I just talked to a friend who is high up at a big New York bank about my take on the deficit, asking:
Is it accurate so say that (leaving out Medicare/Medicaid and the cost of private insurance, all of which are time bombs) that the logical thing to do with the economy is keep spending/running deficits ’til we’re really out of the recession, then jack up taxe rates on the wealthy and cut spending to bring the deficit down?
He said that, yes, he agreed and that many or most in finance would though with varying degrees of concern about excessive borrowing possibly causing a spike in interest rates and inflation.
This is not an issue that should be discussed in moral terms, but in pragmatic ones. If someone argues that the current deficit is catastrophic, that person should make an argument as to how it is, and not just claim that belt-tightening is inherently moral.
Pundits like to phrase things in terms of morality for a variety of reasons. Movement conservatives, especially Straussians, think it’s the right language to reason with/propagandize the Bieber-fearing proles. Some intellectually-inclined conservatives believe that everything should be argued morally rather than pragmatically/empirically, because that’s how Burke and Oakeshott and Jeebus did things. Villagers like moral arguments because they’re both simple and safe. Condemning a president for getting a blowjob is lot easier than combing through budget reports and you’ll never take any heat for it either.
The run-up to the war in Iraq was phrased in moral terms too. It was all about having the Churchillian resolve to fight evil and spread freedom, not about the pragmatic real-world problems that arise from creating anarchy in a large country with a history of ethnic strife. And so it is with we are all Georgians, Iranians, Egyptians, Algerians. It doesn’t matter whether anything we do helps the situations, what matters is that we’re on the right-side morally, in our minds, which are places that are infinitely more important than the world of other human beings.
I don’t deny that moralists can make certain arguments much better than a pragmatist (like me) can. Moral conviction against torture and for gay marriage is probably more convincing than “it doesn’t work anyway” and “why not?”.
A lot of issues just don’t come down to good versus evil, though, a lot come down to the numbers adding up, or a realistic plan, or an economic theory that is supported by historical evidence. Sure, we should get angry and self-righteous about the fact that we are ruled by sociopaths, but if their decisions were less destructive in practice, it wouldn’t be such a big deal that they are sociopaths.
Suffern ACE
Sure, we should get angry and self-righteous about the fact that we are ruled by sociopaths, but if their decisions were less destructive in practice, it wouldn’t be such a big deal that they are sociopaths.
How would we know that they were sociopaths if it looked like they were trying to avoid destroying things after they were told that they were being destructive? It is by their reaction to destruction that they are revealed. One is not a sociopath merely theoretically, and only if conditions are correct.
DougJ®
@Suffern ACE:
Maybe that’s the point, then, we wouldn’t know.
JGabriel
DougJ(R):
My take on that is that it took WWII levels of spending and borrowing to get us out of the depression, and it would take damn near that now to cause any spike in interest rates or inflation that would be worth worrying about.
And we’re not getting WWII levels of spending.
.
.
jrg
One of the biggest reasons for our idiot media’s love affair with moral arguments is the fact that it allows you to be “right for the wrong reasons”. So when Iraq turns to shit, or the economy crashes, they can always say “well, our heart was in the right place”. It allows them to dodge responsibility for supporting catastrophic decisions by completely eliminating discussion of pragmatic things like trade-offs.
It’s a way to pretend that trade-offs don’t exist. Which is good for them, because at least half the country can’t comprehend the fact that something can be both good and bad at the same time.
DougJ®
@jrg:
That’s a good point too.
PeakVT
People aren’t rational, people rationalize – unless they are weird and like to force facts into their heads.
jrg
@jrg: Should have read “wrong for the right reasons”
policomic
You’re onto something here. The big divide in our current discourse is not between conservative and liberal, but between rational and irrational. It’s not about civil argument based on the notion that reasonable people can disagree; it’s reason vs. emotion–and not reason tempered with emotion, but pure, irrational feeling.
This is what bugged me about Jon Stewart’s rally. It’s not a question of cooling the rhetoric, or putting anger aside. Anger is a “side”; reason is the other side.
