On holding “a formal dinner with a pack of feces-flinging monkeys”
So says Max Sawicky in comments related to Paul Krugman’s op ed in the NY Times and commented on here at AB by pgl and cactus and elsewhere by many more. Apart from being unable to resist titling a post with Max’s line it is my turn to weigh in on this.
First, I completely agree with Max. There is no way to make a deal with feces flinging monkeys and even if you did they would just undo it the next chance they got, chortling all the while about “patsies” and “playing hardball”. So what are we to do? Responsible people (not just economists) should want to do the right thing for the country, but if all that means is enabling another round of Republican irresponsibility then it is easy to see why Krugman, Max and others say the moral equivalent of “ah f— it” lets just spend on what WE want because otherwise the government will just get ratcheted down to what THEY want. Until, that is, we hit the wall a la
Now I haven’t given up hope that we can drive a stake through the heart of the mindless Scarlett O’Hara republicanism that has come to characterize the right wing in recent years. (“Fiddle dee dee. I’ll worry about that tomorrow”) But there is no guarantee of this given the inability of many in the Democratic leadership to go for the jugular when they have the chance. And in economic discussions of fiscal policy there is little specificity about what we ought to want – a fact that plays in to my perennial peeve with discussions about fiscal policy. Way too much time is spent debating overall balance, spending and taxes without any reference to WHAT it is being spent on. Of course this is not universally true and the balances are very important – see pgl’s post of yesterday for example, not to mention some of mine – but if we really do want to do what is right for the economy in the long run then the thing to focus on when we are in power is building an economy that is resistant to the feces flinging that may someday come.
Previous commenters on Krugman’s op ed have focused on the question of whether we should or should not bother bringing things back into balance only to have the Republicans wreck it all again. I share the pessimism of many on this front which leads me to want to spend on what we want as opposed to what they want. But even within what WE want there are some choices that make for a more feces-resistant future than others. In short, we can improve the future not only by trying climb out of deficit on the spending side but also by accumulating capital that will generate future income which we can then tax.
What is in and what is out if we are trying to protect capital spending and preventing growth in recurrent expenses? Here is a brief and nowhere near exhaustive list – IN would be spending on physical capital such as roads, ports or other public goods. Also in would be spending on human capital, particularly education. Also in would be spending on research and development – My own favorites are new energy technologies and various biomedical technologies. OUT would be increased defense spending, increases in transfers which end up largely as consumption or subsidies to corporations that already make a profit. Unfortunately, given my personal druthers, this line of thinking also says we might want to go slowly on new entitlement programs that are not directly productive such as Medicare for all though one could make a good argument that this is both protection for human capital and economic “grease” to make our economy more efficient and competitive.
Bottom line? The Republicans have shown in the past 10 years that they do not negotiate in good faith. In fact, they often don’t negotiate at all. What we do has to take that as a fact for the time being, but there is still a policy direction that is “optimal” in the long run sense even if it isn’t what we would have chosen if grownups ran the Republican party.