Gregg Easterbrook

Washington, D.C., is the world capital of phony. Even by Washington’s low standards, the Stanley McChrystal “scandal” now in progress gives phoniness a bad name.

Yes, General McChrystal showed poor judgment in making impolitic remarks on-the-record. But most of what the general said was simply being honest about the shabby aspects of government administration. McChrystal said a rival had leaked a memo to make McChrystal look bad. That’s exactly what happened! The general said he didn’t want to open an email from Richard Holbrooke, who is an accomplished diplomat, but also a haughty man known for condescending hectoring. No sane person wants to open an email from Richard Holbrooke. And General McChrystal pretended not to recognize Joe Biden’s name. People in Washington snipe at each other, stop the presses!

That’s it – the above comments are the super-ultra-mega scandal. Consider:

Nearly everything being attributed to McChrystal was not said by him. That President Barack Obama was “uncomfortable and intimidated” during his first meeting with McChrystal, that National Security Advisor James Jones is “a clown” – these comments did not come from McChrystal. In the Rolling Stone article they are sourced to an “advisor” and an “aide.”

Media coverage has already discarded this significant factual distinction – why let mere facts spoil a scandal? This morning, CBS Radio said the controversy involves “General McChrystal’s numerous attacks on public officials,” while CNN Pentagon correspondent Barbara Starr declared it “extraordinary to hear a general disparaging the president.” It is unnamed aides, NOT McChrystal, who disparage the president in the story. As for the statement that “the wimps in the White House” are “the real enemy” for officers in Afghanistan? That’s a Rolling Stone headline – no one in the story says this!

Bear in mind how convenient it is for Rolling Stone that the inflammatory material comes from people who don’t have names. Reporters and writers place words into the mouths of unnamed sources because people who aren’t identified rarely complain of being misquoted.

POINTS THAT DIDN’T QUITE MAKE THE MAIN COLUMN:

* The 1981 controversy regarding OMB director David Stockman’s comments to The Atlantic involved genuine points of policy. President Ronald Reagan had said supply-side economics, and supply-side tax cuts, were fundamentally intended to help the poor: Stockman told The Atlantic that everyone in the White House knew supply-side was a gift to the rich – that White House rhetoric was “a Trojan horse” to conceal what the Republican Party’s wealthy donors wanted. Top-rate income tax reduction may have been justified, but that’s a separate issue from whether the president was being honest with the public. Compared to the dustup over McChrystal, the Stockman controversy was substantive.
* The 1951 firing of Douglas MacArthur involved policy disagreements and statements far worse than a worst-case reading of the Obama-McChrystal situation. MacArthur publicly accused President Harry Truman of advocating “appeasement and defeatism” regarding China, attempted to order his units into military actions that civilian leadership had forbidden, and demanded the Korean War end with China surrendering to him personally – the latter suggesting MacArthur had come unglued.
Truman made himself seem weak by flying out to Wake Island to meet MacArthur, rather than recalling him to the White House. It’s a long trip from Washington to Wake Island even today, via jet; imagine doing this in a prop plane, for the convenience of your disobedient general. In the White House, the president has the home-field advantage. Barack Obama was right to meet McChrystal there.
*Wasn’t there some kind of oil spill? The McChrystal confabulation gives BP a few days’ vacation from the front page. “They will never forget you/till somebody else comes along,” as the song goes. And we’ve already forgotten who BP pushed off the front page — Toyota and Goldman Sachs. Sources tell me Toyota sent BP a big box of fancy chocolates, while Goldman Sachs sent flowers and a card that reads, “BP, luv u 4-ever! {signed} Goldy S.”
* This sort-of-scandal needs a name, and the “XXXX-gate” formulation is exhausted. Propose your names for the scandal using the reader comment space below.

POINTS THAT DIDN’T QUITE MAKE THE MAIN COLUMN:

*“We need additional federal relief because our state constitution requires a balanced budget.” Governors often say this as a way of rationalizing giveaway demands. In effect they are saying – because my rules forbid me to be responsible for my bills, you must pay for me. I think I’ll try this argument with the waiter next time I’m out to dinner!

*Unlike the U.S. Constitution, which is structured to be hard to amend, state constitutions are a snap to alter. The Texas state constitution has been amended 467 times, the Maryland constitution amended 198 times – versus 27 amendments for the U.S. constitution. In many states, a simple vote of the legislature amends the state constitution. Because of this, most states could amend their constitutions to drop budget-balancing. It’s just that states don’t want to, because pretending their constitutions are etched on stone tablets and cannot be altered is a way of shifting the burden to the federal level – as well as exempting  governors from criticism for deficit spending.

