The economy is terrible. It’s fouled things up in the usual ways — job losses, market losses, smaller retirement and fund accounts … But there’s three ways the terrible economy is causing other types of dysfunction: The first is that it’s moving the Republican Party into a more extremist “no taxes, but never” policy.
At the presidential debate in Iowa last week, the Republican candidates pledged to not accept a deal even if it was a ratio of 1 part tax increase for 10 parts spending decreases. Now, I understand that most Republicans on that stage don’t believe Democrats would agree to any such cuts, but refusing such a deal, even in the hypothetical, underscores how fearful the candidates are of offending activists who associate a 3 percent tax increase for millionaires with hordes of invading communists at the Texas border. But let’s get real. Any responsible Republican should vocally agree with a 10 to 1 cuts to tax deal.
Second, the economy is badly damaging the re-election hopes of President Barack Obama. What that means is that he can’t run on his record. So, prepare for the White House and the president, the man who was supposed to elevate public debate, to wage the ugliest presidential campaign of mud ever. We got a taste of this last week with the trial balloon the White House launched that Mitt Romney was a little (guess it must be his Mormonism) “weird.”
Third, the economy is leading to public discontent that has become violent. The British riots of last week may be as much the result of a criminal underclass, but the riots in Greece and so-called flash mobs here are economically based. One side sees the end of a secure cradle-to-grave life that was earned through work. The other sees a life of secure employment in the U.S. that others enjoyed not happening for them. The unemployment numbers of 9-plus percent are really understated. Many Americans are not counted because they have given up looking and among blacks and Hispanics, as well as teens and young adults, the numbers are higher. Unless we find a way to get jobs started — either through private sector or public sector — we risk both types of violence (Greece and the UK) coming to the U.S.