Editore"s Note
Tilting at Windmills

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February 23, 2011

A RECIPE FOR A WEAKER ECONOMY.... If federal policymakers want to make the economy worse, on purpose, all they have to do is approve the Republican agenda. The Financial Times has this report today.

The Republican plan to slash government spending by $61bn in 2011 could reduce US economic growth by 1.5 to 2 percentage points in the second and third quarters of the year, a Goldman Sachs economist has warned.

The note from Alec Phillips, a forecaster based in Washington, was seized in the ongoing US budget fight by Democrats as validating their argument that the legislation approved by the Republican-led House of Representatives last Saturday would do significant damage to the US recovery.

Sen. Chuck Schumer (D-N.Y.) responded to the Goldman Sachs report, saying in a press statement, "This nonpartisan study proves that the House Republicans' proposal is a recipe for a double-dip recession. Just as the economy is beginning to pick up a little steam, the Republican budget would snuff out any chance of recovery. This analysis puts a dagger through the heart of their 'cut-and-grow' fantasy."

Well, one would certainly like to think so.

Remember, this analysis comes a week after additional research found that the Republican spending cuts could lead to roughly 1 million job losses. (Asked about this, Speaker John Boehner replied last week, "So be it.")

I'd gladly note the GOP response to all of this, but as best as I can tell, there isn't one. Republicans don't know -- and by all accounts don't care -- what the economic results would be if their plan was approved. They don't hold hearings to explore the effects of the proposal, and party officials haven't offered any economic projections they believe would result from their plan in implemented.

They just want to cut, no matter what it does the country. This isn't about consequences, it's about making the GOP base feel good about itself.

We now have independent analyses showing that the Republican spending measure would push the economy back towards a recession and would deliberately make unemployment worse. If Democrats balk, the GOP will shut down the government.

Why this isn't the lead story in every news outlet in the country remains unclear.

Update: I suppose the next question is why Republicans would pursue a plan they know would slow the economy. Among the possibilities: (1) they fear inflation that doesn't exist; (2) they have to hurt the country on purpose to undermine President Obama's re-election chances; (3) they consider the deficit more important than the economy, just on principle; (4) something else? I'd love to understand the GOP's motivations, but just as importantly, I'd love for the media to press the GOP on its motivations.

Steve Benen 2:45 PM Permalink | Trackbacks | Comments (31)

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Comments

C'mon, Steve -- this is the PLAN.

F the economy and Obama gets Fed in 2012.

It is all about power and more for the top 1%.

Posted by: duh on February 23, 2011 at 2:48 PM | PERMALINK

Slower economic growth = feature, not a bug. The 2012 campaign is ON!

Posted by: danimal on February 23, 2011 at 2:51 PM | PERMALINK

Really Steve....How are the Koch brothers and Rupert Murdoch supposed to get a Republican marionette elected president in 2012 if the economy is growing? They want the economy to tank. As far as they are concerned it will be a twofer for them: It'll get more Republicans elected and it will bring them all 3 elected offices.

Then the REAL fun begins.

Posted by: kindness on February 23, 2011 at 2:51 PM | PERMALINK

This nonpartisan study proves that the House Republicans' proposal is a recipe for a double-dip recession

Which would, of course, fit the Republicans' ambition of making Obama a one-term president just perfectly. What a coinkydink, huh?

Posted by: Gregory on February 23, 2011 at 2:59 PM | PERMALINK

Gah -- I meant to add:

They just want to cut, no matter what it does the country.

I disagree. I think many Republican lawmakers know full well what effect their policies are having and will have, and -- since their wealthy patrons already got their sweet, sweet tax cuts -- they're perfectly willing to ensure working Americans have to sacrifice if it means they're pissed off enough at Obama to vote him out of office.

Republicans should not be allowed to get away with such a cynical and damaging game. Democrats should repeat for the next two years that any economic nosedive is the direct results of Republican policy -- just like it was last time, amazingly enough.

Sadly, Democrats' piss-poor message discipline, coupled with a lazy and not-at-all liberal media, make it much more likely.

Posted by: Gregory on February 23, 2011 at 3:03 PM | PERMALINK

I have to agree with ALL the comments upthread, and with your reason #2 in the update.

