Friday, April 09, 2010

Social and Political Stability for Our Children and Grandchildren

-- Posted by Neil H. Buchanan

In my FindLaw column this week (link here), I discuss the scariest consequence of a prolonged, deep recession/depression: unrest boiling over into social mayhem and even political upheaval. Even though there are encouraging signs that the worst of the Great Recession is behind us, there is still the danger that things could take another turn for the worse, because of natural events like a foreign political crisis or another wave of housing foreclosures (stretching the definition of "natural," I confess), or because of a 1937-style bout of political stupidity that results in enactment of contractionary fiscal policies (i.e., attempts to reduce the deficit during a still-nascent recovery).

Even if the economy does not actually turn down again, there is every reason to believe that the job market will continue to be depressed for months (if not years) to come, making it likely that the political environment could get uglier and more dangerous. Just in the day and a half since I finished my article, the list of arrests of people who were engaged in attempts at politically-motivated violence has grown, including a man who had left a long stream of threatening voice messages for House Speaker Nancy Pelosi (in which he pointedly recited her home address), as well as a Texas man who was placing pipe bombs in mailboxes because of his anger at the federal government. On the heels of the attack on the IRS building in Austin, as well as a list of incidents including (but not limited to) those mentioned in my column, these latest incidents suggest that matters at least are not getting any better. It is getting scary out there.

Meanwhile, in my column I pointed out that Congress was at least doing the right thing by continuing to provide extensions of unemployment benefits, helping to prevent people from being left without any support in an economy that cannot possibly provide jobs for them. I at least implied that this would continue, and I did not bother to recount the stunt by Kentucky Sen. Jim Bunning that temporarily blocked an extension of the benefits last month. Amazingly, however, the next monthly extension of those benefits has been blocked again, this time by Oklahoma Sen. Tom Coburn.

Parroting the standard anti-deficit line, Coburn said: ""The legitimate debate is whether we borrow and steal from our kids or we get out of town and send the bill to our kids for something that we're going to consume today." Ignoring the nonsensical structure of that sentence (either we "borrow and steal from our kids" or we "send the bill to our kids," which sound like exactly the same thing), the legitimate debate is just how bad people like Coburn think our kids would be willing to make things for today's unemployed.

Regular readers of this blog know (see, e.g., here) that my long-term research agenda revolves around intergenerational justice. Even assuming that helping today's unemployed would actually reduce future incomes -- a clearly false assumption, given that short-term deficit spending is precisely what is need to restore health to the economy, allowing it to return to a path that would increase future living standards -- it really is important to think about whether the voters of 2040 would look back in time and vote for unemployment benefits in 2010 even if it meant that incomes in 2040 would go down by, say, 0.5% (Even the most pessimistic estimates would be much smaller than that.)

Coburn has claimed that he is being courageous by putting the interests of a larger number of future people over those of 212,000 unemployed workers today. If he presumes to speak for future generations, then we should ask whether those future people would really be willing to put several thousand people through the hell of absolute destitution in the name of a slightly larger future economy.

There might be a few people who think that the efforts during the 1930's to alleviate the suffering of millions of unemployed workers were a big mistake, but that has hardly been the rallying cry of subsequent generations. If future generations will be angry about anything of the macroeconomic variety (thus setting aside their almost certain fury about environmental matters), their anger will surely be directed at those policy choices that shrank the future economy by providing benefits and tax cuts to those who are much better off than today's long-term unemployed.

Perhaps more significantly, the argument in my column raises a fundamental question about current generations' obligations to future generations. The current situation raises the prospect that, if we continue to allow the social wounds wrought by unemployment to fester, the resulting social unrest could result in a cataclysm that threatens our form of government. Yes, it is never possible to know when a revolution might come; but the more the political system countenances economic deprivation for large numbers of people, the closer we come to a systemic break. While that break currently looks like it would be in a hard right direction, history shows that anything can happen when all hell breaks loose. Whatever happens, it is unlikely to be a period of enlightenment.

To put the point differently, the thing that we owe future generations most -- certainly more than a particular level of GDP/capita -- is a functioning constitutional democracy. We threaten that birthright (to say nothing of any claim to decency) when we decide that some people are expendable and doom them to abject privation.


Michael C. Dorf said...

Neil: I very much like your way of framing the question by analogy to the Great Depression. As someone born in the 1960s, my relationship to the Great Depression generation is just about the same as the relationship of the future generations envisioned today will be to us. And I must say that I find absolutely ludicrous the notion that I would have begrudged my grandparents a few percentage points of extra deficit spending. My generation benefited in at least three ways from New Deal spending:

1) To the extent it hastened the end of the Depression, it increased the nation's wealth.

2) It left us with a great many spectacular public buildings as a result of public works projects. (Compare the beautiful Middle School I attended, , built during the Depression with public works money, to my hideously ugly high school, , built in an era of smaller budgets and higher labor costs.)

3) Most importantly, spending in the 1930s provided my grandparents' generation (including my grandfather, a lifelong Postal worker) with jobs, which in turn enabled them to provide for their small children, i.e., my parents. The absence of privation for my parents was a direct benefit to me.

egarber said...

I think the core of this is an ideological divide. Consider this scenario:

A private corporation borrows to finance expansion in some market, like China. Most conservatives would see this as a benefit for future shareholders.

Under any objective assessment, the same examination should apply with public investments. But on the Right, we generally don't get even that far, because of the engrained belief that government doesn't work. In other words, the default mentality is that we're just throwing money in the ocean when the public sector spends anything -- so the only calculus revolves around how much of our kids' money we should throw away, not whether spending now helps them in any way.