Category: History

Deficits and the Party of Duh

Since the Field Guide last discussed the dramatic decline of the US budget deficit, the non-partisan Congressional Budget Office came in with its revised numbers for Fiscal Year 2014, which ended September 30th. According to CBO, the deficit for FY 2014 shrank to $486 billion, or 2.8% of GDP. Because the US economy grows, on average, at a rate of about 3% per year, deficits smaller than that can be sustained forever. The US fiscal crisis is over.

The turnaround of the nation’s finances under the Obama Administration has been remarkable. FY 2009, which began while Obama was yet Illinois’ junior senator, had a budget deficit of 9.8% of GDP – the highest since World War II. Under Obama, that figure has fallen every year, to at last slip below 3%. FY 2014’s deficit is in fact slightly smaller than the average of the past 40 years.

If conservatives were thoughtful by nature, they might be scratching their heads. According to their dogma, Obama’s increased taxes on the wealthy, and the ACA’s expanded social insurance for the poor, should have led to mounting deficits and economic stagnation. That’s what they’ve been predicting for the past 6 years – along with hyperinflation. But the fact that reality has returned the precise opposite of conservative predictions – decreasing deficits, economic growth, increasing employment and below-average inflation – has not caused conservatives to reconsider their beliefs.

Responding to facts, after all, is only something that rational people do. Conservatives in the end are dogmatists whose beliefs are fundamentally religious in nature – they dont care a whit about reality. This is how conservatives can continue clinging to the discredited notion that tax cuts pay for themselves, and that social insurance is a black hole of waste and inefficiency. Despite being wrong again and again, they are unable to learn and move on.

Shortly after Reagan came to office in 1981, he got through his signature legislative initiative: slashing taxes on the wealthy, while affording smaller tax cuts to everyone else. The nation’s finances never recovered. Though the economy rebounded – as was expected, following the sharp recession of the early 80s – deficits remained unsustainably high until Reagan left office in 1989, and were still averaging nearly 4% of GDP during the Bush years that immediately followed. To fully grasp the significance of Reagan’s policy failure, it helps to appreciate that the Carter’s administration never ran a budget deficit greater than 3% of GDP, despite a poor economy.

Clinton came to power as the unReagan: he raised taxes on the wealthy (without a single GOP vote in Congress), while also increasing government spending on stimulus programs that typically help middle income families. With conservatives predicting gloom and doom, the US economy responded with its longest sustained expansion in history, while the deficit shrank to zero.

You’d think this experience would be the slam-dunk/death-knell of Voodoo Economics – if, after all, tax cuts demonstrably worsen deficits, while tax increases shrink them to nothing, while coinciding with unsurpassed economic growth, how could conservatives persist in their folly? But the charm of conservatives is their inability to learn from experience, no matter how obvious or unequivocal its lessons. And thus Bush Duh continued with the same conservative foolishness, cutting taxes on the rich, which gave away the nation’s hard-won surplus, replacing it with deficits stretching far into the future, culminating in a lackluster economy and the nation’s worst fiscal straits in more than 60 years.

Under Obama, the US has expanded its social safety nets and raised taxes on the wealthy, while lowering the deficit and growing the economy. In other words: it’s the same old story – and if conservatives in the Party of Duh had any connection to reality, they wouldnt be surprised at all.


The Field Guide is off mid-week for Veterans’/Armistice/Decoration Day – we’ll return with new material on Friday.




Who Lost North Korea

As South Korean spies ended weeks of speculation by revealing the mundane cause of North Korean dictator Kim Jong Un’s recent absence from public view (ankle surgery), a much more ominous bit of news was simultaneously reported: North Korea has begun work on a submarine-based nuclear missile launching system. With present technology, North Korea may be able to strike Alaska, or perhaps Washington state. With sub-based missiles, they could potentially hit any city in the US. While this project will take years, the long-term prospects are chilling. And no matter how conservatives try to wriggle out from under the inescapable truth, blame for North Korea’s nuclearization falls squarely on the Bush Duh administration.

A little background info is crucial. There are just two paths to creating a nuclear fission weapon. One uses uranium, which involves a technologically complex enrichment process. The other uses plutonium, and is much quicker – if you have a ready supply of plutonium, which can be readily produced in certain kinds of nuclear reactors.

