Month: October 2011

Protests 2.0

by digby

The New York Times did a halfway decent article today on Occupy Wall Street, refuting some of the images that seem to bother people so much:

For all the bedraggled look of the mattress-and-sleeping-bag-strewn camp, it has a structure and routine. A food station occupies the center of the park, where donated meals are disbursed, especially pizza and Popeyes chicken. Sympathizers from other states have been calling local shops and pizza parlors and, using their credit cards, ordering food to be delivered to the park.

There are information stations, a recycling center, a media center where a gasoline generator powers computers. At the east end sits the library, labeled cardboard boxes brimming with donated books: nonfiction, fiction, poetry, legal. There is a lost and found.

A medical station was outfitted with bins holding a broad array of remedies: cough drops, Maalox Maximum Strength, Clorox wipes, bee pollen granules. The main issues have been blisters, including some from handcuffs, and abrasions.

There are also a few therapists. Some out-of-work protesters are depressed. They need someone’s ear.

Elsewhere is a sanitation station, with designated sanitation workers who sweep the park. The park is without toilets, a problem that many of the protesters address by visiting a nearby McDonald’s.

The encampment even has a post-office box, established at a U.P.S. store, and has been receiving a steady flow of supportive letters and packages. Someone from Texas sent a bunch of red bandanas, now draped on the necks of demonstrators. Others have sent camera batteries, granola bars and toothbrushes.

They still exhibited an air of anthropologists observing some lost civilization, but it was at least less condescending than their last foray into the wilds of Zuccotti Park.

And fter tweeting a very provocative note last week about how much this reminded him of Tahrir Square, Nick Kristoff just wrote about it on the op-ed page:

“Occupy Wall Street” was initially treated as a joke, but after a couple of weeks it’s gaining traction. The crowds are still tiny by protest standards — mostly in the hundreds, swelling during periodic marches — but similar occupations are bubbling up in Chicago, San Francisco, Los Angeles and Washington. David Paterson, the former New York governor, dropped by, and labor unions are lending increasing support.

I tweeted that the protest reminded me a bit of Tahrir Square in Cairo, and that raised eyebrows. True, no bullets are whizzing around, and the movement won’t unseat any dictators. But there is the same cohort of alienated young people, and the same savvy use of Twitter and other social media to recruit more participants. Most of all, there’s a similar tide of youthful frustration with a political and economic system that protesters regard as broken, corrupt, unresponsive and unaccountable.

“This was absolutely inspired by Tahrir Square, by the Arab Spring movement,” said Tyler Combelic, 27, a Web designer from Brooklyn who is a spokesman for the occupiers. “Enough is enough!”

The protesters are dazzling in their Internet skills, and impressive in their organization. The square is divided into a reception area, a media zone, a medical clinic, a library and a cafeteria. The protesters’ Web site includes links allowing supporters anywhere in the world to go online and order pizzas (vegan preferred) from a local pizzeria that delivers them to the square.

In a tribute to the ingenuity of capitalism, the pizzeria quickly added a new item to its menu: the “OccuPie special.”

He has a few recommendations for “demands” that sound useful, although I’m not sure this is really about specifics at this point so much as it is consciousness raising.

In any case, a ton of good stuff has been written about this in the past week. Matt Stoller had a fine article earlier at Naked Capitalism that rings true. And this new article by Micah Sifry seems completely on point to me:

[S]omething is happening here, Mr. Jones. The protest, or occupation, is now in its third week, and in addition to a steadily increasing level of media coverage, this coming Wednesday a range of local unions and progressive groups are planning to rally their members to join in. Stubborn resilience plus some outraged media attention to police brutality seems to have been enough to light the spark, but beneath that, credit must go to the horizontal adhocracy running the occupation downtown, which has developed its own infrastructure for internal and external communication and social support. And it’s doing this without obvious leaders (who could be arrested and held to suppress the movement) or institutional backers (who could be pressured), and with a wide array of networked support that is being marshaled via Internet Relay Chat, blogs, Facebook pages, Twitter, livestreaming, online video and street theatre. Some highlights:

The original call to action from Adbusters;

The “Global Revolution” Livestream feed, which has several thousand watching at any given time, even when it isn’t bringing live video from downtown, showing short clips from Anonymous, George Carlin and other troublemakers (132,000 likes as of October 1);

The “We are the 99 Percent” Tumblr collection of autobiographical photos from people facing all kinds of economic hardship, which seems to have a lot of stories from the families of American war veterans…

The Occupy Together news hub, which is curating links to Occupy efforts in more than 100 cities across the US, plus two dozen overseas, as of this writing.

