(It's Real War!) Fiscal and Other Type Phonies and Liars (In the War Against Democracy - Stateside): Questions the Wheeler-Dealers Don't Want Asked

Poor poor rich people.

Do I need to say it one more time?

Seems like I do.

Big Fiscal Phonies

Paul Krugman

May 27, 2012

Quick quiz: What’s a good five-letter description of Chris Christie, the Republican governor of New Jersey, that ends in “y”?

The obvious choice is, of course, “bully.” But as a recent debate over the state’s budget reveals, “phony” is an equally valid answer. And as Mr. Christie goes, so goes his party.

Until now the attack of the fiscal phonies has been mainly a national rather than a state issue, with Paul Ryan, the chairman of the House Budget Committee, as the prime example. As regular readers of this column know, Mr. Ryan has somehow acquired a reputation as a stern fiscal hawk despite offering budget proposals that, far from being focused on deficit reduction, are mainly about cutting taxes for the rich while slashing aid to the poor and unlucky.

In fact, once you strip out Mr. Ryan’s “magic asterisks” — claims that he will somehow increase revenues and cut spending in ways that he refuses to specify — what you’re left with are plans that would increase, not reduce, federal debt.

The same can be said of Mitt Romney, who claims that he will balance the budget but whose actual proposals consist mainly of huge tax cuts (for corporations and the wealthy, of course) plus a promise not to cut defense spending.

Both Mr. Ryan and Mr. Romney, then, are fake deficit hawks. And the evidence for their fakery isn’t just their bad arithmetic; it’s the fact that for all their alleged deep concern over budget gaps, that concern isn’t sufficient to induce them to give up anything — anything at all — that they and their financial backers want. 

They’re willing to snatch food from the mouths of babes (literally, via cuts in crucial nutritional aid programs), but that’s a positive from their point of view — the social safety net, says Mr. Ryan, should not become “a hammock that lulls able-bodied people to lives of dependency and complacency.”

Maintaining low taxes on profits and capital gains, and indeed cutting those taxes further, are, however, sacrosanct. 

Still, Mr. Ryan and Mr. Romney are playing to a national audience. Are Republican governors, who have to deal with real budget constraints, different? Well, there have been many claims to that effect; Mr. Christie, in particular, has been widely held up, not least by himself, as an example of a politician willing to make tough choices. 

But last week we got to see him facing an actual tough choice — and aside from the yelling-at-people thing, he proved himself just another standard fiscal phony.

Here’s the story: For some time now Mr. Christie has been touting what he calls the “Jersey comeback.” Even before his latest outburst, it was hard to see what he was talking about: yes, there have been some job gains in the McMansion State since Mr. Christie took office, but they have lagged gains both in the nation as a whole and in New York and Connecticut, the obvious points of comparison.

Yet Mr. Christie has been adamant that New Jersey is on the way back, and that this makes room for, you guessed it, tax cuts that would disproportionately benefit the wealthy.

Last week reality hit: David Rosen, the state’s independent, nonpartisan budget analyst, told legislators that the state faces a $1.3 billion shortfall. How did the governor respond?  

First, by attacking the messenger. According to Mr. Christie, Mr. Rosen — a veteran public servant whose office usually makes more accurate budget forecasts than the state’s governor — is “the Dr. Kevorkian of the numbers.” Civility!

By the way, even Mr. Christie’s own officials are predicting a major budget shortfall, just not quite as big. And the two big credit-rating agencies, Moody’s and Standard & Poor’s, have recently issued warnings about New Jersey’s budget situation, which S.& P. called “structurally unbalanced” because of the governor’s optimistic revenue assumptions.

New Jersey, then, is still in dire fiscal shape. So is our tough-talking governor willing to reconsider his pet tax cut? Fuhgeddaboudit. 

Instead, he wants to fill the hole with one-shot budget gimmicks, including reneging on a promise to reduce borrowing for transportation investment and diverting funds from clean-energy programs. So much for fiscal responsibility.

Will Mr. Christie’s budget temper tantrum end speculation that he might become Mr. Romney’s running mate? I have no idea. But it really doesn’t matter: whoever Mr. Romney picks, he or she will cheerfully go along with the budget-busting, reverse Robin Hood policies that you know are coming if the former governor wins.

For the modern American right doesn’t care about deficits, and never did. All that talk about debt was just an excuse for attacking Medicare, Medicaid, Social Security and food stamps. And as for Mr. Christie, well, he’s just another fiscal phony, distinguished only by his fondness for invective.

Comment:

May 28, 2012

brendan

New York, NY

This is finally it. With these 771 words of Krugman's we can finally stop forever the charitable and false assumption that takes the Right at its word that they care about fiscal responsibility. It is about power,it is about dominant power, it is about total power.

The curtain of neoliberal economics is pulled back now, to reveal the true machinations of its 'we are the grown ups here, because there is no such thing as a free lunch ' rhetoric .

What is revealed is something much less than the bumbling old man in the Wizard of Oz. Rather, it is a tiny set of cruel and vicious white frat boys who never became real men. Their misogyny, cruelty, and brutality has to be channeled into the only acceptable public arena left, economic policy. Because they are supposedly supported by economic 'science', they can claim they are just doing what is necessary for the economy.

They are thugs, bullies, and the are killing democracy. They must be trounced in the ballot box, again and again, if we are to prevent America from declining even further. They must be taught that there is no free lunch, that they can not just dine on the lives of the poorest among us to meet their grotesque and voracious appetites. We must stop them.

