A Long Time Coming

Some things just creep up on you, and then, suddenly, what you never expected has already happened, even if you should have expected it, because it – whatever has happened – was going to happen anyway. Suddenly you’re an old man. When did that happen? And why is everyone around you now speaking Spanish, or Farsi, or Mandarin or Cantonese? Why did they make you take French and German back in school, and a generation ago, why did everyone at the big company you worked for tell you that you ought to learn a bit of Japanese?

That’s not all. How did we end up with a quite black president, elected twice, and an opposition party talking about secession or revolution? We already had our Civil War, damn it. And how, after the total collapse of the economy in 2008, when the house of cards built on unregulated strange dealings in quite fictional assets, or financial instruments that were derivatives of derivatives of those fictional assets, or unregulated hedges and unfunded insurance against those assets collapsing, did we end up with that same opposition party screaming that any sort of regulation would ruin the economy? How did we also end up with a bunch of folks not only opposed to all abortion, no matter what the circumstance and even if abortion is legal and constitutionally protected, but opposed to birth control too, and generally opposed to allowing the dainty women-folk make any decisions about themselves, or for themselves? And when did science become foolishness, or a hoax, or a sinister conspiracy to end capitalism, and democracy, and Christianity? And when did we decide that all of our kids would be safer if their teachers were fully armed, at all times, and maybe even safer if each of those kids had an assault rifle too?

And while we’re at it, when did it become conventional wisdom and thus common knowledge – at least among everyone on the right – that the economy was just like a rose bush? Cut and Grow was what they said, as severe pruning always produces magnificent blossoms or something. We should cut spending, and borrow no more to invest in anything – even if, unlike Greece, we can easily pay back what we borrow because we print our own money which everyone accepts without question. It’s a matter of drastically reducing economic activity, because drastically reducing economic activity will obviously increase economic activity. What? When did austerity become prosperity, in spite of all evidence that this has never worked anywhere, ever? The Brits tried it and got themselves something like a true depression. The Europeans tried it, and the head of the European Central Bank was forced to admit, after two years of austerity economics, that the concept was pretty stupid – sorry about that. When did quite clear evidence that something is stupid become irrefutable evidence that it isn’t?

It’s all a mystery. These things creep up on you, and maybe they had to happen. Everyone has a theory on how the world works, or ought to work, and no one likes to admit they might be wrong. That’s uncomfortable, but all the pesky evidence that something is stunningly stupid can be overcome with money – set up your own cable news channel and flood daytime talk radio with folks like Rush Limbaugh. That’ll do it. Add a few fire-and-brimstone evangelical preachers and you’re home free.

That’s fine, but some things are just odd these days. We’re the richest nation on earth, and the economy is recovering from the events of 2008, slowly but surely, but forty-seven million Americans live at or below the official poverty level, even if many of them are working two or three jobs, and one in four children go to bed hungry each night. That’s awful, but that too had to happen. Ninety percent of the gains in the current recovery went to the top one percent this time around, and bully for them – they put their idle money in just the right places at just the right times – but everyone else is still in a world of hurt. Jobs are still scarce, for those who have no idle millions to drop into just the right investments and who must live on nothing but wages. There has been no hiring-boom either, and there won’t be one, as hiring people, to produce goods or provide services, has become a bit quaint. Adding new employees is now a last resort. There are better ways to make money if you’re clever – mergers and acquisitions and such, and you can automate most anything or off-shore it. The last thing you want to do is hire anyone new. You want to thin the ranks of those you have onboard now. That’s where the money is. There’s no point in being stupid about these things.

This is also one of those things that did kind of creep up on America. We have a bit of a third-world country here now – there are a lot of hungry people out there, even hard-working people, living on the edge, if they can. Yes, this wasn’t supposed to happen. We’re a rich nation. This is the land of opportunity. But it did happen, as it had to happen, for structural reasons. The new economy is an economy built on not much more than high-level financial transactions, not on making stuff and doing work itself. That’s for chumps. And to live, in fact to just get by, those chumps will find themselves on food stamps.

