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It's November? When Did That Happen?
Hello all you beautiful people,
So, it's been a while. Like a really long time. Almost (but not quite) 6 full months. Suffice to say, I've been remiss in my posting duties. But apparently the world didn't end while I was away fro our little home on the web, so I'm going to try and get back here a little more often.
While I was away, the political scene in the US (and worldwide) went a little manic. The Presidential campaign started to actually get serious... so serious in fact that it managed to give Rick Perry (Gov. ... of where again?) a brief case of amnesia, drive Herman Cain to sputtering incoherence (which is actually less remarkable than the fact that he was actually leading the Republican primary briefly). Oh and some guy named Obama just kind of quietly keeps raising millions of dollars from large numbers of grassroots supporters while letting the GOP contenders make him look more presidential by the day. I stand by my post from May 26... Obama's going to win in 2012.
In other completely-unsurprising-yet-s till-kind-of-shocking news, the House and Senate managed to almost allow the economy to implode on two separate occasions over the debt ceiling and 2012 budget... and then punt the problem down the road. It's five days and counting until the next punt. I feel like a Washington Redskins fan. Oh wait...
What else, what else... Oh yeah. Apparently the remarkable occurrence known as the Arab Spring, which is still ongoing, (see Saif Al Islam Quaddafi, capture of this morning, reported to me as I was marching with Pro Syrian Freedom Demonstrators in Ottawa) helped to remind people in democratic nations that if they believe that the elite are not acting in their interests, they have the right to protest. The Occupy movement reared it's many faced head on September 17th in Zuccotti Park in New York's Financial district, inspiring the birth of numerous solidarity protests around the globe (one of which I just happen to be working with myself). It's a fascinating time to be alive, and not just because of the soap opera that is Washington for once.
With all that being said (and much more on the tip of my tongue), I'm going to leave you for tonight, and try to get back real soon. Because I care.
Cheers (and Occupy Everywhere like I'm occupying this coffee shop with free wi-fi right now)
PSRB
PS: for more on the Occupation that is near and dear to my heart, please go to www.occupy-ottawa.org
PSRB
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That's Right... I Can See into the Future
G'day,
Well, we've hit the beginning of the end of the silly season where Washington politics is concerned (as far as that season can ever be considered to end... I mean people still use the words "President" and "Palin" in the same sentence without the obligatory "will never be elected" being attached, so there is some element of silliness still present) as the serious GOP presidential contenders line up in front of microphones and begin to repudiate (spelled with a "d", not an "f") past positions that seemed reasonable and useful at the time (say, if you were trying to get elected governor of a moderate state... Mitt and Tim, I'm looking at you here) but are potential liabilities if you are running for the nomination of the Great Reactionary Revolution of the Right, also known as the Republican nomination for President. I, for one, couldn't be happier. As much fun as it was going to be talking about Donald Trump, his hair and his mistresses, watching the MTV Rock the Vote edition of Cribs featuring Mike Huckabee and his FOX sponsored Florida Dreamhouse (foreclosure not included), the Haley Barbour-Joe Biden Gaffe-In special, and Mitch Daniels- ok, lets face it Mitch Daniels and fun don't really seem to go together- it's nice to think we may have hit a point where those of us watching this race unfold can actually talk about politics and policy. Until of course Sarah Palin does something newsworthy, at which point the silliness will return. But I digress.
(wow, 3 Palin shots in one paragraph... That's a personal best I think)
So, with the field forming, I'd like to tell you that the names who are out of the race may merely have saved themselves time and money. And not just because there can be only one nominee, and a reality TV star was never likely to be it. No, it is because I am clairvoyant and I am here to tell you that Barack Obama is going to be re-elected President of the United States of America. (Note: I am not actually clairvoyant) How can I be so sure when his approval ratings, according to the Real Clear Politics average of major polls puts his approval rating at a far from dominant 52.5%, even with the Bin Laden (good riddance to bad rubbish by the way) bump? Well it's very simple (and incredibly complex, but we'll get there). In 2008 Team Obama managed to put together a broad coalition of youth, labour, independents and of course, traditional Democrats in order to get the man elected in a hard fought campaign. For 2012, not only will they have these elements still leading the charge (with the labour side revitalized and angry following the battles in Wisconsin and other states around public employees contracts and rights to organize), but they have a new ally seemingly focused on doing whatever it can to get a Democratic President re-elected. This new friend is the Republican Party itself.
