Does Money Matter?

Republicans and Democrats clash on matters of financial realism and political idealism

Photo by Pepi Stojanovski on Unsplash

It’s been over ten years now since the financial collapse of 2008, the repercussions of which are still being felt today [1]. In light of this, it’s highly interesting that one of the major questions facing the United States is whether or not money means anything at all. This is a bit of a partisan issue: Republican leadership, having seen the rise of the Tea Party in the last decade, are slightly more focused on balancing the budget than the Democrats, though both the base and the President himself are more willing to drop significant amounts of cash when it suits their needs (such as for the border wall), and Republicans have always been for greater military spending.

For the Democrats, however, this phenomenon is comparatively new: attitudes on spending and balancing the budget have always been situational and therefore adaptable; it’s what allowed for such major reductions of the federal deficit under Bill Clinton. Under the New Democrats, pragmatism was always more of a consideration than either pure focus on social programs or sound fiscality. However, this is not the 90’s [2]: social democracy is resurgent in the Democratic Party. Increasingly, the concern seems to be less and less “how do we pay for it?” and more and more “do we need to figure that out at all?”.

Given the nature of the alliance between the more conservative Old Guard (such as the New Democrat Coalition [3] and, generally speaking, party leadership) and the newer social democrats, the party has established a bit of a bipolar view of issues in terms of spending.

One of the most talked about issues in recent days has been the endorsement of the Green New Deal by a number of the political contenders in the democratic field for 2020 [4]. The Green New Deal, roughly, is an ambitious project to marry policies aimed to halt climate change with economic stimuli for the lower and middle classes, most notably in regards to manufacturing. It’s a very interesting proposal on many levels, and it has the benefit of making a strong stance on two key positions that the Democrats have been focusing on for years. However, there are more than a few drawbacks. For one, as pointed out in The Atlantic by Robinson Meyer, it would require absolute Democratic control of government [6].

More to the point, however, it’s an ideological albatross. The Green New Deal isn’t just about halting climate change, it’s about halting climate change through specific energy means: solar and wind, but no nuclear. Considering that nuclear energy is the quickest and least expensive means to energy independence (as the French realized back in the fifties; France is still reaping the benefits of that choice: [6]), it would be a way of making the deal more palatable to financially conscious centrists and Republicans: It’s a proven point of possible consensus [7]. This makes the issue all the more thorny; it’s difficult to talk about climate change in apocalyptic turns while still refusing to consider the most effective means of fighting it at present.

Then there’s the other problem: linking fighting climate change to social policies. Not only is it particular in terms of what to fund to combat climate change, it’s a tax and spend nightmare [8], the sort of thing that would wake Rand Paul up at 2 AM in a cold sweat. In addition to climate spending, the GND also aims to make strides at reducing economic inequality and working towards universal healthcare [9]. That such proposals exist on the Left is nothing new or surprising; the fact that they are being endorsed by Democratic leadership  and candidates as a flagship issue for 2019 and especially 2020, however, is incredibly interesting. The overwhelming popularity with the Democratic base suggests that an implicit exchange is being made, one with which Republicans are quite familiar: popularity for feasibility.

As of last week, funding for the border wall has once again been put on hold, but undoubtedly the discussion will return to the table once the shutdown truce has been lifted. Trump’s demands for border wall funding were $5 billion [10]. Though the main argument against the border wall from the left wing of the Democrats has been ideological (the symbol of erecting a physical wall having more than a few detractors), many have emphasized the opportunity cost of it, highlighting how the money could be better spent. This narrative has also been adopted by the mainstream of the Democratic Party, including the leadership [11]. This muddling of the narrative leads to some confusion: if the wall is objectionable on moral grounds, then it should remain so no matter the funding. Both cannot simultaneously be true. As such, it’s even more confusing when party leadership, while initially objecting on moral grounds [12], shifts to be more amenable to lower costs; a fifty buck purchase on a 40k budget is, after all, economically manageable, something that Robert Samuelson of The Washington Post evokes [13].

In order to make any sense of the contradictory statements of the party leadership, we must assume that at least some of the objections to the wall were merely moral grandstanding. As such, we can see that, given political necessity, and given a smaller cost, the wall is a price that the party leadership would be willing to pay for the purposes of resuming the correct function of government and ending the shutdown. As it happens, this wasn’t necessary; the president backed down on funding and handed a win to the Democrats, for the time being. Nevertheless, the discussion surrounding the wall allows for us to determine that the centrist Democrats view spending as a factor in their decision making process.

The distinction between these two factions isn’t necessarily an object-level issue: if the New Democrats feel the need to spend, they will. Rather, the distinction is more subtle: social democracy, by it very nature, is reliant on spending and views it as an unobjectionable aspect of governance. More economically liberal Democrats tend to instead view spending as a necessary evil. However, given the base’s enthusiasm for socialism or socialist measures [14], party leadership is increasingly adopting a devil-may-care attitude: endorse high spending now, deal with the repercussions later. This has the potential to be utterly disastrous, particularly with many pointing to a new economic crisis on the horizon [15] and with fractured and partisan leadership. Even 2008’s bailout seems inconceivable in the current political climate.

The current political situation exists at the crossroads of idealism and pragmatism; consciously, factions on both sides are ultimately choosing between realizing partisan ambitions and continuing to plod forward on the fumes of bipartisanship. Given increasing recalcitrance to meet goals on either side due to the same sort of logic that fuels resistance to nuclear power, 2020 is increasingly looking like an all-out showdown between two extremes, with centrists forced to choose the lesser of two evils. On the other hand, there’s a reason that the politics of consensus have decreased in popularity: middle of the road solutions are rarely the correct ones [16].

Sources:
1. Andrew Sorkin, “From Trump To Trade, the Financial Crisis Still Resonates 10 Years Later”, New York Times, September 10 2018
2. Tabitha Spence, “The Rise of Socialism in the United States”, Daily Times, August 21 2018
3. New Democratic Coalition Website
4. Zack Coleman, “Questions For Democrats, What is a ‘Green New Deal’?”, Politico, January 1 2019
5. Robinson Meyer, “7 Reasons Why the Democrats Won’t Pass a Green New Deal”, Atlantic, January 29 2019
6. The Greenage, Nuclear Power in France
7. John Siciliano, “GOP, Democrats Join Forces to Advance Nuclear Power Bill”, Washington Examiner, March 22 2017
8. Editorials, “Democrats’ ‘Green Raw Deal’ Will Deliver Only Socialism and Misery”, Investor’s Business Daily, December 26 2018
9. Rich Lowry, “Millenial Socialism 101”, National Review, January 8 2019
10. Bob Brian and Walt Hickey, “Most Americans Would Rather Spend the $5 Billion Trump is Demanding for the Border Wall on Infrastructure, Education, or Healthcare”, Business Insider, January 19 2019
11. Joe Perticone, “Nancy Pelosi Declined to Rule Out Border Wall Funding After Trump Announced Shutdown Deal”, Business Insider, January 25 2019
12. Ian Schwartz, “Pelosi: Democrats Are Not Going to Fund Trump’s ‘Immoral’ Border Wall”, Real Clear Politics, December 6 2018
13. Robert Samuelson, “Building the Wall Would Be So Worth It”, Washington Post, January 9 2018
14. Frank Newport, “Democrats More Positive About Socialism Than Capitalism”, Gallup, August 13 2018
15. Matt Phillips and Karl Russel, “The Next Financial Calamity is Coming, Here’s What to Watch”, New York Times, September 12 2018
16. Wikipedia, Argument to Moderation

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