This movement is messy and its decision-making process is participatory in the extreme, which some people adore (because it makes room for all to have a say, compared to our elite- and money-driven political system) and others abhor (because ordinary working people typically can’t devote the time to long meetings and “structure-less” decision-making usually empowers a few people in unaccountable ways). And while we know how to use networks to develop and support “stop” energy, it’s much harder to develop and enact “do” energy around specific demands…

But I think it’s time to recognize that we’re no longer in a what veteran activist Myles Horton would have called an organizational phase of political activity, where meetings have walls around them, messages have managers, advocacy is centrally paid for and done by professional lobbyists, marches have beginnings and endings, and the story line goes neatly gives from petition to legislation to reform.

Instead, in America we’re now entering into a third wave of movement politics (the first being the rise of the “netroots” within the Democratic party after its leadership collapse between 2000-2003; and the second being the rise of the Tea Party after the conservative losses of 2006 and 2008). I don’t pretend to know where the “Occupy” movement is going to go, though its main purpose appears to be to show first of all that it is here to stay, and to force a different perspective into a national discourse that up until now has marginalized and ignored grassroots anti-corporate social justice advocacy.

Like Sifry, I don’t know where this is going. But it’s travelling at light speed — I haven’t seen anything like it online since I started blogging. (I’m fairly tuned in whether I like it or not, as you might imagine, and this is different.)

So, I’m inclined to give it some room to breathe, let go of my pre-conceived notions of “what has to happen” and see if the new media and communications take us in the direction we need to go. Regardless of the outcome, I think this shows that people are reaching a point where they have to do something. And that’s healthy.

Update: more White Shirt action, reported by the NY Times:

Things came to a head shortly after 4 p.m., as the 1,500 or so marchers reached the foot of the Brooklyn-bound car lanes of the bridge, just east of City Hall. In their march north from an encampment at Zuccotti Park in lower Manhattan, they had stayed on the sidewalks – forming a long column of humanity penned in by officers on scooters.

Where the entrance to the bridge narrowed their path, some marchers, including organizers, stuck to the generally agreed-upon route and headed up onto the wooden walkway that runs between and about 15 feet above the bridge’s traffic lanes.

But about 20 others headed for the Brooklyn-bound roadway, said Christopher T. Dunn of the New York Civil Liberties Union, who accompanied the march. Some of them chanted “take the bridge.” They were met by a handful of high-level police supervisors, who blocked the way and announced repeatedly through bullhorns that the marchers were blocking the roadway and that if they continued to do so, they would be subject to arrest.

There were no physical barriers, though, and at one point, the marchers began walking up the roadway with the police commanders in front of them – seeming, from a distance, as if they were leading the way. The Chief of Department Joseph J. Esposito, and a horde or other white-shirted commanders, was among them.

After allowing the protestors to walk about a third of the way to Brooklyn, the police then cut the marchers off and surrounded them with orange nets on both sides, trapping hundreds of people, said Mr. Dunn.

Mr. Dunn said he was concerned that those in the back of the column who might not have heard the warnings “would have had no idea that it was not okay to walk on the roadway of the bridge.” Mr. Browne said that individuals that were in the rear of the crowd that may not have heard the warnings were not arrested and were free to leave.

Officers plunged into the crowd – with protesters at times chanting “white shirts, white shirts” — and, one by one, they made the arrests, using plastic flex cuffs. A freelance reporter for The Times, Natasha Lennard, was among those arrested. Charges against those arrested were not immediately available.

Earlier in the afternoon, as many as 10 Department of Correction buses, big enough to hold 20 prisoners apiece, had been dispatched from Rikers Island in what one law enforcement official said was “a planned move on the protesters.”

Etan Ben-Ami, 56, a psychotherapist from Brooklyn who was up on the walkway, said that the police seemed to make a conscious decision to allow the protesters to claim the road. “They weren’t pushed back,” he said. “It seemed that they moved at the same time.

Mr. Ben-Ami said he left the walkway and joined the crowd on the road. “It seemed completely permitted,” he said. “There wasn’t a single policeman saying ‘don’t do this’.”

Excellent. And so handy that they had buses at the ready to deal with the unanticipated arrests.

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Enthusiasm
by David Atkins (“thereisnospoon”)

This from Gallup is a couple of days old by now, which makes it ancient in blogosphere time. But I would be remiss not to highlight it.

