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Cross-posted at MN Progressive Project. State Rep. Kurt Bills supported and was supported by Ron Paul for the Republican US Senate nomination and has become the nominee. He's a high school economics teacher who refuses to believe anything not found in a Paul newsletter. Pity his students.


I wonder if there's a ready-made web site template for Republican candidates. I don't mean merely a wrapper to go around the content, but the common talking points atop of which the candidate's photo and logo get tossed. Come with me to Kurt Bills' issues page, if you can stand a mixture of "that's just wrong" and "ugh, that's just wroooong!".

Right at the start, Bills says:

The United States Senate should pass a budget; they haven’t since April 29, 2009, which is over 1,000 days.
What does Bills think the Budget Control Act is? Let's call this one half-true, because there hasn't been a budget resolution, but a resolution is just a sense of congressional opinion. The Budget Control Act (BCA), the deal that ended the Republicans' debt ceiling crisis, is actual law. Call it a super-budget, or a budget on steroids, but you can't pretend it isn't the passing of a budget. Those defense sequestrations coming at the end of the year that have the congressional Republicans in such a tizzy --- part of the BCA.

Bills also claims, "Federal spending per household has grown more than 150% since 1965." In what sense? In absolute dollars? I would assume it's more than that. In inflation adjusted dollars? Maybe. That was right before Johnson's escalation in Vietnam, and we're still at war, so maybe. Relative to GDP? We had a healthy economy in 1965, and now we're still recovering from the Great Recession, with reduced government revenues and stabilizers still high (like food stamps and unemployment insurance) so that sounds feasible, but there's still the question, why are we having to guess at what he means? Did Bills just pull this number out of his butt? He doesn't seem that original, and looking for the number on the web, it can be found at the usual conservative outlets, so, I conclude Bills didn't just pull this out of his butt. He pulled it from someone else's butt.

The next section is about the Federal Reserve and inflation. There isn't a call for abolishing the Fed, which must be damned annoying to the other Paulites to whom that's an article of faith, and no one on the left disagrees with auditing the Fed, but does Bills know that's already the law and already being done? Beyond that, the whole section is basically incoherent:

Federal Reserve Bank - Prices are signals. The price of money is known as the interest rate. It is the most important price in a free enterprise system. The policy of printing more money decreases interest rates and the value of our dollar. This affects the ratio of dollars in circulation compared to the amount of goods and services available. It is the root cause of inflation and the business cycle. Monetary policy and devaluation of our dollar is a GIANT that we face. We all work for, spend, invest, or borrow money. Printing money causes the most regressive form of taxation…the inflation tax. Stealing the purchasing power of working class people by printing money keeps interest rates low and encourages people to go further into debt rather than save. This is one of the most morally corrupt policies I have witnessed in my study and teaching of economics. The solution is to audit the Fed and, at minimum, change its dual mandate from promoting full employment AND providing price stability to simply promoting price stability. I will work for a stronger approach to allow working class people to be paid in wages that maintain or grow their purchasing power.
What's worse, that he thinks he needs to explain what inflation is like it's his high school class, or that he gets it so wrong? What next, a history teacher who laments that no one in the past wrote down what happened?

Here's how to cut through the clutter of inflation hysteria: what's the rate of inflation? Pretty close to zero. Quite the contrary, with the crisis leading to a steep drop in demand, the threat was deflation. How do you fight deflation? Print money. Yes, this is inflationary --- that's the point. Inflation is a problem, when it's high. When it's 1%, not so much. Hyerinflation fearmongers like Bills have been predicting hyperinflation for at least as long as the federal government and Federal Reserve have been coping with the financial crisis and Great Recession by bailing out failing industries and stimulating the economy through fiscal stimulus and lower interest rates. At some point, can't even Bills, allegedly an economist, admit inflation didn't happen? That their predictions about the effects of Obama's and the Fed's policies have been consistently wrong? That we were right to worry about lack of demand, high unemployment, and deflation?

It doesn't seem complicated: Bills says government policies should produce a certain effect, and the opposite happened. Will ideology give way to facts? And this guy teaches economics. Pity his students. And no, I didn't say "incoherent" as hyperbole. How would auditing the Fed stop inflation, even if there were any? How would reducing the mandate to just fighting inflation help the working class whose purchasing power he says is being stolen when not only isn't inflation our problem, but does he think unemployment doesn't erode purchasing power? Not just the unemployed see their purchasing quickly reduced, but high unemployment drives down wages (that deflation thing we actually have to worry about). If Bills is serious about "I will work for a stronger approach to allow working class people to be paid in wages that maintain or grow their purchasing power," he'll seek to actually raise their wages. It's not like we don't know how to do it.

