Thoughts on the current discontents

What’s happening in the Middle East? Damfino. Robert Darnton thinks it’s 1789. Ann Applebaum thinks it’s 1848. If Ann’s right, things ought to be pretty tight all around the Mediterranean around the year 2150 or so. Take that, Caesar Augustus![1]

But what about the home front? Well, I had hoped to comment on Obama’s State of the Union address, but I guess I got behind the eight ball on the one, at least as far as timeliness goes. As far as what the President actually said, well, I think it was politically sound, but what I think he really meant was this:

“I will close my eyes now, and when I open them a year from now, this is what I’m going to see:

Unemployment, 8 percent and dropping;

Stock market, well above 12,000 and climbing;

War in Afghanistan, no worse than now;

National debt, whatever.

That’s what I want to see, because if I see that, I’ll be reelected, and the rest is noise.”

It’s sad—pathetic, really—that Obama believes all that nonsense about high-speed rail and “green jobs.” His theory, apparently, is that if we make it possible for all those hicks out there in the hinterland to ride to the big city at 150 mph, they’ll forget all about God and guns.[2] Yes, he believes it, but he doesn’t really care if any or even all of his proposals are rejected, because he knows, somewhere, that all of the jive he believes in so seriously, has nothing to do with the real world, have nothing to do with escaping from this Valley of Economic Despond in which we now reside. He’ll propose high-speed rail and green jobs till the cows come home, and the Republicans will reject them, and that’s the point. A year from now, when the Republicans have rejected everything with Obama’s name on it, he’ll say, “See, if we only had high-speed rail, unemployment would be 7 percent instead of 8,” and he’ll get elected, because unemployment is at 8 percent and he has an explanation of why it isn’t 7. If he has to explain why it’s 9 percent instead of 8, he’ll lose.

I don’t see why Obama has to explain how he’s going to cut entitlements. People seem to forget that half the point of health care reform was to cut entitlements (that is, Medicare and Medicaid), and in 2010 every single Republican, winner and loser alike, promised that they wouldn’t cut Medicare. So why is Obama required to explain how he’s going to cut entitlements even more? It’s like Lincoln and Fort Sumter: you wait for the other side to start shooting.

Ninety percent of Obama’s problems spring from the lack of economic recovery, and from widespread bitterness over the steps taken—under Bush, for the most part—to counteract the effects of the collapse first of the housing market and then of Wall Street. In all of this, I find both Obama and the other actors—notably Hank Paulson, William Geithner, and Ben Bernanke—about 75 percent blameless. I give Obama 5 percent for allowing Geithner to make such a lousy presentation of the Administration’s New Economic Plan back in February of 2009, when the country was desperate for reassurance. An even half-assed plan, if presented confidently, would have sent the stock market up by 200 points (which probably would have been lost a month later). Instead, stocks fell by 400 points. Not a good day’s work by anyone’s standards.

I give the other 20 percent of the blame to Paulson, Geithner, and Bernanke for having swallowed so completely the notion that the first priority—the only priority—in a business crisis is to restore confidence to Wall Street financiers—to restore confidence to those who so massively screwed things up—that their failures would have no impact on their bottom line.[3] If the essence of economic health resides in the animal spirits of the investing class, then those spirits must be fed. Self-doubt, self-reflection, self-criticism? Away with all of that! Away, I say!

In the beginning (March 2008), the Big Three did work to make Bear Sterns feel the weight of their miss-doing, insisting that the value of Bear Sterns be set at $2 a share (down from $172 a share in Jan. 2007), while JP Morgan Chase ended up paying $10 a share, supposedly to prevent Bear Sterns employees from leaving for other firms. (Excuse me, but where would they go?) And they sought to stare down Lehman CEO Dick Fuld, rather than bail him out on his terms.[4] When that exploded in their faces, they insisted, most unimpressively, that they had no power to prevent it from happening, a clumsy lie that was most unattractive coming from men who took themselves with such perfect seriousness.

Well, once burned, twice shy. When AIG collapsed, the federal government paid off 100 cents on the dollar, Bernanke expressing regret that the government somehow lacked the authority to administer “haircuts” to AIG’s creditors even as it was handing out the cash. Throughout the “crisis,” AIG execs continued to treat themselves to platinum-plated luxury jaunts, without interference from GB&P, culminating, of course, in the revelation in March 2009 that they would pay themselves $165 million in bonuses for a job well done. Paulson must have been very glad he wasn’t part of the new administration.

