I see I haven’t written about politics since January.  This isn’t because there hasn’t been any, but because the main issues are technocratic.  We’re in a huge economic meltdown and only blowhards are sure that they know how to get out of it.  There are debates among the grown-ups on how much stimulus we need, how to deal with the failing banks and insurers and auto makers, whether to nationalize or just buy up toxic assets, but I’m certainly in no position to offer good advice.  Solving the Israel-Palestine problem, sure, any pundit can do that, but ending this kind of recession, where major industries have tanked and monetary policy has run out of juice, is tricky.

Meanwhile, the Republicans are trying to see what new lows of hypocrisy and irrelevance they can plumb.  The party that trashed Clinton’s surpluses, that increased the size and scope of government, that spent a trillion dollars on war and another trillion on bailouts, that told us deficits don’t matter, now wants to be seen as the voice of fiscal responsibility?  That would be hard  to swallow in ordinary times, but it’s completely out of touch in a deep recession.  Republicans aren’t participating in the debate because they’re not even able to face the problem.  They want to blame government and taxes because that’s the only problem they know (well, that and culture wars, but even they know that that’s not going to fly right now).

Possibly not everyone reads Krugman obsessively, so I should clarify.  An ordinary recession can be fought by lowering interest rates: that makes it easier for businesses to get loans and invest (and for the rest of us to buy houses and go on credit spending sprees).  That doesn’t work in the present situation, because the federal funds rate is about as low as it can go.

A recession isn’t a moral problem; it’s a technical one: businesses and consumers have both cut back, and underconfidence becomes a vicious circle: firms don’t invest or hire because sales are low; this leads to layoffs which reduce consumer spending, so sales get lower, etc., etc. Consie talking points like letting industries go bankrupt and increasing savings and lessening government spending are precisely what we don’t need: we need to increase production, not lower it.   The GDP gap looms: the difference between what the economy is providing and what it can provide; currently it’s about 8% of GDP.  The stimulus bill is about 3% of GDP, which is why Krugman worries that it’s too small.

So, is there any hope for the GOP?  Not right now; as party chairman Michael Steele discovered, the loonies are in charge and they’re not budging despite losing two elections in a row and facing a president with a 63% approval rating.  The name-calling seems more desperate than ever (Obama is no more a “socialist” than he is a Muslim) and as for talk of secession— please, go ahead.  Now there’s a winning strategy for the GOP: throw away Texas’s 34 electoral votes!

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