In keeping with the Western-themed title of Young Guns: A New Generation of Conservative Leaders, allow me to set the scene: It’s well past high noon, and as the dust settles the economy lies bleeding. Looks like it’s all over but the dyin’ and the buryin’. But wait! Here come the "young guns" galloping into the scene. But have they come to save the day, or finish the job?
That depends on what they’re packin’, and it ain’t a first-aid kit. It looks like the same old ammo their forebears used the first time around.
Republican Whip Eric Cantor, the most senior of the "young guns," takes the first shot, with a somewhat whiny revision of the past 20 months in which he claims that he and House Minority Leader John Boehner handed the president a "fair" and "understandable" alternative stimulus that would cut taxes and lower the deficit. But in reality the plan amounted to a tax increase for millions of Americans and (of course) a massive tax cut for the wealthy. Not only does Cantor conveniently forget the compromises the Obama administration made with Republicans, including shrinking his proposal to get Republican votes, but he manages to block out his GOP’s pledge to exact vengeance upon Republican senators who worked with the White House to come up with a compromised bill.
That he manages to do the above while claiming to have spent the last 20 months trying diligently to work with the Obama administration, only to find Republicans barred from even offering input, is by itself a stunning achievement of endurance in cognitive dissonance.That achievement is surpassed, a few pages later, by Cantor’s claim that the stimulus "failed." He even managed to ignore Republicans who privately admitted the stimulus created jobs. Perhaps that’s due to the book going to press before the CBO reported that the stimulus is working, actually.
The Congressional Budget Office released yesterday its updated estimates of the Recovery Act’s impact on the economy:
…CBO estimates that [the Recovery Act's] policies had the following effects in the second quarter of calendar year 2010:
• They raised real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.5 percent,
• Lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points,
• Increased the number of people employed by between 1.4 million and 3.3 million, and
• Increased the number of full-time-equivalent jobs by 2.0 million to 4.8 million compared with what would have occurred otherwise…
More growth and more jobs with the stimulus than without. Period.
This is not the first scrap of evidence proving the stimulus is working. It is not an outlier report against a tide of opposing conclusions. It’s merely the latest confirmation of what we already knew.
…Conservatives argue that: the economy is still struggling, therefore the stimulus didn’t work. That is an argument not based on any serious, objective economic analysis, and should be dismissed.
Not only does Cantor leave out all of the above, but he goes on to accuse the president of "bailing out corporations." In truth, he probably meant "bailing out the wrong corporations" when he wrote:
Then the Democrats got into the auto business. Instead of allowing union cronies and corporate CEOs to be held accountable for their poor decisions, they made the taxpayers accountable by buying Chrysler and General Motors. It was the bailout culture all over again, with Washington privatizing the gains and socializing the losses.
Here, again, is what really happened.
- Just as with the Wall Street Bailout, the auto bailout got rolling under the Bush administration.
- Still on the Bush administration’s watch, Congress demanded more from auto industry CEOs than Wall Street, for a fraction of Wall Streets "no strings" bailout.
Under the Obama administration, which hammered out the final terms of the auto bailout, the bid to save auto industry jobs — not to mention jobs in industries that rely upon the auto industry — has begun to pay off.
Remember the auto-bailout? Around the beginning of June, and again in mid-August, we started seeing reports that it at last this bailout was starting to pay off. Particular attention given to GM’s turnaround: the first quarterly profit reported in almost three years, rising prices for the company’s cars, filing to once again sell shares publicly, and already producing returns on the government’s investment. Where U.S. manufacturing has lost nearly 175,000 jobs in the last two years, the U.S. auto parts and production sectors grew by 41,000 jobs to 704,000 between July 2009 and July 2010.
No wonder president Obama, when he toured a GM factory in Detroit, touted the success of GM’s turnaround to vindicate government intervention to save U.S. automakers — and the jobs of auto-workers, as well as those in the parts, supply, and service sectors that depend on the auto-industry.