Let's be generous, and leave open the possibility this was written not by Bills, but by some staffer who didn't really understand what Bills was trying to say, and nobody is checking the web site content. That's at least more fixable than an economist in denial of economics.

On healthcare, Bills says:

Obamacare, Medicare, and Medicaid are not self-sustaining programs. Obamacare is becoming an even greater infringement on our rights and economy than we ever imagined. Medicare and Medicaid often only reimburse hospitals and other medical facilities for half of the actual medical expenses for treating patients. To compensate for the lack of payment of these medical claims and to stay in business, these health care providers raise their fees for everyone, which negatively affects the efficient and affordable cost of care for all of us. I will work to slow down and eliminate mandates that expand control over the private healthcare system. Doing so will drive costs down, improve services and provide the patient with control.
"Obamacare is becoming an even greater infringement on our rights and economy than we ever imagined."  Considering his party imagined death panels, that quite the infringement. And what does "self-sustaining" even mean in this context? Maybe whoever wrote this paragraph should have switched with whoever wrote the prior section and improved the odds of coherency. Not only do government programs try to control the fees they pay, but every private insurer does too. Know who can't negotiate, and gets stuck with much higher fees? People without insurance. Yes, they get charged far more than insurance companies. Know what could fix that? Guaranteeing access to health insurance. Know what does that?

If you guessed "obamacare", you are officially better informed than whoever wrote Bills' issues page.

Switching to Social Security:

Given the current state of this government program, Social Security benefits will not be available to the young adults that are paying into it.
How much more wrong can one statement be? Seriously Bills campaign, start checking your talking points. If the trust fund runs out, with no changes being made before then, Social Security revenues will be roughly 75% of benefits it pays out. Coping would mean a huge sudden benefit cut, or equally traumatic tax increase, but payments would continue. It wouldn't stop, and that's a worst-case scenario. Dispute the preferable fixes as a matter of policy and philosophy, fine, but don't make up nonsense scenarios.

This was put under foreign policy:

With American and European debt crisis concerns, we must be vigilant not to allow international organizations such as the IMF to propel or catapult these monetary and fiscal issues to a magnitude that is irreparable. Reversing the course of debt and dependency should be our top priority as a nation
Does he really think the IMF caused the debt problems in developed economies? In underdeveloped economies, sure, the IMF was a big chunk of the problem. We, and the EU, weren't borrowing from the IMF. It's as if Bills, and to be fair this seems true of almost all conservatives, can't grasp that the debts and deficits on both sides of the Atlantic were caused by the financial crisis and bursting bubbles. The debt is the symptom, not the cause, and you'd think the way the debts exploded after the crisis, not before, and that some countries now in depression weren't even carrying government deficits and debts, would make that obvious.

On jobs:

The expenditures of the federal government are approaching 25% of total GDP under President Obama’s budgets. In 1930, federal spending was 3.4% of GDP and the average of government expenditures since World War II has been 18%. In order to grow private sector jobs, we must cut spending by the federal government. Don’t fall for the utopian plans of Democrats or Republicans who claim that they can “create jobs.” As a public school teacher, I know that the only way my classroom is funded is through a vibrant private sector economy. There is a role for government, however it is out of equilibrium with the private sector and has grown too large, crowding out private sector job growth. As a U.S. senator, I will work to get the government out of the way of the people.
Interesting he chooses to compare to 1930, because funny thing, that was the early days of the Great Depression, when conservatives had the presidency and Congress, and went all-out with austerity. How did that work out? Likewise for Bills' current prescription, "In order to grow private sector jobs, we must cut spending by the federal government." In other words, let's be like the Europeans, and do what has failed miserably and what both experience and theory tells us will fail. I like the way Marlys Harris phrased it at MinnPost, "...; reject the Keynesian model of economics as the basis for federal policy (which, let me tell you as a long-time financial reporter, is a lot like rejecting gravity);..."

Bills says "As a public school teacher, I know that the only way my classroom is funded is through a vibrant private sector economy," except an educated population is a prerequisite of a vibrant private sector, not a result. You don't get rich and then fund schools. You invest in education because it allows you to build your economy. Is there any wealthy nation with a healthy private sector that was wealthy before it built its education system? Or did they build schools first? It's really not that hard a question. No logic or philosophy needed. Just look and see which came first.

