What. Just. Happened?
On December 16, 1773, about 60 Bostonians, dressed as Native Americans climbed onto ships and proceeded to dump about $700,000 (in today’s currency) worth of British tea into the murky waters of Boston Harbor. These “Sons of Liberty,” led by Samuel Adams, second cousin to the future president, John Adams, were angry at the British Crown for the imposition of the Tea Acts earlier that year. “No taxation without representation!!” was the clarion call that we associate with this and other key events in the lead up to our Declaration and subsequent War of Independence. But interestingly, the Boston Tea Party was not this rational reaction to the imposition of import tariffs. As Chris Hayes points out in his book, A Colony in a Nation, the British Crown had actually lowered tariffs on the tea sitting on those ships in Boston Harbor. At the time of its sinking, British tea was cheaper than its Dutch competition that had for years been illegally smuggled into the colonies. The issue, according to Hayes, was the Crown’s insistence on enforcing its monopoly on commerce and trade in the empire. The laws had been on the books for decades but had been largely ignored. The Dutch had smuggled contraband tea and other goods into the colonies while the British customs officials had politely turned a blind eye. The colonists had benefited from all of this commerce but now, in the 1770s, Britain needed money to finance its European wars. Extracting revenue from the colonies seemed a logical solution.
The colonists disagreed and a myth was born. “No taxation without representation!!!” But it was all about enforcement.
235 Years Later
On February 19, 2009, a new tea party movement was born on the floor of the Chicago Mercantile Exchange. CNBC reporter Rick Santelli, railed against the Obama Administration’s plans to help troubled mortgagees who were in jeopardy of losing their homes after they found themselves underwater and unable to refinance their mortgages. He screamed nonsense about “deadbeats” and “losers” who did not deserve taxpayer handouts and called for a new “tea party.” Soon, conservative activists, already motivated by the Obama backlash sweeping the right-wing fever swamps, saw their ranks swell with angry and scared voters hell-bent on stopping the President and the Democrats from spending their grandchildren’s future into oblivion.
Vehement warnings of budget deficits and the national debt that would eventually destroy the global economy coupled with fears of Obama’s globalist attempts to destroy America with socialized medicine catapulted ultra-conservative Republicans into all levels of public office. Democrats lost the House in the 2010 mid-terms and soon thereafter, Congress’s ability to pass a budget that would last more than a few months became an impossibility. The Tea Party became the House Freedom Caucus, fiscal conservatives who demanded a reduction in spending for every dollar lost in revenue. And did I mention that the entire world was in the worst recession since the great depression? Oh! And that the recession was subsequent to a financial meltdown initiated by American bankers and mortgage underwriters? It was.
In December, Republicans passed one of the largest tax cuts in our history. (Trump would like you to believe it was the largest. It was not). It was done with 51 votes in the Senate and fiscal conservative (Freedom Caucus, the new name for the Tea Partiers) support in the House. The Congressional Budget Office, even with dynamic scoring, estimated that the plan would result in over $1 trillion of added debt over ten years. Ironic? No. Because in the fiscal conservative parlance, budget deficits and debt resulting from tax cuts are acceptable for two reasons:
- Taxes are immoral. Government is evil. No good can come from giving money to government beyond what it needs to secure the borders, police the streets and intimidate the world with guns, tanks, and bombs. Tax cuts give Americans back their own money. Tax cuts are moral. (This is not Amy the Progressive speaking. This is the actual conservative argument, albeit dressed up with a bit of ‘Amy Flair,’ just to make it interesting).
- Tax cuts create a larger national debt which provides the impetus and need for spending cuts. Where do we spend the most money? Social Security, Medicare, Medicaid and other social safety net programs. Tax cuts essentially “starve the beast” and will lead to “shrinking of government” which is the ultimate objective of the modern conservative movement and the Republican Party.