In thinking about the 2012 presidential election, 45% of Democrats and independents who lean Democratic say they are more enthusiastic about voting than usual, while nearly as many, 44%, are less enthusiastic. This is in sharp contrast to 2008 and, to a lesser extent, 2004, when the great majority of Democrats expressed heightened enthusiasm about voting.

There’s also a scary looking chart which documents that we now have the lowest Democratic voting enthusiasm in a decade:

Meanwhile, the Republicans are excited to get out and vote:

Democrats’ muted response to voting in 2012 also contrasts with Republicans’ eagerness. Nearly 6 in 10 Republicans, 58%, describe themselves as more enthusiastic about voting. That is nearly identical to Republicans’ average level of enthusiasm in 2004 (59%) and higher than it was at most points in 2008.

It’s possible that all those people answering Gallup’s phone calls obsessively read liberal blogs and watch MSNBC, and that it’s the fault of the “professional left” that Democrats are dispirited.

Or it could be that Democrats voted for change in 2008, and they haven’t gotten what they voted for. An honest assessment of the situation would indicate the latter.

In all likelihood the President’s advisers are seeing these numbers, which would account for the newly aggressive tone coming out of the White House. And in all likelihood, when the vast majority of Americans who don’t really pay attention to politics until August 2012 get good hard look at the Republican nominee, Democratic enthusiasm will grow.

But one would hope that Democrats in leadership learn their lesson from the last few years:

1) playing nice with Republicans is a fool’s errand. The modern Republican Party is more cult than political movement. It cannot be reasoned or legitimately compromised with.

2) Playing nice with Wall Street is pointless, unless one is willing to bend over and give them everything they want. Say a single bad word about these Masters of the Universe, and they turn against you in a heartbeat.

3) Abandoning the base is a very dangerous thing to do politically, no matter how many polls show that Democrats favor “compromise” over “standing one’s ground.” The reality when push comes to shove is that if the other side seems to be accomplishing its legislative agenda, even as one’s own side is getting nowhere with the most emotionally motivating parts of one’s agenda, then enthusiasm is going to decrease.

It’s almost as if those dirty hippies on the “professional left” were right all along. Who knew?

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Thanks for everything

This is an interesting segment on Bill Maher’s show last night on a number of topics. If you missed the show, you should watch it. But there’s one thing I think needs a little bit of explication. Maher, Seth McFarlane (who is a real DFH, it turns out) Salman Rushdie and Jennifer Granholm are discussing the legality of the Al Alwaki killing and Rushdie brings up the fact that “there is such a thing as treason.” Yes, they all agree, treason. Maher adds that the punishment for such a crime is death and they all nod sagely as if that settles the matter.

There wasn’t a trial. Not even in absentia (which we don’t do in the US.)

I realize that the official rationale for the killing isn’t predicated on the legal definition of treason. It’s some arcane gobblydygook about a “global battlefield” and unlawful combatants and state secrets, none of which is even remotely settled law. But it’s vitally important that we not start thinking that being accused of “treason” means that the US government can unilaterally decide to kill an American citizen without any due process.

Blue America Chat — progressive stalwart, Mary Jo Kilroy

by digby

Howie sez:

There weren’t many progressives who got dragged under in the Tea Party tsunami– or more appropriately, in the stay-at-home malaise from the Democratic base that practically wiped the GOP-leaning Blue Dogs off the map. But several of Blue America’s best old friends were among that tiny handful– Alan Grayson, Russ Feingold, Carol Shea-Porter and Mary Jo Kilroy. This week Blue America is very happy to be endorsing Mary Jo once again. And the great news is that in their rush to lock in an unfair Republican electoral map, the state legislature has created one super-blue district based around Columbus… the heart of Mary Jo’s old seat. She’s off and running and Blue America wants to help her get back into Congress. So do Progressive Caucus co-chairs, Raúl Grijalva and Keith Ellison, who endorsed her on the same day she announced she would run. She’ll be joining us for a live chat at Crooks and Liars today at 2pm (ET). You can contribute to her campaign here at the Blue America ActBlue page.

One of the things that first attracted us to Mary Jo is that she came roaring into Congress and immediately flew in the face of both party establishments by voting against the Bush TARP bailout, which she recognized as an unwarranted giveaway to the Wall Street banksters. Today she’s still hammering home what she was saying then:

“We must focus on jobs and the economy. It is time we re-invest in America. Build roads, bridges and rail. Help our manufacturing sector revive. Provide strong job training programs. Expand VISTA and Americorps so young Americans can work to improve their neighborhoods, parks and coastal areas. We need to help those long term unemployed to get back in the workforce.

