Breitbart’s heavily edited video was published with the title “Video Proof: The NAACP Awards Racism” in response to the NAACP’s call the previous week for Tea Party groups to repudiate racist elements in their midst. Breitbart’s “story” was then picked up by conservative and then mainstream media outlets (lead by Fox news), many of whom highlighted Sherrod’s racism and the double standards of the NAACP. In general, conservative groups and the media were all too willing to accept Breitbart’s narrative of Black on Whilte discrimination. It was a narrative, after all, that they had been propagating for the past year with hyperbolic stories about ACORN, Van Jones, the New Black Panther Party, et. al. All of these stories carried the subtext that African Americans are asserting control and gaming the system for their advantage at the expense of whites. This attitude not uncommon in writings of Tea Party supporters as well, who often claim they are not racist, but go on to suggest that African Americans are receiving government services and special treatment unavailable to whites, and that these ‘perks’ contribute to America’s economic ills and the size of its government. Of course, the majority conservatives and tea party activists carry no racial animus; however, they do seem to be particularly susceptible to arguments which strike a cord of racial division. This may simply be part of the nature of being a conservative which, as William F Buckley said, is “..someone who stands athwart history, yelling Stop…”

As Rachael Maddow Pointed out this week, the ginning up of racial animus in order garner white votes is nothing new, and has been common in the Republican party since Richard Nixon employed the Southern Strategy in the late 1960’s. What Maddow, and many other commentators, fail to see or acknowledge is how this constant hyping of racial issues overlies our current economic problems. In the early days of the economic meltdown in 2008 several conservative commentators tried to blame minority lending for the collapse of the housing and credit markets. Shortly after President Obama’s inauguration many of these same commentators, followed by the Tea Party groups, began to rail against “redistribution of wealth”, “socialism,” and “communism” — though very few seem to have any idea of what these concepts entail. The cry against redistribution is a cry against the movement of services or capital from the wealthy to the poor. For many Americans, this suggests a movement of capital from white to black or hispanic Americans. The anti-redistribution crowd often site taxes as their real concern. But this is a ridiculous argument, as a glance at the historic tax rates show:

Top Marginal Tax Rates

As we can see the top marginal tax rates are presently  near the lowest levels they have been at in the last 60 years. In fact arguments about redistribution and taxes are often diversions to obscure more fundamental economic problems: the loss of manufacturing and the climbing trade deficit, for instance, due to neo-liberal free-trade policies. Or the widening gap in our nation between rich and poor and the loss of the middle class. Race baiting allows these issues to be obscured in favor of a narrative that pits groups, often suffering the same economic hardships, against one another. This type of division almost always suits the status quo except, of course, is when the smoldering resentment, driven by the media, turns into a violent blaze, and people’s lives become endangered.

Many bloggers and commentators have pointed to the Sherrod incident as an example of the duplicity of Andrew Breitbart. While Breitbart’s manipulation of the facts to generate racial animus is contemptuous, it is not nearly as appalling as the media’s rush to repeat his narrative. Breitbart can be excused for simply being what he is — a partisan huckster selling any trope which brings him attention and his cause to power. Many in the mainstream media (CNN, CBS, FOX, and MSNBC), however, were all too happy to repeat the story without investigation. This alone shouldn’t come as a major surprise. The media, overall, has done an abysmal job at covering some of the most important stories of the past decade (ie. the ongoing wars in Iraq and Afganistan, the fianancial crisis and melltdown, healtcare and financial reform, etc). Again, the Sherrod story fit a particular narrative that the media was eager to exploit — one which divided Americans at a time of shared suffering, and helped maintain the status quo.

Breitbart, racism, Sherrod, wingnuts

In the past week we’ve seen this dynamic play out with several members of the GOP: Senators Kyle (AZ), Coburn (OK), and minority leader Mitch McConnell (KY), all of whom keep intimating that the federal deficit is such a horrific problem that unless we deal with it while we’re in the midst of this recession we will all soon be turning to thunderdome to set our economic policies instead of relying upon their wisdom, have come out and said that huge Bush tax cuts of 2003, set to expire this year, have no effect upon the deficit. McConnell went even a step further in defending Kyle’s suggestion that tax cuts should never need to be offset and said:

“That there’s no evidence whatsoever that the Bush tax cuts actually
diminished revenue. They increased revenue, because of the vibrancy of
these tax cuts in the economy. So I think what Senator Kyl was
expressing was the view of virtually every Republican on that subject.”

