How politics affects economics

opinions

October 31, 2011 - 12:00 AM

Steve Jobs was having lunch with Rupert Murdock, the media mogul.
“Rupert,” Jobs is supposed to have said, “you’ve got it wrong. The new axis is not conservative versus liberal. It’s constructive versus destructive. And your Fox network is one of the most destructive forces in the country.”
Maybe that conversation happened. Both Jobs and Murdock had well-earned reputations of holding strong opinions and voicing them.
The first response to Jobs’ bon mot is “right on!” More reflection brings one to another conclusion: Everyone who agrees that today’s politics divides between the destructive and the constructive also believes that their side is constructive. The destructive types are the other guys. Maybe even Mr. Beck thinks he’s a builder.
Well, OK, but there is another way to look at Jobs’ dichotomy. As a mass market businessman, Apple’s genius innovator knew that America’s economy depended upon a consuming public driven by an optimistic view of today and tomorrow. The gloom-and-doomers were poison to the marketplace, he believed.
So maybe there is something to the ever-growing chorus of critics who are saying that the incessant hammering of the president and his administration by the political opposition is part of the reason why the economy has stayed stuck. The target is the Democratic president. But the slings and arrows may also be hitting consumer confidence.
These warnings are coming from economists who have observed that when attention is focused on distractions such as Hurricane Irene and, on a cheerier note, the World Series, the economy perks up. Then when the news corps trains its sights on Washington, D.C. and the bloody battles between the Rs and the Ds again, the Dow Jones takes another dive and unemployment rises a notch.
How can the economy get better, the public wonders, when the government of the United States is so rotten?

THAT QUESTION takes us back to Mr. Jobs’ aphorism. He was wrong. The axis is between the ins and the outs.
From November 2008 to November 2012, the outs have been and will be the Republicans. They have decided that the most certain way to dislodge the Democrats and take over the government in 2012 is to discredit the ins; the Democrats. 
They are willing to take the chance that all-out opposition, a take-no-prisoners opposition that never recognizes value in Democratic initiatives will do collateral damage to the economy and to the country’s standing in the world. It will be worth taking those risks to win the presidency in 2012, they have concluded.
Republican tacticians will declare this battle plan to be constructive. It is, they believe, building a Republican victory.

HOW THE PUBLIC views the scene will become more apparent as the campaign progresses and the contrasts between the two programs of action become easier to grasp.
Three of the Republican hopefuls have proposed tax reforms that would reduce the taxes paid by the rich enormously and require equally enormous reductions in federal spending. All have promised to repeal the Democratic health care act; none of them have proposed ways to reduce health care costs or provide care for those presently uninsured or under-insured.
The Democrats know who their nominee will be and don’t have to get out on policy limbs yet.
Unanswered questions on defense policy, education and immigration abound.
The 12 months ahead will be supercalifragilisticexpialidocious. Hang on tight.

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