When Bill Clinton came to the White House in 1993 – fresh out of Little Rock, without a scintilla of foreign policy experience – he inherited a Korean peninsula already in nuclear crisis. Clinton competently negotiated a deal, and under the 1994 “Agreed Framework,” North Korea halted its uranium enrichment program, and also shut down its plutonium-producing nuclear plant – blocking both paths to nuclearization. In exchange, the US promised to build North Korea two new nuclear plants – of a kind that could not be harnessed to manufacture weapons – and to supply them with fuel oil in the interim. The Agreed Framework also put the US and North Korea on track for improved relations.

Fun fact: North Korea’s Yongbyon nuclear reactor – source of its weapons-grade plutonium – was constructed on Ronald Reagan’s watch, during 1980-86.

Enter Bush Duh. Late in 2002, the US accused North Korea of violating the Agreed Framework by restarting its uranium enrichment program. Whether or not that’s true, in the 21 years since the Agreed Framework was signed, North Korea has never detonated a uranium-based nuclear weapon. What is true is that the US failed to follow through on its promises to build two new reactors and deliver fuel oil. The reactors were far behind schedule, and oil shipments were often delayed – all because conservatives in Congress opposed the agreement, and sought to sabotage it by withholding funding. This makes it particularly laughable for conservatives to blame North Korean nukes on Clinton, since they did everything they could to undermine his otherwise effective policies.

And so because of congressional conservatives, North Korea had legitimate gripes about the US failing to keep up its end of the bargain. With ham-handed diplomacy, Bush Duh so thoroughly alienated North Korea that they pulled out of the Nuclear Non-proliferation Treaty, restarted their Yongbyon reactor, and – while Bush Duh slept – they ran it for two years, producing enough plutonium to build several bombs. Duh dozed on as North Korea shut the reactor down, extracted the plutonium, and got to work. They successfully detonated their first nuclear weapon in late 2006 – during Duh’s 6th year in the White House.

Bush Duh followed up that 6 year snooze-a-thon with inaction in the face of North Korea’s missile tests, as the North worked on the development of a nuclear weapons delivery system to allow them to strike US allies, as well as the US mainland. He was, after all, quite busy in Iraq, confirming what UN inspectors said before the US invasion: that Iraq had no weapons of mass destruction. Duh!

Kansas Voodoo

Perhaps even conservatives can only be fooled so many times before they get wise. In Kansas, Democrat Paul Davis has pulled even with Republican incumbent Sam Brownback in the race for governor. Davis has even received the endorsement of numerous Republican officials across Kansas, who find Brownback’s dalliance with Voodoo Economics too spooky for their taste.

Credit for the term “Voodoo Economics” goes to George Bush. While he was competing for the 1980 GOP presidential nomination, he applied it to describe Ronald Reagan’s economic proposals, which relied on the notion that tax cuts pay for themselves. To George Bush, and to most of us, Reagan’s policies seemed like a crackpot idea at the time. Our experience over the past 30 years have borne out Bush’s skepticism.

Fiscally, the US never recovered from Reagan’s tax cuts. Deficits remained sky high for twelve years, right through the departure of his successor from the White House in 1993. That not-so-grand experiment only ended with Clinton’s tax increases, which, instead of bringing the disasters predicted by conservatives, delivered the longest economic expansion in US history, and replaced Reagan and Bush’s deficits with surpluses projected far into the future.

Under Bush Duh, the US again endured the folly of Voodoo Economics. His tax cuts gave away the surplus to the very rich, and left the country’s fiscal health permanently compromised. The cure only came via Obama’s tax increases on the wealthy – and the sustained economic recovery that’s (again) happened with conservatives (again) predicting gloom and doom.

But these experiences werent enough to deter Kansas from embarking on the very same, failed supply-side Voodoo. Conservative Sam Brownback was elected governor in 2011, and in 2012 pushed through a massive tax cut, slashing the top income tax rate by 25%, and eliminating income taxes on small businesses entirely. Brownback was hoping for a little of that ol’ black magic: to see state tax revenue grow, even though almost all Kansans were going to be paying a lower tax rate.

For all its voodoo, Kansas is now in deep budgetary doo-doo – because Voodoo Economics has failed Kansas too. With tax receipts falling short of expenses by hundreds of millions of dollars, education, along with other government services have been slashed, and the state’s credit rating has been downgraded. And in addition to all that red ink, Kansas is adding jobs at a slower pace than the national average. With inept governance, deficits, and weak job growth, one might regard today’s Kansas as a time capsule of the Bush Duh years – from which even Kansas Republicans seem eager to escape.







