Okay, this is going to get a little complicated, but people are fond of quoting that quip from Einstein – things should be made as simple as possible, but not simpler. Not that people like Einstein that much – all that stuff about time and space and mass and energy can make your head hurt. And that idea of time slowing down as you approach the speed of light makes most folks roll their eyes. Like, who cares? But Einstein was good at deflecting the resentment of his adopted country of America, where smart people are seen as really irritating. He developed the persona of a goofy but kindly eccentric. It was the hair. Einstein may have been too smart for his own good – the usual thing folks say about someone whose careful thinking runs rings around their half-formed or never quite formed vague notions – but he played the clown a bit. No one ever felt threatened by him. He knew that the insecurity of others was nothing but trouble. So he did play the clown. And that was one of the smartest things he did. No one wanted to bomb his house in Princeton or anything like that. You don’t do that to a man with Harpo Marx hair.
But some things are just complicated. And there’s the problem. One should not say that in this new age where politicians seem to have to apologize to the Tea Party crowd for having a college degree, or even having gone to a few college classes before dropping out, or for even staying in school beyond the eighth grade. You need to establish your credibility as a man (or woman) of the people. So, like George Bush, you say yes, you did go to Yale – but you didn’t learn a damned thing, and you goofed off and mocked all the arrogant professors and your snooty classmates, and you’re proud of it. And then you talk about your gut instincts, and about your total faith in God, who will make the right decisions for you – so you really don’t have to think things through, and in fact thinking that you should think things through is arrogant, and an insult to God or something.
So you keep saying things are simple, really. You know they are not, but like Einstein you do need to cultivate an absolutely non-threatening persona. No one votes for a smart-ass. Only Democrats do that. Of course if you begin to believe things are simple, really, you’ll find yourself blurting out all kinds of nonsense and making some really dumbass decisions. That is a real danger. And there is the greater danger if, like Bush, you believe all that from the get-go. You get that deer-in-the-headlights look far too often. You keep reading My Pet Goat to the school kids. And then things get worse and worse and worse.
And here’s the fourth paragraph – if you’ve read this far you are probably one of those who concedes that most important things – the big problems that the nation faces that seem to defy solution – are complicated. You are probably one of those irritating people who – when someone says things are simple, really – just sighs, deeply. And yes that just killed Al Gore in the debates with Bush. The other guy may be saying dumb-ass things – but don’t sigh. Men of the people say dumb-ass things. That’s how you know them. Arrogant bastards sigh at them. Gore sighed, and became the arrogant bastard and it was over for him.
But Paul Krugman sighs a lot. And of course he has two strikes against him already – that Nobel Prize in Economics and he’s a professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton, and Centenary Professor at the London School of Economics. He probably never went to a NASCAR race in his life. Did he ever run a pizza chain? Everyone on the right dismisses him as someone who doesn’t know anything about real life. But he persists in saying things are complicated and we’re working on the wrong problem:
The latest economic data have dashed any hope of a quick end to America’s job drought, which has already gone on so long that the average unemployed American has been out of work for almost 40 weeks. Yet there is no political will to do anything about the situation. Far from being ready to spend more on job creation, both parties agree that it’s time to slash spending – destroying jobs in the process – with the only difference being one of degree.
Nor is the Federal Reserve riding to the rescue. On Tuesday, Ben Bernanke, the Fed chairman, acknowledged the grimness of the economic picture but indicated that he will do nothing about it.
And debt relief for homeowners – which could have done a lot to promote overall economic recovery – has simply dropped off the agenda. The existing program for mortgage relief has been a bust, spending only a tiny fraction of the funds allocated, but there seems to be no interest in revamping and restarting the effort.
The situation is similar in Europe, but arguably even worse. In particular, the European Central Bank’s hard-money, anti-debt-relief rhetoric makes Mr. Bernanke sound like William Jennings Bryan.
We are being told it’s simple really – cut spending, shut as much of the government down as possible, end all regulation of most everything, and lower taxes on the wealthy, and then we’ll have boom times. People will keep almost all of what they earn and be free to do whatever the hell they want – and we’ll be back in business.
No one can say why the one would follow the other, but the theory is elegant in its simplicity. In engineering, and particularly in mechanical design, an elegant solution to a problem is one that gets the job done with the fewest parts, smoothly and efficiently, and is small and looks pretty damned cool. But it does have to work. The same principle applies here.
But why would we, and the Europeans, keep pursuing something that has never worked before and will not work now just because it’s simple and easy to explain?
And here’s where it gets complicated, as Krugman offers this:
I’m increasingly convinced that it’s a response to interest-group pressure. Consciously or not, policy makers are catering almost exclusively to the interests of rentiers – those who derive lots of income from assets, who lent large sums of money in the past, often unwisely, but are now being protected from loss at everyone else’s expense.
Of course, that’s not the way what I call the Pain Caucus makes its case. Instead, the argument against helping the unemployed is framed in terms of economic risks: Do anything to create jobs and interest rates will soar, runaway inflation will break out, and so on. But these risks keep not materializing. Interest rates remain near historic lows, while inflation outside the price of oil – which is determined by world markets and events, not U.S. policy – remains low.
