Thursday, March 31, 2011

Altered States: GOP Denial and the War Against Reality

Denial isn’t just a river in Egypt

Ever wonder what state politicians live in, especially Republicans these days? From the looks of it, it is the state of denial and it is a state where the poor, elderly, students, immigrants, working class, and the future do not live or matter.

Look at the budget process at both the federal and Minnesota state level and it is clear that many in the GOP are engaged in a war against the poor, elderly, students, immigrants, and working class. In Minnesota, the GOP proposed budget cuts that slash higher end spending, they are cutting money for health care for the poor, K-12 is taking hits, and local governments and their services are being targeted. At the federal level the cuts are also hurting the same constituencies, and in Michigan the governor supports legislation cutting back on unemployment benefits by six weeks. Talk about kicking people when they are down!

None of the above even includes the war on public sector unions in Wisconsin, Ohio, and other states, efforts to pass election voter ID laws to address nonexistent fraud, and of course restrictive abortion laws in Arizona, North Dakota, and perhaps Minnesota. Nor does it include the war against the EPA and it ignores global warming. Moreover, the cuts to education and infrastructure investment seem to ignore the need to invest in the future. Actually, except for wanting to protect a few fetuses, there is no regard for the future. Even with the fetuses, once born they are on their own and too ignored and condemned to attend poorly funded schools and drive on bad bridges and roads, unless they happen to be lucky and be born privileged.

It is clear who the constituency of the GOP is. They represent a state of America populated by corporations, the rich, male, and those who hate government. They do not seem to believe that when things get rough we have an obligation to help one another or that perhaps those better off and capable of sheltering the burdens or costs should do that to help out the less fortunate. It is an antisocial philosophy, reflecting the individualism of the marketplace or the community of civil society. It is Ayn Rand’s vision.

They believe that the free market is wonderful and that it can solve all our problems, while ignoring the recent economic crash of 2008, its lasting legacies, and the role government played in forking out taxpayer money to bail them out. They ideologically believe that cutting government, taxes, and regulation will spur on the economy, yet this philosophy is no more than supply-side economics rehashed yet again for the Nth time.

And where is this ideology taking us? At the federal level we have no budget and we flirt again with a government shutdown. In Minnesota, the GOP keep passing cuts and it is clear Dayton will veto them, making a special session if not a July shutdown possible. It is a philosophy of ideological purity, bent on the belief that compromise is bad and that anything short of a 100% win is a loss and a sacrifice of principle. Better to bring down the government than compromise. Better to hurt the least advantaged than make the more affluent help out. Better to assume the market will work at its optimum in theory than think about how it works in practice and in comparison to government in reality.

Academics are often accused of living in an ivory tower. Yet the tower or state that the Republicans are living in seems so much more detached from reality than any university classroom. It is a state of denial–denying the real world implications of their choices and how by simply serving their constituents greedy interests they are hurting society in general and sacrificing the future to the present. This is an unsustainable philosophy yet somehow it persists, partly because the Democrats are too weak, ineffective, or bought off by the same interests to challenge them, the public often too apathetic or ignorant to care or know, or the media often unable or willing to report the story about this reality.

A Note on the Economy

The stock market slowly climbs and corporate profits have rebounded, yet for most Americans there is little real sign of improving economic conditions. Housing prices continued to slide for the sixth month in a row, and there is little indication that banks wish to lend money and individuals want to buy homes for fear that their investment is not worth it. Millions of houses are poised to enter foreclosure and there is no sight that the real estate market is rebounding. But of course the good news is that the federal government made $24 billion on its loans via TARP to prop up banks and other financial institutions.

Additionally, consumer confidence again slipped last month and while payroll has increased, there is still no sign that businesses are ready to pump money into hiring. Instead, as the Financial Times reports, mergers and acquisitions are dramatically up.

It is now clear what businesses are doing with their money. They are returning to profitability, borrowing at low cost, and using the cash to buy out competitors, such as what AT&T is doing with T-Mobile. They are not investing in jobs or the economy. Welcome to the status quo!

Dodd-Frank, the federal law to restructure the financial markets, was supposed to address some of these problems. Yet it is clear that after the 2008 meltdown and crash little has changed. Banks helped destroy the economy, got bailed out, are again making tons of money and have bonuses to pay their executives, yet they refuse to loan money. Additionally, businesses are not hiring. It seems that the banks, corporations, and the rich are doing well, and the rest of us are being ignored. They got a free lunch in terms of bailouts from the taxpayers and the rest of us continue to pay for their mistakes.

Yes GOP policies are to blame for much of this, but the Democrats seem no better here. They hardly fight and Obama’s surrender on extending the Bush era tax cuts, while perhaps politically savvy, was and remains bad policy that hurts the poor and middle class. Last December Jesse Jackson and Pat Buchanan agreed the tax cuts were bad policy. Buchanan stated the cuts would exacerbate the deficit and Jackson asserted that tax cuts for the rich then would mean service cuts for the poor this year. Both were correct. The economy is marginally better now than in December, and it is clear we have failed to make changes to address the basic problems that 2008 revealed. We seem to have moved onto the future, assuming all is fine, in the state of denial we live in.

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