Dems who are following the current economic debate cannot help but be frustrated by the way that Democratic negotiating positions that are actually totally sensible in the context of dealing with an extremist opposition that considers the economy “a hostage worth ransoming” (in “Mich” McConnell’s memorable phrase) are criticized as “unreasonable” by deficit hawk critics who demand “leadership” or “compromise” from Dems – things that the hawks do not demand of the Republicans.
In fact, in a particularly infuriating maneuver, such critics actually use the extremism and irrationality of the GOP as the reason why Dems must meet Republican demands more than half-way. As Michael Gerson actually had the temerity to put it in a column today “Obama must give John Boehner political cover.”
Many of the spokesmen for the deficit hawk point of view are simply acting as open or covert representatives of the GOP and as such their political motivations are clear. But they are also joined by a substantial section of the mainstream media and the business community who begin from the premise that all sides should recognize the need for limits on deficits, spending and debt and a variety of related economic policies. They complain that Democrats are being “unreasonable” when they do not accept such points as the only proper foundation and absolutely necessary starting point for any serious negotiation.
Critics of this kind dismiss practical Democratic counterarguments about the futility of Obama’s attempts to offer historically unprecedented compromises in 2011 and the continual Republican pattern of “moving the goal posts” and undermining previously negotiated agreements as all irrelevant to the present day negotiations. In their perspective “reasonableness” necessarily consists in Democrats always and under all circumstances completely conceding the basic premises of the deficit hawk platform at the outset and negotiating on the basis of that foundation.
What is ironic is that most of the broad and general deficit hawk positions are actually not really controversial if they are viewed as only one partial aspect or component of an overall Keynesian or European Social Democratic approach. For example, not only a standard Keynesian textbook of the 1960’s but modern progressives like Paul Krugman and even the architects of the post-war Swedish Social Democratic welfare state would easily agree with propositions like the following:
• Except in exceptional circumstances (e.g. wartime) the budget should be balanced over the course of the long-term business cycle.
• Government spending and debt cannot perpetually increase as a percentage of GNP.
• At extremely high marginal rates, income taxes produce tax-avoidant behavior (e.g. use of tax shelters, capital flight) that makes them ineffective.
• The generosity of social welfare programs must be related to the level of real economic growth.
These and many similar propositions are not really controversial; progressives can easily agree with them when they are treated as just one component of a larger approach that is balanced with reciprocal propositions like the following:
• There must be a healthy balance between investment in the private and public sectors.
• Taxes to pay for needed public services and investment are the “price of civilization” and an obligation of responsible citizenship.
• The share of income going to the wealthy cannot continually rise as a percentage of total income.
• National economic policy in modern mixed economies must have as its objective the creation of adequate job opportunities and a basic level of economic security for the citizens of the country.
The American and Swedish mixed economies of the 1960’s reached different political compromises between these distinct classes of propositions, with the Swedish economy providing substantially greater social equality and economic security. But in both political systems, it was recognized that any “responsible” economic policy required the negotiated political reconciliation of many of these kinds of conflicting economic requirements and goals and not just the political imposition of one unbalanced side of the equation or the other.
Seen in this perspective, the inherently dishonest character of the arguments of most of the modern American deficit hawks becomes strikingly clear. They define only one pole of a comprehensive and balanced approach as representing the “responsible” position and simply ignore the other. This places Democrats in the position of having to forcefully assert the other side of the policy mixture simply in order to restore the missing balance to the policy debate. This then allows the dishonest deficit hawks to pillory the Democrats as “irresponsible” because they do not assert a fully elaborated and balanced Keynesian or social democratic view.
This is not economics. It is simply an old and rather transparent debaters’ trick. It can be met with an equally simple response – one that works just as well in negotiations with used car dealers as with political adversaries.
The basic rule is to require with absolute rigidity an equal and reciprocal concession for every concession offered. In this particular case it takes the following form:
I will agree with your assertion that proposition X is part of a “responsible” position if you agree that my proposition Y is also part of a “responsible” position.
So, for example:
I will agree that government spending and debt cannot continually increase as a percentage of GNP and must be held within limits if you will agree that the share of income going to the wealthy cannot continually rise as a percentage of total income and must also be kept within limits.
Conservative deficit hawks will not want to explicitly concede the latter point but – because it is every bit as mathematically inescapable as the former – will be unable to conceal the fact that that it is their own position that is not balanced or “responsible” in any meaningful sense of the word.
For every major plank in the deficit hawk program there is a corresponding and reciprocal progressive plank which can be counter posed to it and which exposes the fundamentally “irresponsible” character of the deficit hawk program when viewed in isolation.
An additional complexity is added to the current economic debate by the fact that one side currently uses the threat of damage to the economy as a “hostage” to extort concessions. In this case, applying the “reciprocal concession” rule to discussions with deficit hawks means demanding the following:
“Responsible and serious negotiations about the debt, deficit and spending cannot be conducted under the cloud of threats and blackmail. Any concessions or agreements on our part regarding deficits, spending or the national debt will be entirely dependent on the GOP first renouncing – and remaining committed to the renunciation – of threats to the economy and credit rating of the United States. Any agreements we may make during these negotiations will automatically and retroactively become null and void if such threats are employed now or at any time in the future”
Making the GOP renunciation of hostage-taking a non-negotiable demand at the beginning of any debates with deficit hawks will force them to either agree with the logic of the Democratic position and repudiate the tactic or, once again, to concede at the outset that it is their position that is not balanced or “responsible” but which rather legitimizes the use of hostage-taking by one political party but not the other. In either case, the spurious claim of “above politics” neutrality that the deficit hawks claim is revealed as empty and dishonest.
(A final note: in case you are wondering, the application of the reciprocal concession approach to negotiating with a used car dealer is to determine the real value of the auto from the Kelly Blue Book or other source and then to respond to each price offered by the salesman with an amount precisely as far below the real value as his is above it. While difficult to execute in practice, it is in principle impossible to defeat)