James Fallows says something I’ve been thinking, too: “For the first time in my conscious life, the Democratic Party is now more organized and coherent, and less fractious and back-biting, than the Republicans,” the correspondent for The Atlantic wrote in a recent online article. “It is almost stupefying to imagine that.”
Indeed. It actually started during primary season, when — as too many have forgotten — the Republican field seemed (and was) dominated by ridiculous figures. President Obama almost revived the Democrats’ old image with his bobble in the first debate, but he and his party pulled it back together. The Democratic campaign was professional, while the Republicans acted like the Keystone Kops. Karl Rove’s image has changed terrifying master of politics to overpaid crybaby.
But I’d go even further: the Democrats now look like the natural party of government. President George W. Bush had already established a reputation for being unable to get anything right in the actual business of governing; all that was supposedly left was political prowess, and now that’s gone too. And even the news media have, I think, begun to notice that the United States isn’t the “center-right” country of fantasy: we’re a diverse nation, ethnically and otherwise, in which a lot of liberal ideas have become perfectly mainstream.
Still, hubris and all that: this newly effective coalition could be shattered if taken for granted.
And you know what could really produce the kind of dispirited base that was supposed to doom Mr. Obama in 2012? A sellout on key Democratic values as part of a Grand Bargain on the deficit. If, say, Mr. Obama raises the retirement age in return for vague promises on revenue (promises that would be betrayed at the first opportunity) or if he appoints a deficit scold to a major economic post, it could all fall apart.
Death by Epistemology
Josh Marshall, the editor of Talking Points Memo, recently had an interesting discussion — partly with his readers, but also with himself — about the Great Republican Polling Debacle. It seems hard to believe even now, but all the stories indicate that the Republican Party went into Election Day in a state of complete delusion. It wasn’t just the Fox News viewers. It wasn’t just the Romney people. The whole party, base and establishment both, believed that it knew a truth hidden almost every nonpartisan polling outfit, and that a big victory was virtually assured. As Josh’s readers said, at one level this makes perfect sense. The modern G.O.P. is very much into denial of inconvenient truths, whether those inconvenient truths involve climate change or macroeconomics.
Why shouldn’t we expect a party that still believes in supply-side economics after the Clinton boom and the Bush bust to engage in voodoo polling too?
And yet Republicans retained for a long time a fearsome reputation for political prowess. How can these be reconciled?
I know that I’m not alone in believing that a large part of the answer is that they were never actually that good; they were just lucky. Remember, Mr. Rove almost blew the 2000 election by wasting time on a triumphal tour — and Al Gore would have been elected with ease if it weren’t for hanging chads, felon purges and a partisan Supreme Court.
With one exception, the G.O.P. lost the popular vote in every presidential election since 1988. And 2004 was a “khaki election,” driven by war talk — better yet for the G.O.P., an election driven by talk of the “war on terror,” where voters had no way of telling how things were going other than the Bush administration’s own boasts of victory.
Suppose Sept. 11 hadn’t happened. I think you can make a good case that Republicans would have lost Congress in 2002 and the White House in 2004, and nobody would ever have talked about the permanent Republican majority and all that.
The big question, however, is 2010 — which will have a long legacy, because it gave Republican statehouses the chance to gerrymander a major advantage in the House. My guess is that it was a very contingent event: bad luck for Mr. Obama on the business cycle, compounded by his own team’s mistakes, plus a weirdly ineffective defense of health-care reform. But I’m sure we’ll have a lot more serious analysis in the months to come.
BELEAGUERED EUROPE, BACK IN THE SPOTLIGHT
So, American voters have spoken and set the nation firmly on the path to destruction, according to the evangelist Franklin Graham — God’s wrath for gay marriage, you know. So we can relax a bit on that front and turn our attention back to Europe, which remains, as the economist Tim Duy says, very grim.
“We are now looking at another year of dismal growth in the euro zone,” Mr. Duy wrote in a recent blog post. “This crisis seems to have no end in sight.”
Europe has been out of the spotlight for a while, partly because of the election focus in the United States, but also because the acute financial strains have abated a bit. The European Central Bank’s apparent willingness to buy bonds has combined with what looks like a surprising willingness of peripheral economies to accept even more austerity; the result is smaller bond spreads and less immediate risk of meltdown. But the macroeconomics of austerity and internal devaluation haven’t gotten any better: Unemployment is still rising fast, and at some point the strain will just be too much to take.
And I think it’s worth pointing out that this isn’t just a Greece/Spain issue. If you look at the euro area as a whole, it has in effect been following drastic fiscal austerity with no offset on the monetary side.
On this page, the International Monetary Fund’s Fiscal Monitor, is one measure of the overall fiscal stance for the euro area, the cyclically adjusted primary surplus (that is, what the budget balance ignoring interest payments would be if the economy weren’t so depressed). That’s a big move toward austerity — 1937 big.
And as I said, not at all offset by anything on the monetary side. And Europeans wonder why the economy is in trouble.
Oh, and just to make things perfect, the European Commission is hitting back at the I.M.F. over austerity and reaffirming its faith in the confidence fairy.,
DUELING ECONOMIC ANALYSES
At the onset of the sovereign debt crisis in Europe four years ago, both the European Commission and the International Monetary Fund recommended the use of harsh austerity measures to reduce budget deficits in highly indebted nations.
However, fund officials revised their position in early October, arguing in the I.M.F.’s World Economic Outlook report that policy makers underestimated the negative economic effects of austerity. According to the fund, Europe faces a liquidity trap, where struggling euro zone members are unable to adjust exchange rates to offset the effects of austerity, and so these nations are experiencing the full contractionary effects of spending cuts and tax increases.
The organization recommended that austerity requirements be eased in the so-called “GIPSI” nations (Greece, Ireland, Portugal, Spain and Italy), and urged a renewed focus on supporting growth.
But a month later the European Commission published a report that contradicted the findings of the I.M.F. The Commission claims that the negative economic effects of austerity were not underestimated, and that they are instead in line with initial projections. The Commission also claims that most of the economic stagnation that troubled nations are experiencing has been caused by a loss of investor confidence. In other words, the recent economic contractions could have been prevented by more austerity.
Meanwhile, despite massive street protests, the Greek government recently approved a new round of spending cuts in order to qualify for more aid the nation’s creditors. The New York Times published an editorial criticizing this strategy: “Greece cannot pay off its debts when it is shutting down its economy,” the authors wrote.
Elsewhere on the Continent, in an attempt to lower indebted nations’ borrowing costs, the European Central Bank announced last month that it was willing to buy unlimited quantities of their bonds. The announcement itself raised confidence, and caused bond yields in Spain and Italy to fall.
