Saturday, March 7, 2009

just making stuff up

With the announcement yesterday that the US economy lost another 651,000 jobs in February, and an upward revision in the job loss estimates for recent months, the current economic downturn is unquestionably the worst since the Great Depression. The economy has lost 4.4 million jobs since December 2007, but more alarming is that 2.6 million jobs have been lost in just the past four months. Unemployment tends to be a lagging indicator, so clearly there is worse to come. Look at the chart below – there is no indication that we are anywhere near bottoming out. We’re still in free-fall.

(During the recession of the early ‘80’s unemployment peaked at a higher rate than the current rate. But it started from a higher base, so the job loss was less. And since then revisions to the way unemployment is measured have the effect of understating unemployment. The broadest measure of unemployment, including those who have given up looking for work or who are involuntarily working part time, is now
almost 15%.)

[click to enlarge]

So what is the Republican response to this worst global economic crisis in our lifetime?

“House Minority Leader John Boehner, R-Ohio, reacted to the rise in unemployment today by calling for a federal government spending freeze.”
You can’t make this stuff up.

And don’t forget the “bold” GOP plan for turning around the economy:
elimination of the capital gains tax. (Actually, there is nothing new about this proposal. Newt Gringrich was pushing it as far back as 1997 – when the economy was booming. Boom or bust, deficits or surpluses, war or peace, inflation or deflation, the Republicans have a one-size-fits-all solution: Tax cuts for the rich and reduce the social safety net.)

I don’t know about you, but the capital gains tax is pretty much the least of my worries these days.

Josh Marshall’s
summarizes the point:
Let's just stipulate DC Republicans are simply not part of the discussion when it comes to repairing the US economy or arresting our slide into deep economic misery. And any reporters who aren't clear about this are just lying to their readers or viewers. The latest Republican plan, in the face of today's new spike in unemployment, is a freeze on federal spending. I'm not even sure it's fair to say that this is a replay of the disastrous decisions the magnified the Great Depression between 1929 and 1933. It's more a parody of it. When the crisis is a rapid and catastrophic drop off in demand, you handcuff the one force that can create demand (i.e., the federal government) in the throes of the contraction. That's insane. Levels of stimulus are a decent question. Intensifying the contraction is just insane and frankly a joke. It's time to recognize that the only debate here is happening among Democrats and sundry non-affiliated sane people. The leaders of the GOP are simply not part of the conversation.

Republicans seem to be occupying some kind of alternative reality. The main Republican tactic these days is to mock every form of government spending to undermine confidence in President Obama’s economic recovery plans and foment opposition to them. It shouldn’t be too hard to find instances of wasteful spending – that’s the oldest populist trick in the book. But increasingly, they are just making stuff up.

Take Bobby Jindal’s Republican response to President Obama’s address to a joint session of Congress last week. His
big example of wasteful spending in the president’s stimulus bill was, “$8 billion for high-speed rail projects, such as a 'magnetic levitation' line from Las Vegas to Disneyland.” The whole right-wing noise machine has been shouting out this mythical Las Vegas-to-Disneyland train in recent days – originally as part of the stimulus bill but lately it has morphed into an element of the fiscal 2008 omnibus spending bill. As “reported” by FOX News’s Megyn Kelly (in the latter context):

It's a super railroad, of sorts -- a line that will deliver customers straight from Disney, we kid you not, to the doorstep of the moonlight Bunny Ranch brothel in Nevada. I say, to the moonlight Bunny Ranch brothel in Nevada. So should your tax dollars be paying for these kinds of projects?

“We kid you not,” says FOX News. (Is it worth pointing out that the
Bunny Ranch is outside Carson City, 400 miles north of Las Vegas? Not that I know these kinds of things.)

Pure fiction. Yes, the stimulus bill included $8 billion for high-speed rail lines. But that allocation of funds does not include any “earmarks” and it doesn’t specify any such Las Vegas-to-Disneyland rail line. The funds are to be allocated by Transportation Secretary Ray LaHood, a Republican it is worth noting. While no specific projects have been designated, the Department of Transportation does have a
map of proposed high-speed rail corridors:

[click to enlarge]

Notice there is no line to Las Vegas (let alone the Bunny Ranch).

And what’s wrong with high-speed rail lines? This is exactly the kind of infrastructure project that has propelled economic growth throughout American history. Canals. The transcontinental railroad. Rural electrification. Western water projects. The interstate highway system. The Internet. To name a few. This is exactly the kind of thing the government should be doing, especially at a time when aggregate demand has collapsed and unemployment is skyrocketing (and we want to break our addiction to fossil fuels). And this is hardly cutting-edge technology. Japan built the world’s first “bullet trains” that could go 130 mph in the early ‘60’s. (I lived in Japan in the early/mid ‘80’s and loved traveling the country on the “
Shinkansen” – much better than air travel.) Heck, even Spain now has a train that goes over 200 mph – and they are planning over 6000 miles of high-speed track (video). But to Republicans this is a subject of mockery and derision. (A funny story here.)