This is the kind of denial which libertarians and conservatives constantly deride their opponents for. But in the so-serious, accepted, world of free-market, small government, ideology some of the most powerful men in our country feel free to spout this nonsense. Business Insider recently illustrated effect of these tax cuts and their relationship to the deficit:

economics, libertarians, free-markets, communist

Earlier this month Nobel Prize winning economist Paul Krugman wrote something which I think resonates throughout recent history and succinctly describes our current situation. In his July 1st column he wrote:

When I was young and naïve, I believed that important people took positions based on careful consideration of the options. Now I know better. Much of what Serious People believe rests on prejudices, not analysis. And these prejudices are subject to fads and fashions.

Krugman sees the austerity responses to our economic problems — high unemployment, below average GDP growth, etc — as irrational, ill-informed, and, perhaps, disingenuous. Of course, he’s completely correct. Today’s hyper-concerns over our Federal deficit bear no-relation to today’s economic realities. Instead they arise irrationally from the free-market ideology which has been de rigueur for the past 25 years. According to this ideology there are only two economic pitfalls to ever be concerned about: government interference (re. regulation or taxation) and inflation.

Within the free-market bubble, regulation always stifles business interests; thus, reducing market growth. In the real world, of course, regulation serves to protect consumers and citizens, and in fact can lead to market competition, as Robert Waldmann observed about telecom regulation in the 90’s which reduced consumer prices, spurred technology, and created employment across multiple sectors.

Like regulation, free-marketers always see inflation as something to be avoided at all costs. We see evidence of this in the constant fretting over inflation in the federal reserve reports and in the extreme flogging of the issue by the Beck-apocalypse crowd, who horde gold in anticipation of the day they can gun down their neighbors, who are pushing around shopping carts full of dollar bills. Again, in the real world, controlled inflation can be a useful economic tool: it often increases real world wages and reduces personal and small business debt. These reasons, of course, are why the free-marketers fear inflation so much. Over the past 35 years wages for most Americans have essentially stagnated:

The starting point, for educated Americans of the nineteenth century, was the belief that human affairs were ruled by immutable law. The central law of political economy was the the general good would be best served by the pursuit of individual self-interest. If, under competition, there were difficulties or suffering in society, these were necessary spurs to the effort. Rewards went to those who worked hard and deserved them, while poverty was almost always a punishment for vice and laziness. It would be both foolish and immoral for the state or for any private organization to intervene in economic affairs.

These laws of political economy were, said the textbooks, the laws of God. They were also, for those who accepted the new lessons of Darwinian evolution, the laws of biology. The struggle for existence was the means by which the human race had reached its present high development. Interference would simply help the weak and unfit, injure the strong, and weaken the race. Often spokesmen of laissez faire combined the two sources of authority: free competition was the means by which evolution took place under Divine superintendence. (Sellers, May, et. al., A Synopsis of American History)

We’ve all seen this ugly attitude rear it head in recent debates over unemployment extensions. Politicians have implied and even stated that those suffering from long term joblessness are too lazy, or spoiled, to get a job or are simply immoral drug users feeding at the public trough. Of course, our modern economy and job creation are tied far more to global demand and a desire to establish profit through supply “efficiencies” than to simple bootstrap individuality. Yet, this myth continues to permeate economic policy.

The “bootstrap” myth is not unlike the accepted belief that somehow the federal budget is similar to one’s household expense sheet. This analogy is constantly called upon by armchair free-marketing economists at every turn. Like all overly simple analogies, it bears no resemblance to reality: in my household, I cannot issue 1,5, or 10 year bonds to offset my immediate debt, nor can I create currency to spur growth. Yet for some reason, some Americans seem to think that the federal deficit is somehow effecting job creation. It’s not.

With government interest rates are at all time lows, taxation a 50 year low, joblessness still remains high. It is time to discard all of these free-market myths and address the real economic problems we are faced with. While it may be too risky to raise interest rates, at the moment, the government must step in an help create demand. It must stop trying to respond counter-productively to problems which are imaginary — like high inflation or over-regulation — and respond to ache that regular Americans are feeling and reacting to: high unemployment and under-employment. Paul Krugman has written that another government stimulus is needed to help prime the economy. Again, he’s completely correct. Yet for long term growth we should also look towards regulation which creates competition and reduces monopolies and too-big to fail institutions. For hundreds of mid-sized banks or small radio stations will employee more people and create more innovation then a couple of ultra large financial behemoths or media conglomerates ever could.

Economy, Krugman, Unemployment