[stevewig]

It is time for liberals to praise the Tea Party, not to bury it.

Not for what it does, of course. The American left – and indeed, much of the not-so-left – is still reeling in shock from a debt ceiling deal that sees billions of dollars shaved off government spending programmes for the needy without a single cent of extra taxes for the rich. But American liberals should certainly admire how the Tea Party has achieved its goals, and give praise where praise is due. Then copy it.

When judged by its own aims, the Tea Party movement has been a remarkable success. It has bubbled up from ordinary voters fuelled by outrage and formed around a coherent set of simply explained beliefs (small government, no taxes, fear of socialism). Then, it set about taking over one of the two big American political parties. With that achieved, it has set about bending the entire political and economic system of the most powerful nation on earth to its will. It has done that with an iron discipline, a willingness to take political risks and an intolerance for ideological compromise that would have left Lenin impressed (not that he would have been welcomed at meetings).

Let's also not forget that even though the recent debt deal represented a spectacular cave by the Democrats and President Barack Obama, many in the Tea Party were still unhappy with it. Such is their genius that the Tea Partiers – on the back of a huge victory – were still able to feel like victims. The Tea Party has the will to do things in a way that the left in America currently does not. They have taken the old leftist battle cry of "Organise! Organise! Organise!" and done just that. Not for them the mass emails, spot protests and petition-signings of top liberal pressure groups. Not for them obeying their political elites. Instead, using the primary system, they have made sure that virtually any Republican candidate aspiring to office has either to be of the Tea Party or to pay homage to it. They put up their own candidates, fight tooth and nail for their beliefs against traditional Republicans, and then either win or make sure their agenda is agreed to.......... ............................

How the Tea Party won the debt deal | Paul Harris | Comment is free | guardian.co.uk

[Nesster]

Liberals? Strange Retreat On Government Spending | The New Republic

In the 1930s, as the world plunged into depression, there were two political factions that insisted nothing could be done: Marxists, who saw the depression as the death knell of capitalism, and laissez-faire economists, who believed that the only way to revive the economy was to let the depression takes its course like a bad storm at sea. Imagine my surprise in the wake of Thursday’s stock market crash to find a similar attitude toward the current downturn among liberals and mainstream economic thinkers.

In a column in The Washington Post, Ezra Klein said the “right question” to ask about the economy was, “Where will the recovery come from?” He responded that “no one has an answer,” but also asserted that the recovery “won’t come from the United States.” Financial Times columnist Gillian Tett said pretty much the same thing on PBS’s News Hour. “They’re out of ammo,” Tett said of the federal government. “I mean, they have already used all the fiscal measures they could in the last two or three years. And they’re pretty much back to where they can go, as far as they can go in terms of the monetary policy measures.”

I got news for Klein and Tett (which sounds like a law firm). If a real recovery occurs in the next four or five years, it will come about the same way a recovery took place after the 1930s: from a huge infusion of government spending. It won’t, one hopes, require the justification of war, but it will have to consist in the fiscal equivalent of war. If we don’t do that, we may not escape this slump for the rest of the decade—and neither will Great Britain and other countries that have also convinced themselves that reducing government is the best course of action.

THE ECONOMICS ARE familiar by now, but under attack from the right and insufficiently understood in the center, including at one of our woe-befallen, politically compromised rating agencies. There are two types of recessions: the short-term, cyclical wage-price recessions that prevailed after World War Two and that were manipulated by monetary policy, and the deeper recessions, or depressions, like those that occurred in the 1890s or 1930s. What is happening today is more similar to past depressions. It was brought about by a financial crash, which creates a backlog of private debt, coming on top of a slowdown in industrial production caused by global overcapacity. The result has been a paralyzed private sector.

There are three kinds of measures that are needed to “solve” this kind of recession: first, short-term measures that revive consumer and investment demand; second, measures that will stimulate new domestic outlets for private investment; and third, steps that prevent the demand government creates from being siphoned off primarily in imports. For the first purpose, the best kind of measures are those that create jobs for the unemployed—whether in the public or the private sector—and that eliminate or reduce debt directly, for instance in housing or school loans. Tax cuts are not as effective because, given the level of private debt, consumers are likely to save rather than spend them. With interest rates already near zero, Federal Reserve monetary measures are also not very effective.

There is a copious amount of historical evidence that cutting spending—and cutting government jobs—is more likely to deepen a downturn. Start with the United States, Germany, and Great Britain in the first years of the Great Depression; the United States in 1937; and Japan in 1997. In each of these cases, cutting spending made things worse. To be sure, large deficits can harm an economy; but not when capacity is idle, unemployment is high, interest rates are not rising, inflation is non-existent, and a government’s currency and Treasury bills are still widely in demand.

Why, then, do policy-makers and pundits think otherwise? Some economists and conservative politicians have swallowed the laissez-faire Kool-Aid, and simply don’t get it. In some quarters, rampant confusion prevails. But with a liberal like Klein, I suspect that despair—what Kierkegaard called “the sickness unto death”—over getting Congress to agree to a dramatic boost in government spending is really behind his thinking there is no economic solution. However, following the lead of my colleague Jon Chait, I would distinguish between what needs to be done economically, and what can be done politically. What needs to be done is fairly clear; what can be done is not. But I think the political effort is worth making.
...

And as the experience of the 1930s testified, a prolonged global downturn can have profound political and geopolitical repercussions. In the U.S. and Europe, the downturn has already inspired unsavory, right-wing populist movements. It could also bring about trade wars and intense competition over natural resources, and the eventual breakdown of important institutions like European Union and the World Trade Organization. Even a shooting war is possible. So while the Obama administration would face a severe challenge in trying to win support for a boost in government spending, failing to do so would be far more serious than the ruckus that Tea Party and Republican opposition could create over the next year.

[jeffkrol]

Problem is most of the world thinks we are a civilized country,..... or do they?

[Nesster]

All I know is that in the past two weeks I noted the price of chicken. It isn't cheap any longer!

[shooz]

All I know is that in the past two weeks I noted the price of chicken. It isn't cheap any longer!

Eat more turkey!!!!!!!!!!

On the plus side.
Over inflated fuel prices have dropped along with wallstreet.
Most curious, no?