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View Diary: Krugman Spins It A Bit In: “The Stimulus Tragedy” (134 comments)

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  •  In a very real sense it IS water under the bridge (7+ / 0-)

    And it was indeed a lost economic and political opportunity that haunts us.  For example, while heartened that the President apparently is done dealing with Congressional Republicans on the budget, etc. because of their intransigence, that move comes about 5 years too late.  To put it bluntly, he and a lot of Democrats could have strangled that Tea Party baby in the crib had they just told the GOP to pound sand the first time the GOP showed it had no interest in compromise.

    But I think Krugman is just being a realist at this point.  He could certainly be shouting, "I told you so", because he predicted the weak impact an inadequate stimulus would have back in 2009.  Maybe Krugman could have said the stimulus was "better than nothing, but not by much" rather than "good but not good enough", but he is not the one we should be taking to task.

    So what's to be done now?  Severely thinning the ranks of Republicans in Congress would be a terrific start, because it is the Republican Party that is the biggest deadweight on our economy and the biggest threat to our nation's future.  That should be the focus.

    •  Water under bridge means mistakes are recognized (7+ / 0-)

      and attempts are made to rectify them.  I've never seen any recognition of the colossal (both economic and political) errors that were committed in 2009-10, much less attempts to remedy them.  If a spouse has been gambling away the family nest egg for years, and said spouse continues to do so, that's not water under the bridge.

      EVERYONE on this site wants to thin the ranks of the GOP in both houses.  At present, however, I don't see anything remotely approaching a coherent party strategy for doing so.  I don't even see the Senate Dems, as a bloc, bringing minimum wage (a focal point of the SOTU) to the floor and forcing the GOP to take the politically unpopular move of filibustering against it.

      Exactly what issues and themes are Dems running on this year that should help thin GOP ranks?

      Some men see things as they are and ask why. I dream of things that never were and ask why not?

      by RFK Lives on Fri Feb 21, 2014 at 08:43:53 AM PST

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    •  The biggest deadweight is Republicans? (3+ / 0-)

      I was going to write that the biggest deadweight is Wall Street and the speculative casino it runs, but actually, they're worse than deadweight; they're active agents of destroying and extracting wealth from the real economy.
      So, yeah, I suppose it's more accurate to describe the Republicans as "deadweight," so long as at the same time we describe Wall Street as worse than deadweight.  

      My point, of course, is that in terms of economic policies, the Democratic Party is really not that much better than the Republican Party. With the Democratic Party we got a mitigated disaster; with the Republican Party we would have gotten an unmitigated disaster.

      The real problem we have to solve is to restore the idea of the general welfare to economic policy making and implementation. As I have argued repeatedly over the past few years, a central idea of the classical republicanism the US was founded on is a hostility to concentrated power, both political and economic. Classical republicanism warns that the rich will usurp the government if allowed to, and use the powers of the state to enrich themselves, and protect and extend their power and privilege. But the left is increasingly abandoning any pretense of respect for the founding principles of the U.S., and arguing instead that the U.S. republic is inherently flawed as an exploitative capitalist system from the outset. This view totally ignores the voluminous warnings about the dangers of concentrated economic power at the beginning of our republic. The left is now well embarked on a path to unmitigated political disaster.

      So, you have the status quo Democrats like Obama and Rahm Emanuel on one hand, who squandered a historic opportunity to shift the balance of power from Wall Street to the citizens of the republic, and on the other hand you have the activist base of Democrats who have turned their back on the founding ideas of republicanism and are embracing the failed nostrums of socialism.

      Lawrence Goodwyn, author of the book,The Populist Moment: A Short History of the Agrarian Revolt in America, passed on a few months ago. I have received permission from his widow to start putting the book on line. Goodwyn's work is all the more remarkable because while it provides a detailed blueprint of how the Populists built a movement to challenhe concentrated economic power in the United States, his work also included a strong critique of socialism as well. For Goodwyn, the most important human struggle was not capitalism versus socialism, but the people versus the powerful and privileged. Or, in terms I prefer, democratic republicanism versus oligarchy. Socialism, Goodwyn saw, was just as terribly flawed as capitalism, and as ideologically rigid as the worst conservatism. Quite simply, Goodwyn noted, socialist societies were just as prone as capitalist ones to create oppressive regimes of hierarchical power: "the history of successful socialist accessions to power in the twentieth century has had a common thread-victory through a red army directed by a central political committee. No socialist citizenry has been able to bring the post-revolutionary army or central party apparatus under democratic control..." Discussing the collapse of populism following the 1896 election of Bryan versus McKinley, Goodwyn wrote, "socialists reacted to continued cultural isolation by celebrating the purity of their 'radicalism.' Thus individual righteousness and endless sectarian warfare over ideology came to characterize the politics of a creed rigidified in the prose of nineteenth-century prophets." Thus, it was naturally Goodwyn's next major endeavor to study, measure, and explain the revolutions of Eastern Europe in the 1980s. And in 1991, Goodwyn gave us Breaking the Barrier: The Rise of Solidarity in Poland.

