Friday, January 2, 2009

Rock. Place (hard).


The deficits run up by George Bush and his Republican congress, even before the so-called bailout (more properly: the unfettered giveaway, with no strings, to the usual beneficiaries of Republican fiscal policy, disregarding the greater good, continuing the discredited delusion -- even Greenspan finally figured it out -- that "markets," ie fat cats, will do the right thing) are appalling. The last two years haven't been much better. Balanced budgets, as a matter of principle, are a long-term necessity, far as I can tell. "Families must balance budgets," we are told, "so why not government?" Despite the fact that the two -- government and family -- are in no way comparable, I agree.

Except now.

Other than dead-enders like Boehner and McConnell (obstructionists for its own sake, it would appear) and Sanford, out of whose cold dead hands Reagan mythology will never be pried, virtually everyone agrees some sort of mega-stimulus is required in these times. Details, a few billion here or there, are rightfully in dispute. But not the central idea. So the question is, ma nishtana ha government ha zeh michol ha other governments? (Apologies to anyone who actually knows Hebrew: I'm taking a wild swing here.) Why is the federal government different from other governments?

What's going on in state governments is instructive. Most require, by state law, balanced budgets. No exceptions for exceptional times. Thus we observe, in California, the nub of the problem: they're screwed. It's about the same, but to a lesser degree, in my state, and in virtually every state with budget requirements so mandated. In hard times, it's the very programs most likely to help turn things around that get cut: education, help for the needy, infrastructure. Yet raising money via taxes seems similarly counter-productive. What are governors to do? Make things worse, through no fault of their own.

Already, there are consequences, with more on the way, undoubtedly.

To my eye, Ronald Reagan screwed us when he was alive, and he's doing it still, from the grave: California never recovered from Prop 13. States that bought into his philosophy (more likely, that of those who whispered into his hollow ear) are now reaping the sour harvest. If it's right, under dire circumstances, for the federal government to spend more than it has, why isn't it so for the states? Even those valued families, when the chips are down, have to. Hard times call for hard times.

From what little I know, a significant part of Obama's stimulus will be in the form of money given to states; maybe not exactly in the form of cash, but in grants for specific "shovel-ready" (look for that one on end-of-year lists of phrases whose disappearance is hoped for) projects. Isn't there a certain amount of charade in that? If states can accept such money -- printed money adding to the amount we all owe to the future -- why the fiction of balanced budget? In effect, it's a pretense that "conservative" economics still are a worthy construct. "Cut spending," said Sanford, above. "Screw 'em," is what he means.

If it's true -- I don't know myself, but I'm easily impressed by Nobel Prizes -- that the idea of low taxes and deregulation and (theoretically) less government as the answer to every economic question is now thoroughly discredited, then why is there this residue across the states? Stuck in the middle with no good answers, governors are having to choose between two wrongs: cut services essential to recovery, take money out of people's hands by raising taxes. All in the name of failed economics.

If my surgical practice had been carried out like the economic practices of the last few decades, not changing when the data demanded it, I'd have been defrocked long since. Sued into submission. Run out of town. My errors would have been shouted in the halls of every hospital whose corridors I'd trod.

But then, surgery is about reality. Not to mention helping people; getting things done.

.

13 comments:

james gaulte said...

There might not be anything sillier than a retired internist and a retired surgeon arguing about discussing economic theory,but..

If you are impressed by Nobel prizes, and who isn't, you might want to give some thought to two winners,the 1986 winner James Buchanan and the 1976 winner Milton Friedman.

And the answer to the question of how does the federal government differ from the states, one answer is the former gets to print money and according to both of the above mentioned laureates therein lies much of the problem.

It is interesting and a bit peculiar that the criticism of Bush's 8 years is at least as vigorous and heated coming from the libertarian or classic liberal crowd as it is from the modern liberal folks.

Sid Schwab said...

james gaulte: I agree, first, that it is amusing that we, of all possible experts, would be arguing. But what the heck...

Second, the printing money thing is a good point. Still, the bottom line is deficit spending, in whatever form. I'm sure I don't understand the difference between the enormous borrowing the US has done, with China primarily picking up the tab, and just printing it; nor, if there is a significant difference, do I know to what extent the current and future plans involve one more than the other. But if I can ignore that, it's about spending more than you have on hand. Families, in fact, do that all the time and most of it, assuming other factors are in order, amounts to a positive: I borrowed money to buy my house, and, on a few occasions, to buy a car. I was able both to enjoy those things and provide a little boost to the economy, and to pay them back without problems. Not that it's entirely the same.

