There’s a bit of interesting confusion breaking out in the progressive blogosphere about how to react to persistent reports (freshly denied, of course, by the White House) that the administration is planning military operations against Iran on grounds of its meddling in Iraq.Armando at Talk Left did an impassioned post accusing Matt Yglesias and James Fallows of arguing for a shift of progressive attention from Iraq to Iran. His main arguments are (1) Iran war talk is “bait” from the Bushies aimed at dissipating congressional efforts to end the war in Iraq; and (2) because Bush and Cheney have no legal authority to start a war with Iran, taking military action based on Iran’s role in Iraq is how they are going to get there. I get dragooned into the argument as someone who doesn’t “get” this latter point, based on a post that expressed incredulity at an Iraqi rationale for an attack on Iran.McJoan at DailyKos picks up on Armando’s post, and clarifies his argument, especially on Point II, suggesting that the only way Bush gets to wage war on Iran is by citing the Iraq War Resolution.What’s confusing to me about both posts is a pretty simple point: is the Iran war talk really a “red herring?” Or is the administration really lusting for immediate war with Iran?In terms of the “red herring” claim, you have to remember that most of the reports of administration war planning against Iran have been relatively under-the-radar, and have been talked about far more by administration critics than by official or unofficial Bush supporters. I see no particular evidence that congressional Dems are folding their tents on Iraq. And with all due respect to the blogosphere, I don’t think the Bushies think they can avoid getting repudiated on Iraq just because some bloggers are arguing about the relative importance of Iran.If the White House really wanted to throw sand in the eyes of Iraq War critics, including a sizable majority of the American people, they’d be doing some very high-profile Iran scaremongering, not focused on Tehran’s role in Iraq, but on the nuclear program, which has indeed gotten significant public and MSM attention.That brings me to the second prong of the Armando-McJoan argument: the Bushies have to make Iraq the pretext for an attack on Iran because they’d otherwise have to get a fresh war resolution from Congress, which ain’t happening. So they are stuck with a transparently stupid and specious rationale for a new war, which would be explicitly described as an expansion of an existing, and overwhelmingly unpopular war. If, that is, they really want to attack Iran, and aren’t just creating a “red herring.”You can see how this argument gets to be a bit circular. The administration either wants war with Iran, or it doesn’t, and if it does, it needs a plausible rationale a hell of a lot more than it needs congressional authority (remember its continuing claims of all sorts of inherent presidential national security powers?). And there’s an obvious scenario where that could happen: the U.S. strongly encourages the Israelis to attack Iran’s nuclear facilities, and then intervenes to help our ally as a matter of emergency military action, subject only to after-the-fact congressional endorsement under the War Powers Act, if the need for any authority was admitted.As for the initial question of how progressive bloggers should think about these tangled questions, I don’t quite see how worrying about a new war keeps anyone from stopping the old one, unless you’re really into an extreme version of the Noise Machine theory and think any dissent or distraction from the Message of the Day somehow adds strength to Bush’s rapidly collapsing support on Iraq.So let a few bloggers try to walk and chew gum at the same time.
TDS Strategy Memos
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By Ed Kilgore
All the talk of renewed inflation brought back some terrible memories for me, and I wrote about them at New York:
When I was a freshman college debater at Emory University in the fall of 1970, the national debate topic was not Vietnam, but the desirability of wage and price controls. Little did we know that just months ahead a Republican president would impose a wage-price freeze, long the anti-inflationary prescription of the left wing of the Democratic Party. But the surprise known in financial circles as the “Nixon shock,” nearly a half-century ago (on August 15, 1971) showed how pervasive the fear of inflation — running at just over 5 percent in 1970 — had become.
That’s ancient history now, even to those of us who remember the double-digit inflation of the late 1970s, and the particularly horrid scourge of “stagflation” (high inflation and unemployment simultaneously). Inflation seems to have been tamed by wise monetary policies. The periodic warnings from 21st-century conservatives that low interest rates and federal budget deficits would create inflation didn’t much bother me. It was like hearing an old priest chant a forgotten litany in a lost language — just one among many ritualistic arguments for the tight credit and reactionary social policies these people favored instinctively as a sort of class self-defense posture.The current surge in consumer prices doesn’t necessarily change that picture; the current post-pandemic (we hope) economic environment was sure to produce a spike in wages and prices that cannot be projected into a future where something approaching normalcy will surely return (though the real-estate bubble is indeed troubling). But now I am beginning to hear echoes of the inflation panics of the not-so-distant past, which make me tremble.
