Debt watch

Any coments on the US debt deal?

21 thoughts on “Debt watch

  1. As an Australian, I am continually mystified by how right-wing US politics is. Supposedly, Barack Obama is a socialist, yet our last Liberal PM, John Howard, presided over a far more “socialistic” state than does Mr Obama.

    If our press is correct, US government revenue is a trivial 15 per cent of GDP, yet the Congress cannot contemplate any tax increases, while US government expenditure is a comparatively modest 24 per cent of GDP, yet it has to be cut.

    I read the deal as a great victory for the Tea Party, even though the press here reports that some of its adherents do not support it because it does not go far enough. Why the Democrats caved in I do not know.

    I am glad to be living here where even the Liberal Party is more “left-wing” than the US Democrats and where we had a Liberal PM who was a Scandinavian Social Democrat in comparison with the US Republican Party.

  2. Chris;

    It’s the south, specifically the white south. They kept the United States from moving anywhere near as far left as the other Western democracies, back when they were part of the Democratic coalition. That meant when the right/neoliberalism began its rise, in the United States it started on the 30-yard line instead of the 70-yard line, and the south has been pushing it harder and further than just about anyone else in the Western world wants to.

    Instead of thinking of a more typical post- British Empire country like Australia, or for that matter the rest of the United States, think of a place like Rhodesia or old South Africa. They’ve been forced (by the rest of America) to stop the most florid expressions of the old order, in a painful multi-generation process that included a war which killed more Americans than the rest of our wars added together, but they haven’t really given up the ghost.

  3. I think Aaron has it partly right. The South is surely the HQ of social conservatism in the U.S. But fiscal conservatism is more of a Western phenomenon. Think Barry Goldwater (who was from Arizona). The Tea Party is assuredly not dominated by Southerners. And California is the original home of the modern anti-tax movement (Howard Jarvis, Prop 13). Living in West Los Angeles, I can tell you that you don’t have to drive very far from the coast to be in “red state” America (it might take you two hours to get there, but that’s a different problem).

  4. I should clarify something, because I realize that I made a claim that might seem at odds with the Salon article that Aaron linked to. I recognize that most self-identified Tea Party Members of Congress are from the South. But all are GOP, and the South is dominated by the GOP. And I don’t think it’s true that tea party adherents in the electorate are disproportionately Southern. A grad student at UCLA did some survey work on this question, and I remember being mildly surprised that she found that Tea Party sympathizers are not more Southern than the average Republican (nor more racist, nor more likely to be birthers, etc.). They are, first and foremost, (radical) fiscal conservatives.

  5. Lind’s argument is that “the South” is not limited to the eleven states that made up the Confederacy, nor does everywhere in those states make up “the South”.

    Incidentally, that was true at the time. Four slave states were controlled by the Union throughout the conflict, three of them very narrowly and with much coercion, and one of them supplied at least as much recruits to the Confederate armies as to the Union armies, and was the last place in the US where slavery was legally in existence. By the same token, Florida south of Gainesville was not populated by more than Indians, and the Union kept control of the Virginia counties adjacent to DC, and today neither of these places are “Southern” in any meaningful sense culturally.

    Lind simply adds to the South the parts of the West settled mainly by people from the Confederacy -much of Southern California and the Central Valley plus Arizona, and areas of the Midwest that either were settled from the South (Indiana) or had strong Copperhead sentiment. He didn’t mention that the Irish Catholic immigrants in the New York City area were pro-Confederate, or at least anti-Lincoln, and their descendents remain Republican today.

    Lind’s piece is persuasive. The year I graduated from university, I worked for the first Perot campaign, and from my experience all the volunterrs were almost exclusively Republicans. But Perot’s weakest region was the former Confederacy, and his vote in 1992 correlates with Anderson’s 1980 vote quite well. I actually think the initial Perot campaign supporters came from the Westernish, Libertarian tendency. The Tea Party has superficial similarities, but comes from a different American political tradition.

  6. One thing that I’ve meant to post is that I was wondering what federal government spending was actually cut today.

    I’ve read the liberalish blogs, and people there are really upset about the cuts, but they don’t identify what the spending cuts actually are. The mainstream press articles are of no help. I’m curious (and also concerned about areas where I benefit personally from federal spending). What was cut? Or was the agreement an agreement to make cuts sometime down the road?

