Nontrivial Pursuits

There seems to be one crucial difference between Barack Obama and John Edwards that stands out more than any other. Obama presents himself as the conciliator, a peacemaker, as a high-minded individual who will refuse to participate in ugly attacks and counterattacks. John Edwards, on the other hand, has shown us that he expects a fight with the Republicans and wants us to know that he is up to the challenge. Many Democrats have actually chosen between Edwards and Obama based on this one distinction, alone. It’s a subject we need to start examining in greater depth…

It has been rather amazing to see what Barack Obama has been able to do with the very same theme John Edwards first popularized four years ago. Remember? It was John Edwards who got the attention of the Democratic Party in 2004 with his Campaign for One America; he repeatedly criticized the Republicans for their efforts to ‘divide America’ in order to achieve their political ends. He could smell and taste the sweet fruit of cooperation and wanted it just as much as Barack Obama wants it today. But John Edwards is not the same man that he was four years ago. After the failure of the Kerry-Edwards ticket in 2004, John had some time to reflect on things and he finally came to the conclusion that it had been a big mistake for him to support George Bush’s war. While this changed position was certainly significant in itself, I think it also reflected a new willingness in John Edwards to question a number of old political assumptions.

He could see that the doubts he had felt about Bush’s motives and methods—-that a rising tide of patriotism eventually overwhelmed—-were right all along. If he had trusted those inner doubts about Bush’s lust for war, he would have ended up on the right side of history. I think this ‘rude awakening’ also influenced his perceptions of what is necessary to prevail against the Republican Party. He was a front row witness, after all, to the campaign of character assassination that the Republican Party—-once again—-used to pull off another victory over the Democrats. (If the strategy hadn’t succeeded as well as it did, the final vote wouldn’t have been close enough for them to steal.)

I think this is a big part of the reason why John Edwards is focusing on a new message this time. Of course he would like—-as would I—-to see everyone ‘come together’ and end their divisions and join together, hand-in-hand, in a new spirit of cooperation. He wouldn’t be a Democrat if he didn’t feel that way. It’s just that he now has a fresh memory of what our Republican Nemesis is capable of and he knows that The Republicans are going to fight with tooth and nail and misinformation and character assassination and lies about almost every aspect of any health care program that any Democrat might propose.

He knows that when the Bad Guys start employing all of their power and resources and wicked inspirations—-through the Republican Party—-they are not going to be interested in ‘ending divisions’ in the country. Negative campaigning is a strategy that has worked for them time after time after time. One of the most famous of Democratic defeats in recent decades was Hillary Clinton’s [foolish, in hindsight] effort to sell the Republicans and their sponsors on a compromise plan that they never had any intention of considering. They had intended all along to throw up a firestorm of opposition (i.e., divisiveness) in order to utterly defeat the Democrats.

John Edwards knows that once he (or Barack or Hillary) try to get any legislation passed that would actually improve the financial security of the bottom 2/3 of America’s citizens, the only way it will be possible to maintain a non-divisive atmosphere is by simply giving up and not pressing the Republicans for any real change. You know, kinda like how the new Democatic Congress caved in on Iraq last year after Bush made it clear that he would put up a huge fight that they might regret.

I would say that John Edwards now has a more mature understanding of the political landscape and realizes that we need to be willing to call bad guys Bad Guys if we want to be able to stop those bad guys from continuing to hurt people through their political efforts. Why must we accuse and define the Republicans and their corporate sponsors as a threat to the American people? Because if we actually try to do something to improve the lives of average Americans, the Republicans will do their best to demonize us, to misrepresent our motives and our methods, to portray us as people who are ultimately a danger to the American people. That’s what they do. We need to reveal these people to the electorate, not let them get away with their evil machinations.

I suspect that at some point John must have realized that his experience in successfully arguing cases of moral import to juries as a trial lawyer actually made him the best qualified Democrat remaining in the field to represent the American people when the time comes to argue the case for universal health care to Congress and the Republican minority. I really think that John is the only one of the three who could overcome the firestorm of Republican resistance (especially if he had Obama on his team as VP) that is sure to come.

You see people, the Republicans fully intend to be devisive (i.e., define us as a threat to the American people) and they will loudly scream that we are the ones being divisive whenever we voice any criticism of their policies, motives, etc. We will not be able to win against these people if we are not willing to define them to the electorate. In order for us to define them (in a way that will defend us from their attacks), we will need to criticize them. And yes, that is divisive. We need to let the American people know who WE are and who THEY are and why they should want to identify with US (it’s because THOSE people actually are are a threat to US). When the other side is committed to trashing your reputation with a huge investment of resources, it is absolutely necessary for us to embrace divisiveness because that is the only way we are going to be able to provide a victory for [the vast majority of] the American people.

Yes, it’s regrettable that we must be strident in our efforts to obtain justice, but that unfortunately is the reality we are dealing with.