In the last month, since the 2011 budget battle (part the first), the Republican Party and it's Tea Party inspired freshman class of congress-people have been seemingly doing everything they can to draw a thick dark ideological line in the sand. From the language used over the budget fight, the beginnings of the debt-limit follies, the Trump-ed up birther nonsense to the Paul Ryan budget voted down by the Senate this week, the Republicans have seemingly put forth a great effort to define themselves and create policies which represent their views. Unfortunately for them, in their distillation of their principles in a search for ideological purity, they have managed to create a brew of social conservatism and libertarian fiscal policy that is far too strong for the average American to stomach. As E.J. Dionne puts it in today's Washington Post :
"Both the leaders and rank-and-file of the Republican Party devoutly believe Âthe people gave them a mandate last November to slash government, including that big-government health-care program known as Medicare. And never mind that many Republican candidates in 2010 criticized President ObamaÂs health-care law for reducing Medicare expenditures."
I've stated before that the biggest danger to the Republican Party was for it to find itself kowtowing to it's "increasingly radicalized base", or, in other words, to find itself moving further and further to the right as the country remained mainly in the centre. This has seemed to be the way that the GOP has gone in the last month. The Ryan budget, aside from its well documented ridiculous assertions (i.e. achieving a 2.8% unemployment rate by 2021), lays out in bare, undiluted majesty the right-wing's prescription for the world. Market first, government only if we have to, cut taxes on the rich, the market again, privatize entitlements, slash spending etc. And then some more of the market. Fairly simple and orthodox by and large, from a Libertarian point of view. The problem is that the public, as the Democrats learned through the debate on Health Care Reform, does not gives points for honestly stating what you believe. They do however tend to get angry when you talk about cutting grandma's Medicare benefits. On Tuesday, in a special election in a Republican leaning district in upstate New York (which John McCain won in '08 by 6%), Democrat Kahy Hochul won after the race became an unofficial referendum on the Ryan plan.
So, what does this mean for 2012 (and beyond)? Well dear readers, my crystal ball tells me that a combination of several factors is going to lead to the third in a series of wave elections (although you could argue that the '06 midterms, with the Democratic gains in the House, was the first one, making 2012 the fourth). First, the Obama team is good. Very good. I highly recommend reading the book Game Change, by John Heilemann and Mark Halperin, which details just how good they are. They are not going to be out-messaged, out-spent or out-stumped by anyone. And their guy has something of a following. Though he was unable to change the course of the 2010 election, 2012 will see at least a partial return of the Obama coattails that pulled so many Democrats into office in 2008.
Secondly, Republican Governors are doing everything they can to steal the thunder out from under their federal counterparts. From Wisconsin to Florida to Arizona to Ohio, GOP state level officials have moved rapidly to the right in policy matters, taking the national conversation with them. This, in turn, has angered and reinvigorated the Democratic grassroots and netroots, much of whose energy had been sapped by the inevitable cooling off that goes from campaigning to governing following 2008. Not only, therefore, are the GOP governors and state-legislators turning off independents and moderates with their partisan activities, they are energizing their opponents.
Third, there is the aforementioned Tea Party. The Tea Party, with its hard conservative ideology, has quickly come to spell out the litmus test where GOP nomination fights are concerned. The no new tax pledges, American Exceptionalism as religion, conservative social view etc. test that all federal level politicians must pass has become increasingly rigorous following the Tea Party's success at winning primaries (and yes, elections) in the last election cycle. However, as the broader electorate has gotten to see the Tea Party govern, and watched the changing face of Republican orthodoxy come to reflect their views, the revolution has lost some of its lustre. The mandate mentioned in the quote above by E.J. Dionne has evaporated quickly, if it was ever there at all, leaving a Republican party that increasingly appears out of touch with the needs and concerns of a majority of the country, and moving in the wrong direction.
