I am more and more convinced that I missed the boat by not becoming an economics pundit. I had naively assumed that my substandard arithmetic skills would be a hindrance to understanding economics, and it certainly is a barrier to being an actual economist. But any idiot can be a pundit. And economic punditry seems a particularly fertile and lucrative field for the ability challenged.

Take, for example, Robert J. Samuelson. Please. He writes in the Washington Post,

Japan’s economic eclipse shows the limited power of economic stimulus and the exaggerated threat of modest deflation. There is no substitute for vigorous private-sector job creation and investment, and that’s been missing in Japan. This is a lesson we should heed.

I don’t want to get into a discussion of what happened to the economy of Japan in in the 1980s and 1990s, but here is an article I found from a link at Krugman’s blog that explains it more clearly than Samuelson’s does. See also Krugman himself.

Where I wanted to reach out and smack Samuelson in the head was at the sentence “There is no substitute for vigorous private-sector job creation and investment.” Well, duh. No one is arguing with that, dude. The argument is over how to somehow entice (notice my avoidance of the “s” word) the private sector to create jobs and invest, and what it is that is discouraging the private sector from doing those things now.

The argument that makes sense to me is that business is not hiring and expanding because people aren’t buying stuff, and it’s stupid to increase supply without evidence there will be an increase in demand. So the key to getting the private sector cranked up is to somehow get people to buy stuff. But Samuelson doesn’t see it that way.

Samuelson concludes,

The lesson for us is that massive budget deficits and cheap credit are at best necessary stopgaps. They’re narcotics whose effects soon fade. They can’t correct underlying economic deficiencies. It’s time to move on from the debate over “stimulus.”

Economic success ultimately depends on private firms. The American economy is more resilient and flexible than Japan’s. But that’s a low standard. Neither the White House nor Congress seems to understand that growing regulatory burdens and policy uncertainties undermine business confidence and the willingness to expand.

First, I don’t think anyone argues that budget deficits by themselves stimulate the economy. The point, as I understand it, is that allowing the government’s budget to go into deficit is sometimes necessary to release money for other purposes, such as getting dollars flowing through the economy so that people buy stuff.

But this thing about “uncertainty” seems to be the new talking point dictated by the Puppet Masters to explain why the economy is stagnant. I’ve seen it crop up in several places lately. The argument is that businesses are not willing to spend money in expansion and hiring because they are so afraid the government is about to slap them with new taxes or regulations, and this uncertainty has turned American business into a twitching, thumb-sucking wretch, curled under its bed in fetal position, afraid to come out.

There was other nonsense about “uncertainty” repeated by some economists in the Los Angeles Times today. Kevin Drum explains in some detail why the uncertainty argument is nonsense. Ezra Klein argues that if the uncertainty theory holds water, it should have crippled the economy during the Clinton Administration even more than now. As you might remember, it didn’t.

Steve Benen says,

In my heart of hearts, I assume that most Republicans know their talking point on this is garbage. They’re using it, I suspect, because they can’t think of anything else — they can’t blame the economy on tax increases, since taxes have gone down not up, and they can’t blame the recession on Bush since they still support his economic policies. They need to figure out a way to blame health care reform, industry regulations, and the rest of the Democratic agenda, so “uncertainty” becomes a convenient catch-all.

But it’s still ridiculous. Businesses have been reluctant to hire because they need more customers. It’s really not a mystery.

In other words, “uncertainty” is the best argument the Puppet Masters can muster right now. I’d like Samuelson to explain (1) exactly why business is more hamstrung by uncertainty right now than it was in the 1990s or, for that matter, the 1960s; (2) even without “uncertainty” over taxes and regulations, why would businesses expand unless there is growth in demand; and (3) where does he think growth in demand will come from, considering business is not investing and hiring, if not from stimulus generated by government?

Now that the 2012 election cycle is underway — Let’s discuss this New York Times editorial, “Try Something Hard: Governing.” It suggests to Republican that if they go overboard with obstructionism over the next two years, as they promise to do, it will hurt them in the 2012 elections.

Steve M points out that, contrary to what the editorial says, the Republican Party paid only a small price for the excessive Clinton-era witch hunts in the 1990s.