REPUBLICAN NEMESIS
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Should the government cut income taxes to stimulate the economy, as the Republicans have urged? No, it shouldn’t. Take a look at this graph Paul Krugman put up on his blog:

According to the graph, it would actually make more sense to raise taxes on rich people than it would to cut them, if your purpose is to fight a recession and stimulate the economy. When Bill Clinton and a Democratic Congress raised the income tax rates of the wealthy in 1993, the immediate result was seven years of strong economic growth. After the Republicans slashed the income tax rates of the wealthy in 2001, the immediate result was economic decline, followed by one the weakest economic ‘recoveries’ on record. Employment and economic activity began to pick up significantly only after the immediate effects of the tax cut had worn off.

To understand why the historical record flatly contradicts the claims of the Republicans on tax policy, it helps to understand a few basics about the economy. Economic recessions are times when unemployment grows, businesses lose money, and measurements of the economy’s performance show a significant downturn. The measurement that gets most of the attention during a recession is the GDP, i.e., the Gross Domestic Product.

The GDP is a measurement of economic output, but it is also more directly a measurement of total SPENDING in the economy. GDP numbers are derived primarily from sales figures, the sales of goods and services. When the economy is in a recession, sales drop because there is a decline in total SPENDING. When spending drops, people lose their jobs. If you want to eliminate unemployment and pull an economy out of a recession, then it is absolutely necessary that you increase the amount of money that is being SPENT in that economy.

(You’ll want to note that the opposite of spending is saving. When money is saved, it is taken out of the economy. When saved money is spent by a borrower, it is injected back into the economy. When an economy evolves into a recession, it is usually because less of the money that has been saved is being spent by new borrowers. Ultimately, then, the only reason why recessions ever occur is because too much saving is going on and not enough spending. Now, it may be prudent for the individual to save for purchases and not borrow, but if everyone were to do this, the economy would collapse into a catastrophic Greatest Depression Ever.)

An “economic stimulus package” can only be effective if it leads directly to an increase in total spending in the economy. Does an income tax cut—-by itself—-cause an increase in total spending to occur? No it does not. An income tax cut by itself cannot produce a net economic stimulus. This is because a tax cut by itself must necessarily be accompanied by a reduction in government spending. Governments cannot spend money that they do not have, so any time a government reduces the amount of taxes it collects, it is automatically depriving itself of the money it needs to continue spending as it had. Unless something else is done a tax cut automatically forces the government to reduce its spending. The ‘something else’ that usually enables governments to continue spending is called borrowing.

When governments borrow money, the economic result is always the same: strong, direct economic stimulus. This is because money that had been taken out of the economy (saved) is then spent by the government. In contrast, an income tax cut by itself takes money that would have been spent by the government and gives at least some of it to savers who will remove a portion of the money from the economy. The only time an income tax cut by itself is not contractionary is when all those receiving a tax cut go out and spend all of it. When that happens, the decrease in government spending is exactly matched by the size of the increase in consumer spending. And when that happens, the effect of the tax cut is neither expansionary nor contractionary for there is no change in total spending. That’s the best you can hope for if you cut taxes and pay for them with spending cuts. Listening John McCain?

Of course, it is far more likely that at least some of the taxpayers who receive a rebate check from the government will either save some portion of it or they will use some of all of it to pay off debt. If/when either of those things happen, the net result is a withdrawal of money from the economy as a direct result of the tax cut. This, because the drop in government spending that would occur would be greater than the increase in consumption spending that would occur. When an increase in consumption spending fails to make up for a decline in government spending, the result is a net decline in total spending and deteriorating economic strength. That, my friends,is why income tax cuts by themselves are almost always contractionary.

The only reason why George Bush’s income tax cuts for the wealthy in 2001 did not throw the economy into a deep depression is because he also did something else besides cutting taxes that actually provided some stimulus to the economy. He borrowed massive amounts of money in order to maintain government spending levels and to finance his incompetently conceived and executed War on Terror. It took all of that borrowing and historically low interest rates to keep the economy from collapsing as a direct result of the Republican tax cut.

If the tax cuts had been given only to poorer people who would have spent all of it, the effect would not have been as contractionary. But because the Republicans gave most of their tax cut to America’s wealthiest people, larger amounts of money were removed from the economy, requiring even more borrowing in order to avoid disaster. Saving is the very last thing you want people to do with a tax cut that is intended to stimulate consumption, so why would you give any of a tax to wealthy people when the economy needs stimulus, not more saving?

Utterly unappreciated by the media is the simple economic truth that tax increases are a true stimulus to the economy, if some of the money collected in taxes comes from people who would have saved it, instead. When/if that happens, money that would have been removed from the economy by the savers would get spent by the government, instead. That is a net increase in total spending, which is economic expansion, any way you look at it.

Why is it that we never hear any politicians proposing that taxes be increased—-on the nation’s richest savers—-as a way to stimulate the economy? Unfortunately, the Republican Party has been so successful in promoting its economic mythology over the years, many Democrats have come to come to accept many of their flawed premises. How incredibly sad for us. Let’s hope that we can start to change that situation this election cycle…

Economic Justice

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