The Twin Peaks Of Policy Evil

The Recession as measured by standard economic models has been over for months.  The "recession" as understood by millions of Americans - perhaps the majority of Americans - is still going strong.

The reason can be tied to two basic philosophies that animate not only the Republican party, but also DC conventional wisdom and much of the Blue Dog/DLC crowd.

The first False God is Randian economic philosophy.  This is really more a failing specific to the GOP, but we see it in the calls for austerity by the sort of "Serious People" that inevitably dominate the punditocracy.  Randian economics basically argues that anyone who relies on the state for anything is a parasite or moocher. Do you need Medicare/Social Security/Medicaid/food stamps/unemployment benefits?  You are a moocher, and your needs are unimportant.  It is your fault for not being rich enough to go without these important benefits.  True Randianism is even harsher than this, but its main expression in DC is the disregard that policy makers who are to the right of Ben Nelson have for the overwhelming majority of Americans who rely on these programs.

The second False God is supply side economics.  This one drives me insane.  Supply side HAS.  NEVER.  WORKED.  Never.  Tax rates can be high to the point where they can directly impede supply.  I willingly concede that.  When the top marginal rate was 93%, that impeded investment and growth.

But that is not the same as saying that supply creates its own demand.  And that is the orthodoxy among the tax cutters in Congress.

Unemployment remains stubbornly and frighteningly high.  The reason is a lack of demand.  Cutting taxes will not create that demand. The presence of large deficits has little effect on demand.  Yet, the GOP and much of the center in Washington seems obsessed with cutting taxes and cutting spending.  That's the only permissible debate.

Private sector hiring is slow, but it is happening.  A lot of the bump in unemployment recently has been because the Fifty Little Hoovers have cut spending and laid people off.  But, again, under the Randian philosophical system, teachers and other public servants are just another form of Moocher, so who cares?  Given that much of the unemployment is centered on high school graduates - many who in days of yore worked in manufacturing and construction - things like infrastructure projects would be essential to re-employing those looking for work.

It is difficult to calculate the damage that supply side economics, combined with the adolescent narcissism of Randian ideas, have had on our body politic.  The Bush tax cuts alone have done as much damage to our fiscal situation as any other event.

How do you kill a monster, when the monster is an idea?