The farm bill and Big Government Conservatism

By Frank Moraes 

A lot of people wonder what a liberal like Dean Baker means when he writes a book like The End of Loser Liberalism. He means a lot, of course, and you should read it because that link provides the book in various electronic formats that are free. But mostly what he means is that the whole paradigm that we have of liberals being for big government and conservatives being for small government is just dead wrong. I write about this a lot myself, but I'm not sure that I didn't originally get the idea from him. The fact is that conservatives are just for a different kind of big government. Most of the time, it is even bigger than the government liberals want. What's more, it is infinitely more pernicious. My favorite example is that liberals want to spend money on libraries. No one ever lost their liberty because of public libraries. Yes, I know: conservatives think that taxation is theft, but that doesn't stop them from taxing for whatever it is they want. And the things they want to tax for really are associated with the loss of liberty: armies, spying, vaginal probes.

Yesterday, we had as clear an example of this divide as we will ever have. The farm bill is normally a very popular thing. Rural representatives like it because it gives money and price supports to farmers; urban representatives like it because it gives food (mostly in the form of food stamps or SNAP) to poor people. But when the House tried to pass a farm bill last month, it failed. Democrats didn't like it because it made savage cuts to SNAP. The most conservative Republicans didn't like it because it didn't cut SNAP enough. So in order to get a farm bill passed, the House Republicans split the farm bill in half: part for farms and part for SNAP. And they passed the "farm only" bill and said they would get to the "SNAP only" bill later.

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Conservative goals and the NSA

By Frank Moraes

Yesterday, I happened to hear David Brooks on NPR. He was asked about the huge NSA surveillance program. He said, "I'm somewhat bothered by the secrecy, but I don't feel it's intrusive. Basically, they're running huge amounts of megadata through an algorithm. That feels less intrusive to me than the average TSA search at the airport. And so I don't think it's particularly intrusive. It is supervised by the court. It has some congressional supervision." Okay, it's Brooks. What's the big deal?

Well, that morning, the Wall Street Journal editorial page wrote, "We bow to no one in our desire to limit government power, but data-mining is less intrusive on individuals than routine airport security." I think it is interesting that Brooks is brought on NPR as a "reasonable" Republican and he just spouts the WSJ editors. Brooks is not supposed to be just some random politician; he's supposed to be an independent thinker. But let's leave that aside.

Jonathan Chait wrote a good article yesterday, "Conservative Freedom Lovers: You're Doing It Wrong." In which he showed the cognitive dissonance in the conservative movement regarding issues of freedom. For example, noted that Jack Welch is a-okay with the NSA spying, even as he claimed that Obama was secretly manipulating the Jobs Report for his own nefarious purposes.

Or consider Roger Vinson, who was one of the lower court judges who struck down Obamacare. He claimed that if the government could force people to get health insurance, it could force them to do anything. So he's a big believer in freedom. Or at least certain kinds of freedom. As Chait noted, "Judge Vinson has reentered the news for having approved the National Security Agency's program of collecting all of the phone records in America."

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Debt interest burden

By Frank Moraes

A couple of days ago, Dean Baker published one of his weekly "Robert Samuelson is an idiot" articles, It's Monday and Robert Samuelson Is Confused. It's a good article. I always look forward to Mondays because Samuelson is a Very Serious Idiot and Baker really does have something to say about him every week. So click over and read it, if you like. However, I bring it up, because Baker touched on something that I would like to expand on.

Baker often pushes an important idea that very few people talk about: government debt versus debt interest burden. Let me explain this with an example. Assume a country named Freedonia. Currently, long-term (30 year) bonds on Freedonia debt pay 1%. Freedonia needs to borrow $100, so they issue a bond for it. This means that their debt is $100 and their debt interest burden is $1 (1%) per year. Now let's suppose that the Freedonia economy starts to improve so that next year, the bond rate jumps way up to 3%. The government still has all its $100 debt locked into a 1% bond, so nothing changes—at least not for another 29 years when the $100 principle will be worth almost nothing anyway.

The person who holds the $100 bond will lose out in this situation. He is now making $1 per year. But if he made the same investment now (in long-term bonds), he would get $3 per year. So his bond is effectively only worth $33 now. Indeed, if he wanted to sell it, he would only get $33 for it (See Afterword below). So the government of Freedonia could borrow $33 (by issuing a new bond) and buy back last year's $100 bond. Thus, the government would have decreased its debt by two-thirds! Woo! Now Freedonia only owns $33!

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Robert Reich whistling in hell

By Frank Moraes 

I really value optimistic people. But I don't pay much attention to them. Two of my favorite political writers are Dean Baker and Eric Alterman, or as I think of them, the Depressing Duo. Or "Pessimistic Pair" if you prefer. Alterman perpetually looks like his first girlfriend just dumped him. Baker has transcended that and is on to that period when you are sarcastic about everything. But I read them because (1) they are brilliant and (2) they are right to be depressed. But sometimes, rarely, an optimist is right. So you have to pay attention.

There is an old Far Side cartoon I remember. It takes place in hell. Everyone is working very hard. There are all miserable. Except for one guy. He is pushing an over-filled wheelbarrow and whistling a happy tune. Two demons overlook the scene and one says, "I don't think we're getting through to that guy." That's how I'm feeling about Robert Reich today.

He posted an article that seems pretty compelling even if it seems on the far side of Pollyanna, "TARP is Over, But the Bailouts Will Continue Until the Big Banks are Broken Up -- And Washington Knows It." He notes that the chairman of the House Financial Services Committee, Jeb Hensarling -- a Republican, of course -- wants to break up the banks. And so does the Dallas Fed. So he argues that all we need is one more big bank loss and we will get a better banking system.

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