The budget, the apocalypse, Weber and competing ethics
David Brooks’s July 4th column was a memorable analysis of his party’s role in the current budget morass, saying the GOP’s intransigence is such that it “may no longer be a normal party.”
Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.
The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no.
The members of this movement do not accept the legitimacy of scholars and intellectual authorities. A thousand impartial experts may tell them that a default on the debt would have calamitous effects, far worse than raising tax revenues a bit. But the members of this movement refuse to believe it.
The members of this movement have no sense of moral decency.
On Monday, Brooks followed up by breaking down the various Republican factions contributing to the intransigence and relating it to a kind of religious affliction:
All of these groups share the same mentality. They do not see politics as the art of the possible. They do not believe in seizing opportunities to make steady, messy progress toward conservative goals. They believe that politics is a cataclysmic struggle. They believe that if they can remain pure in their faith then someday their party will win a total and permanent victory over its foes. They believe they are Gods of the New Dawn.
Powerful stuff, prophetic in its own right. But a commentary in this week’s New Yorker by George Packer cites Max Weber’s insights to provide a better handle on the dynamic at work:
The sociologist Max Weber, in his 1919 essay “Politics as a Vocation,” drew a distinction between “the ethic of responsibility” and “the ethic of ultimate ends”—between those who act from a sense of practical consequence and those who act from higher conviction, regardless of consequences. These ethics are tragically opposed, but the true calling of politics requires a union of the two. On its own, the ethic of responsibility can become a devotion to technically correct procedure, while the ethic of ultimate ends can become fanaticism. Weber’s terms perfectly capture the toxic dynamic between the President, who takes responsibility as an end in itself, and the Republicans in Congress, who are destructively consumed with their own dogma. Neither side can be said to possess what Weber calls a “leader’s personality.” Responsibility without conviction is weak, but it is sane. Conviction without responsibility, in the current incarnation of the Republican Party, is raving mad.
Characterizing one’s opponents as loony is usually a crazy idea. But what are the deeper roots of the current stance by the GOP — or really the Tea Party-infused faction of the House Republicans that is calling the shots. Crazy? Crazy like a fox? If they are playing politics, they don’t seem to be doing a great job, judging by the polls. Then again, all politics is local, and maybe their own districts will love them. If they are playing the card of religious righteousness, well, they made their point. Or is this Samson pulling down the pillars of a pagan temple?
As E.J. Dionne writes today:
The Tea Party lives in an intellectual bubble where the answers to every problem lie in books by F.A. Hayek, Glenn Beck or Ayn Rand. Rand’s anti-government writings, regarded by her followers as modern-day scripture — Rand, an atheist, would have bridled at that comparison — are particularly instructive.
When the hero of Rand’s breakthrough novel, “The Fountainhead,” doesn’t get what he wants, he blows up a building. Rand’s followers see that as gallant. So perhaps it shouldn’t surprise us that blowing up our government doesn’t seem to be a big deal to some of the new radical individualists in our House of Representatives.
There does seem to be some push for a budget deal, a promising one, based on the Senate’s Gang of Six plan. But can Republican leaders control their own? Or would the Tea Party types see compromising as invalidating their very identity?
I don’t think you have to worry to much about the 60 Tea Party republicans, it is the vast majority who are frightened of the Tea Party, and what will happen to them if they compromise, that are the big concern.
“Or would the Tea Party types see compromising as invalidating their very identity?”
I am not a Tea Partier, and I think the House Republicans are acting foolishly. I agree with Brooks wholeheartedly, most especially because they are ensuring Obama’s re-election by allowing him to play the sane middle ground compromiser (despite his silly budget and wishy-washy promises on entitlements), AND missing a unique opportunity to truly re-shape entitlements, not to mention the tax code (Coburn would raise revenue but LOWER rates for example).