How Jim Crow Holds Florida

In denying the right to vote to criminals, even after they have been released from prison, the US is an outlier with respect to much of the world. Let alone allowing ex-cons to vote, numerous countries permit inmates to vote from prison, including Australia, Canada, the Czech Republic, Denmark, Finland, France, Germany, Israel, Japan, Netherlands, Norway, Poland, Romania, Serbia and Sweden. Among US states, only Maine and Vermont let everyone vote, including prisoners.

With America’s skyrocketing prison population, felony disenfranchisement affects an increasing fraction of the US population. While it denied suffrage to about 1 million Americans the in the early 70s, 3 million were disenfranchised by the mid-90s, and nearly 6 million are disenfranchised today. Across much of the south, upwards of 7% of the adult population cannot vote because of past convictions.

Relative to the irrevocable, lifetime disenfranchisement that the Constitution permits (for the moment), states are generally much more liberal about allowing convicted criminals to vote after they’ve completed their sentences, if not parole or probation. As usual, it’s regressive southern states who are the most unforgiving, with a few effectively disenfranchising convicted criminals forever.

Disenfranchisement disproportionately affects blacks. Across the country, about 8% of blacks, and some 13% of black men cannot vote – compared to about 2% of all other adults. Florida is the worst case of all. In 2011, its GOP governor gave the state the most extreme felony disenfranchisement law in the country. With just 6% of the US population, Florida is home to 25% of all of America’s disenfranchised. 20% of all blacks in Florida – and about 35% of all black men – cannot vote. One neednt wonder at the GOP’s zeal for felony disenfranchisement. In its absence, Florida would not be a swing state – it would be solidly democratic.

US AG Eric Holder has been pressing states to reform these outmoded laws – many of which date back to Reconstruction, a living remnant of the Jim Crow south, whose purpose was, then and now, to suppress the black vote. Felony disenfranchisement is an ugly anachronism, with no place in a modern law or governance.



The Constitutionality of Felony Disenfranchisement:

In the aftermath of the US Civil War, with southern states excluded from Congress and yet subject to military rule, northern states changed the Constitution to protect its citizens’ voting rights – somewhat. The 15th amendment, which became law in 1870, is short and simple:

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.

18 months previously, northern states had ratified the 14th amendment. Section 2 is a fine bit of 19th century prose:

Representatives shall be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State, excluding Indians not taxed. But when the right to vote at any election for the choice of electors for President and Vice President of the United States, Representatives in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof, is denied to any of the male inhabitants of such State, being twenty-one years of age, and citizens of the United States, or in any way abridged, except for participation in rebellion, or other crime, the basis of representation therein shall be reduced in the proportion which the number of such male citizens shall bear to the whole number of male citizens twenty-one years of age in such State.

It sprawlingly ties together many areas of law, including apportionment, the legal status of “Indians”, federal and state elections, voting rights and criminal disenfranchisement. That’s a good thing, because it mutually binds, one to another, numerous rights, capacities and effects, forcing courts to interpret them with respect to one another. The bad of it is that it implicitly allows for the unfettered disenfranchisement of convicted criminals. The 15th amendment meanwhile only prevents states from denying the right to vote for 3 specific reasons – leaving other bases for disenfranchisement valid, including not just crime, but gender.

There is hope. See:

n.b. The Reconstruction amendments were drafted, voted up by 2/3 majorities in both houses, and passed on to the states for ratification while southern states had no representation in Congress, were yet subject to military rule, and were effectively territories – not states – governed from Washington, D.C. Their readmission to the Union – and with it, the restoration of their Congressional delegations – was conditioned on their ratification of the these amendments.

Democrat In, Deficit Gone – Again

The latest projections have the US budget deficit falling to 3% of GDP in fiscal year 2015, which started this past Wednesday, October 1st. 3% is the magic threshold for deficits. Under that level, they are theoretically sustainable forever, because the US economy, on average, grows by that amount every year.

On inauguration day, January 20th, 2009, the Obama administration inherited a projected budget deficit of $1.2 trillion for fiscal year 2009. (“FY 2009” began October 1, 2008, while Obama was still a senator.) Fiscal stimulus packages and other legislation passed soon thereafter added an additional $200 billion, to create what would become FY 2009’s largest-ever deficit in US history ($1.4 trillion). As a fraction of US GDP (9.8%), it was and is the largest deficit since WWII.

