[Marxism] Krugman: The destructive center

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

Apparently food stamps took the chop, and medical assistance for the poor. 

I still the rather large assistance to unemployment compensation was the
real target of the "moderates." That's the meaning of the "moderate"
philosophy that money for working people is money wasted, and since it is
the rich who "create jobs," all money for "job creation" should go directly
to the rich, without any of it passing first through the hands of
economically irrelevant children or unemployed workers.

The idea that the producers of the commodity labor power, including
children, simply have nothing to do with "job creation" is partly a product
of the long reign of fictitious capital, in which money mysteriously
produces more money, with no apparent material intermediaries like workers
and machines and products of labor. This thinking is still very dominant in
bourgeois minds (including and perhaps especially the political class)
although it has taken a big hit in the "real economy."

Krugman's hopes for the Senate-House conference are misplaced, I suspect.
More likely as time passes from the latest panic-inducing job loss
announcement, the "moderates" will take the ax to unemployment insurance,
too. (Where my personal ox will be very much gored.)

Clearly there is substantial backing for this ax job on the "stimulus",
reflected in the strong support from the Washington Post, and the bipartisan
character of the "moderate" scum. It seems to me that sectors of the
bourgeoisie have become complacent, because no new giant breakdowns of
finance and trade have taken place for a couple months.

Their tendency may be to say: Why shouldn't we take full advantage of the
cyclical recession? Why should we worry about how deep it is? Wages,
including the social wage (services provided by the state to working people)
are not supposed to be increased but brutally slashed during such a
downturn. Let's get on with it!
Fred Feldman 

http://www.nytimes.com/2009/02/09/opinion/09krugman.html

February 9, 2009
Op-Ed Columnist
The Destructive Center 
By PAUL KRUGMAN
What do you call someone who eliminates hundreds of thousands of American
jobs, deprives millions of adequate health care and nutrition, undermines
schools, but offers a $15,000 bonus to affluent people who flip their
houses?

A proud centrist. For that is what the senators who ended up calling the
tune on the stimulus bill just accomplished. 

Even if the original Obama plan - around $800 billion in stimulus, with a
substantial fraction of that total given over to ineffective tax cuts - had
been enacted, it wouldn't have been enough to fill the looming hole in the
U.S. economy, which the Congressional Budget Office estimates will amount to
$2.9 trillion over the next three years.

Yet the centrists did their best to make the plan weaker and worse.

One of the best features of the original plan was aid to cash-strapped state
governments, which would have provided a quick boost to the economy while
preserving essential services. But the centrists insisted on a $40 billion
cut in that spending.

The original plan also included badly needed spending on school
construction; $16 billion of that spending was cut. It included aid to the
unemployed, especially help in maintaining health care - cut. Food stamps -
cut. All in all, more than $80 billion was cut from the plan, with the great
bulk of those cuts falling on precisely the measures that would do the most
to reduce the depth and pain of this slump.

On the other hand, the centrists were apparently just fine with one of the
worst provisions in the Senate bill, a tax credit for home buyers. Dean
Baker of the Center for Economic Policy Research calls this the "flip your
house to your brother" provision: it will cost a lot of money while doing
nothing to help the economy.

All in all, the centrists' insistence on comforting the comfortable while
afflicting the afflicted will, if reflected in the final bill, lead to
substantially lower employment and substantially more suffering.

But how did this happen? I blame President Obama's belief that he can
transcend the partisan divide - a belief that warped his economic strategy.

After all, many people expected Mr. Obama to come out with a really strong
stimulus plan, reflecting both the economy's dire straits and his own
electoral mandate. 

Instead, however, he offered a plan that was clearly both too small and too
heavily reliant on tax cuts. Why? Because he wanted the plan to have broad
bipartisan support, and believed that it would. Not long ago administration
strategists were talking about getting 80 or more votes in the Senate. 

Mr. Obama's postpartisan yearnings may also explain why he didn't do
something crucially important: speak forcefully about how government
spending can help support the economy. Instead, he let conservatives define
the debate, waiting until late last week before finally saying what needed
to be said - that increasing spending is the whole point of the plan.

And Mr. Obama got nothing in return for his bipartisan outreach. Not one
Republican voted for the House version of the stimulus plan, which was, by
the way, better focused than the original administration proposal. 

In the Senate, Republicans inveighed against "pork" - although the wasteful
spending they claimed to have identified (much of it was fully justified)
was a trivial share of the bill's total. And they decried the bill's cost -
even as 36 out of 41 Republican senators voted to replace the Obama plan
with $3 trillion, that's right, $3 trillion in tax cuts over 10 years.

So Mr. Obama was reduced to bargaining for the votes of those centrists. And
the centrists, predictably, extracted a pound of flesh - not, as far as
anyone can tell, based on any coherent economic argument, but simply to
demonstrate their centrist mojo. They probably would have demanded that $100
billion or so be cut from anything Mr. Obama proposed; by coming in with
such a low initial bid, the president guaranteed that the final deal would
be much too small. 

Such are the perils of negotiating with yourself.

Now, House and Senate negotiators have to reconcile their versions of the
stimulus, and it's possible that the final bill will undo the centrists'
worst. And Mr. Obama may be able to come back for a second round. But this
was his best chance to get decisive action, and it fell short.

So has Mr. Obama learned from this experience? Early indications aren't
good. 

For rather than acknowledge the failure of his political strategy and the
damage to his economic strategy, the president tried to put a postpartisan
happy face on the whole thing. "Democrats and Republicans came together in
the Senate and responded appropriately to the urgency this moment demands,"
he declared on Saturday, and "the scale and scope of this plan is right." 

No, they didn't, and no, it isn't. 




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