One Term of Crow

The crow-eating didn’t last long. Republicans won the House thanks to a group of astroturfed activists who in their hearts believe they are a grassroots movement. Most of them don’t know they are tools of an enormous public relations initiative hell bent on putting business “friendly” Republicans in power. The movement is the antithesis of that, however. It’s about having no power. At least that’s what most of them say.

Movement politics in America in 2010 is anti-bailout, anti-regulation, and anti-tax. This is what the PR machine fed to the lemmings in correctly strategizing that by removing the incumbent party, the friendlies would run the show. But all the things the movement is against are very much counter to the things all Americans, including the mis-informed, want to be: anti-unemployed, anti-unsafe, and anti-bankrupt.

Double-negatives notwithstanding, the new Congress has an enormous dilemma on its hands. If power is all it wants, then it must know that unless the deficit for fiscal year 2013 equals $0.00, there will be another bloodletting in 2012. Those of us who have actually done the math know that if we abolish all the agencies the activists suggest should go and if we cut every earmark, we save ourselves at best 2 months of deficit spending annually. All our “wasteful Washington spending” adds up to about 1/6^th of just the money we already overspend.

Boehner and company now have two years to solve this:

1. Increase employment
2. Cut taxes
3. Eliminate deficits

In other words, Americans who voted in the mid-terms want a viable economy. If the Republicans know how to do this they’ve been doing a damn good job of keeping it to themselves. Yet, within the political reality which is a horrifying nightmare for anyone in power today, lies potential for a stunning silver lining.

If Americans do indeed want full employment, lower taxes and no deficits, then the American people (who are the government as defined that Constitution thing) are at odds with the corporations who paid for this election and every other one in modern history.

First, to increase employment America must quickly enact a rational trade policy that sharply cuts imported manufactured goods. Without a manufacturing base, the American economy is doomed. (I’ve written extensively about the fatality of outsourced labor.) Even if we did it industry by industry, there would be a huge impact. Bottom line: NAFTA and all the other trade deals we’ve cut in modern times serve the large multinational monopolies due to pulling the bottom out of the wage floor.

Secondly, cutting taxes and eliminating deficits are contradictory, unless you’re Arthur Laffer who theorized lower taxes would increase economic activity. Although Laffer’s theory – or at least the margins at which he modeled – has been proven wrong, the Taxed Enough Already (TEA) brigade must understand that most Americans have an effective tax rate of about 13 percent. Wealthier Americans are taxed at lower rates than working class Americans. Still, if 13 percent of our income goes toward government spending, and the government spends about 20 percent of GDP (this has been true since the invention of the political economy which was before Jesus), then there’s going to be a deficit.

We can’t have both tax cuts and no deficits without a significant decrease in spending. As I’ve written before, there is no way to significantly decrease spending without going through the Department of Defense. Furthermore, most of the activist community is not aware that the United States spends more on military each year than the next ten nations combined.

And the deficits have been so high in the past two years in part because President Obama has been putting those two wars over there on the books, something his predecessor did not do. Additionally, it’s possible to be responsible about national security without having to disproportionately increase military spending with each budget, yet that’s what we’ve been doing for decades.

There is no option to cut taxes. They are already historically low. And the argument that business taxes are too high is flat out BS. Effective business tax rates are about 6 percent and most companies don't pay them at all.

We can't have both tax cuts and war, and really it looks like we can afford neither at this point.

If indeed we’re looking a Republican House because Americans want jobs and responsible spending, the new Speaker must play ball and promote what are truly progressive causes: strong labor and peace. Bring manufacturing back and end the wars (via defunding) and he can be Speaker for Life.

Then, and only then, the liberal can work toward turning everyone into solar-powered promiscuous, vegan atheists.