Food stamps – now not stamps but a sort of credit card for SNAP, the Supplemental Nutrition Aid Program – have always been problematic, a mark of shame to some. If you have to use a SNAP card to have barely enough to eat you must be a loser, or a moocher. In fact, in the 2012 Republican primaries, Newt Gingrich mocked President Obama as the Food Stamp President, and the others followed his lead. Obama’s stimulus package, which they hated, had added billions for food stamps, because so many people had lost their jobs in what had been the worst economic collapse since the Great Depression and needed to have a way to keep from pretty much starving, and calling Obama the Food Stamp President was a way to make everyone think he liked moochers and losers, not the good people, the Real Americans. They thought this was a useful dig.

It wasn’t. The Republican candidates soon moved on to other attacks. Calling Obama the Food Stamp President didn’t work all that well – too many unflinching Republicans who hated Obama and weren’t going to vote for him anyway had lost their jobs too. They were themselves on food stamps at the time. They may have blamed Obama that they were, but they needed the food, so the whole thing was soon forgotten. There were many other things that they all hated about Obama and they moved on to those – Obamacare, Benghazi, and all the rest.

Some things, however, do just creep up on you. The part of Obama’s stimulus package that jacked-up funding for food stamps just expired:

Starting Friday, millions of Americans receiving food stamps will be required to get by with less government assistance every month, a move that not only will cost them money they use to feed their families but is expected to slightly dampen economic growth as well.

Cuts to the Supplemental Nutrition Assistance Program, popularly referred to as food stamps, reflect the lapse of a temporary increase created by the administration’s stimulus program in 2009. They are slated to go into effect separately from continuing negotiations over renewal of the federal farm support program, which looks likely to further cut funds for food stamps, which this fiscal year are expected to come to about $76.4 billion.

The Republican-controlled House version of the farm bill proposes cutting $39 billion from the program over the next decade; the Democratic-controlled Senate would cut $4 billion over the same period.

Forty-seven million Americans are still in a world of hurt, and likely to stay there, and Congress is arguing over whether to cut money for their meals by four billion dollars or about forty billion dollars, even if that’s another way to cripple the economy:

The food stamp cuts scheduled to go into effect on Nov. 1 will reduce spending by $5 billion in the 2014 fiscal year, and another $6 billion over the 2015 and 2016 fiscal years. They are expected to shave 0.2 percentage points from annualized consumption growth in the fourth quarter of 2013 and trim an estimated 0.1 percentage point off the annual growth rate of the nation’s gross domestic product, according to estimates by Michael Feroli, the chief United States economist at JPMorgan Chase. Those drags may seem small, but right now projections for gains in fourth-quarter gross domestic product hover around an annual rate of just 2 percent.

“This could potentially affect consumption of food as well as nonfood items, as individuals may maintain the same food intake but reduce spending on other items,” Mr. Feroli said.

Yes, but won’t drastically reducing economic activity obviously increase economic activity? The chief United States economist at JPMorgan Chase doesn’t think so, but what does he know? It’s just that the recovery has been at the top, not the bottom, or even in the middle:

Food stamp caseloads have swollen in the last few years: In fiscal year 2007, before the recession began, there were about 26 million people receiving food stamps. As of this past July, the most recent month of data available, there were nearly 48 million, representing about a seventh of the American population. The increase has been attributed to more people losing their jobs and needing food assistance; government efforts to increase usage by families that did not know they were eligible; and to a lesser extent, policy changes in some states that relaxed eligibility requirements, according to Stacy Dean, vice president for food assistance policy at the Center on Budget and Policy Priorities, a left-leaning research organization.

The payroll tax holiday went away, and so did extended unemployment benefits, but many want to draw the line here, for many reasons:

These arguments are made on the grounds of both compassion and the fragility of the recovery. Measures that grant more spending power to lower-income people generally have strong effects throughout the economy because the money is spent immediately and then re-spent. Moody’s Analytics has estimated that every additional dollar spent on food stamps generates about $1.74 in economic activity.

So what? It’s been one fiscal showdown after another in Washington. Further extensions are more than unlikely – this is about how much to cut, to somehow improve the economy, which has nothing to do with compassion, or economic reality either. When all of the current emergency unemployment benefits end in January, that could also shave another 0.4 percentage point off growth in the first quarter of next year. Even more folks will have no money to buy anything. It’s hard to see how that’s good for the economy, but such thinking has crept up on us. Even the Democrats want to cut off meals for these folks.