As to Bush: it's been a real puzzle to me that conservatives haven't been in the streets with pitchforks and torches calling for Bush's head almost from the beginning. From foreign wars of questionable purpose (the second one, anyway), to aggrandizing executive power, to enormous deficits, to questionable Constitutional arguments. From any point of view -- except perhaps that of certain religious folk who prize a couple of issues above all else -- he's been bad. In that, he's indeed been (or should have been) a uniter not a divider.

Ellen Kimball said...

Did you happen to see this? My husband printed it for me today. Sorry I cannot provide an e-link at this hotel computer :-(, so I am sending the entire article.

EK
&&&&&&&&&&&&&&&&&&&&&&&&&&&

Bigger Than Bush

By PAUL KRUGMAN
Published: January 1, 2009 (NYT)

As the new Democratic majority prepares to take power, Republicans have become, as Phil Gramm might put it, a party of whiners.

Some of the whining almost defies belief. Did Alberto Gonzales, the former attorney general, really say, “I consider myself a casualty, one of the many casualties of the war on terror”? Did Rush Limbaugh really suggest that the financial crisis was the result of a conspiracy, masterminded by that evil genius Chuck Schumer?

But most of the whining takes the form of claims that the Bush administration’s failure was simply a matter of bad luck — either the bad luck of President Bush himself, who just happened to have disasters happen on his watch, or the bad luck of the G.O.P., which just happened to send the wrong man to the White House.

The fault, however, lies not in Republicans’ stars but in themselves. Forty years ago the G.O.P. decided, in effect, to make itself the party of racial backlash. And everything that has happened in recent years, from the choice of Mr. Bush as the party’s champion, to the Bush administration’s pervasive incompetence, to the party’s shrinking base, is a consequence of that decision.

If the Bush administration became a byword for policy bungles, for government by the unqualified, well, it was just following the advice of leading conservative think tanks: after the 2000 election the Heritage Foundation specifically urged the new team to “make appointments based on loyalty first and expertise second.”

Contempt for expertise, in turn, rested on contempt for government in general. “Government is not the solution to our problem,” declared Ronald Reagan. “Government is the problem.” So why worry about governing well?

Where did this hostility to government come from? In 1981 Lee Atwater, the famed Republican political consultant, explained the evolution of the G.O.P.’s “Southern strategy,” which originally focused on opposition to the Voting Rights Act but eventually took a more coded form: “You’re getting so abstract now you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is blacks get hurt worse than whites.” In other words, government is the problem because it takes your money and gives it to Those People.

Oh, and the racial element isn’t all that abstract, even now: Chip Saltsman, currently a candidate for the chairmanship of the Republican National Committee, sent committee members a CD including a song titled “Barack the Magic Negro” — and according to some reports, the controversy over his action has actually helped his chances.

So the reign of George W. Bush, the first true Southern Republican president since Reconstruction, was the culmination of a long process. And despite the claims of some on the right that Mr. Bush betrayed conservatism, the truth is that he faithfully carried out both his party’s divisive tactics — long before Sarah Palin, Mr. Bush declared that he visited his ranch to “stay in touch with real Americans” — and its governing philosophy.

That’s why the soon-to-be-gone administration’s failure is bigger than Mr. Bush himself: it represents the end of the line for a political strategy that dominated the scene for more than a generation.

The reality of this strategy’s collapse has not, I believe, fully sunk in with some observers. Thus, some commentators warning President-elect Barack Obama against bold action have held up Bill Clinton’s political failures in his first two years as a cautionary tale.

But America in 1993 was a very different country — not just a country that had yet to see what happens when conservatives control all three branches of government, but also a country in which Democratic control of Congress depended on the votes of Southern conservatives. Today, Republicans have taken away almost all those Southern votes — and lost the rest of the country. It was a grand ride for a while, but in the end the Southern strategy led the G.O.P. into a cul-de-sac.

Mr. Obama therefore has room to be bold. If Republicans try a 1993-style strategy of attacking him for promoting big government, they’ll learn two things: not only has the financial crisis discredited their economic theories, the racial subtext of anti-government rhetoric doesn’t play the way it used to.

Will the Republicans eventually stage a comeback? Yes, of course. But barring some huge missteps by Mr. Obama, that will not happen until they stop whining and look at what really went wrong. And when they do, they will discover that they need to get in touch with the real “real America,” a country that is more diverse, more tolerant, and more demanding of effective government than is dreamt of in their political philosophy.