All of this adds up to a huge opportunity for Democrats going forward. My crystal ball foresees another Obama Inauguration, with a dual Democratic house-senate majority applauding in the background. Can't tell you who's winning the World Series though. Cleveland maybe?
All right, that's it for today. Talk to you soon folks.
PSRB
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A Hypothetical Conversation With A Believer
Hiya Folks,
Hope everyone's weekend was fantastic. I spent mine (absent from our little home on the web here) writing a couple of papers (one of which I may try to reprise here on the blog.... stay tuned) and generally getting my course work under control. It's crunch time in the world of Paul (which made the incident involving my laptop and all of my paper notes, my water-proof bag, and the canteen that decided to spontaneously open inside my bag this morning all the more convenient. My screen now makes it feel like I'm typing this inside an aquarium. But I digress.).
However last night as I was going to bed at an ungodly hour I shall not mention I performed a little thought experiment. I was thinking about the economic recovery slowly coming around in most of the world and how fragile it is. This is especially important in the context of the budget debates going on in Washington, state capitals across the country, op-ed pages, and around the world, as economists and politicians rehash the debate of Keynesian interventionism versus Friedmanite style monetarism. Are spending cuts and austerity regimes the way to go? Or is it progressive taxation and government stimulus that provides the solution? Or should we pull a libertarian fast one, defund everything and go back to living in caves?
Now, in case my previous posts haven't made this at least somewhat clear, I'm a progressive. I firmly believe in the role that Keynesian thought proscribes to the state, namely as the guarantor of stability and provider of all aspects of security for the nation. This requires taxation in the good times (of which I think the American government has not done enough) and deficit spending to usher the economy through the bad.
In the spirit of intellectual honesty, though, I do recognize that the view that I subscribe to is not the only one, and that the other (though wrong) has been well thought out (to a limited extent) and is firmly believed in by a lot of intelligent and well intentioned people... who just happen to be wrong.
So last night I was thinking to myself, what would it be like to have "The Big Talk" with a monetarist? I mean, up here in the great socialist paradise that is the People's Confederation of Canada (that was hyperbole Republican Readers, we're not communists, please don't nuke us) even my macro-economics professor is a Keynesian interventionist (disclaimer, he's actually on a Soros funded panel in the near future... run with that one Glenn beck and all you conspiracy nuts. Ok, that was unkind... I'm just feeling a little angry about my computer right now. I apologize to all nuts for comparing you to Glenn Beck viewers.).
So, here, after that long-winded explanation of how I got there, is an approximate transcript of what that conversation might sound like. We'll call the monetarist Mo for short:
Me: Hello Mo, how are you today? (I'm Canadian, it entails being polite even with people who disagree with you).
Mo: Not great. The economy is in the dumps and the deficit is rising by the day. My congressman (assume for the sake of argument that we're Americans for a moment) told me he was going to cut spending by $100 Billion this year and balance the books as soon as possible and the Democrats are holding it up.
Me: And you believed him? I thought you didn't trust politicians.
Mo: That's Why I voted for the Tea Party guy! His platform was pro-gun, freedom, liberty and against everything I don't want to believe in. Plus we won't have to pay taxes anymore. And he said that he wouldn't have voted for the bank bailouts or the stimulus. Now that's my kind of responsible government.
Me: That sounds like no government to me. But never mind, aren't you worried that slashing spending will hurt the recovery?
Mo: No! The Tea Party promises no new taxes, and even made a law saying that new spending couldn't be offset by tax increases. They also want to cut taxes as much as possible, especially on corporations, so that real people can spend their money how they want and stimulate the economy.
Me: But corporations aren't reinvesting the money the record profits they're already making in job creation. People are still out of work and that situation's not really improving. Plus, because of tax law loopholes, big corporations like GE almost never pay anything close to the taxes they owe.
Mo: What, you want to penalize them for being smart? I can't believe you Keynesians, always wanting to redistribute the successful people's wealth to the lazy and unsuccessful. Don't you see that stimulus and social safety nets just create the moral hazard of knowing you can't fail? Where's the incentive for success?
Me: Some people would call that the stability required to take advantage of opportunity, and taxation the cost of doing business in a stable society. But back to tax cuts, how do you pay for government without taxation?
