It’s Always the End of the World Somewhere

We live in apocalyptic end-of-the-world times – but we always live in apocalyptic end-of-the-world times. That’s just how we think, and maybe we’re all just drama queens, fighting our quite ordinary and cyclical rather meaningless woes by pretending they are existentially dire and thus the most important thing ever. We did that with the War on Terror after the September 11 attacks – a core group of a few thousand nasty fanatics were the greatest threat we ever faced, greater than the Nazis and the Japanese in the forties, taking over much of the world with all their armies, and far greater than the threat posed by the Soviets during all the long years of the Cold War, with their tens of thousands of nuclear weapons that could easily end all life on earth. Yep, all that was awful, but this al-Qaeda business was the real thing, finally.

It was nonsense – we had a new serious threat to manage, but that threat could be managed. And there was no point in making it something bigger than it was, as when you do that you can end up going all crazy, doing stupid things that squander all your resources, and doing boneheaded things – clumsy military moves and things like adopting torture and kidnapping as policy – that only make matters worse.

But of course you didn’t say that. People like to think apocalyptically. If people say this – whatever it is – could be the defining end of all things battle, and probably is, must be, then they can see themselves as both misunderstood and long-suffering wronged victims and as noble heroes all at the same time – and at the end of all things. And if you sense, in the dead hours before dawn or driving home from the office or in the aisles at Costco on a Saturday afternoon, that your life is rather boring and actually, if the truth be told, rather meaningless, the apocalypse is just the ticket – instant deep meaning to it all. That’s a relief. There’s nothing worse than knowing, deep in your bones, that you’re actually not important at all, that you just don’t matter all that much. But with the right apocalyptic framing you can make that feeling go away.

And you don’t snatch that pleasure from people. They get angry if you try. You don’t burst bubbles. Regarding the War on Terror business, all politicians figured that out in about three seconds – Republicans and Democrats alike. You didn’t say, folks, this is not the end of the world, so get a grip and let’s just solve the problem. You’d get torn to shreds on the cable news shows. And wise pundits would say you were just Not Serious. You’d find yourself dismissed and exiled, voted off the island of the Serious People. It wasn’t hard to figure that out, so everyone fell in line, even Obama.

You get used to this sort of thing in other matters too. At least a full forty percent of Americans firmly believe that Jesus will return and the world will end, not sometime later, but in the next forty years. That’s just the way it is. Obviously we live in apocalyptic times, or more precisely, any fool can see that all human history up to this point was interesting and all, but not all that important. This is it – finally – the final forty years. Don’t tell them otherwise. They’ll get very angry. But you won’t be told you’re not a Serious Person. You’ll be told you’ve abandoned God and you’re damned. But that’s not that different from the secular judgment about lack of seriousness – it’s pretty much the same thing.

Of course this is religious thinking – of the sort known as eschatology – and it’s a lot of fun. Some take it seriously, and everyone has read the Tim LaHaye Left Behind series. You haven’t? What’s wrong with you? And this sort of religious thinking explodes in tough times – to give those times meaning, as things just going bad, randomly, and somewhat regularly, would drain the world of all meaning. That’s unacceptable. After all, everything happens for a reason. It has to. Thinking otherwise would leave you in existential despair at a world without meaning, even yours, thumbing through your copy of Camus. And he was French!

And we do live in tough economic times – we’re only now just clawing our way out of the rubble of the worst economic collapse since the Great Depression. Or maybe we’re still under the rubble. It’s hard to tell – but it doesn’t matter. We’re in the phase where our economic eschatology is in play. We need to assign meaning – it cannot have all been one mundane perfect storm of carelessness, dumb moves and greed. It must have meant something. You cannot just shrug and go on. And thus it calls for applying a thick coat of some sort of religion. And the economic religion at hand is supply-side economics.

But in a curious post – America’s Fiscal Doom – Andrew Sullivan argues that “anyone who wants to cut the debt and restore fiscal balance in America” would be insane to vote Republican this fall. These guys have still not abandoned supply-side economics, which Sullivan notes was taken to its logical extremes under Bush and Cheney.

But it is this economic religion that has given us meaning for so long. The problem is it doesn’t work, and in the Financial Times, Martin Wolf argues it won’t work this time either:

First, if Republicans win the mid-terms in November, as seems likely, they are surely going to come up with huge tax cut proposals (probably well beyond extending the already unaffordable Bush-era tax cuts).

Second, the White House will probably veto these cuts, making itself even more politically unpopular.