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May 27, 2012

The Jersey Comeback

One real problem with living in New Jersey is that the state’s two major cities are, of course, New York and Philadelphia — which means that even if you live here, policy and politics reporting tends to be sparse. So it wasn’t until the latest budget fiasco surfaced that I even knew that Christie was running on the theme of the “Jersey Comeback”.

And now that I know, I wonder what on earth he’s talking about. Here’s job growth in three mid-Atlantic states since Christie took office. We’re the blue line at the bottom:

I’m actually not sure why NJ is doing so much worse than New York or Pennsylvania, and I doubt that Christie has much to do with it, but he’s the one trying to claim credit for … what?

Of course, his response to this chart would probably be to yell insults at the Bureau of Labor Statistics.

Comment:

 pneogy, California

Professor, cease and desist. By making your point with numbers and charts like these, you are threatening to put vast swaths of the right wing, the VSP, and centrists right out of business.

May 27, 2012

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Egos and Immorality

Paul Krugman

May 24, 2012

In the wake of a devastating financial crisis, President Obama has enacted some modest and obviously needed regulation; he has proposed closing a few outrageous tax loopholes; and he has suggested that Mitt Romney’s history of buying and selling companies, often firing workers and gutting their pensions along the way, doesn’t make him the right man to run America’s economy.

Wall Street has responded — predictably, I suppose — by whining and throwing temper tantrums. And it has, in a way, been funny to see how childish and thin-skinned the Masters of the Universe turn out to be.

Remember when Stephen Schwarzman of the Blackstone Group compared a proposal to limit his tax breaks to Hitler’s invasion of Poland? Remember when Jamie Dimon of JPMorgan Chase characterized any discussion of income inequality as an attack on the very notion of success?

But here’s the thing: If Wall Streeters are spoiled brats, they are spoiled brats with immense power and wealth at their disposal. And what they’re trying to do with that power and wealth right now is buy themselves not just policies that serve their interests, but immunity from criticism.

Actually, before I get to that, let me take a moment to debunk a fairy tale that we’ve been hearing a lot from Wall Street and its reliable defenders — a tale in which the incredible damage runaway finance inflicted on the U.S. economy gets flushed down the memory hole, and financiers instead become the heroes who saved America.

Once upon a time, this fairy tale tells us, America was a land of lazy managers and slacker workers. Productivity languished, and American industry was fading away in the face of foreign competition.

Then square-jawed, tough-minded buyout kings like Mitt Romney and the fictional Gordon Gekko came to the rescue, imposing financial and work discipline.

Sure, some people didn’t like it, and, sure, they made a lot of money for themselves along the way. But the result was a great economic revival, whose benefits trickled down to everyone.

You can see why Wall Street likes this story. But none of it — except the bit about the Gekkos and the Romneys making lots of money — is true.

For the alleged productivity surge never actually happened. In fact, overall business productivity in America grew faster in the postwar generation, an era in which banks were tightly regulated and private equity barely existed, than it has since our political system decided that greed was good.

What about international competition? We now think of America as a nation doomed to perpetual trade deficits, but it was not always thus. From the 1950s through the 1970s, we generally had more or less balanced trade, exporting about as much as we imported. The big trade deficits only started in the Reagan years, that is, during the era of runaway finance.

And what about that trickle-down? It never took place. There have been significant productivity gains these past three decades, although not on the scale that Wall Street’s self-serving legend would have you believe. However, only a small part of those gains got passed on to American workers.

So, no, financial wheeling and dealing did not do wonders for the American economy, and there are real questions about why, exactly, the wheeler-dealers have made so much money while generating such dubious results.

Those are, however, questions that the wheeler-dealers don’t want asked — and not, I think, just because they want to defend their tax breaks and other privileges. It’s also an ego thing.

Vast wealth isn’t enough; they want deference, too, and they’re doing their best to buy it. It has been amazing to read about erstwhile Democrats on Wall Street going all in for Mitt Romney, not because they believe that he has good policy ideas, but because they’re taking President Obama’s very mild criticism of financial excesses as a personal insult.

And it has been especially sad to see some Democratic politicians with ties to Wall Street, like Newark’s mayor, Cory Booker, dutifully rise to the defense of their friends’ surprisingly fragile egos.

As I said at the beginning, in a way Wall Street’s self-centered, self-absorbed behavior has been kind of funny. But while this behavior may be funny, it is also deeply immoral.

Think about where we are right now, in the fifth year of a slump brought on by irresponsible bankers. The bankers themselves have been bailed out, but the rest of the nation continues to suffer terribly, with long-term unemployment still at levels not seen since the Great Depression, with a whole cohort of young Americans graduating into an abysmal job market.

And in the midst of this national nightmare, all too many members of the economic elite seem mainly concerned with the way the president apparently hurt their feelings. That isn’t funny. It’s shameful.

 

 You tell'em, Dr. K.

  Comments

William LeGro

Los Angeles

The worst thing about these people is this: They serve no useful purpose in our economy. What they make is money - that's it. They use that money to make more money, ad nauseam, and they buy themselves nice stuff - like that creep Stephen Schwarzman and his $3-million birthday party and his $37-million Park Avenue apartment.

Y'know what? These people are not only sociopathic - i.e., me-me-me is the extent of their entire world. They are also parasites on the rest of us. Whatever they claim is their crucial value to our economy, the truth is that we were doing fine before they ever came along.

And when they came along, they didn't even pretend to make anything of value except money, and that money was for themselves. This is a profound character flaw that should not be allowed to dominate the financial system of any nation, let alone ours with our 312 million normal people.

Frankly speaking - if I haven't been frank enough already - what they do should be illegal. That is the only way to control such anti-social behavior.

• May 25, 2012