The other big target of Republican anti-spending wrath has been $30 million for “Nancy Pelosi’s marsh mouse.” You must have heard about the little rodents by now. They were the primary Republican objection to Obama’s economic recovery plan before the mythical Bunny Ranch train. Supposedly there is some outrageous amount (it varies in the telling – usually $30 million, but sometimes more) in the Obama plan for the protection of marsh mice in Nancy Pelosi’s district. (As I was drafting this post I began to include some of these expressions of Republican rodent rage. But when I got up to over 20 such quotes I decided to cut them all out. But you can read some of them
here and here.)

Again, pure fiction. Turns out, the stimulus bill has some funds for wetlands restoration. (I’m on the national board of
American Rivers and wetlands restoration is a priority of ours. It is a good use of stimulus money. Labor intensive with all kinds of long-term benefits. A GOOD thing.) Among the “shovel-ready projects” submitted to the U.S. Army Corps of Engineers and the National Oceanic and Atmospheric Administration are marshland restoration projects proposed by the California State Coastal Conservancy, a state agency charged with preserving and restoring the coastline. These projects have all sorts of benefits like flood and storm water runoff control, habitat restoration, and clean water improvements. But Nancy Pelosi lives in California and the salt marsh harvest mouse is one of many species that live in the kinds of wetlands that might benefit from restoration, so in the Republican alternative reality this became spending for Nancy Pelosi’s mouse. Never mind that these projects have nothing to do with the marsh mouse per se. And that the Army Corps and NOAA have not even indicated that they would fund any of the projects that the California State Coastal Conservancy has proposed. And that there aren’t even any proposed wetland restoration projects in Nancy Pelosi’s district and she had nothing to do with this wetlands restoration provision. Not only is the story false, it’s stupid. Do Republicans really think this kind of thing is what the American people care about during a global economic crisis when millions of people are losing their jobs?

Earlier, Republicans were claiming that the stimulus bill provided $5 billion as a “political payoff” for ACORN (a group whose voter-registration work has resulted in it being demonized by the right). Republican critics included House minority leader Boehner and Sen. “Diaper Dave” Vitter (R-La.) (perhaps best know as a client of the DC madam with a diaper fetish). Turns out, the funding is for housing and community development programs signed into law by Gerald Ford for which ACORN (along with just about anyone else in America) theoretically could apply – but ACORN hasn’t and has said it has no intention of doing so. As

Boehner and Vitter commit two logical fallacies. Their argument has the form:

1. The stimulus bill provides funding for redeveloping neighborhoods.
2. ACORN does work in redeveloping neighborhoods.
3. Therefore the stimulus bill provides funding for ACORN.

That's an example of what philosophers call the undistributed middle fallacy. It's a common mistake … [b]ut Boehner and Vitter compound their error by treating different terms as if they had the same meaning. ACORN does indeed work in redeveloping neighborhoods, but the work that it does is not the same sort of work for which NSP provides funding. By pretending as if the two are the same, Boehner and Vitter commit the fallacy of equivocation.

We're accustomed to seeing logical fallacies in political arguments. But working two of them into a single argument is unusually bad logic.

Another attack line is the billions of dollars for “remodeled federal offices”. New drapes and designer wastepaper baskets, presumably. From Newsweek:

According to GSA's acting administrator, Paul F. Prouty, this will allow the agency to comply with laws requiring it to reduce energy and fossil fuel consumption. Plans for making the buildings more environmentally friendly include thicker insulation, more efficient windows, dual flush toilets and LED lighting in parking garages – small changes, but GSA owns about 1,500 properties that would need to be updated. They also have bigger plans, such as installing energy-producing roofs and intelligent lighting systems.

Increasing the energy-efficiency of federal buildings sounds like a pretty good idea to me.

Then there is the infamous $300 million for “
golf carts.” Turns out, the funding is for government purchases of (in the language of the stimulus bill), “motor vehicles with higher fuel economy, including: hybrid vehicles; neighborhood electric vehicles; electric vehicles; and commercially-available, plug-in hybrid vehicles.” High-fuel-economy cars = golf carts. The horror!

And who could forget $200,000 for “
tattoo removal” (actually part of an effective anti-crime effort that helps get youth out of gangs).

Don’t even get me started on the $1.7 million for "swine odor and manure management research" (turns out people subjected to a lot of pig emissions come down with a
pretty nasty set of symptoms – the kind of thing that you might want to look into a bit – maybe to the tune of $1.7 million).

I could go on all day refuting Republican lines of attack – but it’s a Sisyphean task. They just make this stuff up, so there is literally an infinite supply of fiscal outrages.

This whole thing about “earmarks” has become ridiculous. First, to be clear, the Obama economic recovery program had NO earmarks. Then there is the $410 billion omnibus spending bill for the remaining six and a half months of fiscal 2009 that has spent eight months working its way through Congress. According to Taxpayers for Common Sense, it has in it $7.7 billion in “earmarks.” That is in addition to a slightly lower amount for fiscal 2009 spending to date.

