Deficit Politics: Harry S Truman Meets Ayn Rand


We have no clue what President Obama plans to propose in his big speech on  federal finances  today, but before he starts flapping his gums, we suggest that he re-read Harry S Truman’s famous 1952 speech to the convention of Americans for Democratic Action:

I’ve seen it happen time after time. When the Democratic candidate allows himself to be put on the defensive and starts apologizing for the New Deal and the Fair Deal, and says he really doesn’t believe in them, he is sure to lose.

The people don’t want a phony Democrat. If it’s a choice between a genuine Republican, and a Republican in Democratic clothing, the people will choose the genuine article, every time…

Truman’s sage observation came to mind as we watched the recent spectacle of Obama performing a jubilant victory lap on behalf of his agreement with Republicans to cut $38.5 billion from the federal budget.

Once again, the president seemed obsessed with conciliation at any price in the process of politics  — but thoroughly unaware of the difference between accommodation and appeasement on policy, or of the distinction between compromise and concession on matters of principle.

Having caved to Republicans last year by agreeing to extend Bush-era tax cuts for the wealthiest Americans, Obama was at it again last week; rewarding the GOP for its threat to shut down the government, he handed them yet another victory by agreeing to a level of cuts that not only fell beyond the mid-point between the positions of the two sides, but that went beyond what the Republicans had asked for. Bill Clinton 1995, he ain’t.

The triumph of defeat: In both cases, Obama celebrated the mere fact that a compromise was reached, never mind that both “agreements” exacerbated the economic problems they purported to address.

The hundreds of billions in tax breaks that Obama delivered to billionaires  will not only deepen the deficit, but also accelerate the ongoing massive transfer of wealth to a tiny group of the wealthiest taxpayers; the tens of billions in discretionary funding cuts that he celebrated as “historic” will further contract a battered economy in the early stages of recovery, inflicting more pain on those most damaged by the recession.

As a political matter, by far the worst aspect of Obama’s actions is his acceptance of the GOP’s fact-free, ideological narrative about the economy: 1) that the federal deficit represents an imminent “crisis” (the current problem is not the debt, but unemployment); 2) that resolution of this “crisis” requires a heavy dose of austerity in public spending (the government should be putting money into the economy, not taking it out); 3) that all of this together somehow adds up to “shared sacrifice” that will fix the recession in a jiffy (it won’t).  Paul Krugman writes:

More broadly, Mr. Obama is conspicuously failing to mount any kind of challenge to the philosophy now dominating Washington discussion — a philosophy that says the poor must accept big cuts in Medicaid and food stamps; the middle class must accept big cuts in Medicare (actually a dismantling of the whole program); and corporations and the rich must accept big cuts in the taxes they have to pay. Shared sacrifice!

Who is John Galt? In his speech today,  Obama is expected to address the Republicans’ new, uber-austere budget plan, put forth by Rep. Paul Ryan, R-Wisc., the GOP’s designated Serious Person on this stuff. Among other things, the budget calls for beginning the process of privatizing Medicare.

Whatever contrasts or tough talk the president may trot out about the plan now, however, the clear and present danger is that by the time the deal goes down, Obama will once again accept wrong-headed ideas  from the right-wingers that Ryan represents — all so he can whoop it up over reaching yet another compromise.

The best take on Ryan’s program comes from Jonathan Chait over at Daily Beast, who notes that Ryan is a seriously smitten acolyte of Ayn Rand.

The Tea Party began early in 2009 after an improvised rant by Rick Santelli, a CNBC commentator who called for an uprising to protest the Obama administration’s subsidizing the “losers’ mortgages.” Video of his diatribe rocketed around the country, and protesters quickly adopted both his call for a tea party and his general abhorrence of government that took from the virtuous and the successful and gave to the poor, the uninsured, the bankrupt—in short, the losers. It sounded harsh, Santelli quickly conceded, but “at the end of the day I’m an Ayn Rander.”

Ayn Rand, of course, was a kind of politicized L. Ron Hubbard—a novelist-philosopher who inspired a cult of acolytes who deem her the greatest human being who ever lived. The enduring heart of Rand’s totalistic philosophy was Marxism flipped upside down. Rand viewed the capitalists, not the workers, as the producers of all wealth, and the workers, not the capitalists, as useless parasites.

John Galt, the protagonist of her iconic novel Atlas Shrugged, expressed Rand’s inverted Marxism: “The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains.”

In 2009 Rand began popping up all over the Tea Party movement. Sales of her books skyrocketed, and signs quoting her ideas appeared constantly at rallies. Conservatives asserted that the events of the Obama administration eerily paralleled the plot of Atlas Shrugged, in which a liberal government precipitates economic collapse.

