It’s the Unemployment, Stupid

And, by “stupid” I mean the Republicans in Congress who are perfectly willing to trash the economy for short-term political gain; the Republicans in Congress who are so clueless that they don’t get it when it comes to unemployment; the Democratic poser deficit-hawks who are just preening morons; and anybody else more concerned with short-term political concern about the deficit over the longer term health of the economy and the millions of suffering Americans.

Slate’s Daniel Gross has a nice column explaining just how short-sighted it is to focus on the deficit instead of relieving unemployment:

My suspicion is that too many people in Washington think it’s smart short-term politics not to demand urgent action on unemployment…

But they’re also wrong. Forget about the damage to the economy at large, or to those people who aren’t working. For both parties, whether you’re a deficit hawk, a tax-cutting obsessive, or an incumbent bent on re-election in 2010 or 2012—persistent high unemployment is poison. Payroll and income taxes—in other words, taxes paid by people with jobs—provide the lion’s share of federal tax revenues. For Democrats, there’s no way to cut the deficit or find revenue for new initiatives unless they grow. Should Republicans retake control of the House and Senate next year, their first order of business would be to preserve the Bush tax cuts that are set to expire—a move that would make already large deficits even larger and thus render significant tax-reduction impossible.

Matt Yglesias summarizes the dissension among Obama’s political (wrong) vs. economic (right) advisers, and concludes thusly:

The President should almost never side with his political team in a dispute of this nature. The reason is that the single most important factor determining a president’s political fortunes is the fate of the economy. Tradeoffs can exist in the form of things that are short-term economic pain for long-term economic pain. But there’s no real tradeoff between “unpopular but growth-boosting measures that ultimately make you more popular” and “popular but growth-strangling measures that ultimately make you less popular.” When it comes to macroeconomic management, it’s results that matter most.

I really find the whole situation quite depressing.  I’m super-lucky– I have a job that’s not going anywhere.  But because I actually care about people other than myself, I sure as hell wish our dysfunctional government could actually do more about the problem.

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About Steve Greene
Professor of Political Science at NC State http://faculty.chass.ncsu.edu/shgreene

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