The Organistion for Economic Co-operation and Development just released a report warning of a looming global economic catastrophe—a replay of 2008—because the same Tea Party Republicans who shut down the US government in October may do so again in January. Brinkmanship over fiscal policy in the United States remains “a key risk and uncertainty,” the OECD’s chief wonk said, adding that everybody in the world needs for the US Congress to negotiate a “credible long-term budgetary consolidation plan with solid political support.”
But the OECD is like Chief Justice Marshall telling President Andrew Jackson not to expel the Cherokees, or the Pope telling Josef Stalin not to invade Poland: Neither the rule of law nor the notion of justice has any relevance when one side has all the power and is bent on destruction. The only hope for avoiding another Washington debacle after Christmas is that Republican strategists can convince their elected nihilists of the value of self-restraint. The GOP might hold the House and gain the Senate if they relent now on a debt-ceiling deal, given that the political wreckage of the Obamacare rollout has evidently put Republicans back in the saddle for the low-turnout 2014 elections.
Alas, one cannot underestimate the appeal of calamity to the Calamity Caucus. We see it here in Upstate New York: the garbled logic, the magical thinking, and the promise, or the threat, to achieve purification through immolation. It’s all on display in the newest essays of our own Carl Paladino.
Paladino v. Cuomo, part deux
The developer who has done a deal with the Democrat-led City of Buffalo to put a hotel on the waterfront, and who rents hundreds of thousands of square feet of sub-prime office space to state and local government, and who alternately praises and scolds other developers when they succeed in getting subsidies that make everybody else scream, is sending out emails suggesting that he may become a candidate for governor of the State of New York.
It’s testosterone politics. Paladino commands the incumbent Republicans to voluntarily rid themselves of their current leadership, or he will organize primaries against them—and then run on the Conservative Party line as a well-funded if not self-funded candidate for governor. Bitter criticism of incumbent Governor Andrew Cuomo is as it was four years ago, but more so. Vitriol against Assembly Speaker Sheldon Silver pervades the Paladino oeuvre. And even through the red mist of Paladino’s hot anger, his message has a populist edge.
It’s the magical thinking that really stands out. Governor Paladino would get hydraulic fracturing going pronto, and thus save the Upstate economy. Governor Paladino would save billions by reforming pension rules for state workers. Governor Paladino would be elected on a wave of citizen anger against the SAFE Act which restricts assault weapons. Governor Paladino would sweep away all the corrupt collusion, and end the “three men in a room” budget practice that has been the norm for Republicans and Democrats for 50 years.
Credible analysis by credentialed engineers, like the ones who presented their report at Cornell University last month, strongly suggests that there’s no big supply of recoverable gas in either the Marcellus or the Utica shale formations north of the Pennsylvania state line—and that therefore, the promise that fracking will create new jobs and transformative wealth in New York State is a fantasy. Economists already note that the price of natural gas has fallen to less than half of what it was just a couple of years ago, making the “plays” from marginally productive drill zones like ours too risky, or even non-starters.
Ditto the anti-government fantasy of “reforming” pension rules to save billions—on the theory that cutting taxes immediately produces jobs. Really? First, pension “reform” has already happened, because there’s a Tier VI for new hires—of which there aren’t many. State public employment is lower than it’s been in decades. And because of a precipitous drop in the supply of incoming freshmen, SUNY employment may soon drop, too. The dependency of Upstate on public-sector jobs is well documented. The American consumer economy here and everwhere profits when retirement income is robust—so who exactly would benefit if retirees got poorer?
And then there’s gun control. Paladino exclaims that there is great citizen anger over the SAFE Act. Really? None of the New York State pollsters have found this to be true. In fact, criticizing the SAFE Act is a general election loser for statewide candidates, because although a slight majority of Republicans and many rural residents dislike the law, city folks and suburban folks like it a lot. Cities and suburbs, especially downstate, are where the majority of the votes are—the votes that in 2010 gave Andrew Cuomo an overwhelming victory, and probably will again should Paladino challenge him.
The roots of the protest
A pervasive sense of economic distress among older white people drives the Tea Party in its many versions across this country. The 35-year trend toward ever-greater polarization of wealth and income, the awful indebtedness of so many recent college graduates, the 95 cents of out every post-2008 dollar that have gone to the top one percent, the utter stagnation of middle-class incomes—these conditions are all well documented. But because of Democrats’ reliance on plutocrats in finance for the money to run campaigns, Democrats have failed to forcefully articulate an anti-plutocrat message. Democrats equivocate about the financial class, and about re-regulating the big banks. Democrats eschew populism. Democratic consultants run from the Occupy Wall Street message because in the off-season, Democratic consultants make money off Wall Street. Meanwhile, Republican political consultants have been far more adept, nimble, and forceful in embracing the right-wing populism of the Tea Party. There’s lots of consultant money to be made in blaming blacks, government, the tepid and so far clumsy redistributionism of Obamacare, and pointy-headed climate scientists for the anxiety that most middle and lower-middle income families experience every damned day.