Personally, I see nothing wrong with “earmarks” per se. An “earmark” just consists of Congress directing spending toward a specific program or project. The Constitution vests in Congress the power of the purse. If Congress didn’t direct the spending, some executive-branch agency would. Even if, as a general matter, the executive branch might do a better job of it, that isn’t inherently so. Congress not only has every right to direct spending, but it is actually the branch of government with the explicit Constitutional control over spending (and more direct accountability to votes – which, of course, is the problem). Sure, it is a power subject to abuse (as the Jack Abramoff scandal demonstrated). And unquestionably many “earmarks” are dumb and wasteful. Earmarks increased four-fold under Republican control of Congress. But now (thanks to Democrats, since they took control of Congress) earmarks are transparent – each one has to be specifically identified to the particular member of Congress who proposed it (in many cases more a matter of pride than shame). According to
Taxpayers for Common Sense there were $14 billion in “earmarks” (including the current omnibus bill) in the 2009 budget – down from 2008. So that is less than ½ of one percent of the $3.1 trillion budget. Even if that spending is 100% wasteful – and there is no reason to believe it is – that is a pretty trivial amount of “waste.”

Speaking of
Taxpayers for Common Sense, they have compiled a database of earmarks in the current budget. The top “porkmeisters”? Six out of the top ten are Republicans:

Earmarks (number/$ in millions)

1. Cochran (R-MS): 204 $471m
2. Wicker (R-MS): 143 $390m
3. Landrieu (D-LA): 177 $332m
4. Harkin (D-IA): 177 $292m
5. Vitter (R-LA): 142 $249m
6. Bond (R-MO): 86 $248m
7. Feinstein (D-CA): 153 $235m
8. Inouye (D-HI): 106 $225m
9. Shelby (R-AL): 125 $219m
10. Grassley (R-IA): 125 $219m

But this is really a silly political distraction. We’re talking about ½ of one percent of the federal budget at a time of global economic crisis. What about, you know, ECONOMIC POLICY? And there we have a Republican “plan” consisting of a federal spending freeze and the elimination of the capital gains tax.

Gail Collins had a
great piece in the New York Times after Bobby Jindal’s infamous Republican response that touches on this subject:

Absent any deep thoughts, the Republicans are going to complain about waste. The high point of Jindal’s address came when he laced into “wasteful spending” in the stimulus bill, and used as an example a $140 million appropriation for keeping an eye on the volcanoes in places like Alaska, where one is currently rumbling.

“Instead of monitoring volcanoes, what Congress should be monitoring is the eruption of spending in Washington, D.C.,” Jindal claimed.

I don’t know about you, but my reaction was: Wow, what a great stimulus plan. The most wasteful thing in it is volcano monitoring.

Louisiana has gotten $130 billion in post-Katrina aid. How is it that the stars of the Republican austerity movement come from the states that suck up the most federal money? Taxpayers in New York send way more to Washington than they get back so more can go to places like Alaska and Louisiana. Which is fine, as long as we don’t have to hear their governors bragging about how the folks who elected them want to keep their tax money to themselves. Of course they do! That’s because they’re living off ours.

O.K., I’m done.

The Republicans can’t try to convince the country their ideas are better because of that intellectual bankruptcy problem. All they can do is make Barack Obama’s programs look feckless, plunging everyone into so much despair that by next summer the public will be ready to go live in caves and eat squirrel stew.

Oh, by the way, volcano monitoring is a pretty good thing. You’d think the governor of Louisiana would appreciate the idea of anticipating natural disasters. But, alas, he is a Republican.


Anonymous said...

Is there any hope that the "government spending freeze" is mainly for "pork" and "aid" to other countries?

I don't mind the US helping others when the $ is there, but considering the Trillions in dept that our Posterity will be paying for I we should be a little more selective on where we are spending it.

If your house, and a house on the next block are on fire you're going to save yours first. We need to be aiding the people of our own Country First.

Doug S. said...

Do you know what Herbert Hoover actually did to fight the Great Depression?

Well, one thing he did was to initiate a massive public works program of unprecedented size and vastly increase government spending. Of course, this was in 1932, at which point it was more than clear that Hoover's earlier efforts to find a solution that didn't involve a massive expansion of the federal government had, indeed, failed completely.

On the downside, Hoover also presided over a substantial increase in taxes, nullifying the post-World War 1 tax cuts that had been championed by Treasury Secretary Andrew Mellon on the basis of what we now call supply-side economics; starting in 1922, the top tax rate was gradually reduced from 77% to roughly 24%, but in 1932, it was raised to 63%. (Point of comparison: Obama's recent tax plan proposes to raise the highest marginal income tax rate from 35% to 39.6% and the capital gains tax rate from 15% to 20%.)