Having said that, and based on the folks I do know who are Tea Partiers, I think they view compromises like the Gang of Six proposals as inimical to their identity. And I don’t think that view is completely irrational. Again, its not altogether different from liberals who for years have railed against the “military-industrial complex.” They have seen deals cut for this and that, and at the end of the day, see very little change in their own economic state. For them, the debt ceiling is another bailout: all these Wall St. big wigs and politicians lecturing how important it is, yet they see joblessness growing, stagnant wages, big bonuses and BOTH parties going up to for fundraisers, etc. It adds insult to injury that many of the very same politicians now lecturing about the importance of raising the debt ceiling once voted against raising it and lectured the country on its profligate ways (Mr. President, cough, cough). So I do think they look at the GOP freshmen and see them standing up to business as usual.
Just trying to give a perspective based on some experience, but not defending it.
GOP/TP say hello the Herbert Hoover, whose name when mentioned insured Democratic victory for twenty years, ‘ A 2020 Democrtic ad…. “Do you want those Tea Party/GOP know-nothings to bring default chaos back?’
Intransigence is the liability (based on compromise equals surrender.)
How did we get to this in American socety?
Think of Rush, Norquist, etc.
BTW is intransigence a chariteristic of USCCB, Vatican, etc.?
Since when did the definitions of sanity and responsibility include spending money one does not have and spending money that does not even exist?
Since when did the definitions of sanity and responsibility include imposing crushing financial obligations on future peoples, effectively depriving them not only of their personal property, i.e. wealth (what little they might have) to pay such debt that they did not incur themselves, but also depriving them of their liberty by having to labor to earn the money to pay such debt?
How much of a given work-hour should a worker be required to labor, not for himself, but for his government masters? How many of the fruits of his labors will he be allowed to keep before he is no longer a free man, but is instead a slave?
At what point does such skyrocketing debt, caused by spending money one does not have and does not even exist, become immoral? $1 trillion per year? $10 trillion per year? $100 trillion per year?
If it is immoral and insane and irresponsible to deficit spend only $500 billion per year instead of Obama’s $1.6 trillion per year, because to “cut” spending to levels that were acceptable in 2008 would practically be an act of genocide against the poor, then why is it not immoral and insane and irresponsible to deficit spend only $1.6 trillion per year? To help the poor and unemployed and elderly even more, should we not be deficit spending $5 tillion per year? Think of all the good we could do if only we were responsible enough to spend $100 trillion per year!
At what point does such debt become immoral itself?
Bender, the whole world economy is based on non-existant money. The bond market alone is valued at 130% of the entire world’s GDP. Do you think any of this money really exists? Yet one can spend it and use it as collateral. The banks are all still holding inflated assets based on the real estate bubble. The world is utterly awash in leveraged assets. The ONLY thing that is keeping all of this afloat is the fact that there have not been any serious debt defaults. If the US defaults, all this paper wealth will come home to mama and we will have a world wide depression. Yes it sucks to be in this position, but US debt is a major part of the world capitalist market. It doesn’t get bracketed out because it is “government debt”. Expanding the debt is by far the less of two evils, because it at least allows for the possibility of production to expand which will at least create more wealth and will allow the debt to be paid down (and these paper positions to be wound down) on the back of a larger and more robust economy.
“GOP/TP say hello the Herbert Hoover, whose name when mentioned insured Democratic victory for twenty years, ”
Because I think even Hoover deserves some defending, with some very interesting modern day parallels:
[Hoover] “is associated in the public mind with slashing spending. But there doesn’t seem to be any question that Herbert Hoover raised both spending and government deficits by rather a lot, and quite bravely considering that his critics–a group led by a fellow named Franklin Delano Roosevelt–”accused the president of ‘reckless and extravagant’ spending, of thinking ‘that we ought to center control of everything in Washington as rapidly as possible,’ and of presiding over ‘the greatest spending administration in peacetime in all of history.’ Roosevelt’s running mate, John Nance Garner, charged that Hoover was ‘leading the country down the path of socialism.’ ”
http://www.theatlantic.com/business/archive/2011/07/hoover-was-no-budget-cutter/241665/
The more things change….
