The Day Goldwater Finally Won

History disappears. What happened long ago becomes no more than dry words on a page, or a curious hour on basic cable, on one of those channels that no one watches – where Hitler always loses the war or Martin Luther King is always giving that speech, or the last helicopter is always lifting off from that roof in Saigon. All of that is probably necessary. Things pass out of living memory and what isn’t documented simply disappears. What is documented becomes what happened, even if far more than that happened, as with the sixties. The was all the civil rights stuff – the turmoil and marches in the South and then the King speech and the Civil Rights Act of 1964 and the Voting Rights of 1965 – and the key elements of Lyndon Johnson’s Great Society were set in place – Medicare and Medicaid and federally guaranteed unemployment insurance – and then the ever-escalating war in Vietnam, and the riots in Chicago at the Democratic National Convention, just after the Soviet tanks rolled into Prague and crushed the Prague Spring, a few months after the student uprisings in Paris that shut down that country and changed things there. In that decade one Kennedy had been assassinated, then Martin Luther King was assassinated, and then another Kennedy was assassinated. There were a lot of major events, as the culture changed too. Sex, drugs and music that moved from Perry Como to Peter, Paul and Mary to the Beatles to the Stones, to Hendricks at Woodstock to the guy knifed to death on stage at Altamont. It’s all a blur that only historians can untangle and realign into patterns that make some sort of sense, and they’re still working on it. That’s a matter of selection, sequencing, connecting, and then emphasis – and exclusion. Some seemingly minor or random things will drop out as if they never happened, and as the sixties pass out of living memory, they pretty much never really happened. As they say, you had to be there.

Some of us were there. In the last months of 1964, the start of senior year at North Hills High School in Pittsburgh, something was going on in the background, although there were the Friday night football games and marching band and girls in tight sweaters and getting the family car in your hands on Saturday night and all the rest, and classes too of course. The adults were having a presidential election – Barry Goldwater was running against Lyndon Johnson. Not that it mattered – high school kids have other things on their minds and the whole business seemed absurd. Goldwater was a strange and angry man – “I would remind you that extremism in the defense of liberty is no vice. And let me remind you also that moderation in the pursuit of justice is no virtue.”

What was that about? Half the Republican Party walked out of the convention at that point – George Romney walked out, dragging his young son Mitt with him. This was no time to call for the end of government as we knew it, to move to that ideal state where it’s every-man-for-himself, which was supposed to be some sort of glorious freedom. It sounded more like chaos. Johnson won in a landslide – 486 electoral votes to Goldwater’s 52 votes, those from his home state of Arizona and the core states of the former Confederacy, the Deep South. Down there they liked Goldwater’s blanket opposition to all civil rights laws, even if Goldwater wasn’t much of a racist – he just believed the government should not concern itself with such things. The government should get out of the way.

All that came to nothing. Barry Goldwater was the forgotten man of the sixties. Maybe he never happened, but he did, even if only a few radical conservatives, libertarians really, continued to idolize him. Everyone else forget him soon enough, which is odd, because now he seems to be the one thing that remains of the sixties, other than Breakfast with the Beatles on the oldies station each Sunday morning out here in Los Angeles. Goldwater’s idea that the government should just get out of the damned way, so we can have some sort of glorious every-man-for-himself total freedom here in America, is now the official position of the Republican Party. Ronald Reagan made the whole idea sound sunny, not angry, and it took hold. It’s their only idea now.

Perhaps it would have been wise to pay more attention in high school, to the larger world – but that’s impossible during those years. Now everyone has to make up for lost time. Everyone has to realize – and Obama should have realized – that the Great Sequester, those massive automatic cuts in almost all government spending, was something Barry Goldwater would have loved, no matter what damage they did. It was cutting spending, and thus shrinking government – a great first step in the process of achieving total freedom. It wasn’t a poison pill that would force anyone to negotiate. It was what they wanted, and each time things go south in any way they can say it’s all Obama’s fault. It’s a win-win for them. Obama miscalculated. He should have never suggested it, and of course they immediately agreed to it, wholeheartedly. It was a gift.

Those who lean Republican – businessmen and corporations and the folks on Wall Street – confirmed that. On the first trading day of the Great Sequester the markets rose to near-record highs and you heard things like this:

The March 1 budget cut deadline, for example, came and went with about as much fanfare as the Y2K crisis, and market watchers, such as Peter Kenny of Knight Capital, are already minimizing that threat. In a note to clients this morning Kenny writes, “The Sequester is so inconsequential in the broader narrative as to be virtually meaningless.”

The same morning there was a highly-cited New York Times story about the problem of persistently high unemployment, which examined an odd paradox, “stock markets are thriving even as the economy is barely growing and unemployment remains stubbornly high.”

