“If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treacherous – or treasonous in my opinion.”
“This guy” is US Federal Reserve Chairman Ben Bernanke. The speaker is Texas Governor and recent entrant into the race for Republican 2012 nomination, Rick Perry, on Monday.
They were no idle comments, no good ol’ boy porch talk. The remarks prompted an angry reaction not just from the Obama Administration and “liberals” (in the US sense, of course) but from business leaders and more mainstream Republicans. “Not a presidential statement” opined onetime Perry adviser, and now apparently foe, Karl Rove. But Perry overnight backed up his statement, saying “I am just passionate about the issue and we stand by what we said.”
Perry — one-time Democrat, Al Gore campaign chairman and Texas secession advocate (speaking of treason) — was doubtless keen to show the Tea Party, locked in a remorseless tug o’ war with the Republican mainstream, that he has the Extreme Right Stuff for them. But the comments bear close examination for what they reveal of a mentality that is primarily that of the Tea Party but draws on wider strands of thinking on the Right.
The issue isn’t so much a US Governor threatening the chairman of the Federal Reserve with assault, imprisonment or execution (treason is a capital offence in the US, and presumably would be in Perry’s breakaway Texas republic). Leaving aside Perry’s repetition of “printing money” — the sort of usage that encourages the idea of Weimar-era, barrows-of-cash hyperinflation, when American policymakers are still grappling with the possibility of deflation — the comments are a natural extension of the profoundly anti-state views of the US Right.
For the Tea Party, for greenthumbed astroturfers like the Koch brothers and the hard Right – the type that regarded both Bushes as hopeless faux-Spendocrats – government isn’t a means to an end in achieving community welfare, but a disease to be kept at bay, if not eradicated, at all costs. The effectiveness of government is irrelevant – it must always be shrunk.
From such a perspective, even traditional liberal rationalism, which assumes government is best kept out of the way of markets but acknowledges an important role for the state in addressing market failure – that is, the size of government is less important than its role in maximising community welfare – is indistinguishable from socialist ratbaggery.
In that context, even government efforts to stimulate the economy and keep citizens in work, or bring citizens back into work, are illegitimate, because everything governments do is per se illegitimate, beyond a few narrow functions limited to what the Founding Fathers — and only the Virginians, certainly not that appalling tax-and-spend liberal Hamilton — thought appropriate. Trying to stimulate the economy is thus automatically a political decision, and therefore suspiciously partisan – even when the partisan concerned is a conservative Republic appointed by a Republican Administration – indeed, by Perry’s predecessor as Texas Governor, Dubya himself.
The preferred alternative is complete deregulation and tax minimisation to enable “job creators” — the people formerly known as “the rich” — to generate economic growth.
That give you some indication of exactly how bad the economic prospects are for the United States; not merely has its political class waited until the worst possible moment to curb the US deficit, but a substantial part of that class regards the very idea of economic stimulus as gross partisanship deserving of punishment.
How different is the thinking among conservatives here? Well, there continue to be those on the Right who claim that stimulus doesn’t work, like the unfortunate Stephen Kates. Two weeks ago he offered an amusing effort on the ABC site that began with a howling error about the carbon pricing package revenue and proceeded to conduct a tour of 2009’s finest arguments about why Australia in fact had a recession and to the extent that it hadn’t was the responsibility of John Howard and the Chinese. Even Michael Stutchbury has long since moved on from that rubbish.
Then there are critics of stimulus programs, mostly resident on talkback radio and among News Ltd journalists, who have entirely confected claims about both the efficacy and efficiency of stimulus programs, usually for partisan reasons but also, one suspects, because they despise the prime beneficiaries of the biggest components of the stimulus programs, construction industry workers.
But actual ideological opponents of any stimulus at all are rarer in Australia. That is, until now. The Coalition’s attack on the Government this week has primarily been around whether its commitment to return to surplus next financial year still holds.
Labor’s commitment to that surplus was always political and intended as a last line of defence of its economic credentials after utterly failing to sell its significant GFC achievements to the Australian people (then again, that’s what happens when you knife the guy who was the architect of those achievements). To that extent, it’s entirely a mess of is own making.
But what should a government – any government – do if another GFC smashes growth, or China stumbles, or Australia otherwise finds itself confronting significantly lower growth than forecast? Should it make up for the tens of billions that will be slashed from corporate tax revenue, via spending cuts, to preserve a surplus, thereby locking in a recession? If things get bad enough, should there be another round of stimulus?
Asked the other night if, in the event of a recession, his policy would be to cut Government spending “as hard as you possibly could”, Joe Hockey refused to reject the idea, instead saying that returning to surplus was “a starting point”.