It’s really about capital gains. Capital gains is the driver or better, the air machine in all bubbles that Unagidon mentions.[ U. get an easier name to spell/pronounce] Beside being taxed at only 15%, gains are canceled when the owner dies. the wealthy play a game of sell the losers at a loss and no taxes and keep the winners. Bubble keeps getting bigger. The middle class found their own bubble in housing under Bush and this bubble sunk the financial ship. I say default is 2 to-get-1 bet on happening. Put your investments into cash and a FDIC bank .. up to 250K in each bank. by next week. the real Rich have no way of protection against chaos because US treasuries will also melt. Scheudenfraude?
Jeff your Hoover defense may be an interesting aside in some economic history class BUT it’s still:
‘whose name when mentioned insured Democratic victory for twenty years, ”
“Put your investments into cash and a FDIC bank .. up to 250K in each bank. by next week.”
Same problem. There isn’t enough cash to cover all of these accounts. FDIC is equipped to cover a small number of bank failures. If the whole system collapses, everyone is screwed – unless the government prints more, in which case your cash holdings probably won’t be much good.
U You’re about not enough FDIC money but you will at least have a USA raincheck for a future payout. Lehmann holding guys have nothing but lawyer bills.
Of course it would be sensible to have a balanced budget, but without some tax increases you would have to reduce spending on August 2 by 40%. No one, especially those TP people who say do not increase the debt ceiling, is prepared to say what they would cut.
MEGAN MCARDLE produced a helpful list yesterday.
http://www.theatlantic.com/business/archive/2011/07/getting-specific-on-spending/242240/
I am suspicious of commentary about “The Tea Party.” As far as I know, there is no organized Tea Party. There are many diverse groups with agenda that are only roughly correlated, who call themselves Tea Parties. It is easy to find a self-proclaimed “Tea Party activist” to go on the record saying almost anything.
But I think there is a well-defined subset of the House whom it is not inaccurate to call “the Tea Party-infused faction of the House Republicans.” My assumption is that the Republican Party is playing good-cop-bad-cop in the negotiations and their role is Bad Cop. The election is sixteen months away and now is the time to play to the base. The independents and occasional voters are on vacation.
The real question is: why do the Democrats have nobody who can credibly play Bad Cop? Is it just that they have nobody who is willing to do it? Is it that the liberal left is too severely discredited to be taken seriously where the budget is concerned?
“Tea Party-infused faction”
I like this turn of phrase very much.
“Since when did the definitions of sanity and responsibility include spending money one does not have and spending money that does not even exist?”
Bender –
Everytime somebody borrows money to buy a new house or car, or borrows money to start a new company or expand an old one, they are spending money they don’t have. If there were no banking system (the banks borrow the money they lend largely from the government) this economy wouldn’t be the greatest the world has ever seen. You need to learn how money works!
Bob Nunz –
I was thinking just this afternoon that both the hierarchy and many Republicans have become rigid in a way that Americans were not rigid. What caused this? Why has this happened? That David Brooks article shows that not all Republicans have become so unyielding, but the bishops certainly seem to be people who think that they have nothing to learn from anyone else.
How did we get here?
Ann (6:55 pm):
With the clear understanding that it will be paid back, Ann, with interest, to the lender. Government debt, on the other hand, is a pyramid scheme. Unagidon thinks that’s OK, just because it’s the way the world works. Bender thinks the world ought to stop working like that. Jeff sympathizes with both points of view.
David Brooks sees something nasty masquerading as a political party, and that sounds right to me. When Obama won the presidency, I thought it would be an excellent time for the Republican party to go into the wilderness and do a lot of soul searching. Maybe they did – maybe they’re still there, David Brooks along with them. What’s passing in Washington for Republican leadership may be just a bunch of sour old actors spitefully doing as much damage as they can before they’re moved off the stage.
“With the clear understanding that it will be paid back, Ann, with interest, to the lender. Government debt, on the other hand, is a pyramid scheme. Unagidon thinks that’s OK, just because it’s the way the world works. Bender thinks the world ought to stop working like that. Jeff sympathizes with both points of view.”
In a word, no.
The clear understanding that anyone will pay back a loan with interest is predicated on two assumptions. The first is that the borrower is not going to default. The second is that the borrower is going to have an adequate cash flow to pay back the debt. This goes for the government as well as your own consumer debt.
