The President’s re-election (More Discussion IV)

In a number of recent posts I set forth a long, and I believe very useful, discussion between Roger Streit of West Orange, NJ and me.

I urge the reader to review that discussion as previously set forth in my posts "The President’s re-election (Discussion)" where I set forth at its beginning exchanges with various people, but near its end my discussion with Roger commences. This discussion continued at length in my post "The President’s re-election (More Discussion)"

However, I then published my exchange with Albert Nekimken, of Vienna Virginia, who had commented on the exchange with Roger in my posts entitled "The President’s re-election (More Discussion II)" and "The President’s Re-election (More Discussion III)."

In the following three posts I digressed from this stimulating discussion. I now want to share the rest of it with my readers.

On November 28, 2012 where after having watched a Paul Krugman / Joseph Stiglitz discussion on C-Span, which Roger recommended to me, I wrote to Roger:

I want to comment on the Krugman/Stiglitz discussion. Krugman used WW II as an example of running up a large deficit that stimulated the economy. He didn't say, and I don't know, (nor do I want to research it) how large the deficit was as a percent of GDP going into the war, nor how large it was at its end. But by his logic we could deal with our present economic problems by quadrupling the budget of the defense department even without a tax increase. I know he wouldn't favor that, but if what he says is true, that is one thing Republicans would go for. So it seems that this would be an easy political solution.

This was never responded to directly, but on December 2nd Roger called my attention to a post by Timothy Egan in the New York Times that can be accessed here, and quoting from that column called my attention to this statement in the column:

Liberalism, in the broadest sense, is about expanding human rights and opportunity, while embracing science and reason.

My response was lengthy! (Brevity isn’t my strong suit.)

I have no problem with that definition. It is too bad that the general public doesn't see it that way. Too discuss why would require a dissertation by itself, so maybe another time.

As for the column as a whole, I think he is too easy on the Republican Party. Since as early as 1876, Republicans gave up their only saving grace as the party of Lincoln. 

"Reconstruction was brought about in the disputed 1876 Presidential election. The Democratic candidate, Tilden, won the popular vote, but neither candidate initially had a majority of electoral votes due to disputes over returns in Florida, Louisiana and S. Carolina--the only states in which federal troops were still stationed in 1876. Although they were not numerous enough to stop white intimidation of black voters, the troops were considered an affront by white Democrats. In back room negotiations, Democrats conceded the disputed election returns to Hayes in return for his agreement to withdraw the remaining 3,000 federal troops, thereby putting a formal end to Reconstruction and assuring Democratic control, based on a platform of white supremacy and black disenfranchisement, throughout the South.” See here. While they had some "liberal" or "progressive moments" after that, they were more aberrations, than real party policy, e.g. Teddy Roosevelt was not popular in the Republican Party. They hated his progressive agenda when he was governor of New York and so to get rid of him, they kicked him upstairs to V-P, figuring he could die on the vine there. This backfired when President McKinley was assassinated and Teddy Roosevelt ascended to the Presidency. 

Along the way there were some real progressive Republicans, such as Morse of Oregon, La Follette of Wisconsin, Hiram Johnson in California, Charles Evans Hughes of New York, and later Jack Javits of New York, and Chase of New Jersey, but they were always a minority.

Nixon supported some progressive things such as the Environmental Protection Agency and even proposed a national health insurance plan, but he was always a political opportunist and was the architect of the Republican Southern Strategy. The Republican Party is and always has been the Party of the rich, and its alliances with racists, theocrats, and misogynists, is opportunistic. But they can't shed them and survive.

After this digression, Roger returned to the main theme, by citing Krugman’s blog and added:

Anyway, my own answer is still what it has been all along: the time for austerity is when the economy is close enough to full employment that the Fed is starting to raise rates to head off an undesirably high rate of inflation; at this point, given the case for somewhat higher inflation, I’d say that we shouldn’t even think about this until unemployment is well below 7 and falling fast. At that point you can, in effect, make a deal — fiscal austerity in return for not hiking rates — that leaves the economy harmless.

And went on to quote from one Paul Mathis:

Since the focus of policy over the past three years has been almost entirely on the federal debt and the implicit danger that its size represents, there has been relentless fear mongering by conservatives about an unspecified danger somewhere in the future that will cause our economy to collapse. Therefore, austerity right now is essential to prevent this calamity regardless of the consequences for economic growth and employment. 

Liberals have been no help in negating this fear mongering because they have agreed, without evidence, that the federal debt is "unsustainable" and must be reduced. In fact, liberals have proudly pointed to the reductions in federal spending that have already occurred, e.g., the wage freeze for federal employees that has gone on for more than 2 years already. 

Those who have said that the federal debt is no problem because interest rates are at historic lows and that any debt, if necessary, can always be repaid with newly "printed" money are derided for "enslaving" us to the Chinese who "own" us and control our future. 

So the bottom line, as usual in American politics, is racism in the form of xenophobia against the Chinese. Against that derangement, we all contend in vain.”

To which my reply was:

While the Chinese have been a whipping boy, it is not fair to blame Republicans entirely for this. To a very large extent, the attack on the Chinese was started by the Labor Unions, who stupidly wanted to stop globalization. They started the campaign against globalization under the Clinton Administration when they vigorously opposed the North American Free Trade Agreement with Mexico, a treaty that has benefited both the US and Mexico. In fact Obama kind of bought into this when he kept talking about jobs shipped overseas. Jobs shipped overseas are an inevitable consequence of globalization, which can no more be stopped, than could the industrial revolution, which the unions also vigorously opposed, resorting to breaking machinery, which is where the term "sabotage" comes from.

Don't get me wrong, I am for unions, but they are often their own worse enemy.

As for the Chinese, it is wholly a stupid argument, no matter who employs it. "China, it turns out, holds less than eight percent of the money our government has borrowed over the years...But politicians like to find an external enemy to rally the troops against, and China is an easy target." 

To which Roger asserted:

…you have bought into the fear of economic calamity because of “unsustainable” deficits.  Krugman says there has never been a collapse of a country with its own currency.

To which I cited:

Argentina.

Roger went on to say:

We can print money when necessary and we can raise taxes and slow spending when the economy is overheating.

And I forcefully pointed out:

Like so many, you simply ignore arguments and facts that don't fit your predilections. In my last e-mail I pointed out the inflation under Nixon and Carter that was caused by the huge deficits during the Johnson Administration's policy of bread and war.

I also asked why; if deficits are the solution, why not simply create a huge deficit by not raising taxes and exploding the Pentagon budget. No response!

Comments, questions, or corrections, are welcome and will be responded to and distributed with attribution, unless the writer requests that he/she not be identified.