That can be explained as with millions still out of work, companies face no pressure at all to raise salaries, while productivity gains – those working do work harder in a desperate attempt to keep their job, and dare not ask for a raise, and may even accept pay cut after pay cut – which allows companies to increase sales without adding workers:

“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”

Companies no longer need Americans to be economically well off in order to thrive – those two things have been decoupled. Thus there really is no reason to expect a full recovery in the labor market. What would be the point? Things are fine:

The relentless focus on maintaining margins continues, even though profit and revenue have never been higher; four days after the company’s shares soared past $90 to a record high last month, United Technologies confirmed it would eliminate an additional 3,000 workers this year, on top of 4,000 let go in 2012 as part a broader restructuring effort.

In short, sequestration isn’t going to upset these folks, and in fact they want more of such things:

Although experts estimate that sequestration could cost the country about 700,000 jobs, Wall Street does not expect the cuts to substantially reduce corporate profits – or seriously threaten the recent rally in the stock markets.

“It’s minimal,” said Savita Subramanian, head of United States equity and quantitative strategy at Bank of America Merrill Lynch. Over all, the Sequester could reduce earnings at the biggest companies by just over one percent, she said, adding, “The market wants more austerity.”

Of course the market wants more austerity. Corporations can make a ton of money employing a skeleton staff of the best and brightest, working their asses off just to keep their jobs, and shed the rest – and profit margins will soar to the stratosphere. Hiring workers is a last resort now too, as technology eliminates jobs and the grunt work can be outsourced overseas. Hiring workers is a sign of serious mismanagement. So they’re not fine with this sequestration if it happens to wipe out almost a million jobs – they’re fine with it because it does. The Republicans took no gamble here. The right people will make money. Just get the damned government out of the way.

Curiously, Dean Baker blames Obama for this:

I’m not blaming Obama for the reasons that Bob Woodward came up with in his fantasyland. I am blaming President Obama and his administration for trying to be cute and clever rather than telling the public the truth about the economic crisis. The result is that the vast majority of the public, and virtually all of the reporters and pundits who deal with budget issues, do not have any clue about where the deficit came from and why it is a virtue rather than a problem.

The emphasis on deficits has been a terrible mistake:

We will never know if President Obama could have garnered support for more stimulus and larger deficits if he had used his office to pound home basic principles of economics to the public and the media. But we do know the route he chose failed.

He apparently thought the best route to get more stimulus was to convince the deficit hawks that he was one of them. He proudly announced the need to pivot to deficit reduction following the passage of the stimulus and then appointed two deficit hawks, Erskine Bowles and Alan Simpson, to head a deficit commission.

This set the ball rolling for the obsession with deficit reduction that has dominated the nation’s politics for the last three years. Instead of talking about the deficit of 9 million jobs the economy faces, we have the leadership of both parties in Congress arguing over the debt-to-GDP ratios that we will face in 2023.

This would be comical if lives were not being ruined by the charade. The unemployed workers and their families did not do anything wrong – the people running the economy did.

Now the sequester comes along, throwing more people out of work, worsening the quality of a wide range of government services and denying hundreds of thousands of people benefits they need. Yes, this is really stupid policy, and the Republicans deserve a huge amount of blame in this picture.

But it was President Obama who decided to play deficit reduction games rather than be truthful about the state of the economy. There was no reason to expect better from the Republicans in Congress, but we had reason to hope that President Obama would act responsibly.

But it’s Rick Perlstein who gets to the heart of the matter:

I wonder how many folks within the White House, gaming out whether Republicans might not just call the bluff, bothered to consider the fact that an embrace of heedless, profligate, across-the-board budget cuts to all manner of popular government programs is a key component of hardcore conservative ideology. That, when Barry Goldwater proclaimed in his 1960 manifesto Conscience of a Conservative, “I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size… My aim is not to pass laws, but to repeal them… And if I should later be attacked for neglecting my constituents’ ‘interests,’ I shall reply that I was informed that their main interest is liberty,” that Barry Goldwater – and the future millions for whom his sentiments became an ideological touchstone- meant what he said.

The forgotten man from the sixties is back:

Did anyone in the White House notice how many conservatives, including ones in positions of governmental power, after Mitt Romney’s recorded back-room admission that he couldn’t get elected because 47 percent of the electorate is addicted to suckling on the federal teat, responded that what he said was absolutely correct? (Even if they admitted it was unfortunate a public unready to handle it had to hear it.) Did they notice that conservatives, as an article of faith, see breaking the link between citizens and their government benefits as the only sure way to break the link between voters and the Democratic Party? And that severing that same link is also the best way to restore the broken moral fabric of the nation?

