Archive for November, 2010

Just Plain Sarah

Monday, November 29th, 2010

I have to be honest.

I don’t understand why anyone would vote for Sarah Palin.

She hasn’t demonstrated that she can effectively govern.  Her short stint as Alaska’s governor was nothing special. 

She has demonstrated shocking gaps in understanding of both domestic and international issues.  As an example, she recently called out Machelle Obama’s initiative to reduce childhood obesity as an unwarranted government intrusion into families. 

She hasn’t demonstrated any special success either academically or in business.

All she has is celebrity.

Yet here she is as a potential nominee for President in 2012.

So she must know something.

I did a little research to figure out what it is.

What I found is that her support is predominantly white working class men.  These are the folks that have been hardest hit over the last decade by outsourcing and unemployment.

Channeling white male working class anger is nothing new for Republicans.   They first tapped into it in the 60’s when white southern men objected to expansion of civil rights for people of color.  In the 70’s working-class wages across the country began to stagnate.  In response, working class families send their women to work, worked longer hours, and ultimately went deeper into debt pulling money out of home equity.  When the housing bubble broke along with manufacturing, anxiety became panic and panic became rage.

What is odd is that Republican policies created the economy where corporate profits and stock prices rose while white working class wages fell.  Good jobs got outsourced or eliminated by labor-saving technologies.   Productivity continued to rise because American companies could make more money with fewer domestic workers than ever before.   The result is that while white collar unemployment rates are around 9%, working class unemployment is closer to 20%.

Republicans reached out to this group positioning them as the “silent majority” that liberal Democrats were ignoring.  They supported “tax revolts” for those desperate for any sort of financial relief.  And they reached out to them through fairly overt appeals to racism (Willie Horton).  So it’s not surprising that when the Great Recession eliminated jobs and home equity, this group began to take to the streets in an effort to regain the position of influence the felt they had in the 50’s.

They are looking for someone to blame.   Republican’s certainly don’t want to take the blame so they have effectively refocused this anger on immigrants, blacks, gays, intellectuals, and lately international bankers like George Soros.  They have done this by spinning the narrative that global intellectual elites who run the mainstream media, direct the government, dispense benefits to the undeserving, and dominate popular culture have it in for the working man.  This is a proven formula for growth in fascism having working during most every historical time of economic distress.

Sarah Palin’s particular spin on this message wraps it in a perky upbeat package.  She is the fishing, hunting, cheerleading, patriotic Christian hockey mom that is willing to tell anyone that it would all be better if the working man were in power.  Unfortunately, the dark undertones are still there.  She promises the same revenge that every previous demagogue did, “The liberal elites think they can keep screwing us, but we know something they don’t.  When we’re in power, we are going to punish them.”

As the ultimate populist, she has also positioned herself as outside even the Republican establishment.  So even they have a difficult time controlling her.

Her fundamental strength comes from the fact that a lot her supporters are desperate for simple answers.  They don’t like to hear that their high paying jobs are not coming back and they may need to retrain themselves and change their lifestyle.  They don’t want to hear that the Republicans that they trusted are the ones who are actually screwing them.  They don’t want to hear that the solutions to our problems are complicated and potentially painful.  They don’t want to hear that the wealthy plan to keep their money, because trickle down wealth is their last best hope.

As long as we continue to suffer high unemployment, Sarah is going to have a base of power.  It isn’t clear that she is electable, because her supporters are still in the minority; but she very easily could wield enough power to undermine any other candidate that the Republicans may choose to nominate.   So my money is on her making a third party run in 2012 after she is denied the Republican nomination.

That will actually work to her favor, because Obama will retain the office and remain a foil for her ambition.  In some ways the worst thing that could happen to Sarah Palin is that she actually gets elected.

Adult Conversation

Sunday, November 14th, 2010

Now that the election is over, it is time to have an adult conversation about the deficit paranoia.

Though the voters are concerned about the deficit, their number one concern is not reducing the size of the deficit.  It is about jobs.

So how did the newly elected Republicans promise to improve the job picture?  They promised that they will be able to produce jobs by reducing taxes and government spending.  When you examine this in more detail, there is precious little research to support that claim.  Regardless of how you feel about government spending, the majority of what governments spend at all levels stays in this country.  That money DOES produce jobs.  Reducing government spending will REDUCE jobs.

How about reducing taxes as an incentive for businesses to start hiring?  It again sounds logical if you accept the premise that businesses are somehow burdened to the degree that they don’t have capital to support hiring.  But when you look at the facts on the ground, what you find is that large businesses are rolling in cash.  They aren’t hiring at rates that will quickly bring down unemployment because they aren’t seeing sufficient demand for their products to justify dramatically expanding their capacity.  They aren’t seeing the demand for their products because CONSUMERS are largely sitting on the sidelines.  Consumer spending is weak because there are still too many people unemployed and those that are employed are underpaid and overworked.  Weak consumer demand has also hamstrung small businesses.  They can’t get the loans they need to expand. It isn’t because of lack of cash or the cost of money.  There are unprecedented amounts of cash in the market right now.  That has driven rates to historically low levels.  Small business can’t get loans because they can’t demonstrate any better than large businesses that there is enough growth in their future to satisfy newly conservative banks.

So who is left to stimulate demand and create projects that are going to create the demand that is going to spur a new round of hiring?  That’s right – it’s the very government that conservatives want to shrink.

Now let’s talk about the deficit.

It came from fighting two wars while giving the wealthy a tax break.  It continues because of the short term costs of recovering from the financial crisis.  Long term, however, the numbers aren’t nearly as scary as some would try to make them. 

According to the Congressional Budget Office, the cause of deficit growth in the future won’t be spending on conventional government services, which will consume a steady 8.4% to 8.6% of gross domestic product from 2020 through 2080 (down from today’s stimulus-driven 16%). It’s not Social Security, which has its own revenue source and will stick at 5.3% to 6.1% of GDP. It’s Medicare and Medicaid, which are projected to grow from 5.3% of GDP this year to 17.2% in 2080.

Still wonder why the Obama administration pushed Healthcare Reform?

Conservatives have portrayed government spending as a vast sinkhole that mortgages our children’s future.  If that money is spent on infrastructure, can you really call it a bad investment?  Was the Interstate Highway system a bad investment, or the Internet, or the creation of our air transport system?  These are the sorts of investments that support decades of economic growth.  Now is the time that we need to spend the money.

The voters were right.  We need to focus on creating jobs and getting the economy going.  Those that ignore that message and take off after healthcare or some endless series of witch hunts, as has been promised by the Republicans, will do so at their own peril.