Friday, May 11, 2012

How High Would the Cliff Have to Be, Before the Republicans Would Stop Hitting the Accelerator?

-- Posted by Neil H. Buchanan

In my Verdict column this week, I offer the second installment of my "What Would Happen Under a President Romney?" series, which I launched two weeks ago (Verdict column here, associated Dorf on Law post here). In this week's episode, I explain again why Romney would do whatever the radical base of the Republican Party might tell him to do. This is especially true regarding budget policy, which is the focus of the column, both because of current Republicans' seething hatred of government spending, and because budget policies cannot (within some limits) be filibustered. They care more, and they are less constrained, when it comes to spending and taxing.

My prediction is that the Republicans (with Romney meekly in tow) would -- if they had the opportunity -- do anything they could to cut spending. I describe Paul Ryan's (dishonest) budget proposals, and how they would be disastrous for the economy. Pointing out that the Republicans in Congress were apparently willing to drive the economy off the cliff last summer, during the contrived Debt Ceiling controversy, I conclude that an unfettered Republican Party would pass Ryan's proposals and quickly add to his spending cuts. There really is nothing in their rhetoric that tells us that they have a stopping point for cutting non-defense spending. We might really see the "shrink the government until it can be drowned in a bathtub" scenario played out.

That is certainly one possibility. Another possibility is that something would stop the Republicans from wreaking such damage on the economy, notwithstanding their rhetorical commitments to cut, cut, cut government spending. What would that something be? The most obvious answer is political survival. Politicians who think they are doing something important while in office (along with politicians who are simply addicted to power, as well as those who have no better way to earn a living) do not want to lose elections. Would the Republicans not stop, once it became clear (yet again) that Keynes was right, and the U.S. economy was hurtling past Europe's on the way to the bottom of a bottomless pit? Would the fear of punishment at the ballot box not be enough to temper their excesses?

I offer two thoughts on that question in the Verdict column, and I will offer a few more here. First, I point out that there is nothing particularly awful about being voted out of office when the economy is tanking, because it is then possible to blame the other side for presiding over a bad economy. (See 2008 et seq.) Second, there is no guarantee that the Republicans would be voted out of office in 2014 and 2016, even if the economy is terrible, because Republicans are doing everything possible to make their incumbents untouchable.

It is also worth remembering that the most radical segment of the Republican caucus in Congress is its first-termers. These people show every sign of believing that they won their seats because they are brilliant politicians with a persuasive message. In fact, of course, they simply rode an anti-in-party wave in 2010, abetted by a very weak economy and a Democratic Party that was afraid of its own shadow (even more than usual).

Even so, these new Republican Members of Congress suffer from a version of Jim Hightower's famous put-down of George H. W. Bush: "He was born on third base, and he thinks he hit a triple." Usually, it is safe to assume that office holders are good at one thing: becoming office holders. In the case of the Class of 2010, we cannot even say that much. They just happened to be around when the going got good. This means that there is a large group of Republicans in Congress who simply think they are political geniuses, and thus bullet-proof.

Yet these first-termers are still not a majority. Will their elders not rein them in? Would, for example, Mitch McConnell not see the writing on the wall, knowing that a 20% unemployment rate would overwhelm even the most Gerrymandered incumbent Republican? Maybe, but there is still reason to doubt this. There is no evidence that the old guys are still running the show. McConnell opposed the election of Rand Paul in 2010, which ought to have meant something, given that Paul was running for the Senate in McConnell's home state. When Kentucky Republicans refused to listen to McConnell, he simply became a puppet.

What really seems to matter is not whether the senior Republicans would balk, but whether the Koch brothers (and all the anonymous backers who have financed the radical turn in the Republican Party) will ever reach the point where they fear that they have gone too far. These guys, to say the least, seem not to be especially concerned about the fallout from their actions. Moreover, they certainly do not care if their puppets lose a few seats and have their careers ruined. The real powers are in this for the long haul, with the apparent goal of crushing dissent from plutocracy once and for all.

Finally, there is little evidence that even the more pronounced failures of austerity in Europe are causing any rethinking over there. The usual suspects are red-baiting Hollande and mocking him (as The Economist did) for "actually believing" that society should be made fairer. Prime Minister Cameron is not taking his UK government in a new direction, despite the horrible failures of his policies. The European Central Bank, the German government, and all of their enablers are unimpressed by the results of the French and Greek elections.

And do not forget that the Europeans generally are not acting from the same fire-breathing sense of holy mission that drives the people here (both the members of Congress, and the money men). If European leaders can stare at 20-plus percent unemployment in country after country -- and 50-plus percent youth unemployment -- without blinking, why should we imagine that it would be different here?

Having said all that, however, I cannot help but maintain some gut feeling that they just would not be that crazy. As the unemployment rate climbed to 10%, 12%, 15%, and upward, would they not have to change direction? We can hope so, but we cannot merely assume that everything will turn out well this time, simply because things have not gotten too far out of hand so far. Thrill-seekers can always justify their next big risk, by pointing out that they have not died yet. That does not make them immortal. Neither is the global economy -- or democracy.


Charles said...

"Finally, there is little evidence that even the more pronounced failures of austerity in Europe are causing any rethinking over there."

What is your evidence for austerity? Richard Rahn has a chart showing spending continues to rise as a share of GDP in the US, UK, Germany, Italy, France and Spain.

Charles said...

More empirical evidence on spending cuts:

"Fiscal discipline also works when it is tried in other nations. Data from the Economist Intelligence Unit reveal that four nations — Canada, Ireland, Slovakia and New Zealand — dramatically reduced budget deficits in recent decades by imposing strict limits on government spending. Interestingly, these data also reveal that the tax burden was stable or falling during these periods of fiscal progress..."