Like Tim Noah, I suspect there may be a generational lapse in understanding the politics of inflation:
“I don’t care to be condescended to by a bunch of Gen Xers and Millennials about my ’70s-bred fear of inflation. It feels too much like the condescension we Boomers directed toward Depression babies whenever they warned us that we were playing with fire in deregulating the financial markets. Poor dears, we thought, traumatized for life by the 1929 crash and one-third of a nation ill-housed, ill-clad, ill-nourished.
“The Depression babies turned out to be right, of course.”
Noah makes it clear he’s not arguing inflation per se is bad for the economy. It is, however, bad for progressive politics, and not just because “stagflation” probably killed the Carter presidency and ushered in the Reagan era far more than the Iranian hostage crisis or other better-remembered Democratic foibles. The deflationary economic strategies of the 1980s weren’t called “austerity,” but rather a corrective for undisciplined policies that fed wage and price spirals which in turned hammered the value of savings, the living standards of those on fixed incomes, and the political case for federal domestic spending.
Most lethally for progressivism, the conservative supply-side tax-cutting when combined with inflationary fears can create enormous pressure for public disinvestment and the shredding of safety nets (which is why reactionaries happily labeled the intended result “starving the beast”). We are still living with some of the long-term consequences of anti-inflationary backlash. As Noah points out, California’s Proposition 13 ballot initiative in 1978 and similar “tax revolts” were a by-product of price spirals that boosted tax assessments on property and income alike.
But sometimes lost in an examination of the right’s exploitation of inflation fears is the abiding fact that the left has no clear prescription for dealing with it, either, other than by denying its existence or significance (sometimes rightly, sometimes wrongly). Ironically, that was made most evident by the supposedly illiberal Richard Nixon’s surprising use of the great liberal instrument for taming inflation.
The veteran ex-conservative economic and political analyst Bruce Bartlett has penned an exceptional explainer on the background and consequences of the “Nixon shock,” particularly its international dimensions, and the role played by Treasury Secretary John Connally, who like his boss and ally Nixon was more focused on short-term politics than on long-term economic realities. What’s clear is that Nixon was convinced a recession induced by the Eisenhower administration and its Federal Reserve Board appointees designed to kill inflationary pressures also killed his 1960 presidential candidacy. As prices spiked in 1970, he was terrified the same thing could happen in 1972.
Nixon had inherited (and temporarily extended) an income-tax surcharge from LBJ that was designed to pay for the skyrocketing costs of the Vietnam War, but its effects were limited. So with his signature televised bombshell reveal (the one he deployed a month earlier to announce his trip to China), amid great secrecy, Nixon rolled out a combo platter of initiatives to fight inflation and international economic instability. They included a suspension of fixed currency exchange rates and the convertibility of the dollar to gold (to head off a raid on gold supplies triggered by a British demand for a major conversion); an import surcharge (to prevent a worsening of the trade balance); and most significantly for most Americans, a 90-day freeze on wages and prices to be followed by an indefinite period of controls by federal panels.
As political theater, Nixon’s speech announcing a “new economic policy” was, well, Nixonian. He began with dessert: an assortment of tax breaks and job-creation incentives balanced by mostly unspecified spending cuts; only then did he mention the wage-price freeze. After promising to “break the vicious circle of spiraling prices and costs,” Nixon moved on to his international proposals, which he downplayed as “very technical,” while assuring viewers that “if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.”
Nixon’s wage and price controls were initially very popular (as polls had told the White House they would be) and did indeed hold down inflation through the reelection year of 1972, when Nixon won his famous landslide reelection over poor George McGovern, in part by goosing federal appropriations to create a mini-boom. By then the administration had moved on to a more discretionary system for regulating wage and price increases, which generated rumors of employers currying favor with generous donations to CREEP (the Committee to Reelect the President), the notoriously corrupt operation heavily complicit in the Watergate scandals that brought down the Nixon presidency. Between the suppressed and eventually unleashed inflationary pressures and the oil-price shock Nixon’s international economic policies helped create, the country paid a very high economic price for the brief respite from inflation the wage-price freeze earned him. He sowed the wind with even greater inflation, and his successors Gerald Ford (whose feckless “Whip Inflation Now” campaign was widely mocked) and Jimmy Carter reaped the whirlwind.
Before you dismiss these events from 50 years ago as irrelevant, consider how much Nixon’s short-sighted approach sounds like something President Donald Trump might have done if inflation had became a political problem during his tenure (or in, God help us, a future term). Indeed, any president mulling Nixon’s choice of recession-inducing fiscal or monetary policies might be tempted to resort to the easy-to-understand, if dangerous, strategy of wage and price controls in which the pain is mostly back-loaded, particularly in or near an election year. Old folks remember how it preceded Nixon’s landslide 1972 win, followed by a decade of economic pain and multiple decades of political misery for progressives.