*Many state and local governments already borrow using municipal bonds and the new Build America Bonds, which are federally subsidized. Steven Malanga reports in the City Journal that muni bond debt has increased from $1.7 trillion in 2000 (stated in today’s dollars) to $2.2 trillion today. So if borrowing your way out of difficulties is smart – this is what local governments tell Washington when they demand extra money – why don’t state and local governments do their own borrowing, and make their own repayments?

Most states’ fiscal years are ending, accompanied by what is becoming an annual ritual – demands that Washington bail out state and local deficits.  In 2008 and 2009, federal taxpayers covered for the featherbedding and corruption at the local level by awarding state and local governments a total of about $275 billion in bonus payments. Right now on Capitol Hill, state and local governments are demanding a fresh $50 billion round of bailout checks.

Set aside that when states refuse to pay their own bills, they hand the debt to federal taxpayers – all of whom live in states.

Set aside that the states’ claims they must be subsidized because “we are required by law to balance our budgets” is a total political fiction – more on that below. Set aside that governors refuse to make hard budget choices, demand bailouts for their states — then campaign by denouncing the big spenders in Washington.

After listening to President Barack Obama call for fiscal restraint in his State of the Union Address this January, the United States Senate imposed the “paygo” rule on itself – no new expenditures unless offset by an equal amount of spending cuts or raised taxes. In the five months since vowing no new spending based on debt, the United States Senate has also voted for $400 billion in new spending that was added to the federal debt. Right now the Senate is debating adding another $80 billion or so in new spending based on borrowing.

As political flaming hypocrisy goes, that’s nothing! The House imposed paygo on itself in January 2007, and since has voted for $5.1 trillion in additions to the federal debt. House leaders support the next $80 billion in borrowing the Senate may approve.

How can the chambers of Congress formally pledge not to increase the debt, then merrily add to the debt as fast as zeroes can be printed? By stamping the word “emergency” on bills. Paygo, you see, not only does not apply to spending for entitlements, defense and interest on the national debt – these categories alone representing the lion’s share of federal expenditures. Paygo also does not apply to any bill classified as “emergency” legislation. And since paygo went into force, nearly all spending bills have been “emergency” bills.

For at least a generation, commentators have declared that Americans buy too much and borrow too much, chaining themselves on a stressful treadmill of work-and-spend. Wouldn’t it be nice, this thinking went, if we learned to buy a little less and save a little more. Maybe then we’d be happy.

We are about to find out – because hidden in economic data is a mild decline in the American obsession with spending money. People are spending somewhat less, even when unemployment isn’t an issue. Americans are paying down credit-card debt, the worst kind of debt, while saving somewhat more. As growth rebounds, we may awaken to a new economic reality in which consumer demand mildly slackens on a long-term basis. This is exactly what social philosophers said would be good for us!

Consider:

–According to Federal Reserve figures, household debt in the United States dropped slightly in 2009, the first drop since 1945. Some of the decline was keyed to housing foreclosure (which can eliminate mortgage debt), but even taking this into account, household debt went down. Credit is tight – but maybe, as well, Americans are beginning to learn to resist that urge to buy like crazy right now.
–The Bureau of Economic Analysis reports that personal saving as a percent of disposable income hit 3.6 percent in April, the highest such figure since 1998. In April, Americans saved $399 billion – money they might have spent, but didn’t. This seems significant because it is the employed who have extra income they decided not to spend.
–The mean amount a household owes in credit-card debt is now $3,900, down from $4,900 a year ago, according to this Associated Press-GfK Poll. This suggests that Americans are becoming cautious about credit-card use – which is not only smart personal finances, but likely to reduce money stress.
–Since 2007, retail sales are down about 6 percent; household income is down about 1.6 percent in the same period, so retail sales have fallen more than income. Prior to the decline that began in 2008, retail sales had risen 27 consecutive years.
–Last November, the typical Black Friday shopper spent $330, versus $390 (in today’s dollars) in the peak year of 2006.
–Electricity consumption declined from 2007 to 2009, though has risen slightly this year. Unlike gasoline demand, which trends up or down roughly in sync with larger economic movements, electricity demand had been rising steadily since World War II ended. The recent decline in electric power demand began before the 2008 financial-sector meltdown. Now the Energy Information Administration projects – see the table on page 5 — that per-capita U.S. energy use will remain in shallow decline for at least the next two decades.