Try defaulting on all your consumer debt at the same time and see what happens. And if you have a business that need loans to operate; to bring in a cash flow for payrolls to offset the seasonality of sales, for example, or loans to expand or pre-pay for things like raw materials and default on THOSE loans, see what happens then.
And this is the boat the government is in now. It has been in this position for years; it’s the threat of default that is making it such a hot and scary issue. The idea that the government can default and its debt problems will go away is as stupid an idea as when a consumer tries it. The government is a massive consumer and producer of commercial capital. If it defaults, it is going to take the private sector down with it. And if the economy contracts, there will be less income from taxes in the future to pay the existing debt. Either way and you will see a catastrophe.
Yes, maybe the world should stop working like that. But the plain fact is, our government is totally integrated with a world capitalist system that works like that. It’s not like the government is awash in debt and the private sector isn’t. The private sector debt in the form of bonds, loans, derivatives etc. makes the national debt look like a drop in the bucket. And as long as capitalism works like that (and there is nothing on the horizon that says it won’t) our government and every other government on our capitalist planet is going to work like that. The idea that a government, especially the government of the largest economy in the world, is going to bracket itself out from the private economy is quite simply a fantasy. A nice fantasy, I agree. But a fantasy nonetheless. It’s poppy tea.
Unagidon (10:21 pm):
Poppy tea being used to dramatically highlight the absurdity of using a printing press to manufacture value, maybe. Presumably, those threatening default are bluffing. But sometimes you have to whack the elephant with a piece of lumber to get its attention.
To some extent, a government default would not be a “real default.” Everybody would clearly understand that it’s just theatrical and that an agreement would (almost) certainly be reached within a week or two. This is not really like a consumer defaulting on his loans. In that case, the understanding is that he has done all he can to avoid defaulting and really does not have the resources to make payments.
On the other hand, I understand there are a lot of institutions world-wide who would be required by law or regulation to sell off US government debt as soon as a default “occurred.” Some could probably get an exception on the grounds that the default was universally understood to be purely performance art. But not all.
I don’t think it is known whether this is a piece of lumber or a hydrogen bomb. Nuking your elephant to convince him to work harder is not a clever strategy.
Thanks for the post and comments. I’d like to, if I could, move us away from the Econ 101 discussion about the nature of money and back to the political/sociological issues Mr. Gibson raised regarding the nature and functioning of today’s Republican party.
I found Jeff Landry’s comments (7/21, 10:14 am) quite helpful—if only because it confirms some of my own observations (admittedly, not the best of reasons). What’s troubling about Jeff’s insights is that it means (I think) that we have a significant “conservative populist” (I know it’s not a very precise term) faction within American society, one that has, to a significant degree, become a dominant faction in one of our two major political parties.
Now, troubled economic times often lead to resurgences of conservative populism. Just to use a few recent US examples:
*the reactionary swing taken by the populist movement in the late 19th century, as exemplified by the career of Tom Watson after his failed Populist Party vice-presidential candidacy in 1896;
*the rise of the KKK in the 1920s (a time of high and rising income inequality, in the wake of a massive wave of new immigrants) in places like Indiana;
*Fr. Charles Coughlin and his National Union for Social Justice in the 1930s.
Here’s the thing. My reading of that history is that “conservative populism” tends (overall) not to benefit the populace, but rather to benefit conservative elites. In addition, it often “plays” with a combustible mix of racism, anti-Semitism and xenophobia.
If the federal government can’t pay its bills next month, then many of the people who will be hurt the most will be the people Jeff identified is his post. Their Social Security and SSI checks will be delayed. Government services they rely on will disappear, or be severely cut back. (See this thought-provoking post by Megan McArdle of the Atlantic. http://www.theatlantic.com/business/archive/2011/07/getting-specific-on-spending/242240/ )
I don’t know what to do about this situation. I do hope that conservatives like Jeff will engage in (and win!) the intra-party fight that seems both inevitable and necessary if we’re all to avoid the worst excesses of a powerful conservative populist movement.