It’s remarkable how much the US fiscal outlook has since improved. Following FY 2009, the US experienced three more years of trillion-dollar deficits – albeit each year’s deficit was smaller than that of the year before. The deficit for FY 2014, which ended on Tuesday, September 30th, is expected to be less than $650 billion. It’s projected to shrink to about $450 billion in FY 2017, when Obama leaves office – about 2% of GDP. (For the past several years, actual deficits have proved smaller than Congressional Budget Office projections.)

To put this in historical perspective, consider that between FYs 1982 and 1993, Reagan and Bush ran precisely one deficit of less than 3% of GDP – and six that were 4.4% or greater. But under Carter and Clinton, every deficit was less than 3% of GDP. Half of Bush Duh’s eight years saw deficits surpass 3%, culminating in FY 2009’s record-setting $1.4 trillion in his last year in office. The pattern could not be more apparent. During the 32 year period 1977-2009, the annual US budget deficit was less than 3% for all 12 years that Democrats held the White House – but over 3% for 14 out of 20 years that conservative Republicans held it. And under Obama the deficit has only ever shrunk.

Obama’s fiscal stewardship is impressive. CBO now projects Obama will become the first two-term president in US history under whom budget deficits will shrink year-over-year, every year. (Bill Clinton and Andrew Jackson came close, each with declining deficits in their first seven years in office.)

The icing on the cake is what finally pushed US deficits under the 3% threshold: Medicare. Under the ACA, growth in healthcare costs have fallen to their lowest rate ever recorded, and Medicare is leading the way, with the public insurer returning slower cost-growth than private insurers.

The Obama administration has returned the US from typical conservative Republican fiscal irresponsibility to moderate Democratic sensibility – enduring conservative recriminations all along the way. It’s the same thing Clinton experienced while he was turning red ink into surpluses. Just as Al Gore cast the tie-breaking vote to enact the tax increase that put the US on track for the Clinton boom and balanced budgets, so Nancy Pelosi and Harry Reid used a side-door reconciliation scheme to enact the ACA, which was the last step the US needed to get under the 3% threshold – without a scintilla of GOP support.






The Fight for Liberalism in Syria

The US may have been tempted to support Bashar al-Assad, Syria’s nominal head of state, in his fight against Islamic State (IS). His army remains the best trained and best equipped of the many belligerents fighting for control of Syria. If the US had the single goal of wiping out IS, then backing Assad would be a good strategy. But the US, prudently, is not fighting militant Islam at any cost – surely not at the cost of aiding a secular authoritarian who has himself demonstrated exceptional brutality. The Obama administration and a majority in Congress are wise to eschew that unsavory liaison, and to support the Free Syria Army (FSA) instead.

There are many factions competing for control of Syria. But the Syrian National Coalition (SNC) stands out as by far the best bet for the cause of liberalism and democracy. Not coincidentally, a growing number of countries have recognized the SNC as Syria’s government, and have been arming their fighting force, the FSA. By denying aid to Assad, and instead favoring the weaker SNC/FSA as part of its newly elaborated campaign against IS, the US affirms that the era of convenient dictators is over.

While grappling with the USSR during the Cold War, the US faced the threat of total annihilation: of civilization, the species, the planet’s ability to support life. And so from Batista to Somoza to Trujillo to Pinochet to the Shah to Hussein to Mubarek, no dictator was too brutal – so long as a regime opposed the USSR and opened its markets to US firms, it could count on unfettered US support. Thus it was that US foreign policy during the Cold War frequently served to subvert democracy and liberalism abroad, as winning the Cold War took precedence. Liberalism within the US took a beating too, with the McCarthy era’s war on free speech and assembly, and the lingering scar that is the phrase “under god” inserted into the Pledge of Allegiance in 1954 – ostensibly to distinguish the US from “godless communists.”

Today the stakes are different. While the rise of theocracy in the Middle East – and the ability of terrorists to project power out of that region – are real and serious threats, they are not existential threats; and they therefore cannot justify the abandonment of what must be the US’s long-term interest in the worldwide proliferation of liberalism and democracy.

It’s for this reason that the Obama administration’s newly devised policy – aiding the FSA in its ground war against IS, Assad, and others (such as the Islamic Front, another nasty Islamist faction fighting in Syria); while itself prosecuting an air campaign against IS across Syria and Iraq – is a good one, and deserving of support.

