Support the Democrats in the Mid-Terms

Support the Democrats in the Mid-Terms October 26, 2010

I will provide seven reasons why a Republican Congress is a very bad idea. I will stick to the salient issues today where the composition of Congress can have a real impact. I will ignore a large number of important areas that will not be affected by the mid-term elections – including abortion, war, the death penalty, and gun control. Here we go:

1. Fighting the recession. A key problem with the latter-day Republicans is that they do not understand basic economics. They fail to understand that a combination of monetary, fiscal, and financial policies prevented a calamitous downturn and even the possibility of a second Great Depression. They fail to understand that – unsavoury as it felt – the TARP succeeded in ending panic and restoring financial stability and is actually turning out to be a pretty good investment for the taxpayer. They fail to understand that, especially in conditions of a liquidity trap when interest rates are close to zero, fiscal policy is the sure way of restoring aggregate demand. And within that, they fail to understand that government spending has larger multipliers than tax cuts, and therefore provides better stimulus. Right now, there is too much pressure to adjust in the short-term, and any loosening at the federal level is being offset by procyclical tightening at the level of the states. The Fed is willing to do more, but even further quantitative easing cannot do that much under liquidity trap conditions. The crisis is not over, and we can’t let our guard down. We simply cannot trust the Republicans on macroeconomic policy.

2. Unemployment benefits. Unemployment benefits provide effective stimulus. In most countries, this would be considered part of automatic stabilizers but the weak safety nets in the United States means that discretionary periodic extensions are needed. With unemployment near 10 percent, and in the midst of the greatest global slowdown since the Great Depression, Republicans have been trying to block these extensions. We must remember the horrendous human costs of unemployment – long-lasting income reduction, poor health, risk of dying younger, likelihood of children doing worse in school, a breakdown in social trust. This problem is urgent – 1.2 million people could have their unemployment benefits curtailed next month if Congress fails to act.

3. Long-term fiscal health. Ironically, while Republicans are racing to victory on a budget-balancing platform, their actual policies (as always happens with Republicans) would make the longer-term debt sustainability problems far worse. They want to extend tax cuts to the rich that would cost $700 billion, and have a whole host of further costly tax cuts up their sleeves. And despite the rhetoric, they have no plans to cut spending (sorry, earmarks don’t count). They would rather disband as a party than touch out-of-control military spending. And they are on record as wanting to repeal the cost controls embedded in the Affordable Care Act.

4. Climate change. The Democratic House passed a cap-and-trade bill, only to be stymied by the Senate. This was only a first step toward curbing carbon emissions, but it was a necessary first step. With a Republican Congress, all attempts to address climate change and protect the environment are dead. In fact, denying that basic scientific consensus on global warming now dominates a more-extreme-than-ever Republican party. We should take them at their own words – they have made preventing the EPA from regulating carbon emissions as one of their key objectives. And you can be sure that big oil companies will be back in favor.

5. Regulation. Even though the roots of the financial crisis can be traced to inadequate regulation, inadequate supervision, and inadequate crisis resolution powers, the Republican party is still wedded to the deregulation mantra. They opposed the Dodd-Frank bill, which did not go far enough, but still represents the largest muzzle placed on Wall Street in a generation. Expect the Republicans to try to loosen the restraint. More generally, expect them to try to roll back labor protections and to fight for the interests of big business.

6. Immigration. The chances of  meaningful overhaul of the broken immigration system, along the lines supported by the USCCB, will fall to zero under a Republican Congress. Even George Bush supported meaningful immigration reform, but today’s Congressional crop has taken to demonizing immigrants and foreigners more than ever before.

7. Procedural issues. Mitch McConnell is on record saying that “the single most important thing we want to achieve is for President Obama to be a one-term president”. We know what that means; we’ve seen it before. Do not expect any interest in good governance. Expect instead a slash-and-burn strategy that is designed to destroy Obama’s legacy, and force him out in 2012. They will choose symbolic victories over meaningful policies. They will use any chance they get to try to overthrow the Affordable Care Act and its important protections. They might shut down the government. They might even try to impeach Obama. Like I said, we see this every time a Republican Congress faces a Democratic president. Except this time, they are more rabid and extreme than ever before.

There is a lot to be said for checks and balances. But for all of these reasons, and for many others, the Republican party does not deserve to control Congress. It has not earned that right.

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