But all is not yet lost—precisely because older white voters may soon heed a new wake-up call. From progressive US Senators, of all people.
Thanks to the admirable Bernard Sanders of Vermont, the admirable Tom Harkin of Iowa, and the not only admirable but now newsworthy Elizabeth Warren of Massachusetts, we have at least three United States Senators—three members of our own version of the noble House of Lords—who are pushing back against the equivocators, the plutocrats, and the Tea Party, too.
Here’s what’s brewing: Sanders, Harkin, Warren, and soon maybe others will fight what could be a winning fight against heaping more harm on the fortunes of families. Here’s how: They are already saying no to cutting Social Security as a way to getting to a smaller national debt.
Their economic rationale is impeccable—but so is their political savvy. Old people, and those who are soon to be old people, want their Social Security to keep coming. They do not want to be told that they should forego benefits. Right now, we do not have a national discourse about the fact that Social Security’s trust fund is solvent. Right now, we do not talk about the absurd situation whereby incomes over $114,000 a year are completely exempt from Social Security tax—notwithstanding the astounding increases in the share of total income that is commanded by people bringing in over $400,000 a year, i.e., the top one percent.
The “global” budget deal that the Democratic equivocators representing the Obama administration have tenatitvely agreed to, with plutocratic Republicans near to signing on, would include restricting Social Security payments without any increase in contribution by high-income households. And therein lies the potential for a political game-change that could make the Tea Party a short-lived phenomenon.
Elizabeth Warren or Carl Paladino?
Carl Paladino did not get rich by being either stupid or slow to spot an opportunity. Though he won’t succeed against Andrew Cuomo, his populist stances against the Albany Republicans—plus his tactic of running as a third-party spoiler—will work to the extent that he can harness the angst of the middle- and lower-middle-class voters who right now are hearing nothing at all from national Democrats.
But Paladino and the Right might be blown out of the political water entirely by a new politics of tax progressivity—if that politics is based on protecting the incomes of old people, and then extended to protecting the prospects of young adults.
For more than three decades, economists and do-gooding progressive activists have been holding seances among themselves about how awful it is that the Wall Street speculators have been gobbling up the national income, crushing industrial employment here by shipping American capital to low-wage production venues in the Third World, and creating a new Gilded Age or Roaring ’20s, complete with highly visible, bigger-than-conspicuous consumption, and not a shred of any pretense of aristocratic behavior—like nation-building philanthropy. We don’t have old-style rich folks in this country any more, apparently. We just have thugs.
And now they may have gone too far. By going after Social Security, the new grasping class has threatened the core constituency of the American Association of Retired People, and scared the bejesus out of Boomers. By attacking the strongest constituency in the land, the potential for a new, economically progressive populism has been reawakened. Elizabeth Warren happens now to be a useful media mannequin for this message: She is already being touted as the progressive alternative to Hillary Clinton.
But it will take more noblesse oblige—more members of the United States Senate, and more sensible corporate leaders, which is to say, business people who understand the fundamental economic equation: that adequate income for retirees, and debt relief for young graduates and prospective students alike, are policy changes that are in the national (and international) economic interest, and that if achieving that broad public interest means raising income and estate taxes on the plutocrats who have been taking outsize shares of income, then so be it. The economics are very straightforward: Either constrain essential consumption of the 99 percent whose incomes are stagnant, or constrain marginal consumption of the one percent whose incomes have exploded.
Americans currently love, fear, admire, and seek to emulate the plutocracy, as if the corporate leader of 40 years ago, who made 40 times the average employee salary, is the same person as the outsourcing, downsizing executive of today, who makes 400 times the average employee salary. That mix of emotions is souring as it becomes obvious, media market by media market, that there are a tiny few who have truly insane incomes these days, while even clever, educated, play-by-the-rules folks struggle. Hundreds and hundreds of thousands of brand-new college graduates working in fast food, daycare, and retail jobs send the message home every day: Something is quite wrong. And now, with the attack on pensions—and specifically, the Tea Party attack on Social Security—the souring will accelerate.
As it did long ago. In the Federalist Papers, the fictional author Publius was absolutely clear about how detestable aristocrats were—and by aristocrats, he meant the unaccountable, swaggering, over-empowered lords of capital whose social progeny we see today. Publius was the pen-name of Alexander Hamilton, John Jay, and the future President James Madison. Aristocracy, to them, was absolutely anathema to a republic of small economic actors who craved some relief from the arbitrary sway of the permanently empowered. Publius would have recognized the arrogant, aggressively accumulative actions of today’s financial plutocrats, and might have even seen through the distracting messaging (as Madison surely did in his attacks on slaveholders) of the defenders of this great distortion.
It’s comforting to think that Publius also strongly argued for a strong Senate, a body peopled by leaders who, though probably rich in property, yet had a long-term view of the public good—comforting if only because, as the country pushes back against the angry, faux populism of Paladino and the Tea Party, which are forever citing the Founding Fathers, there are plenty of strong precedents in American history and letters for putting the plutocrats where they belong.