So this is what I expected. Tax cuts followed by a spending bill that would reduce government oversight and potentially endanger important programs that progressives have championed for decades. Republicans have done such a good job messaging the evilness of government that no one seems to care when it is in danger of shutting down. (As a side note – everyone should care a lot when the government shuts down. Citizens have no idea how consequential government agencies and their employees are to our everyday existence). The Trump Administration has governed as no recent conservative has governed before rolling back hundreds of regulations and refusing to fill key positions. Another side – we should all be concerned here too as despite what opponents might suggest, regulations have purpose and vacancies will have a negative impact. Disagree? Think about your own company. What happens when the manager decides not to backfill when Jane goes on maternity leave or Bob quits? Why do you think the government would be different? Exactly.
But just like those Sons of Liberty who dressed up like Native Americans in 1773, all is not as it appears. Yesterday, or rather early this morning, Congress passed, and the President signed, a two-year budget resolution that increased spending by hundreds of billions of dollars. Moreover, this increase in spending will add over a trillion dollars to the national debt over the next decade. Now we can discuss the consequences of our national debt at any time; it is a fair discussion and there are good arguments on both sides. As a progressive, I am vehemently opposed to a balanced budget amendment and a return to the gold standard. I do not get worked up over deficit financing as long as the money is spent on wise investments that will lead to productive output. Moreover, the total debt needs to stay within a specified percentage of GDP. (It works just like personal debt. Think about the last time you applied for a mortgage. The underwriter looked at your income, expenses and existing debt to determine your income to debt ratio. It is the same concept here only with trillions of dollars!) But while I am supportive of domestic spending in comparable amounts to defense, I question the results of pumping so much money into the system at a time of nearly full employment.
Despite Republican claims to the contrary, the economy under Obama had been steadily improving since the 2009 financial apocalypse. Make no mistake folks, the world was on the brink of a depression back then, something that no one alive had ever experienced. In our age of instant gratification, we expected immediate recovery and when that failed to materialize, it was easy to blame Obama for the lackluster economic results. Were mistakes made? Of course. Was the slow but steady recovery a negative reflection on the 44th president? Absolutely not. If anything, Barack Obama will be recorded in history as the chief executive officer who guided the nation and the world through an incredibly perilous period of time.
So the economy had recovered by 2016, but certainly, it had taken time and as it recovered, it looked different. Trump’s regulation reversal and the tax cuts helped supercharge an already bullish stock market. With so much money in the system and employment at record lows, government spending at these increased levels will likely mean inflation and an interest rate hike. Adding so much debt now makes little sense even to progressives but we will take it given how stingy the Republicans have been in the last two Congresses.
Will the Republican Party return to its fiscal conservatism if and when it loses its majority in Congress? What if Trump loses his bid for re-election? In his book, “How the Right Lost Its Mind,” conservative talk-show host, Charlie Sykes, makes the point early on that the modern Republican Party failed to acknowledge a stunning reality: it did not have a base of support for its conservative agenda. The party had spent decades crafting and honing a message of small and limited government, individual responsibility and freedom, and family values. As it turned out, the GOP base agreed with party elites until the impact of those conservative policies affected them and their families. The base wanted Republicans to repeal Obamacare, but they really meant that they wanted the government to take away healthcare from the undeserving. And of course, they wanted the government to step in and make sure that their healthcare premiums and deductibles were affordable and that pre-existing conditions were covered.
I do not know if this reality led to this week’s Twilight Zone episode but I will tell you, I am confused. Up is down, down is up. The sky is green and the clouds are blue. In the Age of Trump, nothing is sacred or normal. Hell, in the Trump Age, a pedophile can come damn close to becoming a United States Senator (with support from the party and the President) and an Army General serving as White House Chief of Staff can allow an accused wife beater without a security clearance to have access to our nation’s most classified materials. In Trump’s Twilight Zone, Republicans write checks their asses cannot cash, Democratic presidential hopefuls plot strategy to reduce the deficit on their watch once the bottom falls out, and the average American sits on their couch wondering, “What. Just. Happened?”
All is not what it seems.