CARLSON AND PATEL: How Congress, Wall Street and the media traded America’s future for the next short-term fix
If someone had woken you from a dead sleep 20 years ago and asked what the Republican Party stood for, you would’ve had no trouble answering: Fiscal restraint, a strong national defense and lower taxes. Those were the three pillars of the GOP. The party’s brand was clear. Voters understood it, and many approved. In the days before Obama, Republicans won seven out of ten presidential elections.
Things have changed for the muddier. Scratch the surface and you’ll find there is no longer a consensus among Republicans on foreign policy. Fiscal restraint? Years of earmarks, record deficits and at least one new federal entitlement under Republican congresses make that idea a bitter joke.
Of the three principles that have united the party since Reagan, only taxes remain. Republicans have been able to claim — sincerely, and with continuing success at the ballot box — that they are for lower taxes.
Here’s what happened: For reasons that aren’t entirely clear but are probably related to panic and a basic lack of principle, the Speaker of the House and other Republicans in Congress signed on to Democratic calls for “balance” between tax hikes and spending cuts — this despite the overwhelming evidence that spending is the real problem.
So, even before the negotiation began, they abandoned decades of principle on taxes. The result: Two months later, we have a deal, but no balance. It’s all tax hikes. Zero spending cuts. Nice job. (RELATED OPINION: Congress should dive headlong off fiscal cliff)
Many contended Republicans had no choice. The effects of the fiscal cliff were so severe, they said, that a deal — any deal — was imperative. Republicans would be blamed if negotiations fell through.
Recognize this argument? It’s common on Wall Street, where nothing matters but the next fiscal quarter. It pretty much sums up why America is in such steep decline.
Consider what happens to companies that worry only about the most imminent financial report. They do everything possible to push problems down the road while maximizing the shortest-term benefits at all costs. Companies like this may post impressive numbers for a time. In the end, they go bankrupt.
This is a well-known corporate phenomenon and commentators regularly criticize it. Managers like Warren Buffett, meanwhile — those who see past the next quarter and play the long game — get the praise they’re due. Yet somehow, when it comes to our country’s finances, it’s considered wild, even reckless, to think about anything but the few months ahead.
Nobody’s surprised that politicians make shortsighted decisions. They have elections to win. Voters often claim to want limited government, but the evidence suggests they love government largess even more, and this puts elected officials in a tough spot.
What’s changed in America is that leaders who aren’t in politics — the very people you’d expect to take a sober, math-based view of these things — are suddenly celebrating short-term thinking as the only responsible course.
Write down the name of every CEO who came to Washington to whine about the breakdown in our political system and ask them what they plan to do next. How are they going to pressure Washington to get the nation’s fiscal system back in order for the long haul? You won’t hear back from many, because virtually none of them plans to do a thing.
Fixing our long-term problems would be painful and unpopular, and they have no stomach for that. There’s the next quarter to think about.
Add to this a press corps that has all but refused to cover our coming fiscal nightmare, and you have what amounts to a conspiracy of silence, or maybe stupidity. Either way, virtually everyone in this country with the power to persuade has lost the willingness to look beyond next Tuesday.
Nobody liked the spending cuts wrapped into the fiscal cliff. Democrats don’t like spending cuts in general, and Republicans were rightly upset that most of the cutting came from defense and none from entitlements. But at least Congress would have been forced to reduce federal spending, the one thing we really need.
According to CBO projections, going over the cliff would have hurt in the short term, but within a year would have left the economy stronger, bringing unemployment down to 5.5 percent by 2018.
Five years may seem like eternity to the day traders in Congress and their enablers on Wall Street. But it will be here before you know it. Just ask the Greeks.