The Republicans want to cut ten times the amount that the Democrats do, however, and there must be an explanation for their proud lack of anything like compassion, and for their persistent counterintuitive economic theories about how things ought to work, even if things never work that way. How did that happen?

The economist Paul Krugman offers his take on how this crept up on us all:

John Kasich, the Republican governor of Ohio, has done some surprising things lately. First, he did an end run around his state’s Legislature – controlled by his own party – to proceed with the federally funded expansion of Medicaid that is an important piece of Obamacare. Then, defending his action, he let loose on his political allies, declaring, “I’m concerned about the fact there seems to be a war on the poor. That, if you’re poor, somehow you’re shiftless and lazy.”

Obviously Mr. Kasich isn’t the first to make this observation. But the fact that it’s coming from a Republican in good standing (although maybe not anymore), indeed someone who used to be known as a conservative firebrand, is telling. Republican hostility toward the poor and unfortunate has now reached such a fever pitch that the party doesn’t really stand for anything else – and only willfully blind observers can fail to see that reality.

This was a tactical decision. John Kasich, one of the few Republicans with a bit of a conscience, thinks, now, it was a bad decision. Hammering the poor, because they are poor, is wrong, and cruel, and bad politics too, although Krugman saw it coming:

I still sometimes see pundits claiming that the Tea Party movement is basically driven by concerns about budget deficits. That’s delusional. Read the founding rant by Rick Santelli of CNBC. There’s nary a mention of deficits. Instead, it’s a tirade against the possibility that the government might help “losers” avoid foreclosure. Or read transcripts from Rush Limbaugh or other right-wing talk radio hosts. There’s not much about fiscal responsibility, but there’s a lot about how the government is rewarding the lazy and undeserving.

Republicans in leadership positions try to modulate their language a bit, but it’s a matter more of tone than substance. They’re still clearly passionate about making sure that the poor and unlucky get as little help as possible, that – as Representative Paul Ryan, the chairman of the House Budget Committee, put it – the safety net is becoming “a hammock that lulls able-bodied people to lives of dependency and complacency.” And Mr. Ryan’s budget proposals involve savage cuts in safety-net programs such as food stamps and Medicaid.

All of this hostility to the poor has culminated in the truly astonishing refusal of many states to participate in the Medicaid expansion. Bear in mind that the federal government would pay for this expansion, and that the money thus spent would benefit hospitals and the local economy as well as the direct recipients. But a majority of Republican-controlled state governments are, it turns out, willing to pay a large economic and fiscal price in order to ensure that aid doesn’t reach the poor.

That’s rather stupid, and Krugman notes it wasn’t always this way:

Go back for a moment to 1936, when Alf Landon received the Republican nomination for president. In many ways, Landon’s acceptance speech previewed themes taken up by modern conservatives. He lamented the incompleteness of economic recovery and the persistence of high unemployment, and he attributed the economy’s lingering weakness to excessive government intervention and the uncertainty he claimed it created.

But he also said this: “Out of this Depression has come, not only the problem of recovery but also the equally grave problem of caring for the unemployed until recovery is attained. Their relief at all times is a matter of plain duty. We of our Party pledge that this obligation will never be neglected.”

Can you imagine a modern Republican nominee saying such a thing? Not in a party committed to the view that unemployed workers have it too easy, that they’re so coddled by unemployment insurance and food stamps that they have no incentive to go out there and get a job.

Krugman can only suggest market-ideology is driving this change:

If the market is always right, then people who end up poor must deserve to be poor. I’d add that some leading Republicans are, in their minds, acting out adolescent libertarian fantasies. “It’s as if we’re living in an Ayn Rand novel right now,” declared Paul Ryan in 2009.

There’s also the matter of race:

In a much-cited recent memo, Democracy Corps, a Democratic-leaning public opinion research organization, reported on the results of focus groups held with members of various Republican factions. They found the Republican base “very conscious of being white in a country that is increasingly minority” – and seeing the social safety net both as something that helps Those People, not people like them, and binds the rising nonwhite population to the Democratic Party. And, yes, the Medicaid expansion many states are rejecting would disproportionately have helped poor blacks.

So now we have a war on the poor, based on odd economic theory and racism of a sort, or just fear of The Other, which Krugman argues is now the central, defining issue of American politics.

