As summer winds down, the excitement over the struggle in Congress should also be cooling. The Congresspersons have gone to ground, many of them smugly convinced that by compromising they’ve once more saved the union. Well, not so fast, it’s not by any means over yet.
Yesterday NPR’s Morning Edition ran what might be called an “interviewette” with Barney Frank, the redoubtable representative from Massachusetts who’s not in the habit of mincing his words. The whole thing lasted barely five minutes, during which Barney made a Herculean effort to explain the insanity of what the Tea Party Terrorists had demanded that Congress do as the price for a normally routine vote to raise the debt ceiling to honor previously incurred debts.
The interviewer, Steve Inskeep, is either genuinely stupid or was playing dumb yesterday in order to appease the Republican masters who contribute to NPR. His final sally:
“INSKEEP: Congressman, if I can, we've just got a few seconds. You have mentioned defense spending. You've mentioned tax increases. Those are two areas of disagreement. The biggest part of the federal budget is entitlements...
Rep. FRANK: No, wrong. I'm sorry. The defense budget is bigger than Medicare, and Social Security is, in fact, self-financing, still is.Infuriating—so infuriating that I jumped out of bed and rushed to my computer even before I’d had my coffee, which I NEVER do, to write a quasi-profane complaining letter to NPR.
INSKEEP: Let's stipulate for this conversation: a very, very, very, very, very big part of the budget is entitlements. Democrats are seen as resisting cuts. Is your side - in a couple of seconds - going to appoint people to this special committee who are ready to make a deal?
Rep. FRANK: I am not going to tell an 80-year-old woman living on $19,000 a year that she gets no cost-of-living, or that a man who has been doing physical labor all his life and is now at a 67-year-old retirement - which is where Social Security will be soon - that he has to work four or five more years.
But I disagree with you that in terms of draining on the budget, Social Security is largely self-financed...
Rep. FRANK: ...and the military budget is larger than Medicare. So demonizing entitlements and saying that - in fact, here's the deal...
INSKEEP: Congressman, I really have to cut you off there. But I do...
Rep. FRANK: Well, I wish you wouldn't ask me complicated questions with five seconds to go.”
Dammit, the last thing the government should do when depression looms is cut back on the money going into the stream of commerce under the (sometimes pejorative) label of “entitlements.” The saner voices on what has come to be called the Left (formerly known as the Center) of the political spectrum have been trying to explain this to the dunderhead newsies for months now, but their ping-pong soundbyte coverage (in print as well as on the radio) never allows for even the simplest explanation of what’s actually going on in the economy. Barney Frank almost got the point across in his 2.5 minutes of airtime yesterday, but the interviewer’s persistent desire to articulate the Tea Bag analysis in the interest of appearing “fair and balanced” drowned him out in the end.
Henry Ford used to claim that he paid his workers a living wage so that they could afford to buy his cars. If almost 10% of today’s potential consumers don’t have jobs, they’re just not going to be buying much, and that’s the nub of the problem, apparent even to people like me who never took Econ 101. U.C. Berkeley’s Brad DeLong and his alter ego Paul Krugman have been providing an excellent online makeup course for anyone who bothers to read their blogs. But they’d need more than 5 minutes to explain it to the radio guys, which is why you seldom hear them on NPR.
As an English major who did take Linguistics 101, I might quibble with the way the analyis is framed, especially by people like Robert Reich who make noble efforts to provide simple, easily digested explanations. These exhortations usually takes the form of “what we need is a jobs program!” Well, strictly speaking, what we really need in money in the pockets of people who will spend it, pump-primers if you will. They don’t actually have to be working at anything in particular.
Franklin Roosevelt’s WPA-type stimulus financing embodied the principle. Many of the “jobs” it funded were not considered necessary activities of government before the depression hit: taking photos, writing plays, painting murals and similar endeavors.
The Puritan ethic is too strongly ingrained in America to actually allow people to be given spending money if they don’t appear to be working in some fashion. Just giving needy people money to spend would never fly in the U.S., effective though it might be.
Federal Reserve Chair Ben Bernanke is twitted with the soubriquet “Helicopter Ben” because he once in a speech referred to Milton Friedman’s idea about using about using a "helicopter drop" of money into the economy to fight deflation. In some part of the popular imagination, this concept has morphed into pushing payoffs for slackers, which was not the original idea.
Putting on my environmentalist hat for a moment, I’d like to take issue with the underlying rationale for Obama’s original too-little too-late stimulus effort, directed at “shovel-ready” projects. “Jobs” programs have lately been thought of primarily as big-machine construction projects, good for construction workers whether as a society we need them built or not. Such jobs projects take the form, in Santa Cruz for example, of incessantly re-paving parking lots in environmentally sensitive areas that should never have been paved in the first place, or in Berkeley of pushing forward the unneeded and damaging fourth bore of the Caldecott Tunnel. Construction unions and big builders typically join forces to promote such enterprises, which usually consume a lot of non-sustainable resources and promote climate change.
If the rubric has to be “jobs”, there are better things to do with stimulus money than putting it all into “guy” jobs like these. Yes, I know that women have made some progress in the construction industry, but they’re by no means well-represented there.
At a recent event for a congressional primary candidate, a young woman, mother and breadwinner for two small children, laid it on the line. She said that she’d been working for eight years, ever since she graduated from high school, as a pre-school teacher’s aide. Her government job is deliberately limited to less than full-time so she doesn’t get any benefits. Her mother helps her with child care, she has a variety of extracurricular jobs nights and weekends, and she’s trying to get a community college degree, but she just isn’t making ends meet well enough to pay for health insurance. She asked the candidate what could be done for people like her.
Here’s an idea. Why can’t stimulus money simply be used to raise her pay to a decent level so that she can buy insurance? Too simple?
Here’s another idea: we inherited my mother-in-law’s house, complete with 40 years worth of termites. One call to a company that does environmentally sound termite abatement with orange oil produced a thorough free inspection, followed by a slick professional crew who got the job done in a half-day. It’s a much more labor-intensive process than tenting the house and fumigating with toxic gas, but in a depressed economy that’s a plus.
All over the country, foreclosed homes are being allowed to decay, from termites and other causes, as banks walk away from bad investments, yet at the same time many people are still homeless. Why can’t stimulus money be allocated for maintenance of homes like these, to be turned over to people who need them, instead of for wasteful highway construction which accelerates global warming?
What’s wrong with this picture is the eagerness of press commentators who should know better to “stipulate” that “a very, very, very, very, very big part of the budget is entitlements.” That’s simply not true in any statistical sense in terms of the current budget, as Barney Frank could explain if he got ten minutes uninterrupted by facile and fatuous questions. And if Barney couldn’t get the point across, Professors DeLong, Krugman, Reich or Joseph Stiglitz could probably make it clear to even the dullest student in about 20 minutes.
It’s that old “both sides” problem again. Professor Krugman once joked that if President Bush said that the Earth was flat, the headlines of news articles would read, ‘Opinions Differ on Shape of the Earth’ “. That’s the level of information we’ve been getting from most of the press on the economic catastrophe that is upon us.
And meanwhile, Chicken Little, the sky continues to fall. They’re rioting in England—or perhaps we should say they’re engaging in non-monetized spontaneous consumption of goods caused by the absence of income. And they’re rioting in stock markets around the world, increasingly unsure which way up might be, and not helped by the remarkably bad advice they’ve been getting from self-styled know-nothing “experts” both in and out of the media. It's not over yet.