Stuff Rich People Say: Austerity Admissions and Banker Bonuses

Rich people should talk more openly, more often. It would make a progressive agenda a whole lot more achievable.

Consider Mitt Romney’s infamous 47% comment, for example. While President Obama’s brilliant grassroots campaign was always statistical favorite, polls showed that Romney’s display of contempt for hardworking families hurt him in swing states.

So it’s possible that conservative Daily Telegraph Jeremy Warner’s bold admission might offer some light at the end of the austerity tunnel:

But most of those who supported fiscal consolidation [aka austerity] would not have argued that it has nil effect on output and growth. I’m pretty sure I never have, for it stands to reason that if you attempt to rip big chunks of government demand out of the economy, it is bound to have negative short term consequences.
In the end, you are either a big-state person, or a small-state person, and what big-state people hate about austerity is that its primary purpose is to shrink the size of government spending.
The bottom line is that you can only really make serious inroads into the size of the state during an economic crisis. This may be pro-cyclical, but there is never any appetite for it in the good times; it can only be done in the bad.

In other words: yes, government spending cuts will hurt the economy. But that’s fine because austerity hawks really don’t care about the economy or indeed about federal debt. They just want to cut the parts of government that help hardworking families. Record defense budgets are fine, as are tax breaks and other giveaways for big corporations. But hardworking families are just “takers.”

As Paul Krugman writes, Warner’s admission explains why data that show austerity policies deepen and extend recession don’t sway conservatives. GOP leaders know another debt ceiling crisis will hurt the economy. But GOP voters don’t care:

And there it is: Republicans want Congress not to raise the debt ceiling, even if it would cause widespread economic harm.

I don’t really know how to explain this. Perhaps it’s confusion about the debt limit (not raising it, of course, would only cause default on debts already incurred), or maybe it’s an expression of generalized hostility towards something Obama wants. Or perhaps it’s that Republican lawmakers have been telling these voters for years now that spending under Obama is the leading threat to the survival of American civilization (even though the deficit is falling and there just isn’t any near term crisis to speak of), and that standing up to Obama in these epic spending confrontations is the only way to arrest the republic’s slide into total ruin. Apocalyptic intervention is required to salvage what’s left of our country, no matter how much harm it causes in the process.

And if Warren’s cutting admission weren’t enough, AIG CEO Robert Benmosche poured salt in the wound:

The uproar over bonuses “was intended to stir public anger, to get everybody out there with their pitchforks and their hangman nooses, and all that – sort of like what we did in the Deep South [decades ago]. And I think it was just as bad and just as wrong.”

So working families’ outrage at bankers giving themselves bonuses while the economy crashed was just racist bigots like hanging blacks from trees. Both the bankers’ and the blacks’ feelings were hurt, right?

Interestingly, the Wall Street Journal left that quote out of their original story and buried it near the bottom of the followup. Perhaps the Journal‘s editors agree with Mitt Romney’s claim that such topics should only be discussed in quiet rooms.

Conservatives want only rich people to hear the stuff rich people say….

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