by is Mooney
There’s certainly a risk of inflation when you create new money. But the idea that inflation is something we should focus on right now, amidst much more momentous economic hardships—and at a time when inflation is, at this writing, not raising any alarm bells—is ostrich-like.
Nevertheless, the anti-Fed cry led to an extraordinary occurrence: In September 2011, Republican leaders in Congress actually sent Bernanke a letter urging him to cease attempts at monetary stimulus—as if this is a decision that politicians, rather than expert economists, ought to be making.
The Republicans’ stated reason for pressuring the Fed was very peculiar. QE2, they said, had “likely led to more fluctuations and uncertainty in our already weak economy.” Further such actions, House Speaker Boehner and his colleagues intoned, “may erode the already weakened U.S. dollar or promote more borrowing by overleveraged consumers.”
“I’m not shocked by much anymore, but I am shocked by this: the leaders of one of the great parties in Congress calling on the Federal Reserve to tighten money in the throes of the most prolonged downturn since the Great Depression,” wrote David Frum when the GOP letter came out. Presumably Frum can still can remember the days when Milton Friedman, who would have supported monetary easing, was a GOP icon.
The claim of the GOP leadership is deeply disturbing, in that the core problem with the economy as of this writing (in early October 2011) is precisely the opposite of what Republicans say. It isn’t inflation or people getting into too much debt. It’s unemployment and lack of growth. It’s a failure to come out of the recession with the speed that had been hoped for, which is precisely why it was appropriate for the Fed to take additional action.
In sum, Republican economic unreality now extends into monetary policy, and includes rejecting the views of Milton Friedman and pressuring the Federal Reserve, always insulated from politics (until now), to take precisely the opposite actions from those that are needed as we continue to reel from the Great Recession.
As my discussion with Bruce Bartlett about the right wing’s economic follies continued—including conservatives taking positions that, just a few years earlier, conservatives denounced—something occurred to me. Bartlett was a nuanced and a situational economic thinker, rather than one who insists upon strict all-or-nothing rules or black and white approaches. And that (along with his mouth) was what got him in so much trouble with today’s conservatives.
Bartlett was explaining to me his long study of Keynesianism—the view that when an economy freezes, the government has to step in and spend to get the gears turning again. The political right today, explains Bartlett, believes that “any sort of Keynesian fiscal stimulus is not only wrong, but counterproductive.” Instead, for conservatives, it’s tax cuts, tax cuts, tax cuts, no matter the situation—a very un-nuanced application of the supply side economics of the Reagan years.
Bartlett himself was a chief proponent of supply side economics—back then. He authored the book Reaganomics in 1981. But he doesn’t think the time for Reaganomics is now, because he doesn’t think that one economic truth obtains in every economic situation. “Right at the moment when the economy collapsed, it was immediately apparent to me that the whole Keynesian idea was now exactly applicable to the circumstances of the time,” says Bartlett. “Rather than being dead, it was coming back like a Phoenix.”
“I still think the supply side model fits in other circumstances,” he adds, “but it’s certainly not applicable today. We have an excess of supply—why do we need more supply?”
When circumstances change, a flexible thinker like Bartlett can find himself on the same side as a liberal economist like Paul Krugman. Meanwhile, the rigid right keeps pushing tax cuts, and now, “don’t print money”—not so much thoughts any longer, but chants.
Notes
187 “people who literally walk across the street” Interview with Bruce Bartlett, October 3, 2011. All quotations (unless otherwise noted) are from the same interview.
188 “Absolute faith like that overwhelms a need for analysis” Ron Suskind, “Faith, Certainty, and the Presidency of George W. Bush,” New York Times Magazine, October 17, 2004. Available online at http://www.nytimes.com/2004/10/17/magazine/17BUSH.html.
188 “did not want to be associated with that kind of work” Richard W. Stevenson, “In Sign of Conservative Split, a Commentator is Dismissed,” The New York Times, October 18, 2005.
189 economists today are liberal by nearly a 3:1 margin Neil Gross and Solon Simmons, “The Social and Political Views of American Professors,” 2007 working paper.
189 “economic Enlightenment” Daniel B. Klein and Zeljka Buturovik, “Economic Enlightenment Revisited: New Results Again Find Little Relationship Between Education and Economic Enlightenment but Vitiate Prior Evidence of the Left Being Worse,” Econ Journal Watch, Vol. 8, No. 2, May 2011, pp. 157–173. Available online at http://econjwatch.org/articles/economic-enlightenment-revisited-new-results. See also Daniel B. Klein, “I Was Wrong, and So Are You,” The Atlantic, December 2011, available online at http://www.theatlantic.com/magazine/archive/2011/12/i-was-wrong-and-so-are-you/8713/#.
