The Great Debate

By David Callahan

The views expressed are his own.

Occupy Wall Street protestors are pondering their next steps after police raids this week dismantled more Occupy encampments in Los Angeles and Philadelphia. In some ways, though, the movement has already scored its most important victory: It has changed the “narrative” that frames public debate. Polls show that the Tea Party story – about an America being destroyed by big government – has been pushed aside by the Occupy Wall Street story, which stresses rising inequality and corporate greed.

This is good news for President Obama. While there is little that Obama can do between now and next November to jumpstart the economy, he may have a strong chance at reelection anyway if Americans keep gravitating to a progressive worldview.

In an NBC/Wall Street Journal poll taken earlier this month, 76 percent agreed that the “current economic structure of the country is out of balance and favors a very small proportion of the rich over the rest of the country.” In another recent poll, by The Washington Post/ABC News, respondents were asked: “Do you think the federal government should or should not pursue policies that try to reduce the gap between wealthy and less well-off Americans?” A majority – 60 percent – said the government should pursue such policies.

Meanwhile, public concern about the Tea Party’s linchpin issues – taxes and the deficit – has receded. Asked in late October to name the most important issue facing the country, just 5 percent of respondents to a New York Times/CBS News poll named the budget deficit. A majority said jobs and the economy. This same poll included another result that should give Democrats hope: A strong 69 percent of respondents agreed that the policies of Republicans in Congress “favor the rich” while just 12 percent thought the same thing about Obama’s policies.

Clearly, it is too early to count Obama out – even if it’s true that no president since FDR has won re-election with the economy in such bad shape.

By James Ledbetter
The opinions expressed are his own.

For many years, the River Café, an elegant restaurant that sits just below the Brooklyn Bridge, had a plaque on its wall declaring, in effect, “If you work for General Electric, go eat somewhere else.”

This unusual exclusion policy had a simple explanation: for three decades, two GE plants in upstate New York dumped as much as 1.3 million pounds of polychlorinated biphenyls (PCBs) into the Hudson River, poisoning the fish supply that River Café depends on. The effect that this contamination had on wildlife—and on anyone who ate too much fish caught in the Hudson—was severe enough to create one of the largest Superfund projects in the history of the Environmental Protection Agency.

The Hudson pollution was not unique; the bend of the Housatonic River in Connecticut where I grew up was frequently unswimmable, because of PCBs floating down from a GE plant in Pittsfield, Massachusetts. Another aqueous assault, another massive taxpayer-funded cleanup. (Update: A GE spokesman tells me that the company paid for the cleanup of both rivers. Of course, there were also costs to taxpayers, but this is an important distinction.)

By Nicholas Wapshott
The opinions expressed are his own.

As Margot Channing put it in All About Eve, “Fasten your seat belts. It’s going to be a bumpy night.” The battle over Obama’s jobs bill marks the opening of the Keynes Hayek election, which, if the poisonous duel between the two giants of economics is anything to go by, will be a down and dirty clash of opposites. Obama will champion intervening in the economy to get Americans back to work, while his rival will demand a shrunken government and the speedy repayment of the national debt.

The first shots in this snarky contest have already been fired. Take Obama’s dismissal, in his speech to both houses of Congress, of the Hayekian notion that government is too costly and largely unnecessary: “This larger notion – that the only thing we can do to restore prosperity is just dismantle government, refund everybody’s money, and let everyone write their own rules, and tell everyone they’re on their own — that’s not who we are. That’s not the story of America.” Obama finds himself defending the whole of the Democrats’ progressive record, from Roosevelt’s New Deal to Johnson’s Big Society.

Most aggressive in his assault upon Keynesianism is Rick Perry, who declared in the Reagan Library last week that Obama “has proven for once and for all that government spending will not create one job. Keynesian policy and Keynesian theory is now done. We’ll never have to have that experiment on America again.” Gingrich, too, thinks “the American people create jobs, not government.” Most Hayekian is Ron Paul, who said his first act in the White House would be to “bring a course in Austrian economics to teach the people the business cycle and why the Fed creates inflation and depressions and all our unemployment problems.”

By Nicholas Wapshott
The opinions expressed are his own.