Sadly, when Bills says the government is crowding out the private sector, he shows the sort of grotesque ignorance that shouldn't be any more tolerable from an economist than a refusal to believe the moon landings were real would be tolerable in an employee of NASA. The private sector has plenty of cash. Bags and bags of cash. That might seem weird to a small business certainly, but for big business, they've maybe never had so much money. And they won't invest it. They won't hire, won't build new facilities, so just what private investment is the government crowding out? OK, the economy has been growing so business clearly isn't quite as unwilling to build and hire as it was, but there is still a lot of pent up cash, making the claim of crowding out false.

Under "Bureaucratic Growth", Bills has the closet thing in the whole issues page where there's a source. He refers to a 2009 USA Today article for his claim that federal employees make $123,000 on average. I think he's referring to this article, popular on the right because it confirms their prejudices about federal employees, despite a huge flaw. It does the classic media fake even-handedness by saying, "Public employee unions say the compensation gap reflects the increasingly high level of skill and education required for most federal jobs and the government contracting out lower-paid jobs to the private sector in recent years." Well, are the public employee unions right, or not? The reporter didn't say. As it happens, they're right. It's not a comparison of equivalent jobs. Civil engineers and accountants and IT workers are being compared to cashiers and busboys.

Bills provides no sources for his "facts", except in this one instance, where he grossly misinterprets it. Why? Because bloggers like me are likely to look it up? So as I complained about regarding his claim that federal spending per household rose 150%, we don't know where he gets his "facts", so we can't check them, but merely suspect they're nonsense.

On Housing, Bills says:

The housing market crash was just another great folly of the politicians and bureaucrats who think they can plan an economy better than the market can naturally guide it.
Conservatives are fond of blaming the housing bubble on government regulation. If someone wants to be skeptical that deregulation caused the bubble, that's one question, but that the bubble was preceded by deregulation, not additional regulation, is a simple matter of which came first. To refuse to admit this is denialism, which readers might be sensing is pretty common among Bills' issues. As it happens, we do know that the practices that caused the financial crisis were made possible only in the deregulation of 1999 (repeal of Glass-Steagel which prevented financial corporations from getting into other businesses, like commercial banks buying brokerages) and 2000 (the financial "modernization" act that deregulated derivatives).

More on housing, Bills says:

Even President Obama has called for the restructuring of Fannie Mae and Freddie Mac. Behemoth government sponsored enterprises need to be privatized and the trillions of dollars for which taxpayers are liable need to be taken off the public books.
What does he mean "even" Obama? Did Obama ever object do doing something with them other than just sticking them back out in the market as they are? The funny part is Bills seems to think Obama wants them on the government books. Sure, because these political headaches are so much fun. Maybe Bills thinks there's a buyer out there just wishing the government would sell its stock? Know what else is funny? Fannie Mae was founded during the Depression as a public entity, and privatized in the sixties to get its liabilities off the public books, just like Bills is calling for. Freddie Mac was created to provide a competitor. I won't directly connect that to the financial crisis because too much time passed, but I will point out that the GSEs (Government Sponsored Enterprises --- federally chartered corporations) operated in a deregulated environment just like other financial corporations. It was their sheer size, and the fact their business was mortgages which was exactly where the bubble burst, that forced the US Treasury to put them under receivership to avoid a collapse of the financial system --- thus how Fannie and Freddie became the government's property and problem.

Finally, one more of his issues isn't really an issue, but an attempt to make up his own definitions:

The greatest obstacle we face as a country is political virtue. Let me explain. Political virtue takes place when politicians make decisions based on self-interest rather than in service to the Constitution and people they represent.
No, "political virtue" is a literally ancient concept, about what constitutes virtue in politics. He's defining the opposite of "political virtue". What's just as interesting is that he's taking his philosophical musings and treating it like a current issue. Say what?

When I read that, my first reaction was this sounds like something a crank would write. Maybe I was primed to think that way, because I already saw him deny the basic order of events in the financial crisis, go off on inflation when there isn't any and our problem is more likely to be the opposite, reverse cause and effect in the relation between debt and a weak economy, and call for more austerity as if we hadn't been able to see it experimented with in real life with consistently disastrous results. Apparently, when ideology comes into conflict with results, it is results that must give way.

One clarification I want to make, to avoid a conflation of Bills and his supporters' positions: nowhere on his issues page did Bills call for either the abolition of the Federal Reserve or a return to the gold standard. His supporters at the GOP convention called for those things, but Bills hasn't, to my knowledge, which is why I didn't go after Bills for taking those positions.

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