And I would add that, importantly, little or none of the pain would be felt by their true constituency, ie, the wealthy and corporations.

In fact, remember that recessions are in many ways GOOD for large corporations, especially financial services corporations, and for the rentier class. Recessions keep labor in line, keep costs down, and allow corporations to build up cash, buy back their own stock, acquire smaller rivals, and put other rivals out of business. And of course recessions mean that inflation is low, which keeps the real value of debt and many other financial instruments high.

Real Republicans LIKE recessions. If it hurts the economically marginal or disadvantaged, or small businesses or farmers, well, so be it. They don't donate to Republican campaigns.

Posted by: bleh on February 23, 2011 at 3:04 PM | PERMALINK

Absolutely. Since they own the media, the Repubs know they can drive the economy into a ditch and screech about the Recovery Act. Then they might have a chance to win the WH in 12.

Just like in Wisconsin. You would never know Walker had a surplus and he gave it away in tax cuts just after the election.

Posted by: Les Ismore on February 23, 2011 at 3:04 PM | PERMALINK

The Republicans seem to have this dated idea ( see my cartoon http://twitgoo.com/1z87qv ) that returning to an age when people needed less brains and more brawn to get a job was the norm. Which is fine if you want a society based on people smashing rocks to decorate the gardens of the rich, but we assume most people want more. Trickle down economics does not and has not worked and only serves to increase inequality and decrease spending on those areas which would help people change their monatery and social status. Tax cuts for the rich and businesses does nothing little for most Americans.

Posted by: KurtRex1453 on February 23, 2011 at 3:08 PM | PERMALINK

(4) something else? I'd love to understand the GOP's motivations

This is a siege, and the wealthy are better positioned to outlast the non-wealthy. They can break not only unions and government safety nets, but also the very will of the working class, and the expectation of a middle class or upward mobility. The theory is that once the proletariat have all lost their jobs and had to start selling possessions and downscaling their lives, they will beg for jobs with low wages, poor working conditions and no benefits and be thankful to the greedy overlords for those meager "gifts."

The goal is to land somewhere between feudal Europe and the indentured servitude and company stores of the American Era of Trusts and Robber Barons.

Posted by: zeitgeist on February 23, 2011 at 3:09 PM | PERMALINK

#3 "they really care about the deficit" is impossible because they support the Bush/Obama tax cuts ($300 billion a year) and oppose easy ways of reducing the deficit like supporting the public option and allowing negotiation of drug prices.

At this point, it's almost dishonest to even raise the possibility that Republicans might actually care about the deficit.

Posted by: ferg on February 23, 2011 at 3:13 PM | PERMALINK

At this point, it's almost dishonest to even raise the possibility that Republicans might actually care about the deficit.

Given that, even setting the tax cut issue aside, Republicans are conspicuously silent about cutting military spending -- heck, Boehner tried to insist the Pentagon build an "alternative" engine for the F-35 in his state that the the Pentagon didn't need or want -- I'd say you could drop the "almost."

Posted by: Gregory on February 23, 2011 at 3:17 PM | PERMALINK

There are several things wrong with "they want to destroy the economy, so they can win elections".

Even though their big donors have largely moved their production and profit centers abroad (Walmart has had 8 consecutive quarters of missing their domestic earnings target, but are doing just fine in Brazil and China, thank you very much), we still have a consumer based economy. And with no jobs, $5 gasoline, and housing under water, leaves little discretionary cash for the consumer to spend.

The smart (if such a thing exists!) Republican money is on an Obama win in 2012, so they are planning for 2014 and 2016 gains in the House and Senate and a good shot at the White House. What they will do with it remains to be seen.

Posted by: DAY on February 23, 2011 at 3:18 PM | PERMALINK

Steve said, "Republicans don't know -- and by all accounts don't care -- what the economic results would be if their plan was approved."

Republicans know. This is more of the same...hurt the recovery to regain power. It worked for the 2010 elections. Why not keep it going?

Why doesn't the media press the GOP? Because the cabal that owns the media is the same crowd that owns the GOP. They're one and the same, and any claims to the contrary is pretense.

What I'd like to know is what, if anything, we can start doing to change this? The plutocrats are taking steps to eliminate net neutrality. Where the hell do we go from here?

