David Coates

Sanity in a Time of Madness


“When you are in Washington, remember what the voters back home want – less government and more freedom”[1]

(Jim DeMint, welcoming tea-party backed victors in the 2010 mid-term elections)

This is no ordinary day in American politics. This is the day power officially shifted in the House of Representatives from Nancy Pelosi’s Democrats to John Boehner’s Republicans. This is the day the inmates retook the asylum.

For progressives, this shift in power necessitates an equivalent shift in strategy. The task now is initially one of defense – of endlessly resisting the determined efforts of a Republican Party in thrall to its Tea Party base to undo the modest reforms passed during the last Congress.[2] But the best form of defense – as the Republicans themselves demonstrated so vividly when they were the minority party in the House – is principled and determined offense. So if the November “shellacking” of the Democrats is not to be repeated on a grander scale in 2012, the task for progressives is already clear. It is to debunk the wilder claims of Tea Party Republicans. It is to establish clear blue water between their principles and ours; and it is to develop and proselytize a coherent and creditable liberal alternative to the economic vandalism now to be canvassed at us by Eric Cantor, Paul Ryan and their ilk. Three linked tasks, the first of which has to be a full challenge to the conservative economics currently being offered to the American people as the solution to their ills.

Take for example

  • The insistence that all legislation be directly linked to particular clauses in the Constitution.[3] This is clever politics but it is also appalling economics and it will have terrible social consequences. The Constitution is rightly a revered and protected document, but it requires a sustained sleight of hand to present late eighteenth century revolutionaries as the direct ancestors of twenty-first century conservatives. The latter would do well to be careful about that for which they wish. The original Constitution restricted the vote to white men of property.[4] It was written by Founding Fathers many of whom owned slaves; and it was drafted when the U.S. economy was pre-industrial, largely nationally-insulated, and in possession of only one major export crop: cotton grown and gathered by slave labor. There is nothing in the Constitution, or in the economic expertise of those drafting it, to guide us through a post-industrial global financial crisis of the kind which now besets us. To pretend otherwise is merely to hide modern economic and social choices of a reactionary kind behind the skirts of a well-loved document. Social conservatives have been doing that with the Bible for years. Fiscal conservatives now seem set on doing it with the Constitution. It is time for both strands of conservatism to put the ancient documents down and to argue their case on its contemporary merits.[5]
  • The major claim currently being canvassed by the incoming Republican House majority is that federal spending must now be cut quickly and significantly – a cut of $100 billion is regularly cited – in order both to stimulate private sector economic growth and to free future generations from an unacceptable level of federal debt. Both the growth and debt claim are, however, inherently flawed. One has to admire the sheer audacity of the Republicans choosing to lead on debt reduction within a month of their insistence on tax cuts for the rich; and it takes some nerve to threaten a default on U.S. debt when the consequences of such a default would make the 2008 financial meltdown look like a picnic in the park. But audacity and nerve are no substitute for wisdom. Given the persistence of mass involuntary unemployment in the face of a generalized private sector reluctance to hire new workers, a significant further injection of public sector demand is a vital pre-requisite for short-term economic growth and job recovery.[6] Cutting public spending will only add unemployed teachers, police officers and firefighters to those already thrown out of work by a recession rooted in the inadequate regulation of the financial sector.[7] Making public sector spending the problem – rather than part of the solution[8] – enables conservatives to demonize hard-working and under-paid public servants. We hear these days more about the evils of public sector trade unions than we do about the return of large bank bonuses: but public sector workers did not cause this recession. Nor will penalizing them help in any way to end it.[9] It will merely act as a further smokescreen for the guilty. Bank of America quietly paid Fannie Mae and Freddie Mac a fine of $2.6 billion yesterday, to partly compensate losses run up by Countrywide Financial, its mortgage arm;[10] but we don’t hear much about that from the House Republicans now returning to power.
  • What then of the claim that public spending – if left uncut – will leave an unacceptable level of debt to be paid off by our children? Aren’t we, as the Republicans claim, buying our prosperity at our children’s expense? Actually, no, we are not. We are not because, when our generation gives way to that of our children, some of those children will be debt-holders in receipt of interest on their holdings, and some will be taxpayers paying interest. Which of our children are in one category and which in another depends on the distribution of income now and then. If we really want the burden to be shared, we need to leave our children with the highest level of income equality possible. If we really want our children to be debt-free, we need to settle not the volume of our spending but its distribution and focus. Public money spent now on new roads and bridges, rail links and energy conservation, will leave our children a better stock of social capital. Giving our children more and fully equipped teachers will leave them better able later to compete in the global market place. Cutting teaching jobs and leaving tax rates for the rich as George Bush designed them only makes economic sense if you believe that our future lies in trickle-down economics and under-performance on international educational league tables.[11] What is crippling us now is massive income inequality and embedded poverty. Republican spending plans will intensify both and keep us as a nation on the road to ruin.
  • The immediate focus of the Republican cutting agenda is the reversal of health care reform, and here too their proposals lie diametrically opposed to the requirements of both logic and morality. There is no logic in rolling back health care reform that will reduce public sector indebtedness by $130 billion over ten years.[12] (There was after all no logic, if economy had been their concern, in Republican resistance in 2010 to the creation of a genuinely national public option, or in their attempts to block the creation of an Independent Payment Advisory Board.) And there can be no morality in driving more and more Americans away from even basic health care provision, or in dismantling protections for patients with pre-existing conditions,[13] or in denying seniors help with the Medicare doughnut hole. Health care costs are rising, and do need containing – that is not in dispute – but cost-containment requires policy directed at the real cost inflators: at inadequately regulated insurance premiums, at the vast administrative waste necessitated by the passing of claims between insurance companies, at the overuse of emergency rooms by patients without insurance, at the payment of doctors by volume of services provided rather than by quality of outcomes, and at the cost of the life-styles which generate obesity and its linked ailments.[14] The Democrat’s health care reform put us at long last on a track towards universal health care coverage. The recession they inherited, by contrast, pushed more and more Americans out of a health care system linked to employment.[15] Republicans plan to roll back the first without tackling the second. Just how many uninsured Americans do the Tea-Party inspired lawmakers really want to see?

