"Mr. Vaughn, what we are dealing with here is a perfect engine, an eating machine. It's really a miracle of evolution. All this machine does is swim and eat and make little sharks, and that's all."

--  Hooper (Jaws, 1975)


Just because there doesn't seem to be anyone else doing any post-election analysis, I guess it falls to me to interpret what happened. Man, I wish those lazy pundits would pay attention to elections once in a while. Not a peep out of 'em. It's like the Mid-Terms never happened.

OK, enough with the lame jokes (you can see why I don't make a living as a comedy writer). On to what actually went down on Tuesday (and beyond, for some of the closer races).

First and most obviously, Tuesday was a repudiation of something. But of what? Was it liberalism in general that was rejected? Or just incumbents? Or maybe the "socialist" Obama agenda? Or was it just one giant, steaming pile of "NO" flung at the gates of Washington? Is this a sign that the country is continuing its sensible, rightward tack, finally giving up on the utopian dreams of FDR and the flower children? Or are the people just so pissed with everything coming out of our capitol that they will simply vote for anything that seems different, and against anything that smacks of the familiar?

Liberal analysts will point to several rationalizing/hopeful factors to sidestep the notion that the country is rejecting Lefty-ism. Sitting presidents always lose seats in the mid-terms. Sure, Obama's party did much worse than usual, but economic conditions on the ground were more to blame than anything policy-wise. To wit, the actual approval rating of the GOP (24%) is worse than the ratings for Obama and even the Democratic party. On the ideological side of things, the Progressive Caucus in the House actually did very well (only 3 out of 80 seats lost), unlike the compromising Blue Dogs, who got sliced in half. This allegedly shows that Democrats would be better off veering left, not right, to actually present some kind of coherent alternative to the GOP.

All of these justifications and explanations from the left do make some sense. But it's also hard to ignore that voters went for Republicans at every level. The GOP picked up 11 governorships, and also gained control of more state legislatures than at any point since 1928. And this bodes doubly-ill for Democrats, as we're heading into the Congressional re-districting phase, which should lock in more GOP dominance for the next decade.

Even so, it really does seem to me that people were voting with their feelings of economic terror and helplessness, and against all of the circumstances that are strangling the life out of the American spirit, as opposed to any particular party. Americans are saying, "Look, we are totally f'ed, and we're tired of the runaround we're getting from all of our leaders. Just do something to fix this. We don't know what, or how, but just do it." 

Underneath all of this frustration and rage has emerged one single idea, the most important trope of the mid-term elections: Things are economically bad, so we have to tighten our belts and spend less. This idea has many facets, of course. There's the assertion that the housing bubble was caused by spend-happy Dems using Fannie and Freddie to force deadbeats into mortgages they couldn't afford. There's the idea that the TARP and the GM bailout were extravagant and wasteful funnelings of taxpayer money to corrupt and incompetent businesses. Also, the Obamacare monstrosity and the Obama stimulus are seen as taking yet more money from the pockets of regular Joes and transferring it to poor losers and crony-laden local projects. 

Whether or not these interpretations are accurate (they generally are not, in my opinion), they do have the powerful ring of common sense. It is easy to project the finances of an individual or a family onto the national economic scene. 'Hey, I know that I can't spend more than I make forever, so how can the United States do it? Sooner or later, the credit card company cuts me off, so I need to either start making more money, or stop spending what I don't have. Right?' 

This is a powerful analogy, and the Republicans and Tea Partiers especially have wielded it masterfully. Their message to the voters was to throw out the big-spending Dems and restore some fiduciary responsibility to Washington. If the 2010 mid-terms could be summed up in two words, those would be "fiscal conservatism." That's what everyone in the national spotlight wants to be seen as now: a Fiscal Conservative (regardless of one's Social Conservatism or Liberalism).

In another stream of analysis, a la Paul Krugman and other liberal economists, what may be personal financial virtue (living within one's budget) is actually disastrous when writ large on the macro-economic canvas. The common sensibility of belt-tightening will actually tank the economy even further, when all of the large variables come into play: e.g., inflation, international trade, currency valuation, aggregate demand, financial liquidity, etc. 

For these thinkers, shrinking the government is exactly the wrong thing to do at this juncture. Just as with the Great Depression, the country is trapped in a vicious cycle of demand destruction, where people with no money are not buying enough stuff, which causes businesses to lay off more people, which creates more people with no money to buy stuff. In this scenario, the federal government must step in directly to put money in people's wallets via public spending on jobs and infrastructure projects. The key here, in this view, is that fiscal austerity via tax cuts and program cuts will simply put more money in the hands of people who won't spend it: i.e., the already-rich. Tax cut money has a much weaker economic multiplier than stimulus money paid out in the form of wages. And spending cuts, even if virtuous in the long run, are doubly-dangerous in a low-demand landscape, as public sector jobs are lost, and those subsequent unemployed then move to the less-productive side of government spending, unemployment insurance.

