Month: April 2013

Here ‘s my problem with surveillance: its the wrong solution to the wrong problem. Because I really do not have any problems, caeteris paribus, to government surveillance. Sorry, but I don’t. Fears of government surveillance are rooted in the anti-federalist fear that federalism is a way to sneak King George back into power. I don’t buy it. What I do buy are doubts that surveillance is the solution to crime. Crime is a response to unfreedom. And whether its blue, black, or white collar crime, the solution is not surveillance, but freedom. Here, however, government is not the problem but is the solution to the problem, not with cameras, but with aggregate, public supply of the means to expand freedom, from which all of us, in aggregate, benefit. Cameras, by contrast, merely document the problem.
http://nyti.ms/13K4M5p

Joseph W.H. Lough

While flipping through the FM radio dial this morning searching for hip-hop music, my eleven-year old son settled upon a station whose DJ was at that moment offering his commentary on the events unfolding around the Boston Marathon bombing. The DJ, whose indeterminate age could have been anywhere from twenty-five to thirty-five, was lamenting how it was almost like “this wasn’t America.”

 

Several things struck me about the young DJ’s remarks. The first was whether this DJ was aware of the interminable wave of daily bombings Iraqis and Afghanis have had to endure over the past decade and whether he was prepared to acknowledge that the unending violence families endure daily in these regions was at least in part due to his and my insatiable appetite for unrenewable energy. My second thought was to wonder what “America” he was dreaming of that today’s “America” no longer was. Perhaps he was thinking of the America — today’s America — where inner-city youth (compelled to attend schools funded by a declining tax base and to negotiate families and communities torn apart by the financialization of America’s wealth — we used to make stuff, we now make money) are subject to increasing rates of violence (Journal for Social Action in Counseling and Psychology 4:1 Spring 2012). Or perhaps he was not thinking of inner city youth. Perhaps he was thinking of the lynching days when, during my life-time, angry poor underemployed white men roamed southern (and northern) communities, under the protection and usually with the assistance of “the law,” looking for lone black men they could torture and kill. Or perhaps he was thinking of the era when Carnegie and Rockefeller hired thugs to assault and murder striking workers at their factories and plants. Or perhaps he was thinking about America’s march westward, when US soldiers ruthlessly murdered thousands of native Americans in order to clear territory in the Mississippi Valley and Texas to expand human slavery. Or perhaps he was thinking about the colonial era when my ancestors worked in church basements building IEDs to blow off the legs of British soldiers.

But, no. I suspect what he was thinking of was that other America, the America that traditionally has been insulated from this unending spree of violence.

Truly was it said that we wish to “sow where we do not reap.” But it is also true that we are very poor judges of the seed we are planting and therefore fail to recognize the crops we are sowing. We are and always have been a terribly violent people. Only recently, only after the rest of the industrialized world, did we even think to care for our elderly. We still don’t care for our young, sick, or our poor.

What happened in Boston was a terrible, cowardly act. It should not go unpunished or defended. What is unusual, even perhaps pathological, is how many of us jump to the conclusion that such acts of violence are foreign to our soil; as though they must have been introduced from the outside, or as though they have only cropped up recently; for example, since we elected an African American man with an Islamic name.

But, no, tragically, what happened in Boston is not so exceptional, except perhaps that it happened to people who looked like us, doing things that we might do, enjoying a run in the park, just like us, through neighborhoods that, like our neighborhoods, should be safe because of the wealth we have invested in them, but are not.

Welcome to America.

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Joseph W.H. Lough

There is a passage in William Stanley Jevons Theory of Political Economy (1871), where we find among the clearest illustrations of how “perfect freedom” in the sense understood by neoclassical economists entails “perfect despotism.”

By a market I shall mean two or more persons dealing in two or more commodities, whose stocks of those commodities and intentions of exchanging are known to all. It is also essential that the ratio of exchange between any two persons should be known to all the others. It is only so far as this community of knowledge extends that the market extends. Any persons who are not acquainted at the moment with the prevailing ratio of exchange, or whose stocks are not available for want of communication, must not be considered part of the market. Secret or unknown stocks of a commodity must also be considered beyond reach of a market so long as they remain secret and unknown. Every individual must be considered as exchanging from a pure regard to his own requirements or private interests, and there must be perfectly free competition, so that anyone will exchange with anyone else for the slightest apparent advantage. There must be no conspiracies for absorbing and holding supplies to produce unnatural ratios of exchange. Were a conspiracy of farmers to withhold all corn from market, the consumers might be driven, by starvation, to pay prices bearing no proper relation to the existing supplies, and the ordinary conditions of the market would be thus overthrown (in Medema & Samuels 2003:427).