190 the one institution above all that must remain above politics Noam Scheiber, “Fighting the Fed,” The New Republic, November 17, 2010. Available online at http://www.tnr.com/print/article/politics/79223/fed-sarah-palin-war-quantitative-easing.
190 directly refuted right before their eyes Nyhan, Brendan and Jason Reifler. 2010. “When Corrections Fail: The Persistence of Political Misperceptions.” Political Behavior 32(2):303–330. Available online at http://www-personal.umich.edu/~bnyhan/nyhan-reifler.pdf.
190 straight from George W. Bush’s mouth For a rundown of all the times the Bush administration made this claim, see Brendan Nyhan, “Bush vs. his Economists, IV,” October 10, 2006. Available online at http://www.brendan-nyhan.com/blog/2006/10/bush_vs_his_eco.html. See also Dana Milbank, “For Bush Tax Plan, a Little Inner Dissent,” The Washington Post, February 16, 2003.
191 “That’s been the majority Republican view for some time” Quoted in Brian Beutler, “It’s Unanimous! GOP Says No to Unemployment Benefits, Yes to Tax Cuts for the Rich,” TPMDC, July 13, 2010. Available online at http://tpmdc.talkingpointsmemo.com/2010/07/its-unanimous-gop-says-pay-for-unemployment-benefits-not-tax-cuts-for-the-rich.php.
191 some $ 1.5 trillion between 2001 and 2007 Center on Budget and Policy Priorities, “Tax Cuts: Myths and Realities,” May 9, 2008. Available online at http://www.cbpp.org/cms/?fa=view&id=692.
191 “some snake oil salesman” N. Gregory Mankiw, Principles of Microeconomics, p. 29–30, “Charlatans and Cranks.” Dryden Press, Fort Worth, TX, 1998.
191 supremely Manichean stance Bruce Bartlett, “Norquist Holds the Deficit Hostage to ‘Starve the Beast’ Theory,” Tax Notes, March 21, 2011.
192 “not because citizens are taxed too little” Orrin Hatch press release, April 14, 2011. Available at http://hatch.senate.gov/public/index.cfm/releases?ID=cd997230–7bd5–45ec-a1df-18ea6fe1ee10.
192 analysis of our budgetary plight See Pew Charitable Trusts, “The Great Debt Shift,” April 2011, available online at http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Fact_Sheets/Economic_Policy/drivers_federal_debt_since_2001.pdf.
193 “Simple common sense . . .” Bruce Bartlett, “The Republican Myth on Tax Cuts and the Deficit,” Tax Notes, May 16, 2011.
193 early 2010 analysis Congressional Budget Office, “Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output From October 2009 through December 2009,” February 2010. Available online at http://www.cbo.gov/ftpdocs/110xx/doc11044/02–23-ARRA.pdf.
194 “jobless stimulus” “Did the Stimulus Create Jobs? Yes, the stimulus legislation increased employment, despite false Republican claims to the contrary.” FactCheck.org, September 27, 2010. Available online at http://www.factcheck.org/2010/09/did-the-stimulus-create-jobs/.
194 “zero jobs” PolitiFact, “Rick Perry Says the 200
9 stimulus ‘created zero jobs,’” September 12, 2011, available online at http://www.PolitiFact.com/truth-o-meter/statements/2011/sep/12/rick-perry/rick-perry-says-2009-stimulus-created-zero-jobs/.
194 a variety of tax cuts Citizens for Tax Justice statement, “President Obama Cut Taxes for 98 % of Working Families in 2009,” April 13, 2010. Available online at http://ctj.org/pdf/truthaboutobamataxcuts.pdf.
194 64 percent of Tea Partiers New York Times/CBS Poll of Tea Party Supporters, April 5–12, 2010. Available online at http://documents.nytimes.com/new-york-timescbs-news-poll-national-survey-of-tea-party-supporters.
195 “a majority of Americans have seen reduced taxes under President Obama” PolitiFact, “Barack Obama says he lowered taxes over the past two years,” February 7, 2011. Available online at http://www.PolitiFact.com/truth-o-meter/statements/2011/feb/07/barack-obama/barack-obama-said-he-lowered-taxes-over-past-two-y/.
195 The Heritage Foundation Curtis Dubay, “Obamacare and New Taxes: Destroying Jobs and the Economy,” January 20, 2011. Available online at http://www.heritage.org/research/reports/2011/01/obamacare-and-new-taxes-destroying-jobs-and-the-economy.
