Wednesday, August 10, 2011

Andrew Sullivan is Stating to Annoy Me

Andrew Sullivan is starting to annoy me. I suppose I should give him credit for finally coming out and saying that our economy just has to go through this and we shouldn't try to do anything about it. But could he please at least acknowledge that this isn't a winning political message?

Granted, he has occasionally suggested that the economically optimum approach may be short-term stimulus and long-terms cuts, but that just isn’t olitically feasible, so let's forget all about it. Swing voters are too upset over our debt level to tolerate any more big spending, so we should concentrate on cuts, regardless of how they affect the economy. What Sullivan doesn’t understand is that what is economically optimal ultimately IS what is politically optimal.

Sullivan presents evidence that voters when surveyed want deficit reduction, but prefer Obama’s balanced approach of tax increases and spending cuts over the Republican approach of spending cuts only. He presents ample evidence that the voters just don’t buy the theories of Keynes. And I’ll agree with him on both counts. But the evidence is also overwhelming that what voters care most about is not deficit cutting, but the economy and jobs. Voters are angry over the debt ceiling quarrel for the same reason they were angry over the whole spectacle of healthcare reform – why is congress throwing all its energy ad ego into that instead of issues we care about like the economy and jobs? (The fact that both bills seemed to be all about ego and winning rather than the public good didn’t help either). The sight of Obama running around campaigning on how he is going to cut spending and raise taxes is just going to reinforce the notion that Washington is out of touch.

Finally, let mepose two hypotheticals to Sullivan.

Suppose Obama and the Republicans agree on some big spending cuts. I personally don’t think this will be all that popular because, while voters hate government spending in the abstract, actual cuts tend to be much less popular. But never mind, we’ll assume the cuts are popular. Now assume Keynes is right. The cuts withdraw demand from the economy and the economy shrinks as a result. My guess is, these two events will not be linked in the eyes of most voters. But so what? Does Sullivan really think voters will say, “So what if the economy is in the tank, at least they finally cut spending”? I’m guessing no, people will be too upset about the economy being in the tank to care much about the cuts.

Suppose, by contrast, that Obama, having failed as a poker player, decides to imitate McCain and be a high stakes craps shooter. Suppose he draws up Paul Krugman’s dream stimulus and persuades all Democrats in Congress to join him in his crapshoot. Suppose he persuades a handful of Republicans to go along as a amatter or economic sabotage. (“You think I’m wrecking the economy? Then help me really wreck it and it should get you a landslide next year.”)
No doubt such a measure would be very unpopular. Glenn Beck would call it our Archduke Ferdinand moment. Fox News and talk radio would say that Obama so ignoring the will of the people was the moment our democracy died and we became a Communist/fascist/Islamist/atheist dictatorship. They would darkly hint that armed rebellion was in order, although, mindful of Anders Breivki and Timothy McVeigh, I think cooler heads would prevail. But a rash of vandalism and death threats would break out against members of Congress who voted for the measure. Tea Parties would vow primary challenges against every Republican who voted for the monstrosity. Some hotheaded House Republican s might even institute impeachment proceedings. And it would probably not go over well with swing voters either. They would be angry that politicians in Washington were ignoring the will of the people and continuing thei spending spree. Obama’s ratings would plummet, except among the liberal base.

But suppose it worked. Suppose the economy actually did start recovering? I am guessing these two events would be linked in the minds of most voters because Democrats would do their best to pitch the connection. They could compare it to George Bush’s surge – a publicly unpopular action that seemed like just doubling down on a hopeless policy, but in fact finally turned and seemingly intractable situation around. But even if the voters did not connect the two events, the message would be loud and clear – the economy would be improving, and Republicans would not be happy about it.

Does Sullivan really believe that voters response would be that economic improvement was all fine and good, but ignored the really important issue of cutting spending?

And if Sullivan's position is really that there is nothing we can do about the economy so we should start cutting regardless of the pain, he should come out and say so and not pretend his position will be politicall popular.

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