Third, some additional fiscal stimulus is, in fact, what the US needs, in the short term, even though across-the-board tax cuts are an extremely inefficient way of providing it.

Fourth, the Republican proposals would not, alas, be short term, but dangerously long term, in their impact.

Finally, with one party indifferent to deficits, provided they are brought about by tax cuts, and the other party relatively fiscally responsible (well, everything is relative, after all), but opposed to spending cuts on core programs, US fiscal policy is paralyzed.

Wolf points out that the UK government may be being dangerously austere at the moment, but “at least it can act.” He considers the situation with his American cousins extraordinarily dangerous.

In fact, although Wolf doesn’t use the term, this is a religious dispute. There are true believers, and trouble ahead:

The danger does not arise from the fiscal deficits of today, but the attitudes to fiscal policy, over the long run, of one of the two main parties. Those radical conservatives (a small minority, I hope) who want to destroy the credit of the US federal government may succeed. If so, that would be the end of the US era of global dominance.

The destruction of fiscal credibility could be the outcome of the policies of the party that considers itself the most patriotic. In sum, a great deal of trouble lies ahead, for the US and the world. Where am I wrong, if at all?

Sullivan responds:

I do not think he is wrong at all, I’m afraid, although I hold out hope that the sheer scope of the crisis and the rhetoric of the tea-partiers might make the Debt Commission’s proposals feasible. I favor more spending cuts than tax hikes in such a grand bargain, but if the GOP cannot raise taxes at all (under the loopy notion that revenue would thereby be reduced) and if the Dems cannot tackle Medicare and are too spooked by Fox to cut defense, then we’re truly screwed.

But Wolf’s irony is well-taken. The Republican Party has long prided itself on strong national defense and conservative economics. In fact, their recklessness in foreign adventurism has destroyed the deterrent effect of American power for a generation, while their fiscal policies have hollowed out this country’s core fiscal health that we have almost no room for maneuver.

And yet slogans and amnesia still seem to be winning against arguments and data.

Religion is like that. And Wolf makes it clear that we are in the world of true believers:

My reading of contemporary Republican thinking is that there is no chance of any attempt to arrest adverse long-term fiscal trends should they return to power. Moreover, since the Republicans have no interest in doing anything sensible, the Democrats will gain nothing from trying to do much either. That is the lesson Democrats have to draw from the Clinton era’s successful frugality, which merely gave George W. Bush the opportunity to make massive (irresponsible and unsustainable) tax cuts. In practice, then, nothing will be done.

Indeed, nothing may be done even if a genuine fiscal crisis were to emerge. According to my friend, Bruce Bartlett, a highly informed, if jaundiced, observer, some “conservatives” (in truth, extreme radicals) think a federal default would be an effective way to bring public spending they detest under control. It should be noted, in passing, that a federal default would surely create the biggest financial crisis in world economic history.

Yep, you can read that here – it’s very apocalyptic. The idea is to have the US default on all its debt and clear the decks – worldwide chaos of a better world, creative destruction, kind of like Revelation 20:1-10 – but with treasury bonds.

How did we get to this sort of thinking? Try this:

To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the most politically brilliant (albeit economically unconvincing) idea in the history of fiscal policy: “supply-side economics”. Supply-side economics liberated conservatives from any need to insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut taxes and balance budgets, because incentive effects would generate new activity and so higher revenue.

The political genius of this idea is evident. Supply-side economics transformed Republicans from a minority party into a majority party. It allowed them to promise lower taxes, lower deficits and, in effect, unchanged spending. Why should people not like this combination? Who does not like a free lunch?

And, like with the talking snake and the burning bush and assorted other miracles, it was pretty cool:

First, it allowed conservatives to ignore deficits. They could argue that, whatever the impact of the tax cuts in the short run, they would bring the budget back into balance, in the longer run. Second, the theory gave an economic justification – the argument from incentives – for lowering taxes on politically important supporters. Finally, if deficits did not, in fact, disappear, conservatives could fall back on the “starve the beast” theory: deficits would create a fiscal crisis that would force the government to cut spending and even destroy the hated welfare state.

In this way, the Republicans were transformed from a balanced-budget party to a tax-cutting party. This innovative stance proved highly politically effective, consistently putting the Democrats at a political disadvantage.

