There is panic spreading among the Village lemmings concerning the President's new budget.
Some like Joe Scarborough try to compare this economy to that of 1982-84, when unemployment reached above 10% compared to 7.6% today. The problem with that comparison is that we were fighting stagflation and the Federal Reserve could still have an effect on the economy. Paul Volcker was able to kill inflation by raising interest rates to extreme levels. Because we now face the problem of deflation rather than inflation and interest rates are nearly at 0%, monetary policy will have little effect on our economy. Therefore, the government has to create demand through deficit spending. Thus we have the President's ambitious budget that not only deals with our near term economic downturn but deals with long term structural problems in our economy.
I am no economist (I took only an introductory economics course in college) but I sense that either I understand what's going on in our economy better than media bloviators like Scarborough, Jim Cramer, and David Brooks or Scarborough, Cramer, and Brooks are blinded by ideology and/or are politically deceptive.
In his column today - which he arrogantly titles A Moderate Manifesto - Brooks tries to paint himself as a man of reasoned moderation rather than a knee-jerk ideological conservative:
But the Obama budget is more than just the sum of its parts. There is, entailed in it, a promiscuous unwillingness to set priorities and accept trade-offs. There is evidence of a party swept up in its own revolutionary fervor — caught up in the self-flattering belief that history has called upon it to solve all problems at once...
The U.S. has never been a society riven by class resentment. Yet the Obama budget is predicated on a class divide. The president issued a read-my-lips pledge that no new burdens will fall on 95 percent of the American people. All the costs will be borne by the rich and all benefits redistributed downward...
Those of us in the moderate tradition — the Hamiltonian tradition that believes in limited but energetic government — thus find ourselves facing a void. We moderates are going to have to assert ourselves. We’re going to have to take a centrist tendency that has been politically feckless and intellectually vapid and turn it into an influential force.
Brooks describes the President's budget as über-partisan and paints a scary picture of the President as "not who we thought he was," thus reinforcing the extreme right wing meme that the President is a closet socialist.
To his credit, Joe Klein sees through Brooks' fear-mongering and ideologue-in-moderate's-clothing ruse:
But I disagree with him profoundly about the Obama budget--and so, I would venture, do most moderate-liberals. The budget has to be seen in context. We are at the end of a 30-year period of radical conservatism, a period so right-wing that many of those now considered "liberals"--like, say, Barack Obama--would be seen as moderate pantywaists in the great sweep of modern political history. The past 30 years have been such a violent departure from the norm, such a profound destruction of the basic functions of government, that a major rectification is called for now--in rebalancing the system of taxation toward progressivity, in rebuilding the infrastructure of the country, not just physically, but also socially and intellectually.
So it's not surprising that the President would feel the need to move on all fronts, rather than prioritizing, as Brooks would want. And it should be remembered that not all these initiatives will be acted upon at once. This is a ten-year budget. Some of the more dramatic changes, like the cap-and-trade plan to limit carbon emissions, will be insinuated slowly and not for several years.
In almost every case, Obama has chosen a moderate path of government activism--or left the solutions deliberately vague. His ten-year, $150 billion green energy plan, for example, will mostly be accomplished through the private sector--but it does tilt government away from the extreme benefits lavished upon oil companies in the past, policies that reeked of crony-capitalism rather than true conservatism, and toward alternative energy sources.
D.C. solipsists like Brooks are too lazy to remember that the President is returning tax rates to levels similar to those under Clinton and Reagan. Brooks also seems to want to ignore that most all economists along the ideological spectrum believe we need deficit spending to replace the gap of around $2 trillion in private demand that will result while the American people pull back spending and try to pay down piles of debt accumulated over the last decade or so. Ironically, it seems the American people appear to support the President's vision and plans while people like Brooks are still wired into the slogan-as-policy that runs the Republican Party. The President has started to shift the Overton Window about what is economically possible in this country, but the opposition is trying their hardest to maintain the status quo. We need to help the President to continue this shift to a new progressive paradigm.