Frankly, I'm pessimistic because there doesn't seem to be any large-scale coordination and long-term strategy on the left to prevent the loss of net neutrality, eliminate corporate influence in politics (including making elections about judicial appointments to get the base out), and establish a fair and impartial media.

Posted by: Chris on February 23, 2011 at 3:22 PM | PERMALINK

"Why this isn't the lead story in every news outlet in the country remains unclear."
Now Mr. Benen, I know you are not stupid. But really, the answer is as clear as any answer in the history of the World. The "news outlets" are OWNED BY THE GOP.

Posted by: T2 on February 23, 2011 at 3:24 PM | PERMALINK

no jobs, $5 gasoline, and housing under water, leaves little discretionary cash for the consumer to spend

I don't think the plutocracy is particularly worried about how much cash consumers have to spend.

Posted by: Gregory on February 23, 2011 at 3:25 PM | PERMALINK

...I'd love for the media to press the GOP on its motivations.

I have been reading Steve Benen for what seems like ages going back to The Carpetbagger Report.

I continue to be amazed that Steve still seems to believe that the media is some noble institution acting upon good intentions and practicing serious journalism.

6 corporations control 94% of the broadcast and print media in our country.

The role of the corporate media in this country is to serve as an echo chamber and message amplifier for repuknican messages.

What little 'serious journalism' is done in this country is done almost exclusively by other than the M$M!

The media will not call the repukes when they lie; can you seriously believe they are going to question the repukes motives?

Posted by: SadOldVet on February 23, 2011 at 3:28 PM | PERMALINK

zeitgeist nailed it at 3:09.

Just like large businesses can deliberately eliminate small competitors by selling their products below cost (highly illegal), business is thinking long-term by making short term sacrifices to the economy in order to regain power in the White House and Senate where they can have their way.

No, the ultra wealthy don't feel the pain that the rest of us feel in the current economy, and they have no interest in helping the economy for two years because they seek to control it forever.

Posted by: Chris on February 23, 2011 at 3:28 PM | PERMALINK

I have to agree with the first poster on this thread. The GOP plan is to create as much wreckage as possible so that their financial backers can pick up the pieces at a major discount. While they are at it, they will also destroy what's left of the Democratic party's financial base, labor and law.

Posted by: getplaning on February 23, 2011 at 3:28 PM | PERMALINK

I continue to be amazed that Steve still seems to believe that the media is some noble institution acting upon good intentions and practicing serious journalism.

I think it's a safe bet that Steve believes that the media believes they're some noble institution acting upon good intentions and practicing serious journalism.

The right wing worked the refs for decades complaining about the so-called "liberal media." They still do, even though the media is anything but -- it serves the dual purpose of encuraging reporters to accept their spin and insulating their true believers from the cognitive dissonance of inconvenient reality.

Steve is working the media in his own way, appealing to their professionalism to encourage the media to question Republican messaging. I can't say I see a lot of effect, true, but his approach is commendable as one among many.

Posted by: Gregory on February 23, 2011 at 3:39 PM | PERMALINK
something else?

Spite.

I know that sounds like a shallow analysis, but think about it.

These clowns loved the individual mandate ... until Dems supported it.

They approved of end-of-life counseling ... until Dems supported it.

They used to be the doves, preferring not to meddle around the world ... until Dems took that position.

They claim to be good, God-fearin' Christians who love them some Jesus ... until Dems suggest we offer aid to the poor and the sick.

Time after time after time after time, conservatives have taken positions not based out of principle or what's best for the country. They've taken those positions in an attempt to defeat and piss off liberals.

I'm not trying to be Atriostic or anything (not that it's necessarily bad to be so); it's just reality. The right will do whatever it takes to piss off and fight the left, no matter how little sense it makes, or how much damage it causes.

The other options require at least a microgram of introspection and self-reflection, and the right has shown it is capable of neither.

Spite is the only one that fits their words, actions, and policies.

Posted by: Mark D on February 23, 2011 at 3:43 PM | PERMALINK
I have to agree with the first poster on this thread. The GOP plan is to create as much wreckage as possible so that their financial backers can pick up the pieces at a major discount. While they are at it, they will also destroy what's left of the Democratic party's financial base, labor and law.

Posted by: getplaning

I would disagree ... except for the fact banks and other big companies are making more now than before the crisis, and are sitting on $1 TRILLION in cash despite real unemployment near 20%.