When a religion assures salvation and then paradise – in this case, as this is economics, that free lunch – it sweeps the world, in spite of the impossibility of miracles:

True, the theory that cuts would pay for themselves has proved altogether wrong. That this might well be the case was evident: cutting tax rates from, say, 30 per cent to zero would unambiguously reduce revenue to zero. This is not to argue there were no incentive effects. But they were not large enough to offset the fiscal impact of the cuts…

Data and discussion follow that – there are no miracles – see Wikipedia and this chart from Paul Krugman. And the absence of miracles, when you’ve counted on them, means that bad things happen:

Since the fiscal theory of supply-side economics did not work, the tax-cutting eras of Ronald Reagan and George H. Bush and again of George W. Bush saw very substantial rises in ratios of federal debt to gross domestic product. Under Reagan and the first Bush, the ratio of public debt to GDP went from 33 per cent to 64 per cent. It fell to 57 per cent under Bill Clinton. It then rose to 69 per cent under the second George Bush. Equally, tax cuts in the era of George W. Bush, wars and the economic crisis account for almost all the dire fiscal outlook for the next ten years. …

And there’s no fixing it now. No stimulus would ever be big enough, and no further stimulus is now being proposed, as people will believe what they will believe – that a miracle will happen. Wolf says “the faith has outlived its economic (though not its political) rationale” – but there are the true believers nonetheless. And that leads to this:

So, when Republicans assail the deficits under President Obama, are they to be taken seriously? Yes and no. Yes, they are politically interested in blaming Mr. Obama for deficits, since all is viewed fair in love and partisan politics. And yes, they are, indeed, rhetorically opposed to deficits created by extra spending (although that did not prevent them from enacting the unfunded prescription drug benefit, under President Bush). But no, it is not deficits themselves that worry Republicans, but rather how they are caused: deficits caused by tax cuts are fine; but spending increases brought in by Democrats are diabolical, unless on the military.

The word diabolical is instructive. We live in apocalyptic times. People do speak of the devil and the end of the world, and the new world – the paradise – to come. And you don’t snatch that pleasure from people. They get angry if you try. You don’t burst bubbles. But of course we get stuck in nonsense. On the other hand it gives life meaning – a certain and sure framework. Or at least it fends off the overwhelming wave of dread that there is no deep inner meaning here, that this is not the end of the world, so let’s get a grip and just solve the damned problem. There’s nothing heroic in that.

So, Sullivan says it would be insane to vote Republican this fall – but that predicates the existence of rational voters, which may be a stretch. If forty percent of Americans firmly believe that within no more than forty years Jesus is going to drop by and the world will end, then sanity is in short supply. Faith is not.

And there is that other factor – profound disinterest. The political scientist Jonathan Bernstein reminds us that not everyone is interested in any of this at all:

Pick something that you pay no attention to. For my dad, I always suggest NASCAR. My dad has read a sports page every day since he was a little kid; he still gets (as do I) a real, honest-to-goodness local newspaper on his front porch every morning. He must have seen the names of NASCAR drivers thousands of times, but odds are he’s only stopped to read a story if it had something in the headline that really caught his attention (someone from the Bronx, or Jewish, or both, might do it). If you asked him to name a NASCAR driver he’d probably look at you as if you were nuts… but if you named some of them, he’d probably recognize the names. The idea is that lots and lots of people have about that level of knowledge about most of what happens in politics. It’s just background noise. We, the people who write and read political blogs, and watch debates, and pay attention to politics even in the off season – we’re the minority.

Ah – you’ve got the core of true believers, and those who find what they believe emotionally satisfying, even if a few of them sense it’s all quite implausible. And you have a small group of empirical rationalists, who know that pointing out the implausible will end their careers. And you have a vast sea of those who aren’t paying attention and would rather not pay attention – as paying attention is a bit of a bother. And it’s a funny thing. Maybe this is actually how the world does end.

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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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1 Response to It’s Always the End of the World Somewhere

  1. Rick says:

    I must admit, even though I enjoy the fact that so many conservatives fool themselves into thinking tax cuts pay for themselves, I don’t think of that as being the essence of “supply-side” economics.

    The essence, as should be evidenced by the name, is the mistaken belief that all you have to do to keep an economy tooling along is to keep the “suppliers” happy, probably mostly through tax cuts. In truth, I think history has shown that if the demand side gets weak enough, the economy gets sick — consumer spending is said to be 70% of the economy, after all — and there’s nothing the supply side can do at that point to make it well again until demand comes back. The belief that an economy is sick because the rich are being taxed too much is, I think, delusional thinking.

    Both sides are not equal. Demand side rules. It doesn’t matter if someone wants to sell something if there’s nobody with the money to buy it — but if there are enough people who have the money and want to buy something, you can bet that someone who wants to sell it to them will materialize out of thin air.

    Rick

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