Mo: Who needs big government? The market is more efficient at providing services at a lower cost to the consumer, and allows for people to stimulate the economy more effectively through consumer spending and choice. If we free up capital for banks and corporations to lend, the consumers and businesses who can then borrow it will spend more and create the demand you're always harping about.
Me: (mutters something unintelligible about the U.S. private insurance system having one of the worst dollar for service health sector ratios in the industrial world)
Mo: What was that?
Me: Nothing... I don't want to get you started on it... but banks and businesses have some of the largest liquid asset bases in the history of the marketplace today. There's just a lack of qualified borrowers on the consumer side, with most people maxed out in terms of sustainable personal debt, and why would businesses borrow to expand when there's not enough consumer spending to justify current production (hence all the job losses)? We need more stimulus from the government in order to create jobs and enhance demand.
Mo: Listen. Government activity in the market kills jobs by killing choice. We've known that since the 1970's, or even since Hayek's "Road to Serfdom". Killing jobs by killing choice. It's fact. FACT.
Me: Just repeating a bad idea at a louder volume and calling it fact doesn't make it a better idea.
Mo: GOVERNMENT SPENDING KILLS JOBS!!!
Me: But what about the marginal propensity to consume? Based on the likelihood of people to spend only a portion of their earnings when factored into the spending multiplier effect, a round of government spending is, by definition, going to have a larger effect on aggregate demand than tax cuts.
Mo: You lost me. What was that?
Me: It's called accepted economic theory. You know, logic? Basically, if people spend, let's say, 75% of their take home earnings and save the rest, then the subsequent wave effect of this spending will decrease accordingly with each round of spending. So if you cut taxes, you will start with 75% of that tax cut actually going directly back into the economy, and then 75% of that amount, and so on. This takes the form, mathematically, of 1 divided by 1-3/4, or 1 over 1/4, which gives you a multiplier of 4.
Mo: Which means that tax cuts are worth 4 times as much as they cost! Awesome. I win.
Me: Except that government spending actually, by definition, ADDS its value to the economy, instead of just not taking it away (especially if its funded by deficits in bad times.) So for that last example, the formula becomes 1 (1 over 1-3/4), or 1 (1 over 1/4), or 1 4, which equals a multiplier effect of 5.
Mo: (covers ears and hums Alan Jackson songs until I'm done speaking).
I'm sorry, did you say something? I was just thinking about how awesome tax cuts and Scott Walker are.
Me: I don't know why I even bothered. We should probably stop talking about this now if we want to stay friends.
Mo: Oh, we can't be friends any more. Glenn Beck says you want to steal my money and success and Sarah Palin says you want to kill my Grandma. You communist!
Me: I don't even know where to begin.
En Fin
So that's the kind of stuff I think about when I go to bed. I'm going to end there for the day (although maybe I'll get another post up on something less frustrating later. We'll see how it goes, I'm pretty sleep deprived today.
Feel free to correct my math, economic thinking or general outlook on life in the comments section. Always looking for feedback!
and follow my Twitterings!
Cheers,
PSRB
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Closer to the homefront
Hey Sportsfans,
Big news. At some point in the next few minutes a vote will be held in Canada's Parliament (which I can see from the window where I'm writing this) here in Ottawa on a motion of non-confidence in the Conservative Government of Stephen Harper. The motion has the support of all opposition parties (unless the absence of The Prime Minister and Jack Layton of the NDP for the last couple hours signaled the negotiation of some kind of backroom deal. Conspiracy theorists have at it.) and will pass, meaning that the minority government will fall, and we here in Canada will have an election in 5 or 6 weeks' time
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Get Your Brackets in (Late)
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Surprise, Surprise, Some People Weren't Listening
Good Evening,
It's late on Sunday night, the Super Bowl teams have been set, and here I am sitting on my couch thinking about New Years Resolutions. As a few of you might recall, on January 3rd I put up a post featuring some resolutions I had hoped would be adopted by our friends in Washington (as well as one for myself, namely to post at least once a week... which means that I have about 51 minutes to finish this post... It's A Race!) These resolutions included ones for the Democrats (fight hard and communicate better), leaders in general (act like leaders and not managers first) and the American people in general (best described in this song
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Paul Boudreau
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