So which view is right? Are we to spend or cut our way out of our current morass? This is not the place to debate the merits of Trickle-Down/Austrian economics vs. Keynesianism, mostly because I am not equipped to settle such disputes. But suffice it to say, as I look at it, the American economy has grown like gangbusters for the last four decades, and the proceeds of that growth have undeniable drifted upwards, and not trickled down to the masses. In a globalized economy with transnational corporations moving their assets and profits around at will, the idea that more tax and program cuts will finally and magically make businesses hire American workers for awesomely-compensated jobs seems quaint, at best. As I detailed in last week's post, there is a stubborn myth that a stand-alone entity called "the government" has been taxing and regulating small businesses to death, squelching the creativity of entrepreneurs and the "business community" in general. And of course, this is bunk. The reality is that the federal government, thanks to campaign fundraising laws and electoral structures (winner-take-all formats), has become a hybrid proxy for Big Business, which has diametrically-opposed interests to smaller businesses.

OK, enough of that discussion. I beat those things to death in every post. What will actually happen now that the GOP controls the House? Will we see two years of gridlock, followed by a new President in 2012? Or maybe gridlock and then another round of incumbent purging, with the Dems moving back into the driver's seat? Will the Tea Partiers actually make life uncomfortable for their Republican brethren, forcing more austerity than pork-laden careerists are ready for? Will, God forbid, Obama, John Boehner, and Mitch McConnell be able to (gasp) work together to craft some actual solutions for the country that will satisfy, however partially, all parties involved? 

Well, I wouldn't hold my breath. Returning to the Jaws quote at the opening of this post, the analogy of sharks to our two main political parties is apt. Due to many different long-term trends (electoral structure, campaign finance laws, the dominance of TV culture, the rise of partisan, for-profit journalism, the general ignorance and short attention span of the American public, etc.), our national Democratic and Republican parties are now miracles of political evolution: all they do is run campaigns, raise money to fund those campaigns, and then deliver the legislative goods for those who financed the campaigns. And that's all. We never really get the things we hope for from government because our leaders are not in the business of crafting virtuous, public-minded legislation. They are in the business of getting themselves re-elected to deliver rewards to those who pony up to get them re-elected. Every campaign slogan and trope is simply a (usually thinly) veiled message to moneyed benefactors that the public trough will be open for them, in some fashion. The Democratic messaging for federal spending promises contracts for corporations through the front-door (military-industrial complex, anyone?), while the GOP tax cutting winks that profits for corporations will be tucked in the back. Either way, large business entities and their lobbyists will make sure that they win, and regular people lose. That's why large companies hedge their bets and just give money to both parties. That way, they're covered, no matter what happens in any particular cycle.

Of course, the humongous conceit behind both major parties, a myth so profound that no one dare question it, is that economic growth and full-employment are the optimal states to which America can, and will, return. For liberals, this means that our current predicament is just a "liquidity trap," as Krugman calls it. Once consumers can pay down their debt, hopefully helped along by a new round of government stimulus, the salad days of maximum consumption and growth will return. On the conservative side, tax cuts and the shrinkage of the federal government will eventually return money to its appropriate places (families, businesses, and local government), which will then spark the magical alchemy of entrepreneurial, Ayn Randian wealth.

In my opinion, neither of these narrative hopes for a return to "normal" is legitimate. I believe we are heading for a future of much less overall market activity. The global economy of the last few decades has been overwhelmingly built on fraudulent, unfair, and over-leveraged foundations, not to mention the borderline-sociopathic psychology of consumption. We have put economic imperatives ahead of all other considerations, to the epic detriment of our ecologies, our psyches, and our bodies politic. We have created unreal and unreasonable expectations about the nature of economic life, and the ratios of labor to compensation to consumption are simply unsustainable.

There will be no return to a normal, robustly-growing economy, green or otherwise. Our major parties, having become electioneering appendages to big business, do not have, in their very nature, the ability to tell the truth or propose novel approaches to our situation. Return to growth is their only motif, and it is a woefully-inadequate one to the entropy-driven future we're facing. 

So I don't know exactly what will happen in the new Congress. But my guess would be, not much, either way. The way things are structured, sweeping change or sweeping non-change are mostly the same thing, as far as regular folks are concerns. We're hosed, regardless.