And against these hypothetical risks one must set the reality of an economy that remains deeply depressed, at great cost both to today’s workers and to our nation’s future. After all, how can we expect to prosper two decades from now when millions of young graduates are, in effect, being denied the chance to get started on their careers?
Ask for a coherent theory behind the abandonment of the unemployed and you won’t get an answer.
You’ll just be told it is simple, really. And you too might sigh. But someone is being protected by these folks:
They protect the interests of creditors, no matter the cost. Deficit spending could put the unemployed to work – but it might hurt the interests of existing bondholders. More aggressive action by the Fed could help boost us out of this slump – in fact, even Republican economists have argued that a bit of inflation might be exactly what the doctor ordered – but deflation, not inflation, serves the interests of creditors. And, of course, there’s fierce opposition to anything smacking of debt relief.
So who are these creditors?
Not hard-working, thrifty small business owners and workers, although it serves the interests of the big players to pretend that it’s all about protecting little guys who play by the rules. The reality is that both small businesses and workers are hurt far more by the weak economy than they would be by, say, modest inflation that helps promote recovery.
No, the only real beneficiaries of Pain Caucus policies (aside from the Chinese government) are the rentiers: bankers and wealthy individuals with lots of bonds in their portfolios.
So it’s not simple after all. And it’s not doing us much good, as creditor-friendly policies are crippling the economy:
This is a negative-sum game, in which the attempt to protect the rentiers from any losses is inflicting much larger losses on everyone else. And the only way to get a real recovery is to stop playing that game.
And Matthew Yglesias offers a history of that game since 2001 – since Alan Greenspan way back when it’s all about financial asset appreciation as a goal of monetary policy. And Yglesias concludes this:
It’s just that the goal of monetary expansion has been to do just enough to stabilize financial asset prices without going far enough to produce catch-up growth in the labor market. What’s more, from the point of view of capital maybe it’s better not to catch up. As long as growth is positive and unemployment isn’t rising then maintaining a large 8-9% of the labor force out of work could be a useful tool of wage restraint.
You see, it is complicated. And jobs and, you know, actual people, were never the issue.
And Yglesias argues the other way, as he counters that America needs more demand for goods and services, not more labor supply:
The argument that providing unemployment benefits can reduce employment seems pretty clear. People take jobs, in part, to get money – so to the extent that you maximize the hardship associated with not having a job, people will be more willing to engage in desperate measures to get a job. Right now, for example, North Dakota has a far below average unemployment rate, but relatively few people are eager to relocate to North Dakota. This is perfectly understandable. But if we eliminated unemployment benefits, people would be a bit more motivated. Even better, we could deliver regular public lashings to unemployed people and then they’d be in a hurry to get themselves to North Dakota and get a job.
Yes, he is being sarcastic, but he points out that this kind of thinking motivated hedge fund manager Todd G. Buchholz to argue for sharply curtailing unemployment benefits and adding a “signing bonus” – to further motivate people to get jobs. This is one of those it’s-simple-really arguments that Yglesias assesses this way:
The idea here is that labor markets would “clear” more quickly, as people become more willing to accept worse jobs. Now on the flipside to this you might marshal … various arguments including the key point that making people more desperate leads to worse job-matching and worse outcomes over the long-term. If you have a skilled engineer, you actually want him to stay unemployed and wait for an engineering position to open. Frightening him into taking a job at Subway two weeks sooner doesn’t help you in the long run.
And you really do need to think this through:
What’s more, when you scare/bribe the engineer into taking the Subway job, you have to ask yourself what happens to the kind of person who might be working at Subway in a full-employment economy. Pushing skilled workers into lower paid, lower quality jobs just pushes less skilled workers into unemployment or out of the labor force. In a good Financial Times op-ed today, Larry Summers offers the general point that “training programs or measures to increase work incentives for those with high and low incomes may affect who gets the jobs, but in a demand-constrained economy will not affect the total number of jobs.”
Now of course over the long-term, more skills will make a country richer. And more incentives to do paid work will increase the total amount of paid work that gets done. But at the moment we’re suffering from a huge shortfall in aggregate demand due largely to the huge gap in personal consumption. Lots of different kinds of policies could close that gap or substitute for closing it, but increasing the supply of labor won’t.
So it isn’t as simple as Buchholz says. The Buchholz solution is, as they say, simple, elegant… and wrong.
But some things may be simple. And in the Washington Post, E .J. Dionne suggests this:
For the moment, Republicans have no interest in moving the nation’s debate toward investments in job creation because they gain twice over from keeping Washington mired in discussions on the deficit. It’s a brute fact that Republicans benefit if the economy stays sluggish.
Could that be? Steve Benen adds this:
Dionne’s choice of words is a little coy – I suspect deliberately so – but the underlying message is worth considering, even if it’s provocative. Republican policymakers have an enormous influence on economic policy at the federal level, and under the current circumstances, and it’s at least possible – the argument goes – that GOP leaders are using their power in a deliberately destructive way with electoral considerations in mind.
