Beinhart's Body Politic: September 2011

The Revenge of ATBRI, the Grotesque!

by Larry Beinhart, August 26, 2011

Chucky, Freddy, Jason, the Children of the Corn, Aliens, the generic Living Dead, it’s always the same. At the end of the film the creature that has been stalking, killing, dismembering, and devouring normal humans—often with a particular predilection for bouncy teen babysitters—is killed. A stake to the heart, an axe through the neck, division into small body parts, doused in gasoline and set on fire, thrown into the vacuum of outer space, whatever it takes, the monster is dead.

Then, just after the hero leaves the cemetery (the spaceship, the hospital, the morgue, the summer camp) a hand shoots out from beneath the earth!

At the end of the Bush years, it appeared that ATBRI (All Those Bad Republican Ideas) was dead. When the Republicans came into office they had put their ideas into effect and charged directly into the guns of reality. This was the political equivalent of suicide by cop. Reality shot them down with ruthless efficiency.
Tax cuts did not create jobs or prosperity. They created a bubble that became a crash. There you go, the first corpse, the idea that tax cuts, especially for the rich, are good for the economy. They are about as good for the national health as eating chicken with salmonella is for your body.

Initially, the Bush administration chose the response that was correct according to free-market theologians. They let the profligate and incompetent Lehman Brothers go bankrupt. Whoops! It instantly became apparent that the whole house of cards was about tumble in after them. Laissez faire orthodoxy was instantly abandoned and the government rushed in with hundreds of billions of dollars before the entire world economy imploded.

Another idiot idea shot down. Unregulated markets work as well as baseball games without umpires. Everybody steals, nobody stops it, chaos erupts, and the game is destroyed.

According to Freidmanesque economists—the current orthodoxy—monetary policy is the best and only way that the government should manipulate the economy. The Fed lowered interest rates to the point where they were giving money away to the big banks. It didn’t stabilize the economy. It didn’t magically induce the banks to invest in productive, job creating businesses. The bankers just took the cash, traded in derivatives, and other paper nonsense, and gave themselves giant bonuses.

There you go, an entire economic model shot down.