The anger side is not interested in rational argument, because it doesn’t serve their purposes. You can’t convince people that tax cuts for the rich lead to prosperity for all using reason, because it’s not a reasonable proposition, as anyone who isn’t an idiot should easily be able to see. But you can sell an idea that stupid with anger, and you can defend it with indignation. And you can do so very successfully, as it turns out.
Loneoak
Pragmatism is a moral theory, too—it’s a method for making decisions about right and wrong.
Cat Lady
Is your friend high, up at a bank? That might explain his/her answer.
I hate the moralizing approach to everything political also too and it seems to me it all started after Bush’s coup, and I’m pretty sure it’s all attributable to Rove. Political opponents aren’t just disagreed with anymore, they’re demonized, which ends any discussion about the efficacy of a certain policy and instead questions the motive or character of the politician or pundit. It’s why Republicans are so quick to engage that tactic, since it’s so effective at hijacking and derailing the discussion since we now clearly see the failure of 30 years of Republican policy.
jl
“He said that, yes, he agreed and that many or most in finance would though with varying degrees of concern about excessive borrowing possibly causing a spike in interest rates and inflation.”
The data say that the justified ‘varying degrees of concern about … a spike in interest rates and inflation” is approximately zero right now and for the next couple of years.
The food and energy inflation we see now is not related to whether or not the U.S. uses deficit fiananced fiscal policy to support the economy. Energy may be related to sudden emerging market growth, and it may be a medium to long run problem that will occur with any economic growth because of our current place in long run oil price cycle, or peak (easily gettable liquid) oil.
Nominal interest rates can increase because of fears of inflation, or because of expectation of strong economic growth. Just watching the interest rates won’t give much information without a structural model of the economy that has some predictive value for employment, prices and production.
The finance people in big corporations talk to their business forecasting departments, or their forecasting vendor, almost all of whom use Keynesian models of one sort or another.
Krugman, DeLong and Chinn (at Econbrowser) have the evidence in their posts.
But, at any rate, glad your banker contact agrees.
I think there are some very wealthy persons and corporate sectors that still believe that they can hang on to some ownership claim to all the debt that is still washing around, and need to finance their own debt. They want low inflation to keep up the value of the debt they plan to cash in some day, and low interest rates in order to keep the finance costs low for their own debt. They want low or no inflation and low interest rates so they can make a pile of money. They do not care a bit about the economy as a whole. I wonder how much influence they have with the media?
Maybe you could ask your banker contact how much his finance buddies care about the economy, versus retaining the value of their claims on debt, and ease of financing their own debt. That would be interesting.
danimal
Ultimately this moderate Democrat became a self-identified liberal for one simple reason: it works. Liberalism just plain works better than conservatism. Given our binary political system, there is only one political choice for rational people anymore.
It’s a really sad state of affairs.
Another Commenter at Balloon Juice (fka Bella Q)
I wouldn’t have much of an issue if the sociopaths had pragmatic policies that worked to the greater benefit. Alas, the nature of the sociopath is to work only in the interest of the sociopath, and greater benefit is often, indeed perhaps usually, at odds with that interest. So the nature of the rulers piss me off; they’re nasty people and ineffective and destructive also too.
danimal
@Cat Lady:
Before Rove, there was Atwater, and before Atwater, there were the Nixon ratf##kers, and the McCarthyites before them. Demonization has long, deep roots in Republican politics.
Calouste
@jrg:
Funny that, considering that the Bible, in which at least half of the country believes, is full of examples of people who are both good and bad at the same time (David being the obvious example). I guess there’s a difference between reading the thing and understanding what is actually in it. Well, if those bits are in the particular Bibles that are allowed.
jl
I am in a cynical mood, so when I hear about economists or finance people monitoring inflation and interest rates without explaining what they are looking for and why, and how this fits into some kind of model of the world, I think of this gadget:
What economists do
http://www.andyfoulds.co.uk/amusement/economists.htm
Move the mouse, and watch the profession in action.
jl
@Another Commenter at Balloon Juice (fka Bella Q):
It does seem the bigshot ‘You Can’t Handle the Truth’ crowd hasn’t held up their part of the bargain: they will keep the infernal machine working. They didn’t. They blew it up and then had come hat in hand to all the lesser people to cough up lots of money to keep disaster at bay.
