If President Barack Obama’s response to the economic crisis is imperfect, as he acknowledges, and if the Congressional Democrats leave much to be desired as well, then Americans can at least be thankful that the nation’s fate has not been consigned to the frozen minds on the other side of the aisle. Things are bad, and seem very likely to get worse—but the Republicans seem determined to plunge us into a real depression, gambling that catastrophe would return them to power.
The leaders of the Republican party simply ignore flashing red warnings from the unemployment offices, whose reports now indicate that joblessness in this recession will soon surpass the worst of the 1981-82 slump. They complain about “earmarks,” a miniscule portion of the budget, and they suggest policies that would either have no effect at all or make matters much worse, even according to many of their own most venerated economists.
From those Republican politicians often deemed most thoughtful, such as former House Speaker Newt Gingrich, comes a droning chorus for tax cuts on capital gains. This is the conservative panacea in good times and bad, but it is of little relevance to the problems of the moment. Investors are not fleeing the markets because they worry about enormous returns that will be subject to punitive taxation; they are abandoning stocks and real estate because those assets are deflating like punctured balloons. Until there is a real prospect of capital gains, cutting taxes on them will scarcely affect investment and jobs.
Descending the intellectual scale brings us to the House minority leader, John Boehner. He responded to the frightening February data on job losses—more than 650,000 laid off in a single month—to demand a “freeze in government spending” and a presidential veto of the $400 billion continuing budget resolution.
While Mr. Boehner said he understood that the mass firings meant worsening economic conditions, he seems more worried about “wasteful pork-barrel projects,” a problem that concerned him not at all when his party ran Congress. To him, an unemployment rate surging past 8 percent is a signal that the government should impose a spending freeze “until the end of this fiscal year.” A spending freeze, of course, is precisely the opposite of the policies pursued by the Republicans during the last recession, when their own political butts were on the line.