Sunday, February 24, 2013

It’s the Jobs, Stupid: Economism and the Sequester

            President Obama devoted his weekly radio address to warning of the harm to the economy if Congress fails to avoid the budget sequester on March 1. The Republican response, by Sen. John Hoeven of North Dakota, said it was all Obama’s fault and the way to get the economy going is by creating jobs—for which the best recipe was to approve the Keystone oil pipeline. 
            In The Golden Calf, I tried to be bipartisan in accusing both Democrats and Republicans of being in thrall of the false ideology of economism. Since the book appeared and since the 2012 elections, it’s harder to appear even-handed in my comments. While they have yet a long way to go, Democrats are at least calling out the Republicans on their ideological excesses. The Republicans, with the Tea Party apparently fully in control, have by contrast become even more wedded to economism’s view of the world.
            As it seems more and more likely that the dreaded sequester (originally designed as something so terrible that neither party would actually allow it to come into effect) will actually happen, pundits have been rushing to reassure us that it’s not that bad after all—that it would not throw the nation’s credit rating into a tailspin the way the fiscal cliff threatened. Well, not that bad or that bad, take your pick, but no one seems to dispute that it would throw a bunch of people out of work as a result of across-the-board cuts in government spending. In an economy only slowly recovering from a major recession, and where the recovery in the job market has notably lagged behind the rest, that seems a dumb move, especially for a party that loves to attach the epithet “job-killing” to every piece of legislation they oppose.
            What is going on here seems to be a central tenet of economism—that taxes and government are automatically bad and that private enterprise is always good. This means that if government jobs are eliminated, that is always a good thing, no matter what the short term consequences. If you go with the supply-side version, cutting back government jobs will mean cutting taxes, which will mean more money in consumers’ pockets and more money in corporate coffers, which always in the end means more jobs in the private sector than ever would have happened with higher taxes and more government regulation. So any short-term loss of government jobs is only a small and temporary price to pay for long-term prosperity. The fact that the economism recipe has, in the past four decades, failed to produce the promised prosperity for anyone but the fabulously wealthy is conveniently set aside.
            When I hear devotees of economism denouncing government jobs and extolling private-sector jobs, I always think of the local grocery that I frequent. People fill their shopping carts and head to the checkout lines, carrying the wads of cash they need to buy the groceries—a steadily increasing wad of cash, which I keep puzzling over as everyone says that inflation is dead. I imagine the store manager walking up and down among the checkout lines demanding to see the color of the customers’ money.
            The folks with decent, good, private-sector jobs have bright green money, and those the manager welcomes heartily and waves through to the head of the line. But those who are cursed with government jobs—at least the way economism sees it—carry a different color of money altogether. It looks gray and slimy. The manager sees that money and says, “Yuk! Don’t bring that slimy yukky money into my store! Get out!”
            Of course this economism nightmare world is not the way the store works at all. Somehow, those with government jobs and those with private-sector jobs get paid with the same color money. And the grocery manager is happy to see all the money, no matter what the source, come into his store. And when that money is spent it creates more jobs all up and down the line. And the economy (at least temporarily) gets a boost.
            But the die-hard economism champion protests that the private-sector job is real work, while the government job is silly make-work, not a real job at all. Tell that to a policeman or fireman. Tell that to an elementary school teacher. Tell it to a food safety inspector.  Or tell it to the clerk at the IRS whose processing of your tax form stands between you and your refund.
            How firmly economism sits in the Republican driver’s seat is indicated by one aspect of the sequester.  The people who invented this instrument, who in hindsight appear to be such political geniuses (not), figured out that one of the things that made it foolproof was that it cut both domestic programs (which the Democrats would never stomach) and the defense budget. Republicans always rise to defend Pentagon spending, assuring their cooperation with Democrats to do something sensible to cut the deficit in order to avoid the sequester.
            What happened? Well, it’s probably complicated, since recent polls, we’re told, show that defense budgets are quite unpopular with the American public just now so a politician voting to reduce defense spending may not be taking on much of a risk.  But added to this is economism. The Republican Party has apparently gone so far down the road of ideological opposition to government spending and government jobs of any sort that even the once-sacred Pentagon budget is no longer safe from them.
            And so we end up with the spectacle of a Republican senator saying that what we need to bolster the economy is more jobs, and then, apparently, preparing to vote to lay off thousands of workers. Economism tells us that this is perfectly logical.

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