Calouste
Btw, I think I just saw a craptastic ad here from La Bachman against raising the debt ceiling.
scav
Claiming something is the “moral” answer can often require a hell of lot less effort substantiating WHY it is the moral answer. It’s right up there with the “The majority of real Americans’ believe” cheapass mode of justification that usually comes with damn-all evidence of who these “real” people are and how the speaker knows whereof he speaks.
David Fud
This is an excellent point re: emotion vs. reason in the electorate. After all, W supposedly did everything “from the gut”, which tells us to some extent why he appealed to independent voters enough to get elected his first legitimate presidential election.
Another issue to remember is that there is a level of analysis issue going on that normal people simply won’t understand. Specifically, at the individual level of analysis, tightening one’s belt and paying off debt often makes sense, whereas at the national level of analysis a lot of individual belt-tightening creates a crash in consumer spending and government revenues. When the rest of the economy in contracting, only government spending can keep the crashed economy near the same size until the economy recovers. The only thing an individual could accomplish doing such a thing would be going totally broke.
The morality of spending largely applies at the individual level of analysis. It rarely makes sense to argue about the morality of spending at the national level, aside from “leaving our children in debt”. The open-ended nature of the nation-state, which could have theoretically endless growth, means that running a (reasonable) continuous deficit will not damage the finances of such a nation-state. Conversely, think of the finances of an individual who always spent more than they earned. It isn’t a happy ending.
Cat Lady
@danimal:
Yeah, but since Rove, the tactic has been fully mainlined so that every Republican now, and their water carriers in the media engage in the practice. I can’t think of any national Republican politician or columnist that argues policy in good faith. Prior to Bush II it was more dog whistles for the rubes, while the Washington policy discussions were more “civil”.
Gustopher
@Calouste: Click the ad! Take money fron Bachmann and give it to Tunch!
Suffern ACE
@jl: I like how they get all concerned and panic when I move the cursor off the bottom of the chart, but happy and whistful when I create a bubble.
Stefan
It rarely makes sense to argue about the morality of spending at the national level,
‘ivan, Mr. Andrew. Paging Sullivan, Mr. Andrew Sullivan. Mr. Sullivan, please come to the white courtesy iPhone.
Dave
@Stefan: Sweet Jebus, but Sully royally pissed me off with his ranting today. Equating Obama’s plan (which isn’t great but loads better than the GOP plan) with Bush’s insane spending is so dishonest as to derail any honest conversation. Bush blew over a trillion dollars just blowing shit up. Obama wants to spend it so we don’t collapse into a deflationary spiral. There’s a fucking difference there, Andrew! Christ, you think the Tory would look to his home country, where the austerity plan submarined the GDP in the 4th Quarter.
inkadu
@policomic: This.
Tyro
Pundits like to phrase things in terms of morality for a variety of reasons.
Except that they don’t. Is it moral to ensure access to health coverage? Sure, but that argument was almost verboten. Is it moral to stand up against torture? Yes, but pointing out that someone is being immoral by mindlessly supporting Bush’s use of torture because you are slobbering over tax cuts was considered uncouth.
Villago Delenda Est
The problem with torture, and security and intelligence professionals agree on this, is that it does not work.
It does make Dick Cheney’s tiny dick hard, which of course is what it’s really all about anyways.
joel hanes
@Cat Lady:
I hate the moralizing approach to everything political also too and it seems to me it all started after Bush’s coup
It started long ago, if it can said to have been started at all, was already old when purposely stoked by Nixon/Agnew of the southern strategy and the silent majority; was given brilliant expression in the character of Archie Bunker; was vastly encouraged and reified by His Excellency Saint Ronaldus, Presidente For Life of the Shining City On The Hill, amen.
and I’m pretty sure it’s all attributable to Rove
What you’re smelling there is the stench of ’70s College Republican cadre training. Apparently they set up regular camps or something where they taught these people to be complete [epithets] in pursuit of political goals, and further, to be proud of being complete [epithets] in pursuit of political goals. Lee Atwater is their guide star. W’s entire Presidency is their highest achievement.