“It is time to stop giving tax breaks to the most privileged of our society and to end tax cuts for billionaires who pay a lower rate than their secretaries and end the tax loopholes that send our jobs overseas.

“It is time for the millionaires and billionaires to pay their fair share. They have benefited while working people have been hurt in the economy over the last decade. As Elizabeth Warren was so correct in pointing out, they benefited from the teachers who taught their workers, the police and fire fighters who protect their homes and businesses, the public roads they use to take their products to market. When I was in Congress I called for a vote– before the 2010 election– on ending the Bush tax cuts for millionaires and billionaires, and voted against extending that tax cut.

She went from championing working families inside Congress to working on a grassroots level in the campaign to defeat Kasich’s anti-labor legislation. “Teachers, police and firefighters,” she emphasizes, “did not cause the problems with Ohio’s budget.”

Please help Blue America return a fighting progressive and a strong voice for our values back to Congress.

Protest Mockery

by digby

Bill O’Reilly’s little ambush “producer” Jesse Waters went to the Wall Street protests and came back with a heavily edited tape:

Watch the latest video at <a href=”http://video.foxnews.com”>video.foxnews.com</a>

Fox Nation has this headlined as an expose of “who’s behind this” which, if you can get to the end, you’ll find is Anonymous and the “Soros funded” National Lawyers Guild, which they report as also being behind the Weather Underground.

Look, it’s perfectly fair for the right to make fun of the protesters. After all, turnabout is fair play and the Tea Party has provided the left with hours of mockery at their expense. But this sort of highly edited tape is cheating. Here’s a fairer example of the genre:

Notice that Seder allowed these people to elaborate and didn’t edit them to make them look more foolish. Sure he editorialized in the inserts, but they weren’t mischaracterized.

Having said that, I’m sure many of the Wall Street protesters say foolish things. It’s the nature of the beast. And frankly, the most noticeable thing that separates the two videos I posted above is that the Wall Street protesters are young and the Tea Partiers are old which, in my view, makes the latter a little less forgivable. (There’s just no excuse for that lack of basic civic knowledge among politically active people my age.) O’Reilly’s elderly audience will make their own judgments about that, but I think the rest of the country will see it differently.

I just wish I could have heard everything those kids were saying instead of Watters’ clever little edits(which I hope he got permission to clip from each and every film company that owns the rights to those films…) Most of them sounded like they had something to say.

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Forcing “investors” to truly invest
by David Atkins (“thereisnospoon”)

Thomas Geoghegan of The Nation has a very intriguing article that should be the subject of a great deal of discussion right now amongst those trying to determine how best to curb Wall Street’s predatory influence on our economy while reining in both unemployment and deficits. Mr. Geoghegan appeals to the actual writings of famed liberal economist John Maynard Keynes to ask precisely what Keynes would do if confronted with America’s modern economic problems.

The answer Geoghegan gives isn’t quite what one might expect, and it’s well worth some serious thought.

For starters, he points out that Keynes was an adamant opponent of deficits. But the deficits Keynes particularly despised were not national deficits, but trade deficits:

In 1936, when Keynes wrote his classic—The General Theory of Employment, Interest and Money—he was emphatic on this point: no country, ever, should run up any kind of trade deficit, much less the trade deficit on steroids we are running. Of course, in 1936 and for years after, the United States was the biggest creditor country in the history of the world. So Keynes never worried about our being a debtor country—rather, he spent much of his last days begging the United States to get other countries out of debt. If he came back and saw the colossal external debt we run now, he would be pushing for a serious plan to bring it down just as hard as he’d be pushing a stimulus for full employment.

I admit, Nation readers, that standing in line at Whole Foods, I occasionally pick up The Economist, if only to go to the back page and see the merchandise trade deficit the United States and other countries have been running in the past twelve months. It’s scary: $680.9 billion as of July 9. That puts us near $0.7 trillion in the red. But in the chart, much of the world is in the black. OK, the two US wannabes, Britain and Spain, have trade deficit disasters. And some have too much. “Low-wage” China has a surplus of $172.5 billion. “High-wage” Germany beats out China, with a surplus of $188.4 billion. But when I run my finger up this chart to the US deficit, it’s a shock. It’s as if I’m pressing on the sucking chest wound in the world economy.

Keynes would rattle that ripped-out page in front of us.

