There are two types of economists at work today. There's the A Team, guys like Krugman and Stiglitz. There's the B Team, guys like Harper and the people advising American politicians. The A Team win Nobel Prizes. They foresaw the great American meltdown, what Robert Reich calls the Great Recession, and warned everybody and anybody who would listen that it was coming. Then there's the B Team economists, those who, well after the fact, said no one could have seen the Great Recession coming and the same gang who, today, say the answer to America's (and other countries' economic woes) lies in Draconian spending cuts.
The powerful didn't listen to the A Team last time and it cost their country dearly. That enabled their financial institutions to go on a crazy bender, all in the name of Casino Capitalism. It started a trend that continues to rock the world today and is far from over. The powerful didn't heed the A Team warnings that they were heading for trouble and, now, they're ignoring the A Team warnings about making those troubles infinitely worse.
The B Team, the pompous halfwits who didn't see this mess coming, say the way ahead now demands massive cuts in government spending. And that's going to mean finding money in working class entitlements such as Medicare and Social Security in order to preserve upper class entitlements also known as the Bush Tax Cuts for the Rich. Curiously enough, a lot of working class Americans who drape themselves in flags and march to the fife and drum think this is a good thing but I did say they're curious.
As Economic Disaster One has been averted, temporarily, it paves the way for Economic Disaster Two to unfold. The Campaign for America's Future has identified four ways the spending cuts will impact blue and white collar Americans.
1. You'll be less likely to find a job if you're looking. If you've got a job, you're less likely to earn more money - and more likely to lose it.
2. Your housing value is likely to suffer.
3. Your old age just got scarier.
4. Your tax bill is likely to go way up.
What Congress has created isn't really an austerity programme at all. It's a "disparity" programme, one that simultaneously enshrines federal largesse for the super rich and deepens the already cavernous inequality gap between rich and poor. They may try to pitch it as a temporary, emergency measure but the cuts to Social Security, Medicare and other working class benefits will be every bit as permanent as the tax windfall they've handed the rich.
And what have they achieved with their Capitol Hill perfidy? Will their "slash and burn" austerity programme save America? According to the A Team, the Republicans have launched a very dangerous, potentially lethal policy that will undermine the existing, weak recovery and could actually trigger a full scale Depression. If Krugman, Stiglitz and Reich are correct, yet again, Congress is about to break working class America on the wheel. But then again, this wasn't really about austerity and fiscal conservatism. This was about concluding the greatest transfer of wealth and power in history from ordinary Americans, its former middle class, to the richest of the rich. And the Tea Partiers cheered on.
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