Odie Hugh Manatee
It would seem to me that a smart government would want a healthy, vibrant and employed public. It makes sense that economic activity and health are strongest in an economy where the public is employed at fair wages. People need money to burn in the economic engine if it’s to be kept fueled and running. If people have one good paying job then they have no need to work two or more jobs to make ends meet, freeing up employment positions for others to take. This would give them more free time to enjoy the fruits of their labor, further driving the economic engine.
Everything is about corporate profits today, everything. The Dow don’t mean shit to the average person out there, it only shows which direction the rich people’s money is moving in. Never mind that these corporate profits are made at the expense of our economy and way of life, nope. All that matters is that the executives get shitloads of money and the stockholders get their remaining cut of the take.
The ‘companies’ that make the biggest bucks don’t make a damned thing but paper. It just floors me that we value that damned paper more than anything else out there. Cutting the top tax rates was one of the dumbest things our government has ever done. It has allowed, nay, encouraged, rampant executive overcompensation to the detriment of economic health. The employees that actually make shit happen for a company get a pittance in pay compared to their corporate overlords.
Our government has lost sight of what is needed for a strong economy, instead trading their votes for the short term immediate gains of various payoff schemes while sticking “our children” (that they plead for everyone to think about while screwing them and us over) with the mess. Giving the rich tons of money to play with has ended up corrupting our political system by allowing them to buy out one political party and corrupt the other to the point of inaction. Neither our politicians nor the rich are acting in the best interests of our country but rather they are taking the system for everything they can for their own selfish short-term gains.
We are in a mess I see no easy way out of. None.
Villago Delenda Est
@Odie Hugh Manatee:
It’s very difficult for a consumer driven economy to function if you don’t have consumers out there with money that is burning holes in their pockets.
But then again, the parasite overclass is taken care of. Fuck everyone else.
Suffern ACE
@joel hanes: Rove’s contribution was making certain that any liberal caught within a hundred miles of the disaster zone took the blame for the whole thing.
Parallel 5ths (Jewish Steel)
@Loneoak: I was going to point out that DougJ appeared to be making a moral argument on behalf of pragmatism, but your comment cuts to the heart of the matter.
So can we use a moral argument to argue on behalf moral arguing? Is this not a clear case of question begging?
Not that I disagree with a word of it. It’s a splendid post.
Gian
PBS Frontline (not sure if it was a re-run) had the stories of Ukrainian women lied to and sent to Turkey in forced prostitution. The story of the young lady who was pg by her boyfriend/husband, and had gone overseas to try and get medical care which the family couldn’t afford being forced to abort the child by the pimp
escaping home, and then volunteering to return to the life of rape to get the money to save her little brother
only to have him die while she was a thousand plus miles away.
THAT is what Tom Delay, and Jack Abramoff thought was the coolest stuff ever when they defended it in Saipan.
As far as I’m concerned, the GOP position on abortion is Only if your pimp wants you to have one, because he owns you. And affordible health care means fewer people desperate enough to take the jobs.
Did I mention how depressing the episode was?
and sorry I’m a luddite and this will probably explode this post… link to the pbs web site
http://www.pbs.org/wgbh/pages/frontline/slaves/?utm_campaign=homepage&utm_medium=proglist&utm_source=proglist
williamc
Sully finally lost me for good this week.
He hates on a budget because it doesn’t screw the poor enough and is clearly looking for his way out his crush on the President and searching for a more Conservative new crush on Paul Ryan/Rand Paul/Mitch Daniels (leave it to an Englishman to find someone as bland and pale as Mitch Daniels –W’s budget-busting budget director– an attractive anything).
midge
umm…long-time reader, long-time fan, third- or fourth-time commenter…
are you super-stoned, or am i kind of drunk?