I don’t think that the term “conservative populist movement” is quite accurate. It is a populist movement and it does tend to identify itself as conservative (to the confusion of many others who also identify themselves as conservative), but I think that in fact it is (or is in danger of becoming) a radical nationalist movement. It is not Ayn Rand, or libertarianism, or Republicanism, or conservatism that is binding these people together. It’s Americanism and this is what makes the “common sense values” they seem to universally appeal to so hard to break into. Other economies may collapse with a massive default, but this is America, which by definition is different. America is seen as an exception; a very special place based on its “values”, so appeals to the experience of other advanced capitalist countries are by and large irrelevant. Very hard to oppose a movement like this without looking anti-American; very easy for the established GOP to get cast over the line as enemies of the people.
“If the federal government can’t pay its bills next month, then many of the people who will be hurt the most will be the people Jeff identified is his post.”
Who will be hurt the most? People who live from month to month on their Social Security check or people who have carefully and responsibly saved for just such an emergency? People who irresponsibly signed a mortgage they knew they could never afford to make payments on if they lost their jobs or people bought a modest home and payed it off? People who ran up huge student debts getting expensive useless degrees in “humanities” or people who got worked their way to community college degrees in accounting and HVAC?
This is one reason the Tea Party supporters think a default would be OK. Because they think it would hit the irresponsible hardest and spare the responsible. They’re wrong about the responsible, but they’re right about the irresponsible.
“This is one reason the Tea Party supporters think a default would be OK. Because they think it would hit the irresponsible hardest and spare the responsible. They’re wrong about the responsible, but they’re right about the irresponsible.”
Let’s say this is true. How would this make people living from check to check more responsible? Or is this just something about the joy of punishing people?
The idea is that people living from check to check would learn from the bad experience that living from check to check is a bad idea. Bad experiences can be learning experiences. Nobody who has a cell phone or cable TV has any excuse for not having 2 K$ in a bank account for emergencies. I do not personally think this is a good approach. But I know several people who do.
I think you and I said basically the same thing. One fallacy is “my superior values will protect me” and another is “our superior values will protect us.” Leaving aside the question of how many people these days really exemplify those good Puritan values (honesty, modesty, frugality, diligence, ἐγκράτεια), even being a living epitome of moral probity won’t help much if your bank fails and the government which ensures your savings is in default.
Felapton: “The real question is: why do the Democrats have nobody who can credibly play Bad Cop? Is it just that they have nobody who is willing to do it?”
If you’ll permit amateur analysis… it’s because, as Will Rogers famously bemoaned: “I’m not a member of any organized political party. I’m a Democrat.”
The Democratic “Party” is a fictitious monolith. It is, at best, a loose coalition of narrowly focused interest groups (e.g. environmentalists, women’s rights, unions, foreign policy doves, etc.), nearly all of whom would burn down the entire proverbial forest to save their respective tree. The GOP has a couple of those groups, most notably the pro-life camp who would gleefully accept the wholesale reinstatement of Glass-Steargall if it was packaged in legislation that banned partial-birth abortion and instituted federal mandatory waiting periods, et al.
But the GOP is nowhere near so fractured and diverse a coalition as the Dems. As Brooks is (I think accurately) observing, the GOP as it currently exists can basically be dichotomized into those who believe in federalism, limited government, deregulation of markets, etc. and those who somehow believe the federal government could theoretically be eliminated altogether and taxes inexplicably reduced to ZERO.
The reason Dems have such trouble coming up with a united front on anything is that their base is so wildly diverse, and the agendas of these groups re: legislation is often at odds. This was perhaps nowhere more apparent than during the Waxmen-Markey Bill a couple summers ago… the environmentalists pushing for alternative energy were slamming headfirst into labor unions from the rustbelt who argued that the bill would cripple American manufacturing.
My favorite contemporary example is the wind turbine debate. Just within the ranks of those who vote Democrat, it pits the environmentalists who want renewable energy against the conservationists who argue that these things disrupt migratory patterns of birds and destroy other ecosystems. If you can’t get all the Birkenstock-wearing, fair-trade organic, locally-roasted coffee drinking liberals at the farmer’s market to form a united front, how the heck do you expect the national Democratic Party to ever whip all their Members into a line?
