fifty states, and had an incredibly disciplined candidate who was excellent at framing - something that Republicans have traditionally been very good at and Democrats not so much. Obama's team was incredibly savvy about the media. Here, for example, is a great analysis of a truly inspired move by our new WhiteHouse spokesman against raging idiot Sean Hannity.

So, ok, Obama's people know how to campaign, which is totally great and unexpected in a group of Democrats. But what about governing? As George W. Bush tragically demonstrated, winning elections and governing competently are two entirely different things. And the track record of Democrats in fighting evil and incompetence is not reassuring. The Democratic leaders in the Congress are terrible, full of the most cowardly, unprincipled, puling wretches who couldn’t be bothered to defend the law, the Constitution, or our freedoms if their livelihoods depended on it. They continually make choices that are not only bad policy but bad politics. The way they act is a continual source of shock, outrage, and disappointment to their base. It’s like trying to fight Darth Vader with a limp lasagna noodle. There are only a few, such as Marcy Kaptur, Dennis Kucinich, Russ Feingold, and Bernie Sanders (who isn’t a Democrat, of course) who break through the nod-and-wink charade of pretending free market capitalists are not the lying thieves they have proved themselves to be.

Any student of recent politics knows that the GOP excels at being very effective in opposition. Here's what they do: they demand and demand and demand compromise on legislation, which the Democrats always give in to, always too much and too early. Then, when the legislation has been made completely ineffective, they vote against it anyway. This is exactly what they are doing with the stimulus bill. A recent piece by the Rude Pundit puts it this way:

We don't know what Barack Obama actually said to Republican members of Congress in his closed-door meetings with them yesterday regarding his stimulus plan. But we do know one thing for sure: it accomplished nothing. This is the way it's gonna go, and if you've paid attention at all, you know the steps: Obama will concede shit and Republicans will ask for more (even though they already got more tax cuts than anyone fucking needs), Obama will concede more shit and Republicans will ask for more (even though they're gonna get the family planning funding taken out), Obama will concede more shit and Republicans will ask for more, and then when the vote comes, Republicans will vote against it, saying that no one listened to them and fuck that Obama for lying about bipartisanship. Yet the legislation will have passed in a watered down form from the deep infrastructure and other spending so desperately needed to, you know, create jobs, which will, you know, create taxable income, which will, you know, help actually pay for shit some day.

Now, long after the thieving horses have left the barn, they are closing the barn door. In a pattern repeated many times in history, a regime that tortured people and spied on their own citizens has left, leaving a popular new regime saddled with debt and a bunch of Chicago School economic advisors to forbid them from doing anything useful about it. This happened in Poland, in South Africa, in Russia, in country after country in South America . . . and now it is happening here, right on schedule. Read “The Shock Doctrine” by Naomi Klein, if you haven’t already.

We await evidence that the Obama team is just as smart about governing the GOP as they were at campaigning against them. The only effective way to approach this stimulus bill is to devise it with no compromises, to make it an actually effective bill, to reject yet more tax breaks, and to pass it without the GOP. Obama doesn’t need them.

Tomorrow, how we know that stimulus spending actually works.