One conservative making that point was Ryan. His citation of Rand was not casual. He’s a Rand nut. In the days before his star turn as America’s Accountant, Ryan once appeared at a gathering to honor her philosophy, where he announced, “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand.” He continues to view Rand as a lodestar, requiring his staffers to digest her creepy tracts.

The class tinge of Ryan’s Path to Prosperity is striking. The poorest Americans would suffer immediate, explicit budget cuts. Middle-class Americans would face distant, uncertain reductions in benefits. And the richest Americans would enjoy an immediate windfall. Santelli, in his original rant, demanded that we “reward people [who can] carry the water instead of drink the water.” Ryan won’t say so, but that’s exactly what he’s doing.

Amid widespread criticism of the Ryan plan, it’s  instructive that even mainstream conservative economists — who nowadays risk being tagged as liberal sell-outs by the wing-nut zealots whom Obama and the Democrats have allowed to redefine the mainstream far to the right – are highly critical of the Ryan budget.

As David  Stockman, President Reagan’s first budget chief, described the plan in an interview with Talking Points Memo:

“It doesn’t address in any serious or courageous way the issue of the near and medium-term deficit,” David Stockman told me in a Thursday phone interview. “I think the biggest problem is revenues. It is simply unrealistic to say that raising revenue isn’t part of the solution. It’s a measure of how far off the deep end Republicans have gone with this religious catechism about taxes.”

A neo-con Manchurian Candidate: Amid the constellation of possible reasons, psychological and political, for why Obama folds so easily – he doesn’t have stomach for conflict, he’s a born academic and badly miscast as a chief executive, he really is the Manchurian Candidate…for the Republicans – the most charitable comes from Kevin Drum over at Mother Jones:

I suspect Obama really is a long-term deficit hawk and figures that the current budget battle, though not really of his choosing, can be turned to his advantage. He’s agreed to cuts but has also shown that he’ll fight against crazy cuts, and he thinks that will help him take the high ground when he unveils his own long-term deficit program on Wednesday.

Well maybe, but in any case, there are several other, much broader issue at work here as well.

In our recent discussions of the growing inequality of wealth distribution to the richest 1% people in the U.S., a key point that we haven’t raised is this: much of the elite political class involved in forging the policies that have aided and abetted this vast economic shift are themselves members of the privileged 1% – from the billionaire club of the U.S. Senate to former members of congress who strike it big on K Street and the insufferable unctuous pundits who drone about the need for sacrifice by union workers while pulling down multimillion-dollar salaries.

In his signal essay on the subject, Nobel economist Joseph Stiglitz writes:

Wealth begets power, which begets more wealth. During the savings-and-loan scandal of the 1980s—a scandal whose dimensions, by today’s standards, seem almost quaint—the banker Charles Keating was asked by a congressional committee whether the $1.5 million he had spread among a few key elected officials could actually buy influence. “I certainly hope so,” he replied. The Supreme Court, in its recent Citizens United case, has enshrined the right of corporations to buy government, by removing limitations on campaign spending.

The personal and the political are today in perfect alignment. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent.

When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.

The bottom line question: Viewed in this way, the debate over economic issues in Congress goes far beyond how or whether to cut the deficit, the implications of competing tax policies, and even projections about the future viability and operation of Social Security and Medicare.

Rather, it is fundamentally about whether the U.S. will be a society of common interest and unity, or a society of Ayn Rands.

The current confrontation between parties and ideologies is over the role of government. But even more deeply it is a foundational disagreement over whether we are a society, a community, or whether we are a collection of individuals inhabiting the same geographical space…

In a perfect world we would have a great debate throughout the nation, not just in Washington, over the issue of whether we are a society, a national community, and, if so, what role we wish the national government to bear in maintaining that community.

Alas, we do not live in a perfect world. So we let our elected officials struggle over budget cuts that are but symbols of our deeper dilemma and our unresolved definition of who we really are. Two hundred and twenty years should have been enough time to have resolved this question.

Not even close.

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There are 3 comments for this post

  1. avatar hclark says:

    If only Wesley Mouch was real. At least then there would be two sides to this. Let’s hope (sorry, didn’t mean to use that one) the speech has some vinegar.

  2. avatar tonyseton says:

    It seems that the only way to clean up this mess is to remove the money from politics. And since Congress is already bought, the only way to effect this change is for the state legislatures, forced by the people, to change the US Constitution. The 28th Amendment should eliminate private funding of all federal and state elections and prohibit the purchase of politcal air time on federally-licensed broadcast outlets. With a new and honest Congress, we might them restore the tax rates from 1962 and that would eliminate 90% of the greed run amok.

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