      But back to the discussion at hand - the point that Democratic elites are almost as disastrous on economic policies as Republican elites are. I am further in debt to Goodwyn, because it reminds me of the disaster Populists faced in the 1896 election, as the national discussion of real economic and financial reform was submerged by the issue of "free coinage of silver."

      Here's part of the next to last chapter, "The Movement versus the Silver Lobby," in Goodwyn's book, The Populist Moment:
      But, as veteran populists viewed matters, two things were wrong with the free silver assessment, and they both pointed to one conclusive reality: it would destroy the people's movement… Since both old parties were in harmony with monopoly, it was necessary to restructure the party system in order to restructure the nation's financial and economic system. That was why the People's Party had to navigate between the sectional barriers of the two old parties and recruit voters from both by hewing to "the middle of the road and "fighting it straight." Indeed, that was what the Omaha Platform was all about. Even granting the highly debatable proposition that a free silver platform might achieve permanent party realignment, no thoughtful person had any illusion that it would address the underlying economic objective. In fact, by so sharply defining the limits of reform, a victory on the basis of a silver coalition would actually preclude the possibility of attaining significant alterations in the prevailing forms of the American monetary system. Free silver did not alter the existing banking system, nor did it end the destructive privilege national bankers enjoyed through their power to issue their own bank notes on which they gathered interest. Mid-roaders regarded this post-Civil War folkway as a veritable license to steal. Silver coinage elevated the folkway into a system; worse, by deflecting debate from the banking system itself as the proper object of reform, free silver actually undermined the greenback cause. What did silver coinage have to do with a flexible currency, for example? While "unlimited coinage at the ratio of sixteen to one" might end the contraction of the currency--if the silver mines held out long enough--it did not provide a flexible monetary system keyed to population expansion and industrial growth. Indeed, it did not even alter the metallic basis of the currency--for silver at a sixteen to one or at any other ratio was a coin of ultimate redemption. Though silverites seemed unable to ponder the monetary system long enough to think the matter through, hard-money inflation that left the banking system undisturbed utterly failed to address the real needs of the nation's producing classes. Anyone could see that free silver provided neither land loans nor commodity loans. Veteran Alliancemen and reform editors summarized their case by reminding party politicians that free silver was a palliative that would ward off the liberating triumph of a fiat currency. In terms of a decisive monetary breakthrough under capitalism, free silver had therefore become a step backward.

      The second objection to Populist-Democratic fusion turned on the need to rescue the democratic process from the permanent corruption that was rooted not only in the monetary system, but also in the power of large-scale capital to shape the substance of American politics. In not the slightest way did silver address the accelerating movement toward industrial combination. As John D. Rockefeller had conclusively demonstrated in the course of creating the Standard Oil Trust, railroad networks were a central ingredient both in the combination movement itself and in the political corruption that grew out of monopoly. Silver coinage utterly sidestepped the whole matter of government ownership of the railroads. What were silverites proposing--that railroad lobbyists begin buying state legislatures with silver coin instead of gold? Would that noticeably improve the level of ethics in the United States Senate? Mid-roaders could summarize all their arguments by asserting that the ultimate monopoly was the "money trust," a banking system of private plunder anchored in a metallic currency and assured of Power because it owned both "Sound-money" parties. "Free silver" was irrelevant to all of these realities; it did not address corporate concentration.

      Now, like then, a failure to understand that the key problem is the structure of the monetary and financial systems, leads directly to an utter inability to conceive of, let alone enact, the types of far-reaching reforms needed to restore balance to the national economy. And then, like now, other issues are used to divert people's attention for the key problem. Like Chris Hedges observed a couple years ago, the problem is no one has the option to vote against the interests of Goldman Sachs. I have told my Congressman, the handful of times I saw him an local Democratic Party functions that past few years, that there will never be an economic recovery until Wall Street is destroyed. It shocked and terrified him, and he looked wildly about for a way to escape. But I stand by the prescription. And some people here at DKos still object when I make that point. They are today's version of silverites - unable to see the problem, or the stakes involved.


      A conservative is a scab for the oligarchy.

      by NBBooks on Fri Feb 21, 2014 at 10:37:09 AM PST

      [ Parent ]

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