So, that would put Mr. Geoghegan in the deficit hysteria camp and against Paul Krugman, right? Not so fast. He gives Krugman big props and again reminds us that we’re talking about the trade deficit, not the national debt here:

Keynes believed that practical leaders would always see the supreme importance of keeping the country out of external debt—indeed, he seemed to see this as the first duty of the state. For Keynes, in his later years, it was the economic analogue to defending one’s country. Avoiding an external debt was an act of patriotism and national self-preservation in a sense that even reducing unemployment was not. It’s “fighting for freedom,” in Skidelsky’s phrase. Keynes would not believe how Obama, the Tea Party, the Democrats, the Republicans—our leaders—pay so little attention to our whopping trade deficit, as if it had nothing at all to do with our slump.

The right, the Tea Party, the Concord Coalition, Mr. Bowles and Mr. Simpson, Peter Peterson—they want to bring down the federal deficit. The left, our side, generally wants to go deeper into debt and get to full employment. Then we’ll bring down the federal deficit. Then we’ll have full employment and all will be well.

But until we bring down the trade deficit and fix our balance of payments, there is no way out of debt.

I won’t go into the details of Geoghegan’s arguments against both traditional liberal and conservative approaches and bogeymen. I find some of his reasoning potentially suspect in this section, but the whole thing is worth a read. His conclusion, though, is what is truly interesting. In the end, according to the author, America will not get back on its feet without investment in actually productive economic activity by the wealthy.

Again, here a traditional progressive winces as the author sounds like he’s veering perilously close to trickle-down economics, but Geoghegan has a delightfully subversive point. The fact is that there is massive unequal concentration of wealth in this country. Most of that wealth is sitting on the sidelines. Even if that wealth were to be confiscated in the form of taxes, it wouldn’t solve two basic problems: first, the reason that the wealth became concentrated so unequally in the first place (a point persuasively argued by Hacker and Pierson in Winner-Take-All Politics), and second, the fact that government spending on public works might even balloon the trade deficit even higher. Without curbing the trade deficit, it will be difficult to create full employment and more importantly a sustainable economic future. There does need to be growth in investment in the private sector that increases productive, exportable activity in America to bring down trade deficits.

Mr. Geoghegan leads us, then, to the brink of Austrian economics via Keynes himself. But then, just as a progressive reader begins to be inclined to toss the article aside and wonder what happened to the progressive Thomas Geoghegan we used to know, he does a quick turn to highlight what he, by way of Keynes, sees as the real problem: the fact that Wall Street and the wealthy have stopped actually investing in productive investments. His argument has a subtle beauty and a ring of truth to it:

The real point is to get them to invest—not save, not speculate in financial instruments, but invest in widgets we can wrap and ship and sell abroad. And Keynes would put that question to the left, to us: How can we get the rich to invest?…

Everything in the United States is set up to encourage the rich to put money into financial instruments rather than long-term investments. What would Keynes do? Get the rich to think outside the Wall Street banking box. Get them to put money into the part of Main Street that used to trade abroad. How do we do that? For starters, put in usury laws—limits on interest rates. In a general way, cut down the appeal of being a creditor and not an investor.

Keynes quotes Locke on this point: “High Interest decays Trade. The advantage from Interest is greater than the profit from Trade.” And by trade, Locke does not mean day trading.

Now, as Richard Posner recently wrote, part of the problem with understanding Keynes is the vocabulary. So, for example, it is puzzling to us to hear that the rich don’t make enough “investments.” Don’t they invest like crazy? They invest in stocks, bonds, financial instruments, all sorts of things we would never call loans. But to Keynes these “investments” are loans. They’re liquid. They often have a fixed rate of interest. Corporate takeovers on Wall Street may look like “investments,” but if you get up close, many are just loans—i.e., transactions in corporate debt. Keynes could pick up the Wall Street Journal and give the real name for one “investment” after another: loan, loan, loan.

Strip away the pretense of investment, and too many a financial instrument is either a loan or just the inflated price of a paper asset. When Keynes talks about the importance of usury laws, he means laws limiting interest rates but also laws and regulations that hold down profits on financial instruments.

And that’s precisely the point: Wall Street is not actually engaging in productive activity on behalf of the economy. The entire reason that market speculation is supposed to help an economy, according to theory, is that markets are thought to provide the most efficient allocation of capital. But when rent-seeking and pointless lending speculation on paper assets is more profitable than actual investment in real productive activity, financial markets start to become more of a burden to an economy than an asset:

Keynes would point out that the rise in the US trade deficit—which became serious in the 1980s—coincided exactly with the astonishing deregulation of the financial sector. We knocked down usury laws. We allowed the first end runs around the Glass-Steagall laws.