Like the Cold War, the “War on Terror” has also taken a toll on American liberty, with Americans, under the auspices of the Patriot Act, subject to an outrageous degree of electronic surveillance. One hopes that that ill-considered law will be allowed to lapse next year. As for the Pledge of Allegiance, Americans may have to endure its bastardized form for another 60 years, albeit while (cynically) savoring the irony that religious zealots have replaced godless communists as America’s enemy du jour.

Militant Islam, like communism, shall also pass – as will the next affront to liberalism, whatever form it takes. But our commitment to liberalism must not be compromised along the way.



Ukraine, Perspectivized

The story on Ukraine, as most commonly told, has Vladimir Putin, calculating autocrat, out to gobble up a weak neighbor – while the US and EU watch helplessly. But the evolving geopolitical map of eastern and central Europe tells a different story.

It will be 25 years this November since the Berlin Wall fell. In 1989, West Berlin (with Norway, Italy, Greece and Turkey) marked the easternmost extent of the US sphere of influence, in the form of its military alliance, NATO; and-or its economic partner, the EC (now the EU). Berlin is about 600 miles east of Paris and 1100 miles west of Moscow.

Since the Wall fell, every former member or the Warsaw Pact – NATO’s one-time rival – has joined NATO, or is applying to join, including former constituents of the USSR itself. The list is impressive: Poland, Hungary, the Czech Republic, Slovakia, Albania, Bulgaria, Romania, Latvia, Lithuania, Estonia, Slovenia and Croatia have all joined NATO.

Imagine an alternate history in which the US lost the Cold War, and over the past 25 years saw one former ally after another – France, Germany, Italy, the UK – leave NATO to join the Warsaw Pact and the Russian sphere. Imagine Canada wobbling in its allegiance: protestors on the streets of Ottawa, Russian politicians with them, expressing support for efforts to depose Canada’s pro-US president. Then comes the revolution, and installation of a pro-Russian president in Canada, who Russia immediately recognizes, legitimizes, and begins to aid.

“Kiev” in a Russian ear has the warm familiarity that “Toronto” has for an American – but more so, because Russia and Ukraine have for centuries been much more closely tied than have been the US and Canada. Ukraine’s defection to the US sphere is terrifying to Russians – as well it should be. Kiev is 500 miles from Moscow – about the same distance as Toronto to New York, and a bit closer than Ottawa to Washington.

It isnt that Russia lost the Cold War. Russia has been losing ever since the Cold War ended. The past 25 years have seen the US sphere expand more than 1000 miles eastward. And it’s still expanding: when 2014 began, the line between east and west ran through Kiev, where an embattled pro-Russian president struggled with a legislature and local population that favored the EU. Now Kiev is firmly in the US sphere. In just the past few months, the line has moved 500 miles farther east – to Donetsk and Luhansk, which is actually east of Moscow!

To fully appreciate the events in Ukraine, one looks even farther east – to Georgia, another former constituent of the USSR, which for centuries had also been part of the Russian sphere. Georgian relations with Russia have been strained since it gained independence. Crimea might be said to have first played out in Georgian Abkhazia; while war in Eastern Ukraine has its precursor in the Georgian region of South Ossetia. No less a leader than Eduard Shevardnadze – Gorbachev’s Foreign Affairs Minister – put Georgia on track for both EU and NATO membership during his tenure as Georgian president. While Georgia is a long way from Moscow, it shares a border with Russia’s restive Chechnya region – and Russia has often accused Georgia of lending aid and support to Chechen rebels.

Until his death this past July, Shevardnadze denied that the US promised Gorbachev that NATO would never expand east of Berlin – much less east of Germany. His counterpart, former US secretary of state James Baker, also denies that such a promise was made. However Gorbachev maintains that he received explicit assurances, and recently declassified documents suggest that Shevardnadze was lying all along, likely to aid Georgia’s own NATO aspirations.

Our purpose is to put current events in Ukraine in perspective – not to excuse Russia’s practice of old-fashioned European land-grabbery: its 2008 seizure and ongoing occupation of South Ossetia, its recent annexation of Crimea, and its sponsorship of rebellion in Eastern Ukraine today.