195 repeatedly displayed a chart PoliticalCorrection.org, “Rep. Bachmann Blames Deficit on Obama,” January 7, 2011. Available online at http://politicalcorrection.org/factcheck/201101070002. Original transcript of Bachmann’s remarks, on Fox News’s On the Record with Greta van Susteren, is available at http://www.foxnews.com/on-air/on-the-record/transcript/bachmann-president-2012.
196 “the most monumental insanity” Andrew Leonard, “It is the most monumental insanity” (interview with Bruce Bartlett), Salon.com, January 5, 2011. Available online at http://www.salon.com/2011/01/05/bruce_bartlett_on_tea_party_monumental_insanity/.
196 warning about precisely this disaster Bruce Bartlett, “Debt Default: It Can Happen Here,” The Fiscal Times, June 11, 2010. Available online at http://www.thefiscaltimes.com/Columns/2010/06/11/Debt-Default-It-Can-Happen-Here.aspx.
196 “the starvation of this economy-retarding beast” John Tamny, “Learn to Love a U.S. Default,” Forbes, May 24, 2010. Available online at http://www.forbes.com/2010/05/22/default-united-states-economy-opinions-columnists-john-tamny.html.
196 debt ceiling denial Carrie Budoff Brown, “Default deniers: The new skeptics,” Politico, May 17, 2011. Available online at http://dyn.politico.com/printstory.cfm?uuid=11733D6E-25F4–410E-9092–45FD717A8B2F.
197 “default will be painful, but it is all but inevitable” Ron Paul, “Default Now, or Suffer a More Expensive Crisis Later,” Bloomberg, July 22, 2011. Available online at http://www.bloomberg.com/news/2011–07–22/default-now-or-suffer-a-more-expensive-crisis-later-ron-paul.html.
197 “starve the beast” approach John Tamny, “Learn to Love a U.S. Default,” Forbes, May 24, 2010. Available online at http://www.forbes.com/2010/05/22/default-united-states-economy-opinions-columnists-john-tamny.html.
198 Reasonably foreseeable consequences Secretary Timothy Geithner, Letter to the Honorable Senator Michael Bennet, May 13, 2011, available online at http://www.treasury.gov/connect/blog/Documents/20110513%20Bennet%20Letter.pdf.
198 Pat Toomey Pat Toomey, “How to Freeze the Debt Ceiling Without Risking Default,” The Wall Street Journal, January 19, 2011.
198 “a complete mystery” Bruce Bartlett, “Debt Ceiling May Come Crashing Down on Treasury,” The Fiscal Times, May 6, 2011. Available online at http://www.thefiscaltimes.com/Columns/2011/05/06/Debt-Ceiling-May-Come-Crashing-Down-on-Treasury.aspx.
198 just the month of August 2011 Bipartisan Policy Center, Debt Limit Analysis, July 2011. Available online at http://www.bipartisanpolicy.org/sites/default/files/Debt%20Ceiling%20Analysis%20FINAL%20(updated).pdf.
199 “default by another name” Treasury Department Fact Sheet, “Debt Limit: Myth v. Fact,” available online at http://www.treasury.gov/initiatives/Documents/Debt%20Limit%20Myth%20v%20Fact%20FINAL.pdf.
199 “shouldn’t be playing around with inflation” Noam Scheiber, “Fighting the Fed,” The New Republic, November 17, 2010. Available online at http://www.tnr.com/print/article/politics/79223/fed-sarah-palin-war-quantitative-easing.
199 not raising any alarm bells Paul Krugman, “A Quick Note on Inflation,” September 24, 2011, available online at http://krugman.blogs.nytimes.com/2011/09/24/a-quick-note-on-inflation/.
199 sent Bernanke a letter Republicans’ Letter to Bernanke Questioning More Fed Action, September 20, 2011. Available online at http://blogs.wsj.com/economics/2011/09/20/full-text-republicans-letter-to-bernanke-questioning-more-fed-action/.
200 “I’m not shocked by much anymore” David Frum, “The GOP’s Bernanke Letter,” FrumForum.com, September 21, 2011. Available online at http://www.frumforum.com/the-gops-bernanke-letter.
Chapter Eleven
The Republican War on History
“What we see in here isn’t always the same as what we read in books, or see on TV. So what? We know the truth, and that’s good enough for us.”
So speaks Addison, a young female character in former Arkansas governor Mike Huckabee’s cartoon Learn our History series. In the series—tagline: “Take Pride in America’s Past”—a group of kids called the “TimeCycle Academy” ride their bikes back in time to learn about U.S. history. But not just any version: It’s a mythologized and religiously infused account, provided to counter the alleged “hate America” narratives of the cultural left.