Wait—that’s our problem? Not China or the world economy? Well, it’s hard to channel Keynes now, but look at the back page of The Economist. Not just Germany but a lot of other high-wage countries are doing well in the global economy. It’s hard to account for the difference with labor cost alone.

Readers who took Economics 101 (or Economics 1001, as it later became as a result of inflation) may remember something about a “liquidity preference.” That means keeping money “liquid.” For Keynes the first duty of the state is to ensure that the “liquidity preference” is low, to prod people not to keep their money liquid but to lock it up in a long-term investment where it will not be so easy to get.

To some, this all sounds very nice for the future, but right now we need to get people out there to repave the interstates. Fine, let’s get back to work: but as long as the trade deficit keeps on draining us of wealth, the middle class will keep on going down the drain.

In the end there is one way out of this economic mess—Keynes would say we have to shock, push, lure and sweet-talk the rich in this country to part with their money and start enterprises that get us out of debt. But how are we going to do that? We can’t even get employers sitting on hoards of cash to hire a few extra workers.

Geoghegan’s suggestion? Look at Germany and how it has managed to maintain a positive trade surplus:

1) A national single-payer-style health system.

2) Corporations that include an influential section of organized labor on the board of directors.

3) Increased regulations on pointless and harmful speculative market activity.

4) Government-run banks on the model of the Sparkassen, that would step in to provide real lending to the productive parts of the economy when the major lenders refuse to do so. Such a government-run bank exists in North Dakota, and has been very successful in that state.

There is much that might be debatable in the article. But it offers good food for thought that moves away from the tired tax vs. anti-tax/stimulus vs. austerity debate in America, and gets more to the heart of what ails our democracy and our economy in the first place. Yes, taxes on the wealthy need to be increased and corporate loopholes eliminated. But in some respects, as Hacker, Pierson and now Geoghegan are arguing, those tax rates are more symptoms of a broken system than the causes. And yes, we need stimulus to bring down unemployment, but that in itself won’t solve the core problems that got us here.

The problem in a nutshell is the deregulation of the financial sector, and the prioritization of speculative investment in non-productive activity. If we can solve that problem, we’ll be on our way to solving other problems as well.

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Pain and Punishment

by digby

Krugman wrote another post today featuring some people who are getting increasingly confused — and frantic — about the bizarre, contrarian policy failure of elites all over the world. He writes:

I don’t fully understand it. But a large part of it, it seems obvious, is the intense desire to see economics as a morality play of sin and punishment, where the sinners are, of course, workers and governments, not the bankers. Pain is not an unfortunate consequence of policies, it’s what is supposed to happen.

Read the whole post. He cites an Uncle Alan Greenspan post that’s a real doozy.

It called to mind this post by Matt Yglesias on the rather puerile Micheal Kinsley piece today about Chris Chritie’s allegedly disqualifying girth. Matt wrote:

A further nuance here, though, is that not only did Michael Kinsley’s piece on this draw a spurious connection between Christie’s appearance his personal virtue, it does so in order to make a second bad moral panic. After acknowledging that Christie “makes all the right noises about fiscal discipline,” he says that “perhaps Christie is the one to help us get our national appetites under control. But it would help if he got his own under control first.” This not only misunderstands obesity, it misunderstands fiscal policy. The sentiment here is that small budget deficits are a sign of self-control and personal virtue, and that large deficits are to be deplored as the reverse. There’s just no reason to think that any of that is true. The question to ask about fiscal policy is whether it’s appropriate to try to advance full employment in the short-term and capacity growth in the long-term. You have to ask what’s really going on, what the situation is, and what the impact of the policy choices will be. On Yom Kippur, you fast as an act of self-abnegation as part of a process for atoning for one’s sins. A person with out-of-control appetites will have a difficult time doing it. Fiscal policy is nothing like that.

I think all these elites believe they are wealthy and secure due to their superior morality and work ethic. Therefore, it’s important to make sure the plebes feel some pain for their excesses so they’ll adopt the higher standards of their betters. Just as Michael Kinsley believes that Chris Christie’s obesity reveals a slothful character, the Central Bankers are apparently all convinced that sovereign debt is due to the character flaws of slothful citizens who have failed to become wealthy. Neither belief is relevant to fiscal policy. Or even true.

We’ve been mulling this over for some time and I still don’t have adequate answer to the problem. But I think I might be edging toward some insight in reading Corey Robin’s The Reactionary Mind. I’ll keep you posted.