Frank Drackman said...

We GET it Sid, you don't like BUSH...I think its a generational thing, My Dad doesn't like BUSH either...

Frank Drackman said...

OK. I know this'll get Censored worse than that video of Barak smokin a "J" but I'll try anyway...

The EFFIN CIVIL RIGHTS ACT WAS PASSED BY REPUBLICANS!!!! CHECK OUT THE MOTHER EFFIN ROLL CALL VOTE!! I KNOW IT WAS 40 YEARS AGO AND LONG TERM MEMORY IS THE FIRST TO GO WITH ALZHEIMER'S, BUT GET SOMEONE TO GOOGLE IT FOR YOU. IT WAS THE DEMOCRATS THAT FILIBUSTERD AND OPPOSED IT..

Oh what the hell, if it makes you feel any better, you're in my prayers, Dr. Atheist...

Frank :)

Sid Schwab said...

Frankie: You are wrong, of course. It's not Bush I hate (or even BUSH). It's pretty much everything he did. It continues relevance because it must not be repeated. Like, you know, the holocaust.

Your civil rights act comment, in addition to being a bit off topic and not in the era of concern, ignores the fact that LBJ said at the time, and was entirely correct, that in passing it the Democrats had lost the South forever. But it was his ability to strong-arm the southern Democrats that accomplished the passage. So in addition to being out of context you are, how can I say this gently, WRONG. Again.

Anonymous said...

What are your thoughts about a parallel non-money economy becoming a de facto mode of conducting business (and surviving)?

Vehicles such as Craig's List allow for bartering and goods and services exchanges "off the economic grid" so to speak. I wonder how much people who are now unable to purchase essential goods and services will move toward a barter system?

My grandfather, who graduated med school pre-Flexner, pre-ATB tx, pre-radiology curriculum and with TB sanitariums as a part of clinical rotations (but whose school passed - whew), maintained a horse and buggy rural practice until the big city lured him with modern hospitals, specialized training and regular (or more regular) hours with less call. He was regularly "paid" with goods and services throughout his career as an EENT surgeon which lasted until his death in the 1970s. He didn't find that practice unusual, and he never allowed a patient to forgo essential treatment due to personal finances. But that meant that he "knew" his patients in a much more personal and in-depth way than most physicians today do with their patients.

So this isn't a new way of doing business. It may be an increasingly necessary way in order for impoverished people with limited or no job prospects to be able to obtain food, shelter, clothing and essential goods and services since the government has not provided for the general welfare for millions.

All of the people who have lost their homes - where are they?

The prisons now provide over one half of ALL inpatient psychiatric care - the US has effectively criminalized those with untreated and undertreated mental illness - a policy of villainizing victims. As the state budgets seize and contract, the spasms will undoubtedly extrude many of these neglected and maltreated people from prisons to the streets.

How will they fare - still homeless, untreated and without social supports? (A significant portion of these folks are veterans, lest we forget.)

Oh, but how I do go on - and so must we all.

Sid Schwab said...

I always liked the idea of a barter economy, and would have been happy to incorporate it into my practice. It turns out -- and I don't recall the details -- that in such an "above board" economy as medical practice, you can get into legal and tax problems in doing it.

More important -- and a topic about which I have no basis to make suggestions -- is whether an economy based on consumption can sustain itself in the ultra long run. Intuitively, I doubt it; both in terms of resources, and of "morality," for lack of a more cogent term: meaning based on accumulation of things to give one a sense of worth.

Frank Drackman said...

Sid,
Your thinkings so complicated
I've had it all up to here,
But its so overrated, love and hate it, wouldn't trade it, you're so jaded,
so who jaded you?
I'm guessin' a woman...
Frank

Sid Schwab said...

define jaded, vis a vis my thinking.

Sili said...

Not that I know how it'd tie into this, but my impression is that not only has the EU budget not been balanced for decades, they can't even get the accountants to sign off on it. Or something.

Jan in TX said...

Wow - I stumbled across the surgeonsblog - started to read it, but found your new passion and decided I really don't care to waste my time reading the surgeon blog, I have little respect for (and interest in) such narrow opinions who paints with such broad brushes. The web is full of great medical blogs.

Here is to 2009 - things will be GREAT now - Hope and Happiness has arrived.

Sid Schwab said...

Jan: And here's looking forward to your being able to write a coherent thought. Come back when you do.

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