But we must acknowledge the US’s own aggression, though it differs in its manifestation. John Quincy Adams authored the Monroe Doctrine and, with it, the geopolitical strategy that the US has followed for two centuries. Eschewing colonialism, and restricting land grabs to contiguous North America, the US seeks to expand its sphere of influence, not its nominal land holdings. The US has always been extremely aggressive about bringing countries into its sphere – and keeping them there. Toward that end, the list of foreign governments that the US has overthrown or helped to overthrow is impressive, and may yet include that of Viktor Yanukovych.



what the US may (or may not) have promised Gorbachev:

war in Georgia:

a very different take on Russia:

and a rebuttal:

bonus material:










A Tale of Three Crises

Conservatives like to pooh-pooh the US economy’s recovery from the worst downturn since the 1930s. But because the Great Recession is so singular, it’s difficult to judge recent economic performance, and the effectiveness of the government and Fed response. No downturn since World War II compares. Both for the conditions that triggered each, and their severity, the closest and nearest-in-time comparisons we have are the Great Depression and the Panic of 1893. And the US economy did much better this time around.

The Great Depression remains the worst of them all. GDP fell 30% and unemployment got to 25%. The Panic of 1893 saw GDP drop 5 to 10%, and unemployment peak at 12 to 18%. (Measures for that period remain crude.) The Great Recession was less severe: US GDP dropped 4.7% and unemployment topped out at 10%.

The key to our escape from what might have been a replay of the Great Depression was massive, directed spending on the part of the federal government, and perhaps more importantly, a commitment on the part of the Federal Reserve to pump cash into the economy, to prevent deflation. By one measure, US GDP in 2010 was 13% higher than it would have been in the absence of Fed and fiscal action.

It is not generally appreciated that the initial drop in economic activity during the 1st 3 quarters of the Great Recession during 2007-08 was in fact STEEPER than 1929-30. In other words, at the outset, the US was on track for a 1930s-style depression. The difference, according to the best research on the subject (cited below), was aggressive fiscal and monetary intervention.

Financial bubbles happen when banks continue to pour money into an economy, even as asset prices inflate. When banks collectively get cold feet and stop lending, asset sellers quickly outnumber buyers, and prices collapse – as they do, a lot of money vanishes. It doesnt merely change hands – it ceases to exist – no longer available for borrowing, investing or buying. In 1893, the asset bubble was concentrated in railroads. In the Great Recession, it was housing. In the Great Depression, the bubble wasnt specific to a particular industry. In all three, the crash was preceded by a massive run-up in private-debt, followed by a prolonged economic malaise, in which banks were insolvent, and personal savings was wiped out – there was no money left in private hands to buy anything.

Getting out of such a funk takes time. With the Panic of 1893, real per capita GDP needed 6 yrs to get back to 1892 levels. And even after it did, unemployment (which lags behind other indicators) was 12% – the economy wouldnt get back to full employment until 1900, 7 yrs after the bubble burst. The Great Depression was worse: real per capita GDP didnt get back to its 1929 level until 1937, and full employment wasnt achieved until World War II.

By comparison, real per capita GDP after the GR needed 5 years to get back to its 2007 level. Full employment (which is not well defined) may be achieved next year, which would make for a 7 to 8 year recovery. Not quite 5 1/2 years since the GR began in Dec 2007, unemployment today is a manageable 6.7% (though labor force participation remains quite low). 5 1/2 years after the Panic of 1893 and Great Depression, unemployment was still in double-digits.

The relative shallowness of the Great Recession – both in unemployment and GDP contraction – can be directly attributed to a policy of deficit spending by the federal government, and aggressive action by the Fed to shore up banks and maintain money supply. The aim of these policies at the time was to take the edge off – and they succeeded. In 1893 and 1929, prices collapsed soon after asset values. During and after the GR, the US teetered on the edge of deflation but never succumbed – this alone may have halved the depth of the contraction.

The short of it is that financial crises dont make for ordinary recessions – the recovery that follows has always been slow, and is beset by persistent unemployment. But the US economy has come a long, long way since the dark days of 2008, thanks in large part to aggressive government and central bank action.



Click to access End-of-Great-Recession.pdf

great source for historical macro data:

help wanted: i’d be very grateful for a historical graph on private debt for the US that looks like this one for Australia:





How the GOP Became the Whites-Only Party

Immediately after winning the 1980 GOP presidential nomination, Ronald Reagan went to Philadelphia, Mississippi and gave a speech on “States’ Rights.” It was a curious venue for a curious subject. In the same southern town just 16 years previously, 3 civil rights activists were murdered by the local police department, the county sheriff and the KKK. “States’ Rights” had a special meaning: it stood for opposition to the civil rights movement. It would be like giving a pro-guns speech in Columbine today – a massacre which happened 15 years ago.