Is the Tea Party running out of steam? I ask because there appears to be growing evidence that the Mad Hatters’ wild ride, culminating in Obama’s defeat last month over the debt ceiling at the hands of the Tea Party in Congress, has slowed to a trot. Exhibit one, the entrails of the most recent Pew poll where there is a startling finding. Just two months ago, those who believed trimming the deficit was the nation’s top priority outnumbered those who wanted more spending “to help the economy recover” by ten percent. Today, the number who advocate more government spending to fix the lackluster economy are neck and neck with those who wish to cut the budget deficit without delay.

Why the shift? Well, it seems that some Americans have changed their minds over the issue that lies at the heart of our politics. Today’s great political debate divides along the lines established eighty years ago by John Maynard Keynes and Friedrich Hayek. In 1932, when one in four Americans was out of work, Keynes suggested a mixture of policies to pump money into the economy to increase demand and get people back into jobs: keep the cost of borrowing cheap so that businesses could expand; invest in public works that directly employs the jobless; and cut taxes to put cash into people’s pockets. Hayek countered that such expansionist policies were unlikely to work and would have unintended consequences. At the very least they would in the long run fuel inflation and, when the government took its foot off the gas, cause businesses artificially boosted by the measures to go bust.

When Obama was elected in November 2008 he faced an economy that was teetering on disaster. His answer was a Keynesian stimulus package that meant plunging the nation even deeper into debt than George W. Bush had left it after bailing out the banks, enacting a huge tax cut and funding two overseas wars. No sooner had Obama adopted a Keynesian remedy than some of his opponents demanded a Hayekian antidote: paying down the debt as soon as possible. This outbreak of electors’ remorse gave rise to the Tea Party whose argument appeared to be that if a family has to pay off its overdrafts and credit card borrowings when it is going bankrupt, surely a nation should do the same. The 2010 midterms saw the election of a wave of Tea Party candidates, most of whom had pledged not to agree to anything that would either raise taxes or fail to address the national deficit. The raising of the debt ceiling, which had always been a routine matter between the two parties, became a pitched battle, with the president having to bow to the Tea Party’s principles or allow America to default on its debts.

By Maureen Tkacik
The opinions expressed are her own.

There is one thing more nauseating than watching our elected officials weasel their way through another Sunday morning rationalization of our ruinous economic policies: Watching the sole beneficiaries of those policies publicly distance themselves from those politicians on CNBC.

I am talking, generally, about rich people, although to be fair some rich people are more dishonest than others, as a tense Wednesday morning exchange between celebrity analyst Meredith Whitney and the network’s veteran correspondent Rick Santelli demonstrated. Delivering a meandering monologue assailing “children on both sides” of the aisle for…insufficiently gutting what remains of the social safety net, Whitney laid the blame for this failure on an unlikely constituency:

“Call it Tea Party, whatever you will, the fringe element is — I characterize (as) — freaked-out white men who are unemployed and have been unemployed for three years and they’re scared to death.”

Coming into tonight, the Tea Party’s big success has been knocking off a wide range of Republican incumbents or elected officials aiming for the Senate or the Governor’s mansion. This was nearly all to the benefit of candidates with minimal to no political experience. Even the Tea Partiers who held office, like Sharon Angle, were marginal figures in the legislatures in which they served. Whether a Mike Lee, Rand Paul or Joe Miller can actually translate their ideas into action in the Senate—whether they can be anything but marginal players—is an open question that will be resolved over the next six years.

But among the Tea Party-powered candidates, there is one exception, and he is the real big winner of the night: Marco Rubio. A former Speaker of the Florida House, Rubio was not carried by the Tea Party wave, he rode it. He challenged a popular sitting Governor in the primary and did not blink when faced with calls to pull out for the good of the party. Instead, he marshaled his forces, saw which way the political wind was blowing and destroyed Charlie Crist, not once, but twice.

It is not his ideas or his personal story or his hoped-for ability to appeal to Latino voters that makes Rubio garner the respect of the party elite, and have some dreaming that he is the Republican’s answer to Obama. It is instead political savvy that enabled him to tap into the Tea Party movement from the beginning. Unlike many of the other Tea Party officials, he had something to lose by running. Whether this, plus his previous high-level political experience, translates into a successful legislative career is unknown. But it is a good start.