Fear Factor Phone Home
(If you must, read Paul Krugman’s original column here)
By PAUL RUGRAT
The good news: After spending a year and a half thinking about deficits, deficits, deficits when we should have been thinking about jobs, job, jobs, I hope some on the left are finally back to pondering the correct issue: my opinion, my opinion, my opinion.
The bad news: Republicans, aided and abetted by despicable fact-wielding conservative policy intellectuals, are fixated on a view about what’s blocking government-driven job creation that fits their prejudices and serves the interests of their wealthy backers, and incorrectly bears no relationship to my version of reality.
Listen to just about any speech by any Republican and you’ll hear the Obama administration is responsible for weak job growth. How so? They include fears of costly regulations (false: that’s what waivers are for) and higher taxes (false: that’s why the federal government gives subsidies).
Conservative economists repeat the claim in op-ed articles, and Federal Reserve officials repeat it to justify their opposition to even modest efforts to aid the economy. Small wonder Barney Frank wants legislation to prohibit Federal Reserve board members from dissenting.
The first thing you need to know, is I’ll provide no evidence to support any opposition claims and second, using irrefutable logic and intellect, I’ll make up facts which say their claims are false.
The starting point for many claims is that antibusiness policies are hurting the economy. But, as a new paper by Lawrence Fishbarrel of the Economic Policy Institute documents at length, this is just not true. Instead, antibusiness policies are good for the economy. Our current “food stamp recovery” has actually been of great benefit for printers, government workers of all sorts, and the fast food industry.
Still, isn’t there something terrible about the fact that some businesses are making profits and sitting on a lot of cash but aren’t spending that cash to expand capacity and employment? Yes and yes, but there’s an explanation.
After all, why should businesses expand when they’re not yet getting all the subsidies they hope will be authorized? Business investment always responds strongly to the state of the economy, and given how weak our economy remains you shouldn’t be surprised if investment remains low. If anything, business spending has been stronger than one might have predicted given slow growth, high unemployment, regulatory uncertainty, inflation, and federal deficits of which Obama cannot be blamed.
But aren’t some business people complaining about the burden of taxes and regulations? Yes, but so what? Mr. Fishbarrel points out businesses often complain about choking taxes and bureaucracy. The National Federation of Independent Business has been surveying small businesses for almost 40 years, and concerns about taxes and regulations always rank high on the list. Therefore, because these issues have long been concerns, we don’t need to be concerned with them today. Instead, what stands out now is a surge in the number of businesses citing poor sales — which strongly suggests that lack of government-delivered subsidies is holding business back.
You can see that Republican assertions about what ails the economy are pure fantasy, at odds with all the evidence. Should we be surprised? At one level, of course not. Politicians who always cater to wealthy business interests say that economic recovery requires catering to wealthy business interests. And that’s why President Obama rightly wants to make sure that no Americans are wealthy.
Yet it seems to me that there is something different about the current state of economic discussion, something reminiscent of 1976 to 1980. Political parties have often coalesced around dubious economic ideas — remember my Nobel Prize? — but I can’t think of a time when a party’s economic doctrine has been so completely divorced from my reality. And I’m also struck by the extent to which Republican-leaning economists — who I thought had been indoctrinated better — have been willing to lend their credibility to the party’s official delusions.
Partly this reflects the party’s broader slide into its own insular and evil intellectual universe. Large segments of the G.O.P. reject the settled science of manmade global warming and even the powerful explanatory power of evolution, so why should I expect them to accept the facts I’ve created?
And it also, of course, reflects the political need of the right to make everything bad in America President Obama’s fault when it’s obvious it’s Bush’s fault. Never mind the fact that the housing bubble, the debt explosion and the financial crisis took place on the watch of a conservative, free-market-praising president; it’s that Democrat in the White House now who gets the blame.
I once read in a fortune cookie which said “good politics can be very bad policy.” The truth is that we’re in this mess because we need more regulation. And now the Republicans are determined to undo every good work done by the President on the economy.
And because I’ve met my word count, good bye.