Tackling our current and future problems by returning to the policies which initially generated them is the ultimate folly. Seeking bipartisanship with the totally intransigent would be the ultimate dereliction of duty. The task before us is clear. It is to point out the insanity of what is now being proposed by our conservative opponents, and by the power of our arguments to win back in 2012 the capacity to deepen rather than to weaken the vital program of progressive reform.


[1] Jim DeMint, “Welcome, Senate Conservatives,” The Wall Street Journal, November 3, 2010

[2] On the detail, see Jennifer Steinhauer and Robert Pear, “G.O.P. Newcomers set Out to Undo Obama Victories,” The New York Times, January 2, 2011

[3] “House members will not be able to introduce a bill or a joint resolution without ‘a statement citing as specifically as practicable the power or powers granted to Congress in the constitution to enact it’.” (The New York Times, January 1, 2011)

[4] On Justice Scalia’s view that women’s rights are not necessarily protected by the Constitution, see http://www.alternet.org/newsandviews/article/422600/slippery_justice_scalia_says_women%27s_rights_are_not_guaranteed_by_the_constitution/

[5] For more on this, see Robert Parry, We’re Headed for a Major Battle with the Tea Party Crowd over the Constitution itself: posted on Alternet.org December 31, 2010; and available at http://www.alternet.org/story/149377/null?page=entire

[6] For more on this, see the earlier op-ed available at

http://www.davidcoates.net/2010/07/18/the-inmates-and-the-asylum-the-madness-of-cutting-deficits-in-the-depth-of-a-recession/

[7] On this, read Joshua Holland, Republican’s Radical Plans for Budget Could Threaten the Economic Security of Millions, posted on Alternet.org January 5, 2011: and available at http://www.alternet.org/economy/149409/republicans%27_radical_plans_for_budget_could_threaten_the_economic_security_of_millions_

[8] The best two guides to the true significance of current U.S. public debt remain papers written by Josh Bivens and colleagues at the Economic Policy Institute in 2010: Briefing Paper #271, Government Debt and Economic Growth: Overreaching Claims of Debt “Threshold” Suffer from Theoretical and Empirical Flaws, July 26, 2010; and Briefing Paper #272, Putting Public Debt in Context, August 3, 2010. Both are available at http://www.epi.org/

[9] For a useful corrective, showing that on average, state and local government employees are compensated 3.75% less than similar workers in the private sector, see Jeffrey Keefe, Debunking the Myth of the Overcompensated Public Employee: The Evidence, Economic Policy Institute Briefing Paper #276, September 15, 2010: available at www.epi.org

[10] Details are in Suzanne Kapner, ‘BofA to pay $2.6bn over home loan claims,” The Financial Times, January 4, 2011

[11] The evidence, of course, suggests otherwise. See, for example, David Fiderer, The Bush Tax Cuts and the Republican Cult of Economic Failure, posted, November 10, 2010: available at http://beingmiddleclass.org/showthread.php?1667-The-Bush-Tax-Cuts-and-the-Republican-Cult-of-Economic-Failure; or Joshua Holland, The 9 Biggest Conservative Lies About Taxes and Public Spending, posted on Alternet.org December 19, 2010: available at http://www.alternet.org/economy/149265/the_9_biggest_conservative_lies_about_taxes_and_public_spending/?page=entire

