Where were the elites?

Sunday ~ May 20th, 2012 in Uncategorized | by Adam Ozimek

On Karl’s Up With Chris Hayes appearance, Betsey Stevenson rightly pointed out the obvious falseness of the claim that we would be better off if we defaulted on our debt during the debt ceiling crisis. Everyone seemed to agree it was a problem that there were no elites to come down on Republican politicians making this crazy argument and tell them they are, well, crazy. But as I blogged back then, sane conservative did come out strongly against defaulting. You had Douglas Holtz-Eakin, Gary Becker, Keith Hennessey, Richard Posner, and Glenn Hubbard arguing that not only would defaulting be terrible, but that it would unequivocally be terrible. This was not a failure of the elites, it was a failure of people to listen to them. I suspect we may see the same thing happen when the debt ceiling comes back again.

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Sunday ~ May 20th, 2012 at 9:41 am

curtd59

Confusing a truth with a tactic.

There was never any intention to default by Republicans. It was simply a lever. Since default was impossible, resistance was a means of extracting compromises.

So, the people didn’t fail to listen. The did listen. It’s just that they were listening to the tactic, not the threat.

People who pound the drums aren’t all that dim. They may be statistically challenged and rhetorically limited, but they know a good opportunity when they see it.

Monday ~ May 21st, 2012 at 12:56 am

Marcus

If Obama and the democrats thought that the republicans were bluffing as you suggest, they would presumably would have offered no concessions (spending cuts). If that’s what happened, do you think the republicans would have said, “damn, you caught us! We realize actually following thru on our bluff to default would be disastrous, so we will vote for a debt ceiling increase with no strings attached.”

Monday ~ May 21st, 2012 at 5:09 pm

IVV

They’d spin it differently, but yes, it would pass.

The real truth is that Obama and the Democrats want the same “concessions” as the Republicans, they just don’t want to say they want them.

One side may be striding proudly, the other shuffling ashamedly, but they are both most clearly traveling in the same direction.

Sunday ~ May 20th, 2012 at 10:04 am

Kellen Gracey

I’m not so sure that default was seen exclusively as a tactic. Sure, there were some rank-and-file Republicans seeing an opportunity to extract spending cuts. However, without having any studies or specifics to back up my claim, I would like to assert that most of the Republicans threatening default were Tea Party-backed congress members with little to no experience in the realm of negotiating such great compromises.

The conversation on Up with Chris Hayes was pretty accurate in saying that there is no real over-arching group of elites that come down from above to tell politicians where the lines are drawn. There really was no push-back against the nonsense about defaulting and many of those congress members seemed very, very serious about moving forward with it.

While I agree with you, curtd59, that people who pound the drums might not be all that dim… there are certainly some of them that exhibit such a characteristic and demonstrate a fundamental lack of knowledge about economics. The statistically challenged and rhetorically limited people you speak of is referring to a growing minority within the Republican party.

There is a gigantic schism within the Republican party that needs to be addressed by leadership before the country can move forward – how can the same people who fervently supported the Bush administration policies (including two unpaid wars and tax cuts that could be construed as a method of quieting the general populace about said wars) now be the ones screaming about fiscal irresponsibility of the Obama administration?

The people looking to default don’t seem the be the same opportunity-minded, politically adept people that used to make up the Republican Party.

This isn’t dad’s party anymore.

Sunday ~ May 20th, 2012 at 1:53 pm

Jeff

Re: “[t]here is a gigantic schism within the Republican party that needs to be addressed by leadership before the country can move forward”, when Boehner began making moves in that direction, he came close to being deposed. He won’t be trying again, nor will anyone else, most likely.

Sunday ~ May 20th, 2012 at 3:22 pm

curtd59

Kellen,

I have, from that time period, an average of 300 messages a day on the various conservative mailing lists. It was an absurdly common topic. Both sides of the isle work the same way. An idea is produced, circulates, is tested and propagated. THere is no difference between the tea party process and the owe process. The content is different but the strategy is the same.

Sunday ~ May 20th, 2012 at 4:16 pm

Kellen Gracey

Sure, I agree with you – if I was a conservative House member, I would have taken the opportunity to demand policy changes as well.

But – let’s not give the 2010 beneficiaries the benefit of the doubt here. I think it is in the country’s best interest (not just the Republican party’s best interest) that we remove some of these politicians that think radical rhetoric is where we need to go to get anything done.

I think it is ridiculous to say that Democrats don’t want to also cut the deficit and halt the growth of national debt – not that you were.

I wish I was subscribed to some of those conservative mailing lists, I think debt ceiling debates would give me extensive entertainment on Sunday mornings 🙂

Either way, yes – the strategy is definitely the same: “Let’s hold up their main priority, red meat bill and tack on as much partisan nonsense as we can.” Both sides, all the time. Regardless of relative partisanship levels.

But why do moths commit suicide by running into candle flames?
Why do Tea Party conservatives tell us to default on our debt payments?

That’s the $10M (or however that phrase goes) question in today’s politics.

Sunday ~ May 20th, 2012 at 4:18 pm

Kellen Gracey

Maybe we should start a discussion about the detrimental effects of polarization?

Income inequality anyone? I’ve got some charts and graphs from grad school laying around here somewhere, I’m sure…

Sunday ~ May 20th, 2012 at 11:52 am

Paul

Perhaps the elites they were referring to were CEO’s and Wall Street types, i.e. donors, and not academics and economists.

