Obama and ‘European Socialism’

Republicans decided a long time ago it would be easier to run against the imaginary strawman Obama than the real thing. That’s why they keep winking at birthers and people who think he’s a “secret Muslim”. It’s why they keep saying he’s “dividing America” and playing class warfare by advocating tax policies similar to Saint Ron’s.

Given their own track record, it’s not surprising they want to keep the debate in Fantasyland.

Obviously, horrible is from the wingnut perspective.

Some straws in the wind suggest a revival of the European left.

By 7th May, if current polls turn out to be predictive, the Repubs will have a perfect Eurobogeyman: the presidential candidate of the French Socialist Party, Francois Hollande, has a clear lead over Sarkozy. The Left also recently captured the French Senate, for the first time in the Fifth Republic. Sarkozy, in an attempt to regain the initiative, has just said he will impose a 0.1% tax on some financial transactions. Although the left have recently lost elections in Spain, Portugal and Slovenia in the wake of the financial crisis, and will lose the Greek election in April, the German right-wing coalition has been repeatedly losing regional elections, the Danes recently elected a government of the left after 10 years of right-wing rule, Croatia has elected a government of the left for the first time since 2000, and the right-wing governments of Hungary* and Romania are extremely unpopular and in serious economic trouble. Even in the UK, PM Cameron has been bleating insincerely about the need to rein in huge bonuses for top-level bankers (although he boosted his popularity late last year by refusing to sign up to an EU treaty – ironically one that would entrench austerity policies very similar to his own, which are pushing the UK and most of the EU towards renewed recession).

I understand polls in the US are showing that growing inequalities have replaced immigration and security as Americans’ main concerns, which no doubt explains Obama’s recent reference to increasing taxes on the rich if he’s re-elected. I’m increasingly confident he will be, unless there’s a new financial crunch before November – and may even get a more Democratic Congress.

*Hungary’s government already verges on fascism, and there’s a real possibility of the outright fascists of Jobbik coming to power if its economy collapses, as it may well do.

I’m not a big fan of Sullivan most of the time, but interestingly, he says –

For me, the true test of conservatism is empiricism.

That’s right, Andrew, the US so-called “Conservative Movement”, as defined by Fox/Limbaugh/the Tea Party/etc, is NOT “conservative” with a small “c”.

In fact, denial of reality (scientific, historical, and economic) is one of its defining features. The others are irresponsibility (but they claim to value “personal responsibility” because they deny reality), corruption, and unremitting negativity (all their goals amount to an effort to harm someone whom they consider vulnerable and a claim that their supporters will benefit from this; if you disagree, name one overt US right wing policy that doesn’t involve harming some group of people, whether gays, the poor, the sick, the elderly, people in countries to be bombed, ethnic minorities, people who work for a living, etc, and I said “overt” – secretly giving sweetheart deals to cronies doesn’t count.)

KG: The left was the dominant political force in Europe during the late 90’s, the right ruled the first decade of the millenium, so a continent wide alternance is to be expected, although many right-wing poliicians are trying to restart the old alliance between the conservative upper-class and far-right demagogues to stave off the their coming defeat.

I recall some European countries’ metrics were doing quite well where non-conservatives were benchmarking their results to advocate we consider those successes when crafting U.S. policy. The conservative rebuttal was that those countries were socialist, we’re not nor do we want to be, enough said. So this argument is in play even these European countries are doing well. [One doesn’t have to ‘go socialist’ to learn from others, you still have to craft policy within our own context.]

The U.K.’s current fiscal policy is one of the most carefully watched experiments when it comes to valid recessionary economic policies. Keynesian theory argues their current policy is contractionary to the point of doing net harm to the economy. The only claimed success I’ve seen coming from anti-Keynesians are two-fold:

1) Successful monetary policy coming from Monetarists influenced by Milton Friedman.

2) President Reagan and the corresponding Congress’s policies when he first entered office in a deep recession.

Neither are valid defenses within our current context.

Most economists and policy-makers have already adopted successful monetary policy prescriptions into their tool-kit. Our Fed follows monetarist policy now. That those originating right-wing policies have already been successfully incorporated into mainstream economic thought – while economists correctly point out that prudent governance allows monetarism and Keynesian fiscal policy to co-exist and in fact can be complementary. In fact, because central banks tend to be biased towards lenders at the expense of the labor market, it’s even more imperative to check monetarist polices with prudent fiscal policy from the national and state governments. In addition, monetarism as its normally executed is often limited in how much it can influence real growth in the short-term, especially in a deep recession, so the need for fiscal policy even when employing monetarism remains.

The policies under Volcker, Reagan, and the corresponding Congress were confronted not just with a recession, but also inflation, “stagflation”. This sort of stagflation was increasing the price of goods and services more rapidly than wages. So besides high unemployment, even the employed were increasingly unable to purchase the same volume of goods and services they had previously because their net take-home pay was less due the inflation of goods and due to “bracket-creep”, they’re increased wages pushing them into higher marginal income tax rates which increased the share of their take-home pay going towards taxes.

Stagflation hasn’t existed since then and makes this case study inapplicable to this down-cycle or most recessions. But because conservatives don’t care about reality, they frequently argue inflation is higher than reported and therefore we should obey their god Reagan regardless of the applicability.

Yes, Laurent, but these reports make it politically harder to justify help for Greece. The poor people there don’t deserve to pay for the powerful.

It’s also crazy given our own experience with Brüning and the resulting political impact that Merkel insists on preventing even a little bit more inflation.

The poor people there don’t deserve to pay for the powerful.

Greek citizens are hardly blameless: the public funds embezzled did not merely go toward politicians’ bank accounts: they used this money to build vast clientelist networks, and Greeks deliberately voted for politicians who made sure that Greece’s fisc stayed embryonic, that Greece remained the only advanced country with no register of real estate, that European funds meant to fund infrastructures were used to artificially increase the salaries of public servants, etc…

Greeks could be compared to American voters living close to military bases who keep sending representatives favoring the endless swelling of millitary budgets because it means more money in their pocket: sure, the politicians who keep demanding more millitary spending are to blame, but the people who put them where they are are hardly innocent themselves.

*

That’s actually what’s really disgusting with Merkel and her coalition behavior: they turned an economic problem into a morality play where punishing the guilty party is now more important than fixing the economy. And they did so in order to demagogically accuse their critics of fraudster sympathies.