On its surface this is none other than the neoclassical definition of the market and, as such, it is entirely uncontroversial. It is only when we begin to imagine the world in which such a market exists that red (or, better, red, black and white) flags should begin to appear. It is a world in which perfect and complete knowledge prevails and therefore presumably also a world where parties to any exchange have been compelled to know completely what others also must know. That said, it is a world in which no party to any exchange has anything but disregard for the “requirements and private interests” of any other party, but regard only for their own requirements and private interests. We must therefore imagine a world in which empathy has been replaced completely by only the pleasure derived from empathy. Yet, notwithstanding complete knowledge and complete independence, no party will be free to conspire with any other party so as to influence in one way or another the outcomes of any exchange. Which is to say that we must imagine a world in which communication with others over needs they may hold in common is specifically proscribed and where political organization on behalf of shared interests is prohibited.

Such a world, of course, is the perfect despotism, a world where πολιτεία in Aristotle’s sense is outlawed and where concern for res publica, the wealth we hold in common, or for “the General Welfare” as announced in the Preamble to the US Constitution are strictly prohibited.

This William Stanley Jevons calls “perfect freedom.”

Joseph W.H. Lough

My Economist just arrived with the post. It bore the caption “Freedom fighter” above a black and white image of Margaret Thatcher peering above my head and clear out into space.

Not that I was altogether too surprised. It highlights one of the reasons why I feel annoyed with the editorial decisions of this otherwise superior weekly. You see, as an historian, I am often deeply troubled by the deficit among my economics colleagues in critical historical reflection. And “freedom” is one of the touchstones that casts that deficit in a particularly harsh light.

You see, the problem is that the editors at the Economist believe that, by attaching this term to Ms. Thatcher, they are making a bold and controversial claim: the Prime Minister who made a quarter of the British workforce redundant, who drove down real British GDP and hastened the flight of world capital in Great Britain from investment in wealth to investment in financial instruments, thereby depressing wages and consumption and therefore production throughout the UK – that Prime Minister the Economist calls a “Freedom fighter,” making no attempt whatsoever to conceal their identification of Ms. Thatcher’s economic policies with the U.S. use of right wing death squads to overthrow democratically elected leaders throughout the developing world.

Controversial? No. Not really. Such claims are de rigueur for the Economist. Yawn.

No. Instead, what the editors have overlooked is how the notion of freedom that they attach to Ms. Thatcher bears no relationship to the canonical understanding of freedom that for well over two thousand years overcame all the odds only to be usurped over the last century by this novel, specious and quite literally vacuous double.

It is novel because prior to the fourteenth century, except among a handful of stray desert ascetics, freedom always bore a substantive and never a purely negative connotation. That is to say, it always carried the sense, brilliantly described by Economics Nobel Laureate Amartya Sen, of the conditions that make for freedom, and never the absence of constraint. Freedom in latter sense only arose in the specific context of western Europe’s emerging market society, where markets, rather than serving secondary and tertiary supporting roles to religious, political, and economic institutions, instead came to dominate the latter. As this transformation moved forward, it prompted entrepreneurs to advance the novel position that “freedom” entailed not conditions, but the complete absence of conditions, so that absolutist governments began to enact a sweeping array of laws and regulations designed to monitor and enforce “free” markets against trade groups, religious organizations, political organizations, and other public interests that formerly had played central roles in shaping public space and public policy.

In three short centuries, between 1450 and 1750, western European absolutist governments had, with near complete success, rid western Europe of the economically inefficient and politically cumbersome laws by which their societies had for centuries been governed. According to these now obsolete laws and traditions, freedom consisted of the wealth, leisure, and education universally thought necessary to govern responsibly. Indeed, so powerful were these traditions that even the framers of the US Constitution, while moving in nearly the opposite direction, felt nevertheless compelled to appeal to them in 1783 when drafting their new Constitution. By the time France came to draft its post-Revolutionary constitution less than a decade later, in 1791, virtually nothing was left of the substantive freedoms that had inspired their American counterparts. In France, “universality” was the watchword and “universal rights” and “universal liberties” already bore next to no meaningful relationship to the actual substantive conditions of the individuals who were to assert these rights and liberties before judicial panels whose justices and legal codes were, in any case, blind to such conditions.

Across the Atlantic, in the new United States, constitutional framers had adopted a different model. There, where res publica, “the wealth we hold in common,” was the watchword, public representatives instead set to work ensuring that all individuals with a right to participate in public office would also have the wealth, leisure, and education that would enable them to do so responsibly. This explains why, in contrast to France, where a universal male franchise was granted almost immediately irrespective of wealth, education, and leisure, the United States set up innumerable barriers to prevent either private wealth or public penury from winning a seat in the legislature. Those eligible for office had already to have earned their wealth. Those without wealth were thus prevented from using public office to accumulate it.