The losing argument in 1964 is the winning argument now, and Ronald Reagan played his part too, with his ten percent across-the-board cuts he proposed when he was governor of out here:

In 1967, it happened, inconvenient political reality spiked his administration’s hope to decimate (literally!) the entire state budget. He did, however, decimate where he could. For instance, in the state’s Department of Mental Hygiene, this seemed a practical notion at the time because, as Lou Cannon noted in his book on Reagan’s governorship – “the population of the mental hospitals was declining, thanks to tranquilizing drugs and new medical procedures.” Although, oops: “the numbers were deceptive. The patients leaving the hospitals were the ones who responded best to tranquilizers; those who remained were more apt to need intensive care. And the state’s mental hospitals had never been adequately staffed.”

Yes, oops, but there’s a pattern here. Demand massive across-the-board cuts to government and get what you can, even if you don’t get them all. Those cuts you will get will do the necessary damage, and with any luck it will be irreparable:

Another prediction: sequestration will cause greater budget deficits down the road – because of the simple fact that there are certain things government has to do, and making it harder to do those things at any given moment makes it more inefficient and expensive for government to make up the ground down the road.

Do what damage you can do. It’s self-reinforcing, and the funny thing is that this time the Democrats are more than willing to help:

Back then, Democrats instinctively and successfully fought what Reagan was up to. This season’s budget decimation, on the other hand, has been underwritten by Democrats – by Democratic naiveté. By a simple refusal to absorb and accept the lesson of history: that some conservative Republicans will always be constitutionally incapable of acknowledging that a cut in government capacity can ever be a bad thing. The fact that they now can claim, even if disingenuously, that the cuts were Barack Obama’s idea in the first place may make their triumph politically only the sweeter.

And it only gets better for their side:

The Federal Bureau of Investigations told lawmakers in a recent letter that across-the-board cuts resulting from sequestration “will cause current financial crimes investigations to slow as workload is spread among a reduced workforce. In some instances, such delays could affect the timely interviews of witnesses and collection of evidence.”

Investigations yet unseen may also be harmed. “In some instances, such delays could affect the timely interviews of witnesses and collection of evidence. The capacity to undertake new major investigations will be constrained,” FBI Director Robert Mueller III wrote in the letter, addressed to Sen. Barbara Mikulski (D-Md.), the chair of the Senate Appropriations Committee.

The warning closed with the type of reasoning that critics of the lack of investigations would readily support. “Left unchecked, fraud and malfeasance in the financial, securities, and related industries could hurt the integrity of U.S. markets,” Mueller offered. “In addition, the public will perceive the FBI as less capable of aggressively and actively investigating financial fraud and public corruption, which would undercut the deterrence that comes from strong enforcement.”

Just a note:

More than four years after the financial crisis, not a single Wall Street executive has been jailed for playing a role in the creation of the toxic financial products that fueled the real-estate bubble, which were in some cases designed simply to fail.

No one was going after them anyway, but now they can say sorry – no funds for that anymore. This too is a win-win for the Republicans.

So let’s recap. The Republican Party lost the presidency two times in a row, failed to regain control of the Senate when everyone thought they would, lost House seats, and all the polling is against them. Something had changed – there were more and more urban voters than ever before, a substantial number of them black, and more Hispanic voters than ever before, with more on the way. Dismissing those voters was a bad idea, but the Republican Party did just that, while at the same time offending a whole lot of women, quite a few Asians, quite a few folks with college degrees who kind of liked science, and a whole lot of young voters who didn’t get what the issue with gay folks could possibly be. Occupy Wall Street didn’t help much either – the movement fizzled but the idea that every-man-for-himself predatory capitalism was the best thing since sliced bread, and that the very rich should be worshiped as heroes, seemed more and more ridiculous. What started with Marx, and had faded as communism failed again and again, and then one last time, was back in a different way, but back nonetheless. The whole system was failing us. More and more people began to notice that. They wanted the government to do something. It was their government after all.

Then Barry Goldwater, that forgotten loser from the sixties, rose from the ashes (he was from Phoenix after all):

I have little interest in streamlining government or in making it more efficient, for I mean to reduce its size… My aim is not to pass laws, but to repeal them… And if I should later be attacked for neglecting my constituents’ “interests,” I shall reply that I was informed that their main interest is liberty.

Yes, break the link between citizens and their government benefits, which will surely break the link between voters and the Democratic Party, and severing that same link is the best way to restore the broken moral fabric of the nation. Isn’t that obvious?

That wasn’t obvious forty-nine years ago, but some say it’s obvious now. The loser then is the winner now. History is funny that way – what was dropped from serious consideration was just what should have been considered. Who knew? Even if you were there you would have never imagined such a thing. But then who pays attention to anything in high school?

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
This entry was posted in Austerity Economics, Barry Goldwater, Deficit Hawks, Sequestration Showdown, The Uses of History and tagged , , , , , , , , , , , , . Bookmark the permalink.

One Response to The Day Goldwater Finally Won

  1. BabaO says:

    It seems everyone is on the road to Damascus today. And that further illustrates that every arc of the pendulum is shorter, even more erratic.

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