So ... yeah. That's comforting.

**bangs head on desk**

Posted by: Mark D on February 23, 2011 at 3:46 PM | PERMALINK

Benen: It would be unfair to call your question disingenuous. Still, for all your pride in calling yourself a political animal, you consistently accord the GOP treatment that borders on the coy.

It is the party of rule or ruin.

Why not come out once and scream it?

Posted by: JW on February 23, 2011 at 4:39 PM | PERMALINK

Cliches come and cliches go, but the really good ones stick, and can be used over and over when the circumstance matches the long held cliche.

Well, here we are, and it is obvious the Republicans are cutting off America's nose to spite her attractive face! -Kevo

Posted by: kevo on February 23, 2011 at 5:15 PM | PERMALINK

"I suppose the next question is why Republicans would pursue a plan they know would slow the economy."

They wouldn't. The problem is that most of them start from the premise that whatever they support will help the economy, regardless of what the evidence suggests. Then when the experts tell them they're wrong and lay out the evidence, their conclusion is that the experts "just don't get it".

Posted by: sacman701 on February 23, 2011 at 5:30 PM | PERMALINK

Real Republicans LIKE recessions. If it hurts the economically marginal or disadvantaged, or small businesses or farmers, well, so be it. They don't donate to Republican campaigns.

What bleh said, in toto, up-thread. As succinct a statement of reality as I've seen in awhile.

Americans simply can't face this. They can't face the fact that they are being continuously screwed by the wealthy. And that this screwing is becoming more and more obvious. The more obvious it becomes, the more Americans refuse to look at it. And the more our MSM ignores it.

http://www.youtube.com/watch?v=acLW1vFO-2Q

Carlin recorded this in 2005. I saw it in first-run. It dropped into the media universe and disappeared. It is, like bleh's comments above, as succinct a statement of our predicament in this country as could be imagined.

We've all seen it. We've all heard it. But America hasn't heard it. Or, if America has, it's been asleep for 5 years. Or more like asleep for 100 years, with a brief period of actual consciousness during the Progressive Era, and during the Great Depression. Otherwise? Denial ain't no river in Egypt.

-sigh- It's a hard world.

Posted by: LL on February 23, 2011 at 7:26 PM | PERMALINK

The Republicans, having no real policies to promote after the Bush/Cheney and McCain/Palin disasters, helped to create and encourage the Tea Party movement, in order to retain some sort of power base besides the super-rich and large corporations.
The monster they created now controls them. They have to appease the monster or they will be replaced, no matter how insane a trajectory that appeasement forces them to take.

Posted by: Jack G on February 23, 2011 at 8:10 PM | PERMALINK

Benen is to naivety what the Koch Brothers are to dirty energy.

Posted by: Jasper on February 23, 2011 at 8:21 PM | PERMALINK

I rather think sacman701 @ 5:30 PM has gotten closest to the truth. Too many of these people base their actions SOLELY on what they "believe". If the facts are different from those beliefs, then the "facts" are obviously WRONG! Remember, these are people that base what they do on their "gut reactions", no thinking allowed!
It's the only explanation that covers their inability to formulate viable policies in ANY area, their complete lack of any understanding of modern economics and their disinclination in compromise in any form.
Or it could be that they're just stupid, corrupt and/or insane. Take your pick...

Posted by: Doug on February 23, 2011 at 8:42 PM | PERMALINK

why Republicans would pursue a plan they know would slow the economy.

Republicans are sociopaths, liars, and incompetents. They are not confused. They are not well-meaning. They do not care about the deficit. They are sociopaths, liars, and incompetents.

Any newspaper, magazine, reporter or blogger who says the r's are anything other than sociopaths, liars, and incompetents is aiding and abetting.

Posted by: elbrucce on February 23, 2011 at 10:31 PM | PERMALINK

A disproportionate amount of suffering will be borne by Negroes, at least, the GOP hopes so.

Posted by: Andrew Lazarus on February 23, 2011 at 10:46 PM | PERMALINK

A million jobs lost? That would reverse Obama's record of presiding over the creation of more jobs in one year than W did in eight.

Posted by: Daniel Kim on February 24, 2011 at 12:09 AM | PERMALINK




 

 

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