(pssst. i think it was the use of the word “sociopath” that prompted this post.)
El Cid
It’s immoral, and quite likely evil, to use “moral argument” to justify actions based upon ignorance, callousness, and lies.
On the most basic level, how on Earth could anyone call it a “moral argument” or “absolutist” to discuss liberating some people from tyranny without, you know, addressing the topic of whether or not you’re actually going to liberate them from tyranny?
If “moral arguments” based on shallow absolutism are A-OK, then I guess the Weather Underground had it right. Sure, there might be negative repercussions from trying to blow up buildings to represent an escalation of opposition to the US’ war against Vietnam, and it might hurt some people, and it might actually undermine the entire cause, but, hey, it was a really awful war, and someone had to do something. Right?
El Cid
If moral arguments based upon stirring principles are basically okay even if their connection to this actual world are tenuous at best and absolutely lunatic at worst, what was wrong with, say, the Soviet Union?
I mean, wasn’t it right to fight for the empowerment of the working classes? To unite all in one struggle to end oppression everywhere?
Gian
@El Cid:
I see in the hypo that you’ve forgotten to refudiate Stalin and all his empty promises
(joke about boxcars omitted because real peoplee died a painful death)
Some things just aren’t funny until Bob Crane makes a TV show
Angry Black Lady
it’s catching. i like it.
Arclite
This story could probably use a “fuck the poor” tag.
Arclite
@JGabriel:
Yeah, but at that time we were an oil exporter. Now we are an oil importer, AND we are entering peak oil. I don’t think that even if we get out of this recession that we should expect a 1950s level boom.
Elia
I hope no one interprets this as me endorsing a false equivalency here, because I don’t think they’re remotely comparable in scope or impact but:
I think we see some of this dynamic with calls from some liberals for Obama to “use the bully pulpit” etc and damn the loss to political capital b/c the Overton must be moved.
agrippa
Will this proposed course of action accomplish the task? -the ends and means issue. Yes; but, these are the costs: ___, ___, ___. Difficult question to answer in a contingent world.
It is far easier to “go with the gut”; or, to make decisions based upon ‘morality’. It is far easier to reward your friends and punish your enemies.
That is why governing and politics are two separate matters; and politics is frequently the enemy of governing.
rickstersherpa
A few weeks back Karl Smith and Steve Randy Waldman had an exchange of posts on the role of morality plays. The fact is most people are not technocratic wonks who accurate bullshit detectors. If our housing values are rising, if we get raises at work, if the prices we pay for everyday stuff seems stable, and we feel secure about our jobs, then the economy is great. When the opposite is happening, not so much. And story tellers come along to explain the bad stuff, and we listen because we are story telling and listening creatures, at least since language started. And we have story to tell ourselves, that the current morality tale being spun is a vicious, evil tale. As this excerpt from Interfluidity explains: http://www.interfluidity.com/
“…Steve Waldman agrees entirely. The problem isn’t that there is a morality play, but that the morality play Smith describes is a bad, stupid, dumb, even evil morality play that needs to be challenged on moral terms. (As Smith is doing, by the way.) No one claims what Smith is ridiculing, that on an individual level overconsumption should be punished with unemployment. But people do claim that in aggregate “we” deserve and must endure a period of recession because “we” overconsumed and invested poorly. The right response to that story is, “Who the fuck are this ‘we’ of which you speak, kemosabe?”