  7. Sadly I do not really see Australian politics as very different. Australia, Canada and the US seem to be developing into a bogansphere all of their own. In all three countries a major party is opposed to any action on climate change and the economic debate is largely about symbols. Australia did not even go into recession during the GFC, but to read the Murdoch papers or listen to the Coalition you’d swear we were being out-performed by the US.

  8. Aaron,

    Thanks for that insight. I had not realised how significant the South was in the Tea Party. We get only a few snippets over here, and the Tea Party is portrayed as a small government outfit with no mention of the South at all.

    If you are interested in the rise of the right, you may find Thinking the Unthinkable, by Richard Cockett, worth reading. It charts the counter-attack on Keynes from the 1930s.

    I wonder how different US politics would be if – horror of horrors – the US had compulsory voting, like we do.

    Mike,

    You inadvertently raise another thing that has intrigued me. In most parts of the world, the “red” party is the one on the left and the “blue” party the one on the right, but in the US the “red” party is the Republicans and the “blue” party is the Democrats. How did this come about?

  9. Alan,

    I agree that there has been a rise of a “bogansphere” in Australian politics. Even rednecks have computers nowadays and can blog away all day if they choose. However, we are a long way off the US at this stage; there is nothing like a Tea party movement here. We do have the IPA, but it is a far more sedate outfit and less influential.

  10. Chris,

    Cal-Berkeley is blue (and gold) and Stanford is red (and white)? Coincidence?

    Actually, I have no idea why red and blue were assigned as they were. I agree that it’s counter-intuitive.

  11. “You inadvertently raise another thing that has intrigued me. In most parts of the world, the “red” party is the one on the left and the “blue” party the one on the right, but in the US the “red” party is the Republicans and the “blue” party is the Democrats. How did this come about?”

    US national news networks cover presidential elections by coloring in states as one candidate or another wins them, advancing in Electoral College votes. Historically, they alternated colors between the parties. One year, the party that held the White House would be assigned red, and the out party would be assigned blue, and then the next year this would reverse.

    As it happened, in 2000 it was the turn of the presidential party to be assigned blue, and the non-presidential party red. As this was the most controversial election in US history, the colors stuck.

    In 2004, the Republicans were now the presidential party, and so with the normal rotation the presidential party got red, so the Republicans were assigned red and the Democrats blue again.

    My mind is drawing a blank as to what happened in 2008, but I think that instead of reversing the colors the networks just went along with the fact that people now associated red with the Republicans and blue with the Democrats.

    I also disagree that the Democrats are more “left wing” than the Republicans, but that really calls for another thread. But the political spectrum used in the much of the rest of the world really doesn’t work for American politics. And anyway the shorthand of “left” and “right” was originally just as arbitrary, it described where delegates in the various clubs happened to sit in the French revolutionary assemblies.

  12. Chris

    There is no real need for a Tea Party in an Australia where most Tea Party ideas have been adopted, at least rhetorically, by the official opposition. And some Tea Party ideas on multiculturalism, immigration and marriage equality have been adopted by the ALP itself.

    The top down reliance on close bureaucratic supervision and bugger human rights approach to indigenous issues arguably goes beyond anything envisioned by the Tea Party.

    The disconnect between the international scientific consensus and the subordination of science to policy concerns,pretty much prevails in both parties from the Coalition adopting a broadband policy that, to quote Rod Tucker, ‘defies the laws of physics’ to those sections of the Labor cabinet which wanted to abandon carbon trading entirely in 2010.

    I concede that the opposition is unlikely to attempt putting many of these ideas into practice if it wins government.

  13. Mike,

    Now I’m going to have to fond out the relevance of Cal-Berkeley and Stanford. I think I get Cal-Berkeley as the site of ancient protests.

    Ed,

    Thanks for that. You are right about the limited value of “left” and “right”. What Alan calls “marriage equality” in post 12, I call “word theft”, so I must be a right-winger. Then again, The Australian today has a series of attacks on the shop assistants union and the supposedly generous conditions of their members, which it blames for the downturn in retail trade, an attitude I regard as nasty union-bashing, so I must be a raving leftie.

    Alan,

    I think the IPA has been influential in the past, but I don’t think it has got anywhere with pushing the Tea Party line because Australia is a different place from the US. We just do not have the small government culture or, at least, we do not have the tiny government culture. We get some raving against a government that takes in a quarter of the GDP, but no open intent to push it to one tenth.

  14. Chris

    I agree there is no small government tradition. Arguably the environment is so harsh that small government is an impossible luxury here. Sadly there is also no real rights tradition, which puts minorities at the mercy of ‘tough love’ policies. In that sense the IPA has its case already made for it.

