Sunday, October 06, 2013

Shutdown politics and the alleged reasonable Business Community

Paul Krugman has some thoughts on why CEOs have some trouble controlling the Frankenstein's monster that the Republican Party has become. (CEOs All At Sea 10/02/2013) Including:

[CEOs are] still trying to position themselves as the middle ground between extremists on both sides, when the reality is that we have a basically moderate Democratic party confronting a radical Republican party that doesn't play by any of the normal rules. ... I do sometimes wonder how these guys can be that naive, and some of them probably aren't — they’re playing class warfare on the sly. But some of them really do seem clueless, probably because thinking about the reality of American politics today would make them uncomfortable — and who's going to tell the guy in the big office things that make him uncomfortable?
The Grand Bargain to cut benefits on Social Security, Medicare and Medicaid keeps popping up. Obama's getting a bit more into campaign mode and actually now and then, criticizes the Republicans for being Republicans! But he's spent so long framing issues in Republican-favorable terms - look how much I've cut the deficit during a depression, whoo-whoo! - that he can't seem to stop.

He gave a speech this past week talking about "a reckless Republican shutdown in Washington." (Remarks by the President on the Government Shutdown 10/03/2013) And the speech included several good digs at Republican crackpottery.

But he also mixes in things like, "Congress has to pass a budget that funds our government with no partisan strings attached."

Why not? He got re-elected last year by a solid majority, the Senate is majority Democratic. Democratic voters should sure get something more than the Ryan-budget levels of spending the Senate voted to pass a few days ago!

And Obama brags about that budget - because the Democrats agreed to screw their own voters:

So the Senate passed that with no strings attached -- not because it had everything the Democrats wanted. In fact, it had very little that the Democrats wanted. But we said, let’s go ahead and just make sure that other people aren't hurt while negotiations are still taking place.
That no-red-America-no-blue-America talk sounded good in 2004 when the Cheney Gang was in full gallop. Now he needs to just stick to the message, "The Reds have shut down the government!" (I love the Republicans-as-the-reds color scheme.)

In one sense, the extremism of the Republican Party enables Obama to promote "centrist" positions, that each year get far more conservative than the "centrism" of the years before.

Which brings me to the allegedly sensible Business Community. Joshua Green writes about this elusive entity in Republicans Are No Longer the Party of Business Bloomberg Businessweek 10/03/2013. That article adds to my suspicion that business lobbyists are going to make an even bigger push to boost the corporate wing of the Democratic Party. Which hasn't exactly been suffering as it is. But that's a bigger story.

But I'm skeptical about the premise of Green's story. It smells a little too much like Business Roundtable-style scamming to me:

... it's only the latest sign suggesting that the old adage, "Republicans are the party of business," no longer holds true. From the austerity imposed by sequestration to the refusal to reform immigration laws to the shutdown and now, as appears likely, another debt-ceiling showdown when U.S. borrowing authority expires on Oct. 17, the GOP’s actions have put a strain on one of its most valuable partners: the business community.

With no clear resolution in sight, those partners are getting antsy. "A government shutdown is economically disruptive and creates even more uncertainty for the U.S. economy," says R. Bruce Josten, the Chamber's executive vice president of government affairs. "We are disappointed this has happened, and we urge Congress and the administration to work together immediately to find a path forward on the [continuing resolution] and debt limit to remove any threat to the full faith and credit of the U.S. government."
It's nice that BBW highlights a small bitnessman from Tennessee saying something Keynesian like, "Every second the shutdown continues pushes a delicate recovery closer to a recession." But something tells me the Business Community is more worried about losing their own federal contract payments and missing out on other ways they suck directly on the evil federal gument's tit. They haven't exactly been screaming about the negative macroeconomic effects of pre-Great Depression levels of wealth and income inequality.

Also, my scalp starts to tingle when BBW starts talking about the Business Community in the same way an orthodox Marxist-Leninist political flyer - the latter all concepts from the pre-email age, I know - would talk about the Capitalist Class. (Actually they would talk about "the bourgeoisie," a word I've never figured out how it slipped into English, much less why people who use it typically seem to have no idea what it means.) The Business Community includes bank CEOs who want mega-bailouts from the wicked gubment and friendly treatment from the Federal Reserve, as well as oil bitness gangsters like the Koch Brothers who want to be able to drill and pollute and screw over their workers without the federal gubment restraining them or requiring them to pay taxes to support their country.

Different factions of the Business Community support different things, and different industries tend to align more with one party than the other. The late great Molly Ivins in the book she co-authored with Lou Dubose, Bushwhacked: Life in George W. Bush's America (2003):

[T]he Republican Party is the party of unregulated meat and poultry. That is not a partisan charge; it is a statement of fact. The Republicans win elections in the "red states" in the center of the country, where cattle and chickens are produced and slaughtered. Democrats win their elections in the "blue states" on the coasts. Republicans use the USDA to pay off their contributors from the red states. The result of that crude electoral calculus is laissez-faire food-safety policy whenever a Republican is in the White House. (If you must eat while the R's control the White House, both houses of Congress, and the judiciary, you might want to consider becoming a vegetarian about now.) In the 2000 election, the corporate food-production combines donated $59 million in both hard and soft money, 73 percent of it to Republicans. Forget hanging chads. It was the hanging sides of beef in IBP's hamburger factories that made George Bush president.
Also, there's just plain crazy. The only place that the Business Community consistently makes optimum decisions based on rational calculation is in the mathematical models of economists who don't let the real world affect the purity of their models. The Koch Brothers are ideologues who have promoted the Libertarian Party for decades and, from what I can tell, pretty much see the world like Bircher loons.

I was at the annual San Francisco Hardly Strictly Bluegrass Festival on Saturday, founded and financed by a trust form the late investment banker Warren Hellman. Steve Earle was playing and said some nice things about Hellman, including that his life proves that "just because you're rich doesn't mean you have to be an asshole." We could also say that just because you're rich doesn't mean that you have to be rational. Or sane. But just try convincing a typical academic economist of that!

One of the most famous quotes from John Maynard Keynes is from 1935 is:

... the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.
In other words, the Business Community, captains of industry, Masters of the Universe often really do believe their own ideology, even though it may be far divorced from reality.

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