Those who have plenty of capital to invest are holding back because consumers don’t have enough cash. But let’s not give potential middle-class buyers jobs and money to spend. No, let’s heap yet more resources onto investors. And if sharp guys made fortunes writing abusive mortgages, let’s repeal all the rules we just passed to prevent them from doing the same thing again.
Better yet, don’t blame the people who got the windfalls. Blame poor people. Thus did Rep. Michele Bachmann place responsibility for the mortgage mess on the Community Reinvestment Act (CRA), a law aimed at preventing discrimination against people in neighborhoods, many of them predominantly African American, where banks wouldn’t make loans. The CRA had nothing to do with the proliferation of subprime mortgages; old-fashioned greed did the trick there. But it’s so much easier to pass the buck to the powerless. They don’t make many campaign contributions.
Then there is Herman Cain’s 9-9-9 tax plan, the only policy proposal to get really serious attention at Tuesday’s encounter. The biggest flaw in Cain’s scheme barely got discussed. It is designed to shift the tax burden away from the wealthy and toward the middle class and the poor by cutting income, corporate, capital gains and estate taxes. It would then collect a lot of new money from a 9 percent federal sales tax, layered on top of existing sales taxes. Plutocracy, thy name is 9-9-9.
Former Massachusetts governor Mitt Romney, who dominated the debate, is much smoother than his adversaries. He even had some good words for the struggling middle class and spoke with concern about getting health insurance to children. (Romney’s desire to provide poor children with a chance to see a doctor will surely bring charges of socialism upon the architect of Obamneycare.)
For the most part, though, Romney was selling the same wares as everyone else. “The answer is to cut federal spending,” he said. “The answer is to cap how much the federal government can spend as a percentage of our economy and have a balanced budget amendment.” But wait: This was the answer to every question that was posed in New Hampshire. There’s no problem that can’t be solved if the federal government just does absolutely nothing about it.
And thus spoke Republicans in the Senate on the same day as the debate. In any other democracy, we would say that Obama’s jobs bill passed its first test in the Senate because 51 out of 100 senators supported moving it along. But not in America, where we now require 60 votes to get a bill out of the Senate — even though our Constitution, supposedly so revered by conservative “strict constructionists,” says absolutely nothing about a Senate supermajority.
The jobs bill is a pretty simple mix of tax cuts and spending on popular items such as schools and roads. Its core idea accords with what the vast majority of economists (and a lot of businesspeople) think needs to be done: In the absence of private-sector investment and job creation, the federal government should be the investor of last resort to get the economy moving. This should be an urgent priority with unemployment stuck at more than 9 percent.
But no, “don’t do something, stand there” is the order of the day. Every Republican senator present voted to block the jobs bill. Government is to be powerless because the country’s most energetic ideological minority has declared that it must be powerless.
Years ago, Rep. Barney Frank, the Massachusetts Democrat much maligned during the Post-Bloomberg debate, introduced me to the concept of “Reverse Houdinis.” They are people who tie themselves up in knots and then declare, “I can’t do anything because I’m all tied up in knots.” We seem on the verge of putting Reverse Houdinis in charge of our government.