  15. Alan,

    The convict past of NSW has something to do with the “no small government” tradition in Australia. After all, we started out as a prison, a fairly socialist institution. Coupled with the harshness of the environment, that meant people saw the sense in strong government action to make life better or, in early days, just workable. I am sure there are other influences too; e.g., the transportation of unionists from the UK (the Tolpuddle martyrs).

    If we were where the US is now, out very own IPA might adopt a Tea Party stance, but it would be counterproductive for it to do so in the current social setting, but we never stop hearing from those who want working people to be worse off. There have been several attacks on shop assistants lately. They are being blamed for the low growth in Australian retailing because their conditions of work are supposedly too good. They get a mere $A17.00 an hour (good when compared with the US, I suppose), so some want them to work longer hours with lower or no penalty rates.

    Below are some links:

    http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/productivity_commission_gillards_work_place_laws_hurt_the_economy/

    http://www.theaustralian.com.au/news/opinion/unfair-fight/story-fn558imw-1226109374409

    http://www.theaustralian.com.au/news/opinion/julia-gets-message-from-centre/story-e6frg71x-1226109372229
    http://www.theaustralian.com.au/national-affairs/government-fails-with-two-speed-economy/story-fn59niix-1226109337591
    http://www.theaustralian.com.au/news/opinion/trade-unions-power-on-the-rise/story-e6frg6zo-1226109343929
    http://www.theaustralian.com.au/national-affairs/ir-laws-undermine-gillards-plan-to-recruit-retirees/story-fn59niix-1226109399913
    http://www.theaustralian.com.au/national-affairs/business-and-the-coalition-call-for-action-to-fix-fair-work/story-fn59niix-1226109407095
    http://www.theaustralian.com.au/news/opinion/retail-therapy-starts-with-labour-market-reform/story-e6frg71x-1226108540733
    http://www.theaustralian.com.au/national-affairs/industrial-relations/coalition-demands-fair-work-overhaul/story-fn59noo3-1226109114915.

  16. Chris

    The IPA is not a wildly influential organisation now and never will be. However, they do not need to be because measuring IPA influence tells you little about Tea Party ideas in Australia.

    The Coalition and the Tea Party have identical ideas on almost all issues. The Labor Party and the Tea Party have identical ideas on rights, immigration, indigenous affairs, law and order and even same-sex marriage.

  17. Taking the discussion in a different direction (if I may) there are very interesting parallels between the US debt crisis and that of the eurozone.

    At the moment the monetary authorities in Washington and Frankfurt are taking measures that are testing the scope of their powers. See today’s Financial Times ‘Two against the world’ http://www.ft.com/cms/s/0/85ea6768-c4f0-11e0-9c4d-00144feabdc0.html#axzz1Uvcbceao

    The ECB is veering in a political direction which is worrying especially for Europe’s paymasters – the Germans – whose central bank the ECB was modelled upon. Jean-Claude Trichet had so far resisted moving closer to the politicians. He will be leaving his post within a year and we don’t know about his successor’ instincts.

    The Economist ran an on-line debate on the motion ‘This house believes the euro, as a single currency, is dividing Europe and should be abolished’ where 36 per cent voted ‘yes’ and 64 per cent voted ‘no’.
    http://www.economist.com/debate/archive

    There are other worrying developments in Europe of several national governments (including France) making a grab at pensions to address their fiscal crises as reported several months ago on the Adam Smith Institute blog:
    http://www.adamsmith.org/blog/international/europe%27s-pension-seizures/

    Françoise

  18. It seems to me that Europe has an Articles of Confederation problem and the EU will remain unable to resolve the eurozone crisis while figures like Merkel have a veto on the necessary policies. Instead they are relying on ever more detailed fiscal rules and trying to disregard the sad fact that these rules have been consistently ignored since the eurozone was created.

    At least the euro crisis is easier to solve than a structural deficit where one party has made never raising taxes an article of faith.

  19. Alan,

    I must disagree with your statement that “the IPA is not a wildly influential organisation”. When the Liberals were elected in 1992 in Victoria, they followed the script prepared for them by the IPA in its Project Victoria series. The IPA has produced another book telling the new Liberal government what to do too. We will see how much influence it has as “reforms” are made to this state.
    You will find some discussion of the IPA and its role at:
    Newspoll: 57-43 to Labor in Victoria
    and
    Don’t Give Up – the Eternal Battle.

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