Morning Jay: There's a Bad Moon On the Rise
6:00 AM, May 27, 2011 • By JAY COST
Since the end of World War Two, the political class has basically had to manage the country's rapid economic growth. That hasn't been a cakewalk, but managing growth has been relatively easy: you can spend billions on guns or butter, without taking too much from the average middle class American taxpayer. Yet these days are over. Now, our political leaders have to manage decline -- for even if the economy continues to grow, it likely will not grow fast enough to pay for all the financial obligations the elites made when they foolishly assumed that the days of 4 percent growth would last forever.
The great political scientist Harold Lasswell once famously defined politics as, who gets what, when, and how? In the postwar age of perpetual growth, we've long thought of that in terms of who is going to get the extra revenues that our ever-growing economy is producing for us. But now, with our huge budget deficit and weak economy, it'd be better to classify our current politics as: who loses what, when, and how?
Any partisan who thinks their side has an inherent advantage in the battle of assigning losers is deluding himself. The Democrats have long argued for increased taxation to distribute more income to the lower classes. The Republicans have long argued for decreased taxation to spur business, coupled with free-market mechanisms to make social welfare more efficient. The response of the American public over the last thirty year? Regularly divided government, so that one side inevitably checks the grand ideological ambitions of the other, and nothing really changes. In other words, the public has consistently voted for the status quo over the Democratic plan and the Republican plan.
Sooner rather than later, this status quo must give way. No more guns, butter, and low taxes. At least one of them has got to go, and millions of Americans are going to lose something on the deal. How will that play out politically? Honestly, I do not know. But I can say two things for sure:
One, the political process, which has been ugly for some time, is going to get a whole lot uglier. You thought the Republicans and Democrats were vicious when they were fighting over a growing pie? Just wait until they finally catch on that the pie has to start shrinking.
Two, anybody who tells you what is likely to happen in 2012 is fooling themself. One way or the other, the country has voted for the status quo in just about every election for the last thirty years. What do they do when they realize that they can't vote for the same thing anymore? The tiresome pundits don't know, the statistical "gurus" don't know, and the wonky poseurs don't know. If they say otherwise, it's simply proof that they don't really get it.
Make no mistake: there's a bad moon rising on Washington, and it's foreshadowing a politics of decline that is going to dominate the election of 2012, and beyond.