As of this morning, I think the game is still about what leverage one can get for ideology.
It’s my view that the GOP or should I say POG(Party of Greed) is still interested in protecting big money and utilizes the Tea Party (undoubtedly made up of many kinds of folks but driven by an almost insane dsire to limit government) to whipsaw what it can for the big backers who have already almost ruined us.
My coleagues and I – of several political persuasion -watch this go on, shake our heads and hate the continued stream of partisan commentray by talking heads that are almost as bad as the Washington performance itself.
David S. ==
Money has no existence in itself as does old-fashioned money (gold, etc.) did. Paper money and computer data money is only a promise to provide a goods or service. Too many people are under the misapprehension that it has some ontological reality that more we can exchange for something else. Ultimately, cash is only a sign of a promise.
Our whole economic system is built on trust. We seem to have run out of trust, and we’re sinking.
“To some extent, a government default would not be a “real default.” Everybody would clearly understand that it’s just theatrical . . . ”
Felapton –
You wish. And here I thought you were a n intelligent person.
Have you seen Joe Walsh talk about what he and the other T-Pers are going to do? They’re mad. Literally. They’re the one’s who need to be whacked, though I doubt that even that would get their attention.
They dismiss the intelligence and knowledge of all the leading economists who without exceptions– liberal and conservative — say that a default would be catastrophic.
If you whack this elephant with a plank there is every reason to think it’s going to trample you.
Ann, you can’t argue with folks who constantly shppt from the lip.with little to put forward except their own ideologies, prejudices and preconceived notions.
It just gets worse and worse in the glorious world of blogdom.
@Ann: I said “to some extent.” Can I still be considered a half-intelligent person.
I am positive it is all histrionics. There will be a deal by August 2nd. I’ll bet. Loser donates $100 to the winner’s parish.
“Unagidon. get an easier name to spell/pronounce”
For those who enjoy Japanese food, it’s easy:
Unagi = eel
Don = donburi
“To some extent, a government default would not be a “real default.” Everybody would clearly understand that it’s just theatrical and that an agreement would (almost) certainly be reached within a week or two.”
I’m not so sure this is true. Greece. Italy. Spain. Portugal. All cases that are much more than theatrical and “agreement” in these cases if very one-sided and imposed from elsewhere.
Would we want China to dictate the terms of our “default agreement?”
“They dismiss the intelligence and knowledge of all the leading economists who without exceptions– liberal and conservative — say that a default would be catastrophic.”
That is until Moody’s tells you that YOUR state (MD, NM, VA, etc), which is so very tied to the US government for business, will go down the tubes, too.
Talk about a “come to Jesus” moment! All of a sudden the blind see and the deaf hear.
David B has contributed another fine column to the brace that David G cited in the orginal post. Headline: “Congress in the Lead”.
http://www.nytimes.com/2011/07/26/opinion/26brooks.html?src=recg
Btw, regarding yesterday evening’s presidential speech: President Obama wins the necktie sweepstakes in a walk. (Green tie with a light-blue dress shirt? Really, Speaker Boehner? Really?)
Rhetorically, it was more or less a draw. Boehner did a workmanlike job. But I couldn’t take my eyes off his eyes. Knowing his predilection for weepy oratory, I was on the watch for evidence of the opening of the tear-duct dams. I thought, once or twice, that the streams, and the Speaker, would start gurgling and bubbling. But he kept it in check.
It almost seemed that President Obama was using the two Brooks columns cited by David G above as his talking points. Which is pretty remarkable regardless of how you look at it, and probably explains why moveon.org has been having the proverbial cow for weeks now.
What we’re watching here, in large part, is the working-out of the soul of conservatism that commenced in the wake of the 2008 shellacking of the GOP. That process gave birth to the Tea Party, which has been transformative for conservatism and for the country, but the soul-searching is far, far from over. Clearly, the Republican party is not of one mind, and their lack of unity is hampering a deal on the deficit.