Reagan advisor Lee Atwater said in a 1981 interview, “You start out in 1954 by saying, ‘Nigger, nigger, nigger.’ By 1968 you cant say ‘nigger’…. So you say stuff like ‘forced busing, states’ rights’ and all that stuff…. You’re talking about are totally economic things and a byproduct of them is blacks get hurt worse than whites.”

Conservatism among poor whites was and is fundamentally about racism. The GOP, not by accident, but BY DESIGN, is a party for whites only. Though they feinted toward inclusiveness during the 90s, their Tea Party wing – birthers and all – still doesnt care enough about winning the White House to strike a deal on immigration reform – a necessary first step toward taking a fraction of the Hispanic vote – without which they have little chance of winning a national election.

LBJ knew that the Civil Rights Act would drive white southerners to the GOP. The so-called “solid south” had been wobbling since the 1940s, when Strom Thurmond formed the “States’ Rights” party, whose single policy goal was maintaining segregation. He took 4 southern states in the 1948 presidential election. Coming just 4 months after passage of the Civil Rights Act, the 1964 Presidential election saw 5 southern states go to the GOP, whose candidate, Sen. Barry Goldwater, voted and campaigned against the Act. With his home state, they were the only states he won. The same 5 states went to George Wallace in 1968, again running only on segregation. Wallace remains the most successful third-party presidential candidate of the past 100 years. Racism, and nothing else, was all it took to win the white southern vote. And still is.

One of Nixon’s advisers dubbed it “the southern strategy” – stripping the white southern vote from the DNC though appeals to racism. Remarkably, one facet of the southern strategy explicitly included pushing southern blacks into the Democratic Party, to lower that party’s stature in the eyes of racists. As a Nixon adviser put it, “The more Negroes who register as Democrats in the south, the sooner the negrophobe whites will quit the Democrats and become Republicans. That’s where the votes are. Without that prodding from the blacks, the whites will backslide into their old comfortable arrangement with the local Democrats.”

Success breeds success – Nixon’s “southern strategy” has grown to define GOP electioneering and politics, as increasingly virulent strains of conservatism have taken over the GOP – a once-great party with a strong liberal tradition. Since Reagan, GOP candidates have competed in general elections on Goldwater’s conservative policy positions, using Nixon’s electioneering strategy. The quadrennial GOP presidential candidate’s visit to the outrageously racist Bob Jones University (which forbids interracial dating) only ended after Bush Duh went in 2000, after which BJU unilaterally decided to withdraw from politics.

The language the GOP uses has evolved – where before we had “states’ rights” and “busing”, we now hear about “the takers”, “the 47%”, “illegals” – and then there are the birthers. The common element is belief in an “enemy within,” against whom a nation unifies in animus. Patriotism – nominally defined as love of country – is routinely expressed as hatred of particular people within it.

The birthers – crazies who suggest that Obama was born in Indonesia or Kenya – are NOT fringe elements within the GOP – they are mainstream. Mike Huckabee, Sarah Palin, Michele Bachmann and Newt GIngrich – all GOP national candidates – have made remarks sympathetic to or supportive of them.

And that’s how we got here – with many poor, white Americans supporting a political party that opposes there own financial interests. Among 46 million Americans in poverty, more than 30 million are white. Red states are themselves net recipients of federal dollars – receiving far more in federal support than they pay in federal taxes. Increasing the size of government almost invariably means that rich, liberal states will pay more; while poor, conservative states will receive more – and yet red-staters are against “big government.”

Almost 10 years ago, Thomas Frank took a crack at this issue with his book “What’s the Matter with Kansas.” His conclusion was that conservatives pulled a bait-n-switch on poor whites: luring them with demagoguery on cultural issues (abortion, death penalty, gay marriage, flag burning, etc.), in the hope that they wouldnt notice their regressive stand on fiscal issues (reducing taxes on passive income, slashing social insurance). There’s a lot of truth in his analysis – though Frank, a decent Kansan himself, was a bit too genteel in his conclusions.

In a Russian fairy tale, a genie appears to a peasant and says he will grant him any wish – on the condition that whatever he receives, his neighbor will receive double. After thinking it over for a minute, the peasant replies “kill one of my cows.” Poor whites have long taken pride that they’re somewhat less poor than poor  blacks. They remain content with losing, as long as they think those other folks will lose more.