Kevin Drum adds this:
I wonder if this is ever going to become a serious talking- point. It gets batted around now and again by the odd newspaper columnist or blogger, but that’s about it. No serious person in a position of real influence really wants to accuse an entire party of cynically trying to tank the economy, after all.
But it would sure make headlines if Obama decided to take up this ball and run with it. He’ll never do it, because it wouldn’t be post-partisan or pragmatic. But Republicans are all set to turn the next eighteen months into the World War III of political campaigns, and this would sure be a way of showing them that two can play at that game.
But Benen points out that it’s considered beyond the pale to discuss motives in debates like these:
There’s nothing wrong with saying, “Republican economic policies would be disastrous for the economy.” But one tends to get in trouble for saying, “Republican economic policies would be disastrous for the economy – which may be why Republicans are pursuing them.”
But that’s why I find it all the more interesting when credible, well-grounded figures raise the argument at all. E. J. Dionne is known for being a responsible center-left voice, not an unhinged partisan bomb-thrower, and he came close to the “sabotage” argument in his column today. A few months ago, his Washington Post colleague, Eugene Robinson, conceded on national television that “maybe” the Republican approach to the budget “is to depress economic growth to set up the Republican Party for 2012, so people will be angry with President Obama and maybe elect a Republican.” Robinson, incidentally, is a Pulitzer Prize winner, not some wild-eyed activist.
And Benen points to these recent comments from Daniel Gross, a former senior editor at Newsweek and now an economics editor at Yahoo, who also argued that it’s at least possible that some congressional Republicans are pursuing a destructive economic policy on purpose:
Indeed, Gross suggested it’s practically common sense: Republicans believe they will benefit from a weak economy, so it “stands to reason” that the party “would engineer policy to get that outcome.” Gross added that there’s “an element” of the Republican Party “that just wants to blow stuff up.”
So Benen sees a shift here:
I haven’t seen any Democratic officials willing to go this far, at least in public, probably because the accusation would cause a significant firestorm. But there appears to be a growing number of credible voices who at least consider this a topic worthy of conversation.
Well it is, as explanations go, simple and elegant, and it seems right too. Why would these guys want things to improve? Of course they gum up the works, and call it fiscally responsible governing – and they keep saying it’s simple, really. Of course if you begin to actually believe things are simple, really, you’ll find yourself blurting out all kinds of nonsense and making some really dumbass decisions. That is a real danger.
So what are they really thinking? Who knows? But Charles Hurt in the Washington Times is thinking this:
Back into our lives rode Sarah of Alaska, Maid of the Bering Sea, devoured, ogled and debated by the masses. She is our modern Joan of Arc, dressed in black leather chaps, hunting camo or fishing boat slicker, unafraid to mount her steed, whether a Harley or a snow machine. She is a woman, bloody hands, capable of any man’s task – even that Holy Grail of politics with which no woman has ever been entrusted.
Unlike sister St. Joan, Sarah does not pass herself as a man. She can do any man’s work, without ceding an ounce of her gas station pin-up babe good looks. But in most else, she shares with sister St. Joan. Driven by visions from God and destined for sainthood by way of a burning at the stake, Sarah is misunderstood here in her own lifetime.
Things should be made a simple as possible, but not simpler – and this is ten levels below simpler. But one of Andrew Sullivan’s readers puts this in perspective:
At what point did our political system become decadent? The moment when the United States collectively abdicated its responsibilities in self-government was when the American people accepted the notion that John McCain believed that Sarah Palin was qualified to serve as President of the United States. The fact that the media continues to legitimize the political viability of an individual who never gave a press conference and demonstrates zero ability to recognize what she does not know, is appalling. The fact that 45.7% of the American people in 2008 gave an affirmative answer to the very simple question: “Is Sarah Palin qualified to be President of the United States?” is telling in and of itself.
I will go further: the introduction of Sarah Palin and her perverse relationship with the American media has been the singularly most toxic element in American politics in the post-Cold War period.
I continue to be astonished that someone can post a blatant lie on a Facebook page, have the media report on it as factual news and a real policy prescription, and permanently poison the political well.
Yep, there were no Death Panels, but there’s more to it:
We should not be deluded that even if Sarah Palin does not run for the Presidency that she will not have a profound impact on the Republican nomination process. She and her Christianist tendencies will enjoy a de facto veto over any candidate that fails to tap into her revanchist version of history – resentments against virtually all portions of American society. She is a constituency of one and the most important constituency in the Republican Party, which will result in a candidate who has no viable policy programs, but just might get elected due to economic circumstances.
But she does keep saying it is simple, really, whatever it is. And that could kill us:
Palin’s style of politics and our ability to ignore it has resulted in our inability to extricate ourselves from three foreign wars; have an honest discussion about the impact of debt, revenue, and entitlements on the sustainability of a decent quality of life for most Americans; and permit a natural generational shift of values to occur on equal rights for all Americans.
Oh… that. That stuff is for all those irritating people who think too damned much. We have no use for them, unless they’re goofy and eccentric, with Harpo Marx hair.
All you can do is sigh.