At an individual level the correlation between past consumption and recent unemployment is obviously negative. The people who have sinned are not by and large the people being punished. Some people overconsumed relative to their income, and some people invested poorly. Those who overconsumed have mostly faced consequences for their misbehavior — they are either deeply in debt, or they have endured foreclosure or bankruptcy. But the people who invested absurdly, especially “savers” who lent money but permitted themselves ignorance and indifference to how their wealth would be mismanaged, have not suffered the costs of their recklessness. Instead, they have been almost entirely bailed out. It is lenders and investors more than any other group who determine the patterns of our macroeconomy. There are always people willing to overconsume or gamble on foolish enterprises. We do and must rely upon those with resources to steward to ensure those resources are used wisely. They did not, and their recklessness has brought us to catastrophe. But rather than condemn them for negligence and permit their claims to be appropriately devalued, we applaud them for “prudence” and let government action be bound by commitments to sustain their destructive and ridiculous claims. You don’t counter that sort of villainy with technocratic arguments about liquidity traps. You point out that the motherfuckers who are calling themselves prudent, who are blocking both writedowns and government action that might risk inflation, are hypocrites and thieves. You state clearly that their claims are illegitimate and will be written down one way or another, unless we can generate sufficient growth to ratify them ex post, which would require claimants to behave less like indignant creditors and more like constructive equityholders. It is not technocratic economists who will win the day and pull us out of our cul-de-sac, but angry Irishmen and Spaniards (and hopefully some day Americans) who challenge, on moral terms, the right of German (and American) bankers to impose vast deadweight costs on current activity because they lent greedily into what might easily have been recognized as a property and credit bubble.”
RSA
There are two kinds of moralists/moralizers who really bug me. The first kind wants to have it both ways. I’m thinking in particular of Charles Krauthammer, whose argument for torture begins, “Torture is an impermissible evil. Except…” And then he goes into an explanation of a “moral calculus”, which is no more than moral arithmetic, to say that torturing someone is okay if there’s a chance it might save someone else’s life.
The second kind of moralist I’m thinking of will say that abortion is an absolute evil, because it harms an innocent life, but then will argue against public funding for postnatal care for infants. The kid’s someone else’s responsibility now.
Bob
It’s funny because on torture “It doesn’t work” and the reasons why convinces me a lot faster than a moral argument, since there’s actually hard data.
debbie
I think a very bad situation will be made a whole lot worse if cuts are arbitrary and based on some sort of percentage. The first thing government should do is determine the country’s long-term goals and then tailor cuts so those goals are best met.
One example: If we want to be a leading country in technology, then we need to make sure that an excellent education will be available to support that goal.
thalarctos
@Dave:
I see what he did there:
oliver's Neck
Just because morons like Bobo and Sullivan abuse Oakeshott, that doesn’t mean you need to as well DougJ. I know marxists and radical democracy theorists who are big fans of Oakeshott’s work, for good reasons. You should try reading him sometime – and then feel free to abuse him from a place of knowledge.
4jkb4ia
Steve Randy Waldman tackled this with “Tragedy of the Technocrats”, which, appropriately enough, started out with arguments about austerity. One of his points IMHO was that economic arguments are about who gets what. So arguments/feelings about who deserves to get what are always in the background for the general public. Deserving is part of the reason that blaming Fannie, Freddie, and the CRA for the financial crisis stumbles around and refuses to die.
4jkb4ia
@rickstersherpa:
I knew someone would get there first.
ThatLeftTurnInABQ
@Arclite:
Ditto that and for another reason as well.
Our boom in the 1950s was aided and supported by a mass migration (aka “brain drain”) of highly educated people from war torn Europe to the USA the likes of which we are very unlikely to see again. If you read in detail about the achievements we made in science and engineering (or for that matter in areas of humanistic culture like the fine arts) back in the 50s it is amazing how many of the people involved were born and educated somewhere other than the US. We harvested the massive investment made in higher education by early 20th Century Europeans for the benefit of our economy, a net transfer of wealth across the Atlantic which was largely invisible but very real.
ThatLeftTurnInABQ
@ThatLeftTurnInABQ:
and to follow up on my own thought, I wonder if this invisible history is one of the reasons why Americans don’t seem to understand the need to seriously invest in our educational system. Because during our last great boom we didn’t, instead we had the benefits of other people’s investment simply fall into our laps. Perhaps it is no wonder that Americans think that education is something that simply happens for free, without anybody needing to pay for it.