As for the mediocre success of the stimulus package, I give 95 percent of the blame to the Republican Party, which simply bailed on its responsibility to the nation. The economic crisis of 2008 was fully equal in severity to 9/11, yet Republicans gave Obama not an ounce of loyalty, and conducted themselves throughout with unlimited partisanship. Ever since the rise of Newt Gingrich, Republicans have made the unscrupulous pursuit of power an end in itself. Fearing the loss of its ever-more-dominant right wing, the Republicans capitulated to what became the “Tea Party” movement.

Well, self-preservation is the first law of politics, isn’t it? How could a party lose its “dominant” wing? It wouldn’t be a party, would it? And isn’t it a fact that both Germany and Great Britain have followed “austerity” packages, to the great lamentation of liberal economists like Brad DeLong and Paul Krugman?

Yes, but at the time of Obama’s inauguration, almost all economists supported a stimulus of some sort, though the conservatives usually found something trivial to bitch about, and Republicans had been happy to vote for stimulus packages both early and late in the Bush Administration, as long as they consisted entirely of tax cuts. Instead, the Republicans caved, completely and utterly, and did everything they could to wreck the Administration’s plans. When you consider that the “Great Contraction” of 2007-2009 was easily the worst economic crisis since the Great Depression, one that directly threatened the prosperity of the entire world, the Republicans’ record looks ugly indeed.

But not nearly so ugly as the Obama Administration’s record in Afghanistan and regarding the “War on Terror” in general, for the Administration caved to the worst elements in public opinion far more grievously than the Republicans did. The Administration did begin with good intentions—shut down Guantanamo and provide civil trials for the accused. But the furious backlash, unscrupulously pushed by Republicans but ultimately attributable to the hysteria and bad conscience of the American people themselves, stampeded first the Democrats in Congress (who did have strong majorities in both Houses, after all) and then the Administration into backtracking on all its promises. But once driven down a bad road, the Administration pursued its new path with a vengeance, embracing all the worst tactics of the Bush Administration, most especially claiming an unreviewable authority for the President in all “security matters,” up to and including the power to assassinate American citizens whenever “necessary.”[5]

Even less attractive, if less bloody, has been the Administration’s furious pursuit, both legal and extra-legal, of the entirely legal Wikileaks. The outrage the Administration apparently feels at having its lies exposed by a bunch of hicks from down under knows no limits, beyond the fact that the notorious Julian Assange has not yet been “eliminated.”

It is a very sad fact that the “War on Crime” and the “War on Drugs” and now the “War on Terror” have accustomed our nation to the notion, and far worse to the practice, that only by creating a police state of unlimited arbitrary power can we be “safe.” When the police smash their way into an apartment and shoot an innocent person, all on the basis of a mere rumor of marijuana, the “serious” men and women of our nation can only shake their heads sadly. This is, after all, the price we pay for being free. And when American killer drones slaughter the innocent overseas, when American troops, or American-financed mercenaries, “take out” suspicious characters by the dozen, all of whom miraculously prove to be free of all weaponry, again, “we” are never to blame. We are, in fact, the victims! This damnable fog of war! How damnable it is that we are forced to make these tough, tough decisions! But if we did not make them, we would not be who we are!

No Relief in Sight
Some small fissures are developing in the Republican Party’s devotion to war as the solution to the party’s political problems. There is obvious fear among the neocons that America’s devotion to Israel and to a continuing military presence in the Middle East has peaked. There are some Tea Partiers who put cutting government spending above all other considerations and who, when push comes to shove, might be tempted to treat military spending as simply another form of foreign aid rather than a sacred obligation, but the likelihood that substantial progress could be made here is slight. The great secret of defense spending, of course, is that it is glorified and glamorized pork, pork measured not by the billion but by the hundreds of billions. If we are very lucky, the pressure in favor of continuing massive commitments in Iraq and Afghanistan might decline, allowing the Obama Administration to engage in an awkward, inglorious but highly worthwhile retreat. The President is deeply and personally committed to our “war” in Afghanistan, a war whose only purpose to build a somehow imperishable monument to our supposedly limitless power to refuse to admit our mistakes. Any nation can fight a “useful” war, after all. Only a great nation can fight a useless one. I can see the President growing weary of the war after his re-election, perhaps, but not before. To make any admission, even a tacit one, that he had somehow been wrong would be a terrible sign of weakness. Is the President afraid of being weak, or afraid of being perceived as weak? In practice, it makes no difference, least of all those who are doing the dying, half way round the world, people who mean us no harm and could do us none if they would.