Thus in the sample World War II video, Adolf Hitler’s evil is unleashed across Europe, but the U.S. rallies and even the “gals,” like Rosie the Riveter, pitch in. At least in the sample video, however, Franklin Delano Roosevelt appears absent.
Huckabee’s series offers another sample video about the Reagan Revolution. At its beginning, America of the late 1970s faces a “financial, international, and moral crisis”—epitomized by scenes of Washington, D.C. drowning in squalor and street crime. But “one man with some very big ideas set out to make a huge impact.” He gave people “hope,” says Addison. Then, at a speech given in New Hampshire in September of 1980, we see a campaigning Ronald Reagan saying,
God had a plan for America. I see it as a shining city on a hill. If we ever forget that we are one nation under God, then we will be one nation gone under.
“One man transformed a nation . . . and the world,” Huckabee’s video goes on to declare—and soon the Cold War has been won, with Reagan ordering Gorbachev to “tear down this wall.”
From a liberal perspective, this is hogwash. Words like reductionist, triumphalist, even jingoist come to mind. For Huckabee, it would appear that history is a simple, linear story that makes America look great—and why not? We are God’s chosen, after all.
It gets worse. It looks like the Ronald Reagan quotation above isn’t even something the former President said—or at least not in September of 1980, while campaigning in New Hampshire. Rather, the words seem to be an amalgam of many things Reagan said over the years: a composite speech, at best. Reagan often spoke of a “shining city on a hill.” That great line—“if we ever forget that we’re one nation under God, then we will be a nation gone under”—was said at an Ecumenical Prayer Breakfast in Dallas, Texas on August 23, 1984.
A liberal found this out, of course—tracked it back to the sources, proved it. As if the goal of this sort of conservative history is to keep good footnotes.
The Huckabee series is just one in a number of recurring cases in which conservative politicians, intellectuals, and activists have been caught committing historical fouls for ideological reasons. Consider a few recent episodes, several quite infamous:
After touring Boston’s Freedom Trail and the Paul Revere house in June 2011, Sarah Palin stated that Revere, on his famous midnight ride, “warned the British that they weren’t going to be taking away our arms, by ringing those bells and making sure as he’s riding his horse through town to send those warning shots and bells that we were going to be secure and we were going to be free and we were going to be armed
.” The errors here are multiple. Palin is anachronistically interpreting Revere as an icon of a right to bear arms that didn’t exist yet—this was before the Constitution and the Bill of Rights. Revere’s ride was not to “warn the British”—it was to warn prominent colonists like Samuel Adams and John Hancock that the British were coming—and it was highly secretive. There was no ringing of bells. Later, Revere was captured by the British (though he was trying to avoid them) and he did try to spook them with some puffed up talk about how many armed colonists there were. But obviously this was not the purpose of his ride. Palin nevertheless refused to admit correction and stood by her statement—seizing on this last detail in particular.
In a January 2011 speech in Iowa, Michele Bachmann, celebrating the U.S.’s tradition of inclusivity and diversity, claimed that the Founding Fathers “worked tirelessly until slavery was no more in the United States.” She then cited John Quincy Adams, our sixth president, as an example. There are, again, many problems here: Many of the founders owned slaves, and the Constitution treated slaves as three-fifths of a person for the purposes of apportioning representatives to different states. And John Quincy Adams, who did oppose slavery, was not a founder. Nevertheless, when asked about her claim by George Stephanopoulos of ABC, Bachmann, like Palin, stood her ground. She explicitly called John Quincy Adams a “Founding Father”—even though he was born in 1767 and so would have been a mere child in 1776, and just 20 years old when the Constitution was signed (not by him).
In 2010 in Texas, a Republican-dominated state Board of Education changed the social studies curriculum to require high school government classes to cast doubt on the idea that there’s a constitutionally mandated separation of church and state. Specifically, the new standards state that students should “examine the reasons the Founding Fathers protected religious freedom in America and guaranteed it free exercise by saying that ‘Congress shall make no law respecting an establishment of religion or prohibiting the free exercise thereof,’ and compare and contrast this to the phrase ‘separation of church and state.’” Where’s the contrast? The First Amendment’s prohibition against Congress’s creating an “establishment of religion” (the so-called Establishment Clause) has indeed been interpreted by the courts as creating such a “separation”—based in significant part on writings of Thomas Jefferson. In an 1802 letter to the Danbury Baptists, Jefferson described the purpose of the Establishment Clause in precisely this way, writing: Believing with you that religion is a matter which lies solely between Man & his God, that he owes account to none other for his faith or his worship, that the legitimate powers of government reach actions only, & not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should “make no law respecting an establishment of religion, or prohibiting the free exercise thereof,” thus building a wall of separation between Church & State.
