Ill-Timed Fiscal Responsibility

Imagine the kid least clear on the topic getting to deliver the lecture in class and you get a sense of what happens to economics in a modern democracy.

Democrats are talking fiscal responsibility now. They've heard from their districts that Americans are aghast at our level of deficit spending. And, of course, Republicans have been harping on deficits ever since spending plans have shifted from the military to health. This is terrible timing.

Geithner and Obama have both signalled that they're aware of the need to reduce deficits and that they dare not do it too soon at the risk of tilting us back into a recession.

When the economy was expanding, the Bush administration ran chronic deficits and hardly a word was said. This was ridiculous. Large deficits during good times guarantee huge deficits in bad. And deficits in good times just fuel speculation, price inflation, and new ventures that cannot be sustained. It is during good times that we ought to speak out against deficits but it is during good times that a people feel they can afford to take on such debt.

During bad times, there is a sense that we spent our way into financial trouble and this reckless spending ought to be stopped. Americans in particular have always been uneasy about credit. Few remember that commercial credit met as much opposition in the late 1800 and early 1900s as homosexuality meets today: the apostle Paul wrote more clearly and as often about avoiding debt as he did homosexuality. We get very moral about debt during bad times. This is unfortunate, like getting squeamish about blood during surgery.

Deficit spending is necessary during bad times and is - at best - an annoyance during good. Economics is, of course, continually subordinate to popular opinion in a democracy, so what makes for good policy matters little. Lots of people claim that medicine is a conspiracy but the individual who believes in modern science and medicine can still visit a doctor: if enough people see economic policy as a conspiracy rather than the best we know, all of us get banned from seeing the doctor. Talk show hosts who fell asleep during economic lectures will fume and sputter and callers will chime in with their outrage and these kinds of people will send letters, organize voters, and set policy.

Keynes was a genius but there are lots of coffee shop diners who understand economics better than he did (and, presumably, understand physics better than Einstein). For the record, Keynes recommend government surplus in good times and deficit in bad. Right wing talk show hosts recommend the opposite. You take a guess as to who can be trusted more.

News from Week One of the Obama Era

President Obama warned Republicans on Capitol Hill today that they need to quit listening to radio king Rush Limbaugh.

On a related note, Pastor Rick Warren warned gays to quit lusting after each other.

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Caroline Kennedy dropped her bid for Clinton's Senate seat. Apparently, being a part of America's most famous political dynasty was not enough to compensate for the speaking style of a nervous high school student, a refusal to give up her privacy, and a disinterest in politics.

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President Obama has decided that the best way to rectify the madness of the Bush administration is to pass a trillion dollar stimulus package while cutting taxes for 90% of Americans. Spending money like a drunken sailor while slashing taxes. Hmph. Now why didn't Bush think of that? This should change everything.

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Illinois Governor Rod Blagojevich continues to give Blagojeviches everywhere a bad name. He claims to be the victim of a plot to raise taxes. I would try to make fun of this but that would be like painting over a Van Gogh to make it look better.

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The Apple Macintosh turns 25 on Saturday. Still the only computer to be first marketed as a smart toaster, even Wozniak expressed surprise at the product's enduring success.

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One of Nigeria's biggest daily newspapers reported that police implicated a goat in an attempted automobile theft. In a front-page article on Friday, the Vanguard newspaper said that two men tried to steal a Mazda car two days earlier in Kwara State, with one suspect transforming himself into a goat as vigilantes cornered him.

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Timothy Geithner was confirmed as Treasury Secretary this week. Geithner's disinterest in paying taxes was apparently no obstacle to congressional approval for him to head the IRS. In his defense, Geithner said that it was not as if Defense Secretary nominee William Lynn carries a gun. When asked by a confused Max Baucus what relevance this had, Geithner squinted his eyes shut and, witnesses claim, began to baa.

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Republican Party leaders have confessed in private to utter confusion about how to define themselves. With the collapse of communism as a sure enemy and the Democrats now offering big tax cuts and the poor marketing response to their plan to rename minorities as "magic Negroes," Republicans are now floundering through an identity crisis.

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Sources close to Supreme Court Chief Justice John Roberts explained why he stumbled in his delivery of a mere 35 words for Obama's oath of office. "He was more than a little befuddled when he found himself face to face with Obama," they explained. "No one had told him that Obama is black."

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And this blogger is 3X happy. Not only is Dubya gone and Obama in, but the folks in politics are still providing "can you believe it?" material for our amusement. At least we're getting something for our tax dollars. And this might just be proof that as we approach the perfect society, we'll still have politics. How do I know this? Because a perfect society has to include humor and really, doesn't the existence of humor argue for the persistence of politics?