It is remarkable how silent “the left” is on all of this. Only the Nation, a barely visible presence, is forthrightly against the war.[6] Most liberals, like Paul Krugman and those manning the blogs at the New Republic are almost exclusively concerned with domestic policy. And however scathing Krugman is about Obama’s failure to follow his advice on the economy, on foreign affairs and civil liberties he is almost silent.

Domestically, neither party has much to offer. Obama rightly if clumsily remarked that he took office “too soon.” The country—much of it, at least—was in search of comfort food rather than the second coming of the New Deal. Considering the massive extent of the crisis, Team Bush (which did not actually include George; he essentially retired sometime around March 2008) didn’t do too badly, if you don’t count the fact that none of them had the slightest inkling that the storm of the century was about to smack them on their asses. Certainly, they did a hell of lot better than Bush did handling 9/11. But the shock to the right wing, who had been “promised” (by God?) that tax cuts could cure all economic ills, was brutal.

I feel about one percent sympathy for the Tea Party folks. These are the people who applauded George Bush’s deeply irresponsible tax cuts, his massively irresponsible wars, his deeply irresponsible prescription drug plan, his massively irresponsible increases in domestic and defense discretionary spending. And then when a Democrat comes in and starts spending money on common people (i.e., not them), they’re enraged.[7]

Yet such is the fury of the Tea Party folks that the Republicans are terrified of them. Where are the Republican wise men and wise women, anyway? Hiding in the storm cellar, all three of them.

The Democrats are marginally, and only marginally better, upper middle class folks who feel they ought to be in charge of things, dreaming of all the wonderful things they could do if they were only given complete power, a solution in search of a problem. I think there are probably good reasons for cutting the home heating fuel subsidy, announced by the Obama Administration a few weeks ago, but it’s telling that the Administration wants to cut funding the poor so that it can spend billions on high-speed rail, which I have repeatedly denounced as an upper-middle-class toy and will do so again right here.

The truth is that the great task domestically for Obama is to cut spending, rather than to boost “investment,” which I do not believe would generate one tenth the return of which he fantasizes. Budgets are not uncuttable: Clinton and Gingrich, when they had to do it, did cut spending. Republicans even dared to limit agricultural subsidies, for a year or two, at least, for as soon as the economy began to recover they started passing “emergency” legislation giving back with the left hand that which they took away with the right. But the Tea Party Republicans, with all their talk of hating spending, give off a very strong odor of repudiation. They didn’t run up these debts, after all. So why should they have to pay for them?

I’ve read from various “experts” that the U.S. needs to cut spending by about $400 billion a year. In theory, that’s almost easy—cut defense by $200 billion a year, domestic discretionary spending by $50 billion, and trim Social Security, Medicare, and Medicaid by a total of $150 billion a year, and the country would be much better off. None of that money is “necessary” by any stretch of the imagination.

Politically, of course, it’s another matter. It’s going to be a very ugly sausage, but somehow it can be done, and it will be done, if the economic pressure stays on Congress, and the President, long enough. But as long as inflation stays low, there’s no necessity.

The real danger lies in foreign affairs. It’s remarkable how few Americans are willing to believe that the U.S. ever does anything “wrong.” The entire Iraqi invasion was a con job, that had nothing to do with Al Qaeda’ attack on the U.S. Right-wingers invented “weapons of mass destruction” as a “threat” because they missed the Cold War, not because they were actually afraid of biological or chemical weapons, which are not used by real armies, because they do not work.