Republicans lost a few seats in ’98 — but they kept both houses, and did so again in three straight election cycles, and they kinda-sorta won a presidential election in 2000 that, based on peace and prosperity, should have been a Democratic blowout. And they won the White House again in 2004. Do I really have to recount all this? Excessive investigation did very little damage to the GOP in the Gingrich years — and creating a sense of multiple scandals (involving Gore and money as much as Clinton and sex) surely helped keep Gore out of the White House.

My sense of things is that while much of the country found Gingrich, Lott, DeLay, etc. etc., highly annoying, they also bought a large part of the propagada they were selling, especially after the Monica Lewinsky/Paula Jones episodes.

However, the United States of the 1990s was a very different place from the United States of the 2010s. Remember when some pundits were calling the 1990s the “age of complacency”? The economy was pretty sweet, and few were imagining rabid jihadists behind every bush. So what if Congress did little else but investigate the president? What else needed to be done?

The crew about to take over the House of Representatives promises to make the Ken Starr inquisition seem like a respectful little inquiry. As the editorial says, we’re in for endless tooth-and-claw politicking but little or no governing for the next couple of years. Their first priority is destroying the Obama administration, and they may succeed.

However, I’m not sure the American people will react to the witch hunts now the same way they did in the 1990s, for a couple of reasons.

First, as hard as they went after Clinton in the 1990s, the president remained popular. Were it not for the fact that they actually caught Clinton with his hand in the, um, wrong cookie jar, so to speak, I think the witch hunts would have backfired on the Republicans much more than they did. As disciplined as he is, I very much doubt President Obama is going to hand the GOP anything nearly as tangible to use against him.

Second, people are not complacent now. In fact, in my lifetime I can’t think of a time in which people were less complacent than they are now.

I think the Democrats should prepare a simple talking point — something like “Republicans in Congress need to stop politicking and start governing” — and be prepared to repeat it incessantly. The solid Democratic counteroffensive should be that Republicans are a bunch of clowns who are not serious about government, which has the advantage of being true.

As usual, Paul Krugman gets to the heart of the National Commission on Fiscal Responsibility and Reform:

It’s no mystery what has happened on the deficit commission: as so often happens in modern Washington, a process meant to deal with real problems has been hijacked on behalf of an ideological agenda. Under the guise of facing our fiscal problems, Mr. Bowles and Mr. Simpson are trying to smuggle in the same old, same old — tax cuts for the rich and erosion of the social safety net.

At TPM, Brian Beutler points out that following the Catfood Commission’s recommendations (which are not official), would require dismantling the health care reform law enacted this past spring.

That’s the view of prominent economists who’ve examined both the Simpson-Bowles plan and the health care law. Wednesday’s plan calls for strict limits on federal health spending and the amount of revenue the government can collect via taxation. But the Affordable Care Act expands insurance coverage by increasing both taxes and spending and, with health care costs soaring, it would have a hard time meeting the commissioners’ requirements.

A number of economists, including Brad DeLong, are saying that the stipulations of the Commission would require not just dismantling the Affordable Care Act but Medicare as we know it as well.

What’s worse, there appears to be a kind of circling of the wagons in Washington, protecting the Commission from the wild mob outside the Beltway that is reacting against it. Already media is hinting that anyone who is adamantly opposed to gutting Medicare or raising the retirement age is an extremist, whereas reasonable people are soberly considering these things because they have to make tough choices (i.e., tax cuts for the rich and erosion of the social safety net).

And how come tax increases for the rich isn’t a “tough choice,” but unthinkable?

So the plan, as I understand it, is to slash support to the poor and elderly and raise the retirement age in order to afford lower income tax rates across the board, including corporate taxes, and this is called “fiscal responsibility”?

For further comment, see Paul Krugman, “Unserious People” and “Income and Life Expectancy“; and Kevin Drum, “Is the Deficit Commission Serious?” (executive summary: no).

But what really pissed me off this morning was the President.

President Obama is in Seoul, South Korea, where today he said lawmakers in the United States should hold off on comments about his fiscal commission’s proposals to slash the federal budget deficit through spending cuts, ending tax breaks, and a revamping of the Social Security system.

“Before anybody starts shooting down proposals, I think we need to listen, we need to gather up all the facts,” Obama told reporters….

…”We’re going to have to make some tough choices,” Obama said.

