The Rockin Johnny B

Saturday, February 16, 2013

Marco [The Zombie] Rubio

As some of you know, I'm a big fan of Paul Krugman, the Nobel Prize winner for Economics].  Here's what he has to say about Rubio's economics: Definition of Zombie;
 [ zómbee ]   
  1. offensive term: an offensive term for a person considered to lack energy, enthusiasm, or the ability to think independently
  2. dead body given life by voodoo: in voodoo, a dead body supposedly brought back to life again without a soul
  3. voodoo spirit reviving dead body: in voodoo, a spirit that supposedly brings a dead body back to life again

On the other hand, the G.O.P. reply, delivered by Senator Marco Rubio of Florida, was both interesting and revelatory. And I mean that in the worst way. For Mr. Rubio is a rising star, to such an extent that Time magazine put him on its cover, calling him “The Republican Savior.” What we learned Tuesday, however, was that zombie economic ideas have eaten his brain. 

In case you’re wondering, a zombie idea is a proposition that has been thoroughly refuted by analysis and evidence, and should be dead — but won’t stay dead because it serves a political purpose, appeals to prejudices, or both. The classic zombie idea in U.S. political discourse is the notion that tax cuts for the wealthy pay for themselves, but there are many more. And, as I said, when it comes to economics it appears that Mr. Rubio’s mind is zombie-infested.
Start with the big question: How did we get into the mess we’re in? 

The financial crisis of 2008 and its painful aftermath, which we’re still dealing with, were a huge slap in the face for free-market fundamentalists. Circa 2005, the usual suspects — conservative publications, analysts at right-wing think tanks like the American Enterprise Institute and the Cato Institute, and so on — insisted that deregulated financial markets were doing just fine, and dismissed warnings about a housing bubble as liberal whining. Then the nonexistent bubble burst, and the financial system proved dangerously fragile; only huge government bailouts prevented a total collapse. 

Instead of learning from this experience, however, many on the right have chosen to rewrite history. Back then, they thought things were great, and their only complaint was that the government was getting in the way of even more mortgage lending; now they claim that government policies, somehow dictated by liberals even though the G.O.P. controlled both Congress and the White House, were promoting excessive borrowing and causing all the problems. 

Every piece of this revisionist history has been refuted in detail. No, the government didn’t force banks to lend to Those People; no, Fannie Mae and Freddie Mac didn’t cause the housing bubble (they were doing relatively little lending during the peak bubble years); no, government-sponsored lenders weren’t responsible for the surge in risky mortgages (private mortgage issuers accounted for the vast majority of the riskiest loans). 

But the zombie keeps shambling on — and here’s Mr. Rubio Tuesday night: “This idea — that our problems were caused by a government that was too small  — it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies.” Yep, it’s the full zombie. 

What about responding to the crisis? Four years ago, right-wing economic analysts insisted that deficit spending would destroy jobs, because government borrowing would divert funds that would otherwise have gone into business investment, and also insisted that this borrowing would send interest rates soaring. The right thing, they claimed, was to balance the budget, even in a depressed economy. 

Now, this argument was obviously fallacious from the beginning. As people like me tried to point out, the whole reason our economy was depressed was that businesses weren’t willing to invest as much as consumers were trying to save. So government borrowing would not, in fact, drive up interest rates — and trying to balance the budget would simply deepen the depression. 

Sure enough, interest rates, far from soaring, are at historic lows — and countries that slashed spending have also seen sharp job losses. You rarely get this clear a test of competing economic ideas, and the right’s ideas failed. 

But the zombie still shambles on. And here’s Mr. Rubio: “Every dollar our government borrows is money that isn’t being invested to create jobs. And the uncertainty created by the debt is one reason why many businesses aren’t hiring.” Zombies 2, Reality 0.
In fairness to Mr. Rubio, what he’s saying isn’t any different from what everyone else in his party is saying. But that, of course, is what’s so scary. 

For here we are, more than five years into the worst economic slump since the Great Depression, and one of our two great political parties has seen its economic doctrine crash and burn twice: first in the run-up to crisis, then again in the aftermath. Yet that party has learned nothing; it apparently believes that all will be well if it just keeps repeating the old slogans, but louder. 

It’s a disturbing picture, and one that bodes ill for our nation’s future. 

Here's a piece of realism.  You cannot...I repeat...cannot stimulate an economy with slashes in in spending and lowering taxes.  It simply does not work, never has, never will.  It is actually very easy to show why.

Let's say you make $10.00 per hour on your job.  I, as the employer, say: "let's cut your salary to $9.00 per hour."  Now I ask you, can you go out and buy more?  No, of course not.  That's just silly.  But that's what Rubio and the nutty Republicans want you to believe.  They want you to believe if they cut taxes and spending, the economy will rebound faster.  Remember, taxes are the government's wages we pay them to do our bidding.  If they don't get as much in wages, they damned sure cannot stimulate the economy, now can they?

I can hear my Repubs yelling right now.  All you liberals want to do is increase the size of government and seize control of our rights and freedoms.  Listen not my friends to the woes and laments of the failed party, that's balderdash.  Nothing could be further from the truth.  What is true, is that government spending kept us from dropping into a severe depression after the fuzzy economic policies of Ronald Reagan and two Bushes.  Remember, it was Uncle Mitty who said, Let the car companies fail...that wasn't just him talking, it was also his party's stand on that issue.

See, Republicans are 'Supply Siders' and 'Social Darwinists'.  They believe if you give money to the rich, they will build businesses and the money will "trickle down" to the working man.  You and I both know what the rich do with money.  They don't spend it, they invest it and lately they've been investing it overseas where they get huge tax breaks and low wage benefits.  In the meantime, the U.S. economy takes a dive.   But they don't care, because they worship the bottom line.

No, the only way we'll get out of our economic dilemma is to keep spending high thereby creating a "demand" for goods which goads the rich into building businesses to take advantage of the money out there that we --the people -- have to spend.  This is just a very simple economic realism everyone should know.  The Republicans are dead wrong...period.  If you don't believe me ask yourselves how did we get here in the first place.  It wasn't the Democrats that got us last Democratic president was Bill Clinton and he left office with a surplus handed over to Dubya...and what did Dubya do?  Rhetorical question.  And, the president now, Barack Obama, is leading us slowly but surely out of this fiscal offal.

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