The Peterson Principle
by digby
I see that the press is once again taking Pete Peterson’s deficit propaganda and regurgitating it as news. You’ll recall that CNN did the same thing last year when they showed the agitprop documentary IOUSA and then hosted a “discussion” about it featuring a panel luminaries who all agree with the premise. Now the Washington Post has joined CNN as a willing outlet for Peterson propaganda disguised as news. Dday has the full story in all its hideous context.
I have been accused more than once this past year of being absurdly obsessed with these deficit scolds and their plans to inhibit progressive government. People have said I was overstating the problem and they insisted that it was wise for the administration to talk about a Grand Bargain in order to somehow disarm the opposition. Indeed, I was told early on that it was actually a cunning strategy to fool the Republicans into backing health care reform as deficit reduction. (That plan didn’t work out too well.)
Instead of being co-opted it’s gaining traction and the congressional fiscal fetishists are about to stage quite a drama. (They had threatened to do it before Christmas, but relented at the last minute and agreed to put it off until after the New Year.)
The agreement sets up a Jan. 20 vote on a longer term debt limit expansion, which would raise the ceiling to about $13 trillion. It would include votes on several Republican amendments on that date, as well as related Democratic amendments. The amendments will need 60 votes to pass.
The most closely watched may be an amendment offered by Senate Budget Chairman Kent Conrad, D-N.D., and ranking member Judd Gregg, R-N.H., creating a special commission to recommend binding steps to reduce entitlement spending.
Whether that particular gambit succeeds this year remains to be seen. Conrad had threatened to filibuster the whole bill unless they got their way last month. But they will not give up. That commission is what Peterson has been explicitly demanding and is the vehicle they see as the most efficient way of dismantling the safety net. (Believe me, Medicaid and the insurance subsidies in the new health care reform will eventually be included.)They will just keep coming.
And now we can see that they have a fully formed propaganda strategy as well with this news service that will salt the nation’s newspapers with “objective” stories about how we must end entitlements or risk the destruction of the world as we know it.
That post I wrote a year ago about the IOUSA documentary said this and I think it still applies:
I say this is a shock doctrine documentary because it is nearly impossible for me to believe that it is a coincidence that the deficit hawks have put together this slick “non-partisan” documentary and well financed campaign to cut spending at the moment of what many people believe is America’s greatest economic peril since the 1930s. They are, quite obviously, attempting to use the crisis to dismantle the social safety net and avoid doing the real work of reforming the financial system. Shock Doctrine 101.
And when I say slick and non-partisan, it really is. The show also featured a panel with none other than the smarmy village saint Bill Bradley and the Clinton era deficit maven Alice Rivlin. Of course, it also included hedge fund king and deficit fetishist Pete Peterson and his little dog ex-CBO GAO chief David Walker. (Walker seems to be halfway aware that he might not be on the right track, but he’s committed to this project.) It couldn’t be more in keeping with the post-partisan, non-ideological zeitgeist. Except it’s ideological to the core.
One would think this message is so dissonant that no one could possibly find it persuasive. After all, they are worrying about some potential future catastrophic event while we are in middle of a current calamity. But it’s actually very clever —you can see by the press release that it sounds like they are talking about the current problem, even though their prescription is exactly the opposite of what is required . Indeed the diabolical effect of this project and its timing is that it’s designed to make people believe that government spending is the cause of the current economic crisis.
And it’s smart. What they are prescribing makes more intuitive sense to many people than what is actually necessary to solve the problem. We are all coming to terms with the fact that we are going to have to stop spending beyond our means and pay down our debt in order to get our financial houses in order. Why shouldn’t the government have to do the same thing, especially if it’s facing an imminent “balloon payment” with all those retirees and sick people getting ready to explode the debt? We all know that the government has been spending like drunken sailors and it stands to reason that’s why we find ourselves in this crisis, right?
The sainted Bill Bradley said it right out on the program:
People understand that if they run up debts in their own lives, it’s no different than when the government runs up debts the same way.
Americans have been mentally trained over the past few decades to believe drivel like that— the free market is always the preferred method to solve economic problems, that the government should be run like a business (or your household budget) and, most importantly, that government is the cause of problems, not the solution. This deficit obsession plays into all those beliefs and makes it very difficult to explain in the middle of the crisis that the government isn’t a business or a household and needs to go further into debt in periods when everyone else is trying to escape it. And, needless to say, it also sounds like the tax ‘n spend libruls are at it again.
I’m sure it hasn’t escaped anyone’s notice that the deficit scolds are coming out of the woodwork now that the Republicans brought us to the brink, slashing taxes for the wealthy, larding their own contributors with earmarks, solidifying the notion that military industrial complex spending is a sacred, untouchable icon, and fetishing and deregulating the market until they finally brought the whole system to its knees. They certainly didn’t say much about the debt while it was adding up these last eight years.
They did the same thing during the 80s, which is why Cheney uttered “Reagan proved deficits don’t matter. (What was left out was “for Republicans.” Democrats are endlessly and relentlessly harassed about deficits — as they clean up the big mess the deficit spending Republicans leave behind.)
They’ve reanimated the yellow peril, which is only fitting. Last time, we were told that Japan was taking over the country by buying up all of our real estate. This time it’s the Chinese buying up all our bonds. (In 92, Perot put a little zesty mexican salsa in the recipe.) It’s always something. The foreigners are going to kill us in our beds unless we cut social security and medicare. And if we even think of enacting any new “entitlements” (a conservative buzzword designed to make you think people are getting something they don’t really deserve) it’s pretty clear that the Asian hordes are going to destroy our way of life (if the muslims don’t get to us first.)
One of the fundamental characteristics of shock doctrine economics is extreme complexity for which a simple, intuitive solution is proposed. It’s hard to argue with and it’s hard to resist. Here are famous people who really seem to understand what’s going on and the solutions they propose just seem like common sense. Even Joe the plumber can see how right their view is. Unfortunately, they’re completely wrong — at least if you care about the country as a whole and the suffering of the millions of people who will have to endure their “solutions.”
It’s highly unlikely that they will fully have their way on this. We are in deep shit and there are a lot of very smart people who know the deficit is the least of our problems at the moment and that “entitlement reform” is one sure way to deepen the panic and make personal spending contract further than it needs to. (There’s a lot of wealth among seniors and near seniors. I can’t imagine that chit-chat about how social security is going broke is particularly good news to people who’ve just lost a good portion of their portfolios in the real estate plunge and the stock market crash.)
But these people are going to cause trouble, which comes as no surprise to me. I’ve been writing about this for years. It’s one of the reasons why I believe in liberal rhetoric (and, yes, the dreaded “ideology.”) If you don’t bother to educate people counter to the myths and propaganda they hear from the right, they have nothing to hold onto except faith in the Democrats in the face of arguments that have been built layer by layer over many years. (And having faith in Democrats really take courage.) The fact that they refuse to do this doesn’t automatically spell failure for democratic policies, but it makes it many times harder to succeed.
They don’t even seem to intend to do tank the stimulus, just restrict it. What they are doing is setting the stage for entitlement cuts and a swift, premature pullback on government spending — thus extending the crisis. And if the Democrats are cowed by these people (they always are — they hate being called spendthrifts) there will be enough egomaniacs in the congress to hamstring the administration and force them to adopt these “common sense” methods of running the economy — which is precisely how we got into this problem in the first place.
I just heard a panel on CNN declare that 2010 will be the year of the deficit. Oy vey.
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