Last night, Robert Reich made a decent point. Writing about the debt limit deal and yesterday's market sell-off, Reich wonders if Republicans are ready to take ownership of the problem.
John Boehner said Tuesday the Republicans got "90 percent of what we wanted" from the budget deal. So presumably he and his colleagues are willing to take responsibility for some 450 points of today's mammoth 513-point drop in the Dow Jones Industrial Average.
I'm being a bit facetious -- but only a bit. It's always dangerous to read too much into one day's move in the stock market.
Of course, there are a lot of factors that figure into the ongoing dive -- economic uncertainty in Europe, for example -- that have nothing to do with the US. But jitters about jobs and the threat of a double-dip recession are driving a lot of it. If Republicans got 90% of what they wanted from the debt limit deal, then Republicans now own 90% of responsibility for the economy.
So, preserving the tax cuts and avoiding any stimulus spending -- in fact, drastically reducing government spending -- ought to fix this right up. After all, didn't we just send a message to the world that we're going to get serious about spending and deficits? Didn't the market need "certainty" and didn't they just get it?
"Wall Street investors aren't ideologues," Reich says. "They don't obsess about budget deficits ten years from now, or the size of the government. One day doesn't make a trend, but a giant sell-off like this is motivated by hard, cold realities."
And those realities are that "the economy looks like it's dead in the water" and "investors now know the federal government's hands are tied." Thanks to Republicans, the US government has no way to fix this. Investors have their certainty all right. Unfortunately, it's the certainty that the US will stick it's head in the sand and ignore economic problems, hoping they'll all go away on their own.
I suppose we could try another round of tax cuts, because they've been working so great so far. The Bush tax cuts are driving up deficits and really not accomplishing much else, but the GOP is sure to argue that they didn't go far enough.
Still, the market worries about jobs, not taxes. And do you know why? Because they aren't complete idiots. Job growth -- or lack thereof -- is an indicator of consumer demand. Higher unemployment means lower demand, which means a weaker economy. Republicans like to argue that tax cuts for the wealthy spur job growth, but where's the evidence of that? Certainly not in America today. Demand creates jobs, demand creates wealth, demand creates federal revenues that drive down deficits. Demand is all and Republicans ignore it with their supply-side economics. Whether they want to admit it or not, Republican economic policies reduce demand. Austerity leads to stasis if done extremely carefully and decline if done carelessly. Growth and cutting spending just plain don't go hand in hand.
What I'm getting at here is that a lot of things need to be done and they aren't going to get done. Because Republicans will stand in the way and because, by getting 90% of what they wanted in the debt limit deal, they've made sure that what needs to be done has become impossible.
So the next time Republicans complain about jobs or economic growth, remember that they're trying to have it both ways -- setting 90% of US economic policy and claiming responsibility for none of it. When a Republican asks why what the president is doing isn't helping the economy, you'll know the answer -- because what the president is doing was the Republican's idea.