Tough choices? Making the rich richer is not a “tough choice.” A tough choice is choosing between filling a prescription or paying the heat bill. A tough choice is when your child has a fever, but if you take him to a doctor there won’t be money left for groceries. Those are tough choices.

But to be well fed and well housed and choose to deprive others of necessities to give yourself an income tax break is not a tough choice.

There also are reports that the White House is about to cave on the Bush tax cuts. And I might add, this is what happens when your base doesn’t bother to vote, but the other side’s base does.

Oh, yeah, and It’s Armistice Day.

Update: Greg Sargent says that the White House is denying that the administration will cave on the Bush tax cuts.

Seriously? These clowns meet for eight something months, and the plan they come up with is to cut Social Security, Medicare, eliminate tax breaks for mortgage interest and child care, but cut income tax rates? Including tax rates for corporations?

Seriously?

Well, OK, not seriously.

Apparently Glenn Beck has called George Soros a “puppet master.” I’d like to introduce my own version of the world of puppeteering:

Comments? Criticisms? Spelling corrections?

Michael Lind’s “Can liberalism save capitalism from conservatism?” is a must read. It’s so spot on it made me want to give Lind a standing ovation as I read it.

And it also sorta kinda goes with the last post, which points out that guys like Rand Paul, who thump their chests and declare they are going to take an axe to the federal budget, often have no clue what government does. In addition, in Paul’s case, he has no personal experience working within a large organization to provide a product or service, yet he deems himself qualified to go to Washington and decide which civil service jobs are necessary and which are not.

Lind’s point is that movement conservatives and libertarians fancy themselves to be friends of business and tough-minded economists just because they are conservatives and libertarians. It’s like the rightie bloggers who believe they must have an inherent understanding of war and the military just because they are conservative and not liberals, who of course are born with their “understanding war” gene missing.

But in fact, right-wing ideas about business and the economy combine anachronistic models from the 19th century with crackpot ideology. They have no clue, in other words, what the economy and business really need to grow and thrive in the 21st century.

But our national mythology informs everyone that conservatives are pro-business and liberals are anti-business, and this myth runs so deeply that business owners reflexively believe conservatives are their friends even when conservative policies are choking their businesses to death. “It is as though a shopkeeper shaken down by a gangster were persuaded by the gangster’s argument: ‘We private sector businessmen must stick together against those meddling cops,'” Lind writes.

And Lind brings out one of my own long-time arguments, which is that the corporatists’ favored policies of driving down wages to save cost also drives down demand for their products because the wage-starved consumer cannot afford them.

Every business may want to pay workers the lowest possible wages. But workers are also consumers. What is more, the non-rich spend more of their income than the rich (in Keynesian terms, they have a higher “propensity to consume.”) This means that driving down the wages of workers, however it may benefit particular employers in particular industries in the short term, ultimately starves the economy of demand in the long run.

The economies most likely to sustain themselves and survive as democracies into the 22nd century are those with strong unions and a commitment to providing a strong safety net, including national taxpayer-funded health care, unemployment benefits, education benefits that are not loans, etc. In other words, the United States is unlikely to make that cut.

The road the U.S. is on now will either lead to utter chaos or a fascist-style takeover by corporatists and the mega-wealthy. And, ironically, this is being made possible by people marching around pretending to be liberty-loving patriots who want to save the constitution.

Now that they’ve taken back the House Republicans are in full chest-thumping mode. Rand Paul and Jim DeMint bragged to ABC’s Christiane Amanpour that they were going to take an axe to budget bloat and cut excess government spending. But when Amanpour tried to pin them down to specific cuts, the he-men wimped out.

AMANPOUR: Give me one specific cut, Senator-elect.

PAUL: All across the board.

AMANPOUR: One significant one. No, but you can’t just keep saying all across the board.

PAUL: Well, no, I can, because I’m going to look at every program, every program. But I would freeze federal hiring. I would maybe reduce federal employees by 10 percent. I’d probably reduce their wages by 10 percent. The average federal employee makes $120,000 a year. The average private employee makes $60,000 a year. Let’s get them more in line, and let’s find savings. Let’s hire no new federal workers.