Sunday ~ May 20th, 2012 at 2:16 pm

Jeff

You’re right that the bulk of partisan Republicans do not think of academics and economists as their elites to whom they should turn to get substantive advice. They are seen basically as borderline ‘useful idiots’, whose status and legitimacy is tenuous and contingent on providing convenient support for the party line. Easy examples include Bruce Bartlett and David Frum (although neither is actually an economist); similarly Ken Rogoff is no longer considered in good standing by many now that the claim that it always takes longer to recover from a recession due to a financial crisis is inconvenient and he won’t change his tune with the prevailing winds. When the last debt showdown was happening, I actually sent a clip of Douglas Holtz-Eakin explaining that we couldn’t default to a conservative friend, and he simply dismissed these arguments from ‘liberals’ as he always dismisses whatever liberals argue, apparently without any recognition that DHE is not a liberal by any stretch of the imagination. It is frankly quite naive to think of Douglas Holtz-Eakin, Gary Becker, Keith Hennessey, Richard Posner, and Glenn Hubbard as being the elite of the Republican party. While it’s true that they did offer up meager efforts to push back, how hard did they really push? Certainly they recognize what happens to those who take a consistent stand loudly enough. Furthermore, were their critiques promoted through the venues that reach the bulk of rank and file Republicans and partisan activists (i.e., Fox news, Limbaugh, etc.), or did they mostly remain quietly and safely in less traveled and more rarefied corners?

Sunday ~ May 20th, 2012 at 3:11 pm

Vagabundus

Default would of been a conscious choice made by the treasury, since there was enough income to service the debt. What is equally crazy is trying to sustain a unsustainable level of government spending.
There are no solutions, only trade offs.

Sunday ~ May 20th, 2012 at 7:18 pm

Kellen Gracey

Default was certainly not a conscious choice of the Department of Treasury; quite the opposite, in fact. I’m not sure where you get that info, but it would have devastated our economy…. utterly.

An “unsustainable level of government spending” is quite relative – if one studies Keynes, deficit spending is good, not bad.

The important figure to pay attention to is the level of government spending in relation to GDP. What level of government spending are you suggesting is unsustainable?

We own the global currency reserve and can borrow money practically for free. Why not borrow more? Why not borrow a ton of money, stick it in glass jars, bury it 1,000 feet underground, and pay Americans to dig it up and keep it?

Sunday ~ May 20th, 2012 at 4:07 pm

Kellen Gracey

All I know is that I’m terrified of people who claim to be fiscal conservatives, but can’t tell me what it is we need to cut spending from.

While I side with the libertarians on some of the defense policy issues (like Germany for instance – let’s get the troops out of there, I’m pretty sure that conflict is over), I cannot justify cutting off social spending programs that make up a vast majority of the federal budget.

Either way, we have a problem. I think we can all agree on that.

But, as Karl Smith put it, where were the elites?

I’ll take his argument a step further – where were the elites in 2004 election cycles when we had entered two wars on the credit card and issued tax cuts we couldn’t afford?

Wednesday ~ May 23rd, 2012 at 3:46 pm

Gabe

I favor ending interest payments before ending social spending…Democrats and Republicans both favor paying interest payments first. There is no polarization on this issue, mainstream democrats and republicans agree.

Wednesday ~ May 23rd, 2012 at 3:53 pm

Gabe

the elites like more and more debt….that is why our tax system is set up the way it is. An indebted public can be threatened, herded and controlled. Look at Greece right now…they want to raise taxes and cut social spending to make sure bondholders get paid…greece’s supposed “bailouts” are merely transfer payments to bondholders…(making sure the banks get paid).

I assume all you progressives here are in favor of higher more aggressively enforced taxes in Greece? all in the name of paying the bondholders? and you’ll take some reductions in social spending too right? what is happening in greece now will come here…make up your mind now whether it is morally ok to force younger generations to pay the odious debts of corrupt politicians and selfish older people.

Thursday ~ May 31st, 2012 at 11:42 am

Tom

There was no vote about default, there was a vote on raising the debt limit.
Most Republicans want less gov’t spending, most Tea Party folk.
Most honest people who look at Greece, or California as compared to Texas, will agree that it is possible to have “too big government”.

To talk about the default as something people were for or against was a media tactic to avoid talking about limits on gov’t.

Voting against raising the debt limit is NOT a vote in favor of default, i.e. the gov’t not paying their promised interest payments to bondholders.
Two other possibilities:
2) Cutting other gov’t spending.
3) Printing money.

What was obvious then, and is obvious in many comments above, is the PC attempt to increase, not cut, gov’t spending, by raising the debt limit.

Everybody who really wants smaller gov’t should be against raising the debt limit.

And big spending gov’t, including being supported by Reps, won that round, again.

Let’s also remember that tax cut fiscal stimulus means more win-win deals made by those who earned the money by prior win-win work. More gov’t spending is always a win-lose deal, with the taxpayers the losers, and the gov’t winners getting Other People’s Money over which they take less care.

After the dot.com bubble, tax cut deficits led to growth; after the housing bubble, gov’t spending deficits have not.
Where is the data that indicates more gov’t spending is more growth oriented than lower taxes? What little data exists, because tax cuts are so few, indicate higher growth from tax cuts.

But yes, tax cuts are easier to sell politically than gov’t spending cuts.

Sunday ~ March 17th, 2013 at 1:47 pm

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