[12] According to the non-partisan Congressional Budget Office. The data is at http://crooksandliars.com/karoli/cbo-hcr-knocks-130-billion-deficit-reduces

[13] We should remember that one in every seven applicants for health insurance was denied coverage in 2009 because of their prior medical history. (Jane Adamy, “Insurers Denied Coverage to 1 in 7,”The Wall Street Journal, October 13, 2010)

[14] On this, see Bending the Curve: Effective Steps to Address Long-Term Health Care Spending Growth, Engelberg Center for Health Care Reform at Brookings, August 2009, available at: http://www.brookings.edu/reports/2009/0901_btc.aspx

[15] “The number of nonelderly uninsured grew to 50.0 million due to the recent recession, which contributed to the continued erosion of job-based coverage. As incomes dropped more qualified for Medicaid, buffering the loss of health insurance for millions.” The Uninsured – A Primer: Key Facts About Americans Without Health Insurance, Kaiser Commission on Medicaid and the Uninsured, December 2010, available at

http://www.google.com/search?q=The+Uninsured+-+A+Primer%3A+Key+Facts+About+Americans+Without+Health+Insurance%2C+&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

David Coates holds the Worrell Chair in Anglo-American Studies at Wake Forest University. He is the author of Answering Back: Liberal Responses to Conservative Arguments, New York: Continuum Books, 2010.

He writes here in a personal capacity.

7 Responses to “Sanity in a Time of Madness”

  1. charles hill says:

    Mr. Coates, Please post facts about Cloward-Piven strategy of government manufactured crises to include the use of the Community Reinvestment Act and the roles played by Acorn, Barack Hussein Obama, Barney Frank, Chris Dodd, Franklin Raines and Jim Johnson in efforts to effect government takeover and making citizens dependent on government. Use as examples socialism in other countries; Cuba, North Korea, China, Venezuela, Syria, etc.

  2. charles hill says:

    Mr. Coates, Please explain how our country has benefited from the $5.2 trillion deficit imposed by the Pelosi house in 4 years. Pelosi seems very proud of this.

  3. David Coates says:

    Dear Charles

    I didn’t post material on the CRA, or on Acorn and the others listed, because I don’t consider them major causes of the housing crisis and financial meltdown. Your requirement suggests maybe that you do, and of course as I assume you know, if you do you are in good conservative company. But focusing on them – secondary players at most in the causation of the financial meltdown in 2008 – serves to obscure the critical roll of ill-regulated private banks and mortgage companies. I have written about this in Chapter 10 of “Answering Back” and have again in a special appendix to “Making the Progressive Case”, the follow-up book due out this July. I will gladly e-mail a copy of that Appendix to you if you let me know where to send it. There is a serious conversation to be had about what created the current mess. I just don’t think that your list of culprits is the main one.

    As to Cuba, North Korea… they are only relevant if you buy the argument that the Obama administration is taking us in the direction of socialism. Forgive me, I know this is taken as truth by the right-wing media, but it is literally sheer nonsense. Obama reforms nudge us slightly nearer to the state practices of very successful capitalist economies like Germany, Japan and even France. We can productively discuss whether that is the way we should go, but that conversation will only be productive if this ‘Obama is a socialist” claim is set aside for the inaccuracy that it is.

    Apologies to you if my comments distress you as much as perhaps the original piece did: but these are critical times and conversation across the political spectrum has never been more vital. Best wishes

  4. David Coates says:

    Charles, again! If the question is seriously meant, then I do recommend you read the two reports by Josh Bivens footnoted in the op-ed. As I understand it, Nancy Pelosi is no fan of deficits, but she is proud, I think, of the way public spending under her leadership was used to prevent the recession deepening. I share her belief in that. I imagine you don’t; but I must say that government spending did not cause this crisis – toxic assets did – 50 million people world-wide lost employment as a result, and more would have done so but for co-ordinated government action globally – with large initial fiscal stimulus packages and easing of monetary policy

  5. David Coates: Sanity in a Time of Madness | Debt Forgiving says:

    [...] more: David Coates: Sanity in a Time of Madness This entry was posted in Uncategorized and tagged debt, debt help, economic, growth, rich, sheer, [...]

  6. matmoseagonia says:

    Pretty nice post. I just stumbled upon your blog and wanted to say that I have really enjoyed browsing your blog posts. In any case I’ll be subscribing to your feed and I hope you write again soon!

  7. David Coates: Not Working in America: People and Public Policy says:

    [...] we have argued before, in a very real sense the lunatics have taken over the asylum in contemporary Washington. The genuine danger is that those lawmakers [...]

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