I was watching Alex Wagner this morning and I shuddered when I knew one of her panelist was Ed Redell who is a screaming moderate Republican hiding in Democratic clothes. And he did his best impression of what Paul Krugman calls a VSP (Very Serious Person). That is a person who one, does not understand Macroeconomics, and secondly always counsels that there needs to be pain for the recovery. They have bought into the debt is the problem and we have to suffer some pain to solve our problems (meaning poor people). So here is how it went down.
Alex referenced the Tomasky, The GOP’s Three Lies (See Who Said It Best Today), and asked her panel to respond to it. Josh Barro from Bloomberg, pointed out that we have been in a deficit for 46 of the last 50 years so if it was going to ruin the economy, it is slow in coming. And then he pointed out that debt can go on as long as forever and if the economy keeps growing, the absolute size of the debt can grow. Rana Foroohar from Time Magazine pointed out that it is all about growth. We can grow out of our deficit problem, and we fail to recognize what we have already done to reduce the deficit. Then she raised the healthcare spending problem. This is another conventional wisdom that we must do something about our healthcare spending which is code for cutting entitlements which is what the grand bargain would be about (the answer to that is no, but as many have pointed out, if we had the costs of everyone else in the industrialized world for healthcare, there would be no problem).
Then Joy Reid jumped in by pointing out that the Republicans have been so successful, aided and abetted by Democrats, in getting us only focused on debt reduction instead of jobs and growing the economy. Then Alex pointed out that the Democrats brought this focus on the deficit on themselves as they bought into the Republican narrative. Then Joy said, “Our problem is the economy and jobs. That’s where the President started, and even Democrats have managed to get on this playing field, and the media, and the beltway where everyone in Washington agrees we have to talk about deficits and debt all the time.”
This is encouraging as the consensus is that the debt is a long term problem, we need to start focusing on growing, and then here comes Governor Rendell with a grudging acknowledgement of this, but wait, be afraid of the debt, be afraid of the debt:
“I think that in my party we have too many people who are debt deniers (who?). The point Josh made is the right one. It is not balanced budgets, it is debt as a percentage of GDP. If we let our debt get to 90-95% we are a European Nation and we are going down the tubes fast. That is number 1. Number 2 we got to drive debt down between 70 and 60% of GDP. We don’t have to do that in the next year or two and Simpson Bowles (the Holy Grail of the Beltway) doesn’t recommend that, they recommend that the debt reduction gets phased in in the out years so we can grow the economy, and Simpson Bowles says we can invest in the short run.
So it is like everything else if we put our mind to it. We can invest in the short run, juice up the economy as Joy says, and at the same time we can put things in place things are going to have some level of pain for all sides, put things in place that will reduce to a manageable level of GDP, and Josh I disagree about one thing, I have dealt with enough CEOs in my role as campaign chair to fix the debt, that if we were to do a debt deal that would in the long term bring the debt under control, I think you would see a lot of investment that is not happening right now (The confidence fairy!).”
Now there is so much wrong with what Governor Rendell said, I am not sure where to start and he is the Chairman of the Fix the Debt task force. God I hope no one is listening to him. First of all is his first statement that Democrats are debt deniers. That is pure B.S. and lends itself right into the Republican talking points, Democrats will spend us into hell. Then he gets it a little right because more people are starting to recognize we can’t get out of this problem without some growth, but his whole discussion doesn’t focus on stimulus and growth, it is totally focused on debt reduction again playing right into Republican talking points, be afraid of the debt. We must deal with it first.
Oh, but it gets worse. He tells us we could be a European nation. No we can’t and does he understand anything about the macroeconomy and the fact that we can print our own money (fiat money)? It is not the same at all as many economists have pointed out, but is another false Republican talking point. Oh and Governor, how have nations like Japan (who does print their own money) run a debt over 100% of their GDP and do fine? An economist you are not and you have your facts wrong. Then he says, some level of pain for all sides, meaning the poor will have to fund this again through cuts in entitlements. The man is a walking talking Republican talking point.
Then we get to the pièce de résistance, that he has been talking to CEOs. You remember, the guys who did not see the housing bubble, are making tons of money in our depressed economy, and have said inflation and higher interest rates will destroy our economy for the last four years (and there has been neither). And they have told him, with a grand bargain they will just start creating jobs right and left. This is the confidence fairy that Paul Krugman and others have so discredited. Oh, and that same bull shit is what drove austerity in Europe and that has work out so well, right? Good lord. The man is brain dead and is so far behind what the rest of us know, it is scary. If that is what we are getting for Democratic leadership on the economy, we are doomed.
Please, somebody fire him so we can talk about what is really going to be effective and not Republican and CEO talking points. He is clueless and is the perfect caricature of a VSP. Alex, are you listening?
*VSPs – Are those that look at a problem and appear serious because they call for harsh measures and self-sacrifice to seem serious about the problem when those measures are actually counterproductive, but makes them appear to be serious thinkers. Very Serious People hear other Very Serious People citing an alleged finding that supports their conclusions, then repeated it themselves, and it became part of what Everyone Knows — after all, everyone they talked to said it was true (this is also known as the Scarborough effect).