It’s a religious matter too. Consider the catechism of capitalism – the instruction in the principles of a religion using a simple-minded set of questions and answers for the simple-minded. You go there for dogma, in little, easy chunks, and here’s the first question. Which one is more efficient – a government program to fix an obvious problem, or a free-market solution, where folks offer to fix the problem, if you pay them enough to make a good profit? And there’s the answer. The free-market solution – as if someone wants to make a profit, and beat out the other bidders, then they have to provide a wonderful product – the best possible solution to the problem at the lowest possible cost. Competition for the big bucks will force them to do that, so let them do the work – and if they later flake out and screw up they know that someone out there in the wings will jump in and grab the contract they’ve been given to do the work. It’s not like that for the government. When you have to make money or go out of business you do things right. The invisible hand of competition keeps folks in line and allows for no foolishness – Adam Smith said so. And Ayn Rand said so, and so did Ronald Reagan, over and over. That was the catechism. Everyone knows that. What is the chief end of man? To glorify God and enjoy Him forever! It’s like that.

And that is why your cable service is flawless, and your bank charges you no service fees on anything at all, and why cheerful repairmen always arrive on time and fix your refrigerator right the first time, your expensive car never breaks down, and why private military contractors and private security contractors – like CACI and Titan at Abu Ghraib and Blackwater in Fallujah – were so much more efficient and effective in Iraq than our sorry excuse for an army ever was.

No, wait – that’s not right. These folks all have to make a buck, so they do things right. It’s in their self-interest to do so. But then they don’t do so. How can that be?

There are obvious operational problems with market-ideology, but more to the point here, the religion itself has questionable tenets, depending on the catechism. What is the chief end of man? Maybe it is to get rich – comfort does matter – or to become famous, or to become powerful, or to glorify God and enjoy Him forever, or to lead a reasonably decent life and not hurt too many others, or to write the great American novel, or not to be embarrassed too very often. Your mileage may vary, and for some, from the days of FDR through the Great Society and civil rights stuff of Lyndon Johnson, the chief end of man was to ease the suffering of others, and make sure everyone was being treated fairly – as we’re all brothers and we should look out for each other. Self-interest wasn’t the key factor that was going to fix all the worlds’ woes, nor was free-market capitalism – all of that was sometimes useful to consider, and quite interesting, but it was irrelevant.

This was a different catechism. Both Social Security and unemployment insurance seemed like a good idea. Keeping people afloat in old age and hard times was not only the decent thing to do, but it was also good for the economy, stabilizing things. Later it was Medicare and Medicaid, and food stamps. All that stuff wasn’t anti-American, unless you define America as a place where everyone is wholly autonomous, where putting aside your immediate self-interest and pitching in is anti-American treason. Others see America as a family.

That’s what finally crept up on us. See Ross Kaminsky at American Spectator with this:

We are not a nation of impoverished peasants living in straw huts, desperate for just enough kindness from the czar to allow us to survive, albeit cold and hungry, through another gray winter, while we listen hopefully to Bolsheviks promising to free us from bitter serfdom.

We are not a nation of mice, helpless in our cages but for the magical hand that makes cheese appear in our bowl.

And we are not a nation accustomed to seeing our fellow citizens’ self-worth destroyed by being led into the opiate of dependency – at least not on this scale.

Separate from discussions of the importance of freedom, the immorality of redistribution, and the exceptionalism and self-reliance that once defined the American character, an economic debate also surrounds the food stamp program.

Kaminsky disputes all the fancy economists, of course, but this is religious:

I do not want Americans to starve in the streets, much less riot at the thought of getting less of my money. But even during the Great Depression, prior to the existence of the welfare state, we did not have either. The American people have been, and must return to being, proud, self-sufficient whenever possible, and voluntarily generous, rather than living in a statist world where Big Brother takes care of everything – meaning citizens need care little for others, or even for themselves.

He longs for the days when folks banded together in collective action to help others, if they chose to, in churches perhaps, but he’ll be damned if he’ll accept any situation where people have banded together in collective action, as they do in large modern democracies, and actually vote to help others, even if some, in the minority, dissent from that vote. And people should take care of themselves anyway. Every loser and creep out there seems to want his money, and it’s HIS money, damn it!

This was a long time coming, creeping up on us, but it’s finally here. Food stamps are the immediate issue, but not really the issue. The country broke apart, as had to happen. We should have seen it coming.

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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.
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