… It serves to remind Americans of what conservatives would rather we forget: that they were adamant that the government stand by and "do nothing" as U.S. automakers failed, with disastrous consequences for workers, families and communities that relied on the industry. Likewise, conservatives were willing to let the financial sector collapse, and let million of Americans suffer another Great Depression, "For the sake of the altar of the free market." Many of the congressional conservatives who advocated letting the U.S. auto-industry die, came from southern states that offered generous incentives to foreign automakers to build factories, which came the expense of their constituents, and failed to yield the promised economic growth.
None could claim to be as successful, in fact, as our government’s investment in saving the U.S. auto-industry. No wonder conservatives who claimed at the time that president Obama effectively "owned" GM, with a government rescue in place for the company and other automakers, are now claiming that he can claim no credit for its turnaround.
I’ll admit that in this case, it’s a bit personal. There are people in my family who still have their jobs because the president did not take the advice of Cantor and other conservatives. Granted have their jobs at anywhere from one-fourth to one-third less pay. They’re working harder for less, and sacrificing time with their children and families. But they have jobs, because this administration chose not to let one of America’s biggest industries go extinct.
Cantor and his fellow conservatives’ let-them-collapse attitude then would have meant a lot more people unemployed now; no jobs created, no jobs saved. (The GOP never presented a plan to employ the huge numbers of people who would be unemployed by now, had Obama listened to them, but it’s pretty certain they would have obstructed the unemployment benefits of those autoworkers who would have been "held accountable" for being autoworkers.)
Back(wards) to the Future
Cantor’s revision of the past is, it turns out, prelude for his vision of the future. What he calls "A Better Way" amounts to little more than shifting into reverse, and rolling back what has been accomplished in the short time since January 2009. Like Marty McFly in Back to the Future, Cantor seems to think conservatives can go "back in time" to fix today’s problems.
Don’t count on a typical Hollywood ending, though. They can’t get their hands on a time machine, but they could get the next best thing if they take over Congress after November. Unlike McFly, however, conservatives won’t do anything differently with their chance to "turn back time." They’ll do the same things as before, and expect different results.
As I’ll show in my next, and final, post on the "young guns," the "better way" that Cantor, Ryan, and McCarthy advocate is more of the same conservative failure that got us here — the same disdain for government, free market fundamentalism, and miscast morality that got us here; with a unhealthy dose of disdain and hostility for Americans who are suffering the consequences of all the above.
We all know how bad it is out there. Sure the recession may be over, but the recovery hasn’t started for millions of Americans.
The biggest danger posed by these misunderstandings is that they will mislead people into thinking things are getting better on their own. We’re technically in a "recovery," but that’s like saying the flood waters are subsiding after a tidal wave. Millions of lives are still devastated, and the pace of recovery is much too weak to help them in the foreseeable future.
How bad is it out there? There are 4 million fewer wage earners today than there were in 2007, but more and more people are entering the workforce. Long-term unemployment is at record levels. If things don’t change, many unemployed Americans over 50 may never work again. Their passport to the American dream will have been permanently revoked.
Young people aren’t faring any better. The unemployment rate among people aged 18 to 24 was 18% in August. We’re facing the possibility of a entire generation entering the workforce without any jobs available. That’s why Derek Thompson, a fine economics writer who also belongs to the twenty-something generation, added this comment to a piece on millenials forced to live with their parents: "We want to work. We want to grow up. We want have own own jobs and apartments and weddings and baby showers. But many young people cannot do those things right now … "
…Under-employment is an enormous problem, too. As Arjun Jayadev and Mike Konczal observed, underemployment is up across thirteen different employement sectors. That’s one reason why the gap in household earning between white and African American families isn’t closing, even though their average hourly wages are closer than they once were.
More economic tragedy: Nearly 44 million Americans live in poverty. With 14.3% of its citizens impoverished, the US now has the third worst poverty rate of any developed nation.
Don’t think it could get worse? Remember the scene from Back to the Future II, when McFly returned to a present where Biff Tannen — the bully of the story — had remade reality more to his liking?
The economy still lies bleeding, and it doesn’t matter if the "young guns" deliver the final shot, or just watch. The ending is pretty much the same.