Originalist Abortion

Conservative justices – Thomas, Scalia, Allito, Roberts (in descending order of extremism) – take issue with abortion rights because they believe, among other things, that they require us to “rewrite” the Constitution to gain a modern reading – that the Constitution’s 18th century drafters and ratifiers; and-or the 14th amendment’s 19th century drafters and ratifiers would not have subscribed to women’s reproductive freedom. These conservatives dont treat the Constitution as a “living document” – but instead would freeze it in time, holding its meaning constant since it became law, which occurred in 1791 for the Bill of Rights, and 1868 for the 14th amendment. Since people in 1791 and-or 1868 would not have regarded abortion as a right, they will argue, then we should not. This style of Constitutional interpretation is called “originalism.”

Clearly, if the Constitution’s protection of privacy evolves with modern sensibilities, then a woman’s dominion over her reproductive organs cannot be seriously questioned – almost every rich, modern country – including the US – has resolved this issue to permit abortion on demand, without significant limits. But a woman should also have the same rights to early-term abortion under a conservative, originalist reading of the Bill of Rights and 14th amendment.

Few people know that when the Constitution and Bill of Rights were ratified in the late 18th century, early-term abortion was legal in EVERY state – and had been legal under the common law for centuries. In fact, abortion was legal in every US state from colonial times up until 1821, when Connecticut passed the US’s very first anti-abortion law.

The roots of legal abortion predate American history. The Christian philosopher St. Augustine (4th century AD) adopted Aristotle’s moral reasoning (4th century BC), sanctioning abortion until the “quickening” – when the fetus is felt to kick, which doesnt happen till after the 1st trimester. Thomas Aquinas (13th century) adopted Aristotle’s belief that the soul entered the male fetus in the 40th day (90th day for females!) – and so also permitted early-term abortion. The Catholic Church followed these prescriptions, and permitted early-term abortion until 1869.

What even fewer people know is that early 19th century anti-abortion laws were adopted NOT to protect fetuses or embryos, but to protect women from a potentially dangerous practice. Such laws did not necessarily address abortion per se, or women, but the drugs that induced abortion, and the druggists who dispensed them. The Connecticut law is a good example – it outlawed “abortifacients” – poisons which were used by women to induce an abortion – and subjected apothecaries to prosecution for distributing them. Like most early 19th century anti-abortion laws, the Connecticut law did NOT subject women to penalty or punishment for abortion. Most of the early laws did not apply to early-term abortions in any case. And despite such laws, abortifacients were widely advertised in major US cities throughout the mid-19th century; during which time abortion remained quite common in America – most frequently practiced by married Protestants, right through the 1860s, when abortion laws first targeted women.

Some of the founding fathers objected to adding a Bill of Rights to the Constitution. One specific fear was that if we had a discrete list of rights, someone could argue that a particular right’s absence from the list was evidence that it was not a right. To cure this problem, the 9th amendment was included in the Bill, expressly stating that “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” it’s primary purpose is to prevent one specific legal argument: you cannot construe the absence of a “right to abortion”, for example, in the text of the Constitution as indicating that the right doesnt exist. (The charm of conservatives is their fondness for seizing on the one Constitutional interpretation that the Constitution itself forbids!)

Even if the 9th amendment evidences the existence of other rights, one cannot argue that everything a person was allowed to do in every state in 1791 (and-or 1868) is a human right. But abortion is special – it’s hard to imagine anything more intimately personal – nor an interest into which the intrusion of the state is more noxious.

Early anti-abortion laws were meant to regulate the practice of medicine, and protect women, not fetuses. Laws aimed at forcing women to take pregnancies to term were quite uncommon before the 1860s. An originalist reading of the Constitution must incorporate the fact that early-term abortion – from colonial times, right through the mid-19th century – was an entirely acceptable part of mainstream American life. A law outlawing the practice entirely would likely have shocked an 18th or 19th century sensibility. For these reasons, abortion should be regarded as a Constitutional right, whether you give the Constitution a modern or an originalist reading.


good articles on the history of abortion in the early US:

other background info:

19th – early 20th cent. ads for abortion drugs:

PS Roe v. Wade’s holding is based on the due process clause of the 14th amendment, which has been interpreted to require the states to respect most of the explicit and implicit rights in the bill of rights. In the case of Roe, this is the right to privacy – that states cannot insinuate themselves into such personal decisions made by a woman in consultation with her doctor.

Prior to the 1920s, the states were NOT bound by the bill of rights – in state court, you had no constitutional right against self-incrimination, privacy, counsel, speech, etc. This changed primarily during the 1960s, and today states are bound by most (not all) of the rights specified or implied in the Bill of Rights.