I checked on the claim about federal versus private sector salaries:

The August report does not compare the salaries of people working in specific federal jobs to similar positions in the private sector. The BEA [Bureau of Economic Analysis, an agency within the U.S. Department of Labor] notes that its private-sector data includes employees of all professions. That means everything from minimum-wage jobs to the salaries of chief executive officers. Federal employees typically work in professional occupations that pay more, such as accountants, attorneys and economists, according to Congressional Budget Office research.

The BEA also noted in recent years that the federal government is hiring more highly skilled workers who tend to make more money. Many of the lower-paid positions, the BEA found, have been contracted out to the private sector.

I’m sure it’s easy to imagine that drastic cuts to federal bureaucracies will be oh, so easy when you have no idea what they do and no personal experience working within a large organization, public or private, to provide a service or put product on store shelves.

Dana Milbank writes about why (he thinks) the Democratic Party would be in better shape today if Hillary Clinton were president:

Clinton campaign advisers I spoke with say she almost certainly would have pulled the plug on comprehensive health-care reform rather than allow it to monopolize the agenda for 15 months. She would have settled for a few popular items such as children’s coverage and a ban on exclusions for pre-existing conditions. That would have left millions uninsured, but it also would have left Democrats in a stronger political position and given them more strength to focus on job creation and other matters, such as immigration and energy.

In his Friday column, Paul Krugman demolished the argument that President Obama should have “focused” on jobs instead of health care. It’s not as if Obama was ignoring the issue of economic stimulus while he “focused” on health care. His administration did get an economic stimulus package through Congress. The problem was that Obama took what seemed to be the politically cautious course and allowed the stimulus to be watered down to please Blue Dogs and Republicans. And, as a result, it didn’t do enough stimulatin’.

“Mr. Obama’s problem wasn’t lack of focus; it was lack of audacity,” Krugman writes.

It was a mistake to let the health care reform wars drag on as long as they did, and the blame for that can be spread around. But I fail to see how a complete sellout (as opposed to a significant watering down) of a major campaign pledge would have made progressive voters feel less disappointed.

Do we know for certain that a President Clinton would have put forth a more audacious stimulus plan after having kicked health care reform completely under the bus? I’m not seeing any arguments that persuade me she would have. Her (and Bill’s) entire governing modus operandi has always been to bow to special interests and settle for tweaks for the people.

To be fair, Bill Clinton presided over the sweetest economy in at least 20 years, partly because he stood up to Republicans on taxes. Credit where credit is due. But other than that, more often than not, he settled for tweaks.

Part of Milbank’s argument is that in the 2008 primary Hillary Clinton had more support than did Obama from low-income white voters, a group that abandoned Dems in the mid-terms. But as Steve M. points out, Hillary Clinton’s reign as blue-collar queen was a passing phenomenon:

Yes, we know that Hillary Clinton became the Queen of the Working Class for a few months in 2008. But how did that happen? It happened in large part because she began seeking out white voters driven by racial animus only when the delegate math showed clearly (to everyone but her) that she’d been beaten. Her efforts were reinforced by propaganda from Republicans and GOP operatives who wanted to divide the Democratic Party and possibly produce a divided convention — all of a sudden they were full of praise for her.

Now, can we discuss what they would have been saying about her if she’d genuinely had a chance to win the nomination as the primaries moved into Appalachian states, or if she’d already handily defeated Obama, or if he’d never run? She wouldn’t be the working-class queen. She’d be the Alinsky-addled anti-war radical of vintage-1992 propaganda.

See also Zandar.

I’ve seen several commentaries that pointed out that many younger people who voted in 2008 stayed home in 2010. The reason, I dare say, is that the Dems hadn’t done enough to show them that it matters who controls Congress. They rallied in 2008 for big, progressive change, and they didn’t get it. I don’t blame them for feeling let down. But I fear they’re about to learn that there are worse things than feeling let down.

The sad thing is that President Obama has delivered on more progressive achievements than any Dem president since Lyndon Johnson. That there seems little to show for it at this point in his presidency says a lot about the lack of progressive achievements since Lyndon Johnson. But I see no evidence whatsoever that Hillary Clinton would have saved the day.

I have held off commenting on Keith Olbermann’s suspension from MSNBC, figuring another shoe would drop eventually. I just didn’t know whose shoe. Lee Fang at Think Progress is on to something, I do believe.