Wayne O’Leary

The Deliberate Stupidity of Austerity

The worst news coming out of the 2014 midterm elections was not the Democratic loss of the US Senate, nor the Republican gains in governorships, state legislatures, and US House seats, bad as those results were. No, the worst news was that austerity, the steady grinding down of the public sector at all levels, was given a confirming seal of approval — courtesy of the minority that decided to vote last November.

Austerity, let’s remember this holiday season, is a real-life political application of the management principles of Dickens’ Ebenezer Scrooge. But unlike Scrooge, don’t expect the Republicans to experience a sudden epiphany of goodheartedness; Boehner, McConnell, and the rest of the GOP green-eyeshade crowd now in control of Capitol Hill will be handing out no Yuletide turkeys this year, or for the foreseeable future. Even if they did, we’ve learned that Speaker Boehner’s favorite turkey recipe includes basting the bird in garlic. Sounds unappetizingly Republican, doesn’t it?

The first indication of what’s in store for the country under GOP governance in 2015 and 2016 appeared in the small print of the wretched annual spending bill rammed through Congress during the recent special session with the predictable acquiescence of President Obama and lame-duck Senate Majority Leader Harry Reid (D-Nev.); it was a classic demonstration of “bipartisanship” in action.

Over the gallant resistance of Sen. Elizabeth Warren (D-Mass.) and her liberal cohort, the Dodd-Frank financial law was substantially disemboweled by an attached rider; wild-eyed derivatives trading by bankers, the very thing that brought down the economy in 2008, will once more be allowed using depositors’ money, and the FDIC and Federal Reserve will socialize any gambling losses incurred by the too-big-to-fail banks. This protective guarantee of a federal bailout amounts to “moral hazard” at its worst.

Carving up Dodd-Frank by means of a policy insert unrelated to spending, foremost of several such right-wing amendments, constituted collateral damage under the budgetary process; it was a travesty, but it paled next to the immediate harm done by the actual funding part of the GOP disbursement package. As part of their continuing effort to make austerity a permanent feature of American life, Republicans wrote in a budget cut of $346 million for the Internal Revenue Service, providing the IRS with its lowest level of funding since 2008; tax cheats will be safe for another year. Likewise, the Environmental Protection Agency was cut by $60 million, forcing a reduction in EPA staff to its smallest number since 1989; party on, polluters.

Such forced reductions in agencies responsible for providing essential public services has become par for the course in Washington under austerity and its stepchild sequestration. Since the 2010 elections, when Republicans essentially began running the federal government — the Obama administration has been reduced for the past four years to being largely reactive — government agencies have been consistently under the gun, their effectiveness intentionally neutered.

Consider the persistent degradation of government the following staff and budget cuts represent. The aforementioned IRS is down $1 billion in funding and over 8,000 employees since 2010; don’t expect much help with your taxes. The National Park Service is making do with its stingiest budget in five years and its least number of park rangers since 2005; volunteers and philanthropic organizations are providing minimal, catch-as-catch-can park upkeep.

The National Weather Service has sustained an 8% funding reduction and a hiring freeze imposed by the federal sequestration; it now employs hundreds fewer forecasters and technicians than it did before Hurricane Sandy, so good luck with those storm warnings. The Social Security Administration, whose operating budget is 4% less than in 2010 despite an increased workload, has closed dozens of field offices and let go 14% of its field-office personnel; just stay on the line when you call.

The story is the same across the full spectrum of federal departments, agencies, and programs. Food stamps were cut significantly in 2014. So were unemployment benefits. Even the FBI was forced to close offices, curtail hiring, and furlough employees this past year; crime is about to pay.

The mindless cutting, which is being replicated in the states, especially those ruled by Republicans, begs the question of why the country is irrationally self-imposing this pain — waterboarding itself, you might say, in a passive acceptance of the conservative ideology peddled by the right. Budget cutting doesn’t lead to economic growth or prosperity, any more than torture elicits useable information from one’s enemies.

But government-hating Republicans, who are setting the agenda, have convinced themselves that it does. Perhaps more importantly, it makes them feel good, much as torture (to carry the analogy one step further) satisfies the revenge motive. In GOP eyes, emasculating government is a way of exacting vengeance against their sworn enemy the state, the enemy that regulates them and raises their taxes.

One thing more needs to be said about the GOP-driven austerity regime: it’s been endorsed to varying degrees by “fiscally responsible” Democrats, including many who ran in the midterm elections. The reason for this me-tooism isn’t hard to decipher; the voters, offered no alternative, have bought into the austerity argument, and Democrats, anxious to curry favor at the polls, have repeated it ad nauseam, thereby reinforcing this dead-end philosophy and making it the conventional wisdom. The circular reasoning: austerity is right because everyone says it’s right, and since everyone says it’s right, it must be right.

Conversely, there is a counter-argument that actually does make sense: Hire a government worker. He pays taxes and spends his paycheck. The businesses he patronizes expand and hire more workers. They, too, spend and pay taxes, repaying the initial public investment and then some. The stimulative impact thereby spreads outward in concentric circles.

One leading Democrat, at least, does appear cognizant of the austerity trap and has proposed the proper exit strategy. “Democrats must embrace government,” Sen. Charles Schumer (D-N.Y.) told the National Press Club on Nov. 25. “It’s what we believe in; it’s what unites our party; and, most importantly, it’s the only thing that’s going to get the middle class going again.” Schumer, an erstwhile friend of Wall Street — he’s from New York, after all — may be a flawed messenger, but the message is one Democrats need to hear.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He is the author of two prizewinning books.

From The Progressive Populist, February 1, 2015

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