Dangerous Thoughts
It's Not The Economy, Stupid
It's the stupidity about the economy.
Dan Gerstein, 11.11.09, 12:01 AM ET
Of all the simplistic, self-serving interpretations that have been
proffered about last week's off-year election results, the one getting the
most
common purchase is that old Clintonian saw, "It's the economy, stupid." Voters
are extra angry and anxious about this painful recession, according to
many analysts and more than a few rationalizing Democrats, and they are
lashing out indiscriminately at incumbents of both parties.
Sounds pretty reasonable on the surface, but a deep look at the polls and
long listen to voters will show it's largely backward: It's the stupidity
about the economy in Washington and on Wall Street that's driving most voters
berserk. Indeed, the financial system is still out of whack and tens of
millions of people are (or fear they soon could be) out of work, yet every
day our political and economic leaders say and do knuckleheaded things that
show they are unfailingly and imperviously out of touch with those
realities.
Just look at the latest food-fight dominating the Capital's attention and
threatening to derail the health care bill: abortion. I don't mean to
belittle the seriousness of the issue, but is abortion coverage really a
pressing
priority when unemployment is at its highest rate in 25 years and many
experts are warning that another crippling financial collapse is in the
offing? Moreover, what does it say about our government's responsiveness that
the
first big thing it does after a supposedly message-sending election last
Tuesday is revert to another small-minded culture war?
Then there's the broader debate about health care itself, which has become
little more than a cornucopia of myopia. The Democrats are so obsessed with
the prospect of making history, and fixated on the public option as the
means to an end, that they haven't noticed that the bills they are moving may
in fact degrade the current system and actually increase costs for
consumers and the Treasury. This is not the conclusion of conservative
ideologues,
but of a number of moderate Democrats and independent experts that The New
York Times quoted Tuesday in a damning report headlined _"Missing in
Health Bills: Solutions for Rising Costs."_
(http://www.nytimes.com/2009/11/10/health/policy/10cost.html)
The Republicans, meanwhile, seem equally obsessed with making health care a
political albatross for the Democrats. Yes, many in the minority are
raising legitimate concerns and criticisms of the majority's bills. But you
don't need to be a policy wonk to discern that the party leadership's goal is
not to nudge these unbalanced plans back to the center or to foster an
intellectually honest debate about how to control costs. All you have to do is
check out the base-sating fig leaf of a reform plan the House Republicans
recently released to shield themselves from being attacked as "the party of
no," which matches the Democrats in _hard choice avoidance_
(http://www.gop.gov/solutions/healthcare) .
Neither side seems much interested in the bill's opportunity costs--what we
as a country have lost as a result of all the time and energy spent on
this debate. It's not that the president and Congress have done nothing else
for the last six months for the economy; just last week they moved
_legislation_
(http://www.whitehouse.gov/the-press-office/fact-sheet-worker-homeownership-and-business-assistance-act-2009)
to extend unemployment benefits,
extend the first-time home buyer tax credit, and give a small tax cut to small
businesses.
But that was an easy--and relatively meager--lift. The intense and often
consuming focus on health care has prevented and preempted a more robust
response to the pervasive economic anxiety the middle class is feeling.
This goes a long way toward explaining why President Obama has suffered
such a precipitous drop in confidence among Independents. They want to reform
our health care system (though many are wary of the Democrats' approach),
but not at the exclusion or expense of fixing the economy and lowering
unemployment, which poll after poll shows is the top priority of voters,
especially those who came out last Tuesday. Yet that is exactly what the
President
and the leadership of Congress seem to be doing--pursuing their own
agenda, not the public interest.
Part of the problem, of course, is that after the stimulus bill and the
health care bill and the war in Afghanistan, the Democrats don't have any more
money to spend. But there's no reason they can't make adjustments to the
stimulus money already allotted. For example, Congress could, as
Pennsylvania Gov. Ed Rendell suggested Sunday on Meet the Press, quickly
redirect and
front-load many of those dollars on infrastructure projects that will have
an immediate impact and multiplier effect (unlike payoffs to the
public-employees union). To do so, though, would be to risk acknowledging the
initial stimulus wasn't up to the job(s); sadly, that's not something the
Democrats are willing to do.
You might think the Republicans would seize this opening to offer an
ambitious, pragmatic growth and reform agenda, much like Robert McDonnell did
in
winning the governorship in Virginia. Instead, the GOP has resorted to the
same one-size-fits-all, reality-divorced talking points about smaller
government and lower taxes. You really think that the way to bring down the
swelling debt is to reduce federal revenues by trillions of dollars with
another sweeping Bush-like tax cut? Or that the way to prevent Wall Street
from
running amok again, or to stop credit card companies from ripping off
consumers, is to loosen regulations even further?
That intelligence-insulting line of argument was on the ballot in last
week's special election in the Republican-heavy 23rd Congressional District in
New York, thanks to the ideological candidacy of tea party hero Doug
Hoffman. There was no deeply unpopular incumbent running in that race, like
Jon
Corzine in New Jersey--or a desultory Democratic candidate like Creigh
Deeds, who was running for the open seat in Virginia--to tip the balance. The
New York special was a straight-up test of political messages on national
issues. And dumbness took a drubbing, much like incompetence did in the prior
two national elections.
Speaking of insulting, the third player in this axis of cluelessness, the
big banks that almost destroyed our economy, seem to be set on testing just
how insensitive and ungrateful they can get away with being. On Monday, it
was reported that the three largest banks to exit the TARP
program--Speaking of ins, , <ORG>Morgan and and <ORG>JPMo--are planning on
handing out
record bonuses for the year totaling _close to $30 billion_
(http://www.bloomberg.com/apps/news?pid=20601109&sid=au.pavWlxfZg&pos=11) .
This in spite of
all the promises the president has made about Wall Street changing its ways
and the much-hyped (and largely hollow) edicts issued by pay master Ken
Feinberg.
How do these guys justify this latest taxpayer abuse? The standard line is
that it is necessary to retain talent--the pinstriped equivalent of your
15-year-old son saying everyone was taking a hit off the joint. But Goldman
Sachs CEO Lloyd Blankfein, who makes Jon of "Jon and Kate" look like an
image genius, went a step further in a _recent interview_
(http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece)
with the Times
of London.
In the coup de gracelessness of this season of stupidity, Blankfein
rationalized his company's obscene payouts by saying that Goldman serves an
important "social purpose" by helping companies to raise capital they need to
grow. He went on to say he is "doing God's work."
Well, Blankfein actually got the social purpose part right. His expression
of total and irredeemable shamelessness did the country an invaluable
service, crystallizing the stark dividing line that now exists between the
political/economic elites and the rest of us suckers. We have gone long past
"they don't get it" territory. It's now unavoidably clear that they won't get
it--and we won't get the responsible leadership and honest capitalism we
want--until (_as I have suggested before_
(http://www.forbes.com/2009/10/13/banks-economy-washington-opinions-columnists-dan-gerstein.html)
) we demand
it.
Otherwise, we'll be lucky to get pocket change we can believe in.
Dan Gerstein, a political communications consultant and commentator based
in New York, is the founder and president of _Gotham Ghostwriters_
(http://www.gothamghostwriters.com/home.html) . He formerly served as
communications
director to Sen. Joe Lieberman, I-Conn., and as a senior adviser on his
vice presidential and presidential campaigns. He writes a _weekly column for
Forbes_
(http://search.forbes.com/search/colArchiveSearch?aname=Dan+Gerstein&author=dan+and+gerstein)
.
Read more Forbes Opinions _here_ (http://www.forbes.com/opinions/) .
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