The Bush Administration knew that Saddam was not involved in 9/11, knew that he had no interest in attacking the U.S. and no interest in aiding those who did wish to attack us. The whole purpose of the invasion was not to defend the U.S.—the sole justification, supposedly, for “preventive” war—but to establish American dominion over the Middle East and to ensure that the Middle East’s oil would be used as a “weapon” to promote U.S. interests rather than to hinder them. And so perhaps a hundred thousand innocent human beings died; perhaps two million were driven from their homes; tens of thousands were unjustly imprisoned; and hundreds, if not thousands, were harassed, humiliated, and even tortured as the direct result of the acts of commission and omission of the President, Vice President, and Secretary of Defense of the United States, at a cost (to the U.S.) of approximately one trillion dollars; and for all of this, none of our goals, stated or unstated, were accomplished. And when this abysmal record is examined, how few dare say what was done was “wrong.” The fog of war, the lie of “good intentions,” covers all. Because the United States, of course, always means well. Unfortunately, we don’t always do well.

The aristocratic leaders of Germany and Austria started World War I because they felt that only a glorious victory in war would give them the prestige needed to reverse the tide that seemed to be running so strongly in favor of their enemies—the bourgeoisie, the social democrats, and many-headed nationalists of the newly hatched Balkan states. Similarly, the Republican Party needs a war—a continuing war—to justify itself. George H.W. Bush led campaigns of opportunity against former CIA-asset Manuel Noriega and former alley Saddam Hussein.[8] George II tried to outdo his pop, but, well, wars are tricky things.

If Obama wants a task worthy of his ambition, ratcheting down America’s mighty war machine, ever in search of a target, is one he might pursue, even greater than high-speed rail or even “green jobs.”[9] But the Democrats see no votes in this. They tried the peace thing and they got burned, badly. No more hippie shit for them. The Tao says that the Sage proceeds by not-doing, and Democrats wage war on war, to the extent that they do so at all, by not-doing. Maybe it will work. I just hope the Republicans, searching for a little war, don’t start a big one.

[1] I take the year 1989 as the year that all of Europe more or less became free. When Poland is free, Europe is free. That’s two hundred years by Darton’s counting, and 141 by Ann’s calendar. I hope it’s quicker than that, and I hope we skip the whole WWI/WWII thing entirely.
[2] Of course, “high-speed rail” actually translates into “faster than they’re going now, however slow that may be.” The day that 150 mph becomes routine for American train travel is the day I get reelected to my third term as President of the U.S. As Obama says, don’t be afraid to dream big.
[3] I’ve said this before. Obviously, I’m going to say it again.
[4] It is Fuld rather than GB&P who deserves most of the blame here. As a seasoned Wall Street jungle fighter, he simply could not get it through his head that it was time to stop screwing people 24/7. It had always worked before! I think Paulson et al. blew Fuld off in a fit of pique (and emotional, physical, and moral exhaustion arising from struggling 24/7 with a staggering financial crisis), hoping (or rather wishing) that it wouldn’t prove disastrous, which it did.
[5] But only overseas, so we don’t have to worry about being shot down in the streets of DC, for the time being, at least.
[6] The Nation talks about things that other people don’t—for example the $500 billion “embassies” we continue to build in Iraq, Afghanistan, and Pakistan, which are of course crammed with literally hundreds, if not thousands, of tons of state of art computer technology. You say we don’t have “vital” interests in Afghanistan? We do now! Imagine what would happen if this equipment fell into the hands of the “bad guys”! Preventing such a disaster is worth a hundred billion dollars a year! Easy! The problem with the Nation is that, by and large, it’s still bitter that the U.S. won the Cold War. Somehow, that seems unfair to them.
[7] Joe the Plumber (or rather, not-Joe the not-Plumber) complained that Obama was “tap-dancing like Sammy Davis Jr.” Hey, no racial subtext there.
[8] It is a matter of historical record that the first Bush Administration encouraged (or thought they encouraged) Saddam to take part of Kuwait. It was only when Saddam took the whole instead of a part that he switched from asset to “war criminal.”
[9] I’m sorry, but this is a total fraud. “Green jobs,” however defined and however achieved, simply means making energy more expensive, thus reducing productivity and reducing growth, and thus making the world, if not poorer, then less rich. But liberals have never been fans of untrammeled economic growth. Neither John Maynard Keynes nor John Kenneth Galbraith wanted the workers to have cars. They were getting above themselves.

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