With any luck, the question of another stimulus package will never arise. But if it does, it’ll be the ideological equivalent of lifting up a rock to find out what crawls beneath.
Thanx for this presentation of Perry’s economic policy.
I suspect that the Australian Coalition would oppose stimulus in opposition (I note that it has found a way of opposing (part of ) the tobacco packaging legislation) but support it in government.
It’s actually worse than you think Bernard, because what Bernanke (and therefore Perry) are talking about is not spending, so not stimulus in any Keynesian sense, but purely Friedmanite monetary policy, quantitative easing to avoid deflation. You can be as hard-line anti-Keynesian as you like (I am) and still think Perry is talking nonsense.
What gets me is these conservatives continually spout their financial & administrative credentials but in reality they are totally incompetent.
After Bush jnr & Perry as Governor the result is the Texas is an economic basket case. If it hadn’t been for the Obama stimulus money Perry would have had to call in the receievers
Remember Bush jnr inherited a USA from Clinton that had a surplus, sound economy, reasonable oversight & relatively at peace. Look what he left Obama, Bust Banks, Bust Economy, Bust Treasury and a couple of unwinnable wars with a nation divided
How can anbody consider these buffons as a real option?
Emerging rivals are sprouting up around us like mushrooms, while these idiots are sabotaging western civilisation from the inside.
And when I say “these”, I mean the billionaires who created the tea party movement then promoted it into the public consciousness in order to divert the fear and rage of globalisation’s losers away from themselves.
The poor and the middle class of America are angry, and they’ve now been programmed to think it’s all the government’s fault. They need to ‘starve the ‘beast’, get rid of taxes on the wealthy, and clear away all the environmental regulations.
And as long as the conversation focus is held there by the media, no-one will be asking why 20% of Americans have 80% of the wealth, while the other 80% of people fight over the scraps.
Now I know not all of the mega-wealthy are part of the tea party campaign, but the Koch brothers and the Murdochs have been throwing their weight around by manipulating the media and funding insidious networks of fake grass-roots organisations with innocent sounding names.
Warren Buffer has been telling us for a long time now that there is a class war being waged and the rich are winning, but he hasn’t put his money where his mouth is to fight back. Instead, he put his money into Goldman Sachs and made himself another fortune.
As the tea party paralyses economic recovery to steer America towards the iceberg of social chaos, I can’t help but wonder how closely we are following behind them. Australia may be somewhat economically insulated, but the vile, corporate funded rhetoric propagating through the airwaves is infecting the rest of the English speaking world.
Will we escape the undertow of a sinking empire?
It is quite an accepted mainstream tagline these days that Federal Labor are victims of their own inability to sell their messages to their electorate.
I believe this is-at best-a half-truth and not the whole truth as suggested in Bernards piece above in a passage such as the following which claims that Labor had been:
“utterly failing to sell its significant GFC achievements to the Australian people (then again, that’s what happens when you knife the guy who was the architect of those achievements). To that extent, it’s entirely a mess of is own making.”
The mainstream media has clearly been running on the opposition’s agenda.
Basically all news items -instead of being a vehicle to explain or -God forbid-promote government’s decisions and policies from a point of appraisal or even a factual basis,are instead seen through the prism of minor faults blown out of all proportion by popular -and contextually trivial-oppositional catchlines.
An obvious example is the coverage of the BER scheme where no mention is made of the economy-wide and employment stimulating components…nor the excellent facilities gained adding quality,possibility and opportunity to our youth and civic society.
Instead the entire and very broad realities achieved by this policy are represented by the MSM solely through the prism of a small percentage of cost blowouts-which are frankly entirely to be expected given the (WTO endorsed!) importance of quick action to rolling out the scheme.
So my point is that it is entire bunkum to blame the government for being denied a platform by the same mainstream media that previously trumpeted the Howard governments desired messages to the masses whilst ignoring their glaring faults (ie-‘Howard protects us from evil’ not ‘Howard illegally invades a sovereign nation’/’Howard saves us all by improving productivity’ not ‘Howard strips workers pays and rights without a mandate’)
In my opinion Federal Labor have indeed floundered under these circumstances and I continue to hope to see them cut through their messages into more direct and effective soundbytes.Since the departure of Lindsay Tanner I think Mark Dreyfus is now one of their best in getting their message through.
Labor has many failings which deserve public scrutiny but
to keep on mindlessly trumpeting that the government is failing at communicating its message is akin to blaming the long distance communication skills of someone who is out of mobile phone coverage range.
It is ignoring one very large elephant in the room.
And don’t even get me started on the other elephant…the medias lack of scrutiny of Mr Rabid!