Not that this sat particularly well with all Americans. It sat specially poorly with those who had actually carried a rifle (who were not the framers) during the Revolution. But those who today count themselves the guardians of freedom quickly forget – assuming they ever knew – that the enemies of the more substantive, federalist notion of freedom enshrined in the US Constitution called themselves Democrats, not Republicans (although the championed the same vacuous notion of freedom).

Evidently the editors of the Economist are similarly confused. Like their eighteenth century precursors, just as they confuse substantive freedom with the absence of constraint, so they also confuse substance with privilege. We admire Ms. Thatcher for any role she might have played in emancipating the Conservative Party from its wedding to social class and economic privilege. The framers of our own constitution likewise faulted privilege, private law, and the role that it played in preventing individuals from acquiring land, leisure, education, and wealth. But what they did not fault – indeed could not and would not fault – was land, leisure, education and wealth as such. For without land no individuals could reproduce or sustain their own livelihood; without leisure they could not give public affairs the time and attention they deserved; without education they lacked the tools they would need to critically reflect on public policy; and without wealth they could not purchase any of the others.

But what the framers considered the goal, the anti-federalists and Democrats considered the means. Grant us freedom, they cried, and we will take care of the rest; arguing, in effect, that they would use public office to seize the wealth, land, education, and leisure that the framers had won through their private enterprise. The framers, by contrast, had argued that it would be the aim of res publica, of the wealth they owned in common, first to ensure “General Welfare,” as the Preamble puts it, and only thereby ensure the liberty that only substantive freedom can secure.

When Ms. Thatcher deregulated and privatized British society, when she championed freedom as the absence of constraint, she reversed over a century of careful, painstaking, thoughtful public work directed specifically at generating the kind of substantive freedom that might of transformed British society from a society characterized by class and privilege into a true Republic. In the name of the French variety of abstract, vacuous, specious freedom she trampled upon the substantive freedoms of real, concrete working English women and men: the freedom to education, the freedom to leisure, the freedom to a living wage and good health.

Moreover, having confused substance with privilege, Ms. Thatcher no doubt believed that by ridding her Conservative Party of the former, she also delivered them from the latter. When, in ever larger numbers, landless, underemployed, undereducated, unorganized workers began to cast their ballots for her party, Ms. Thatcher no doubt believed that this was evidence of freedom; when, in fact, it was evidence only of a growing lack of substance – a lack of education, land, leisure and wealth.

Yes, to be sure, voters for her Conservative Party were less privileged. But that was not because Great Britain’s social and economic elites had targeted their considerable wealth to the realization of republican values and institutions; not, in other words, because they had decided to use their private wealth to expand Great Britain’s franchise. Hardly.

No. Insofar as freedom depends on the conditions that make for freedom – upon substantive education, health, land, and leisure – Ms. Thatcher actually did more to undermine than to expand freedom.

In this but only in this sense, to be sure, Ms. Thatcher was a “freedom fighter”; not because she fought for freedom, but because she fought against it. Remarkably – or perhaps not so remarkably – the editors of the Economist seem not to know the difference.

Joseph W.H. Lough

Social Scientists are always at risk either of so emphasizing individual agency that they lose the right to develop, much less deploy, explanatory models, or of so emphasizing supra-individual structures, processes, and institutions that agency and therefore historical possibility are completely removed. As I reflect on Margaret Thatcher’s legacy, I find myself caught between these two extremes: on the one hand reflecting on the very real damage that she, individually, unleashed on millions of British subjects and hundreds of millions of non-British subjects throughout the world, while on the other hand recognizing that Margaret Thatcher would have been powerless were it not for conditions that, after all, were neither of her making nor of her choosing.

Die Menschen machen ihre eigene Geschichte, aber sie machen sie nicht aus freien Stücken, nicht unter selbstgewählten, sondern unter unmittelbar vorgefundenen, gegebenen und überlieferten Umständen. Die Tradition aller toten Geschlechter lastet wie ein Alp auf dem Gehirne der Lebenden. [Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past. The tradition of all the dead generations weighs like a nightmare on the brain of the living.] (K Marx, Der achtzehnte Brumaire des Louis Napoleon. http://gutenberg.spiegel.de/buch/4983/1 sited 9 April 2013)

Whether it was possible for Margaret Thatcher to critically reflect on the conditions of her own possibility, as this last quote suggests she might have, is doubtful. Neither she nor her partner in crime, Ronald Reagan, possessed the wherewithal to understand their moment in history or the circumstances that brought them up to that moment. In those subjects that would most have mattered – an education in the classics, neoclassical economic theory, history, anthropology, science – Ms. Thatcher’s education was tragically wanting, to say the least. Thus, in this respect as in so many others, Ms. Thatcher was a victim of the very class structure that she helped to perpetuate and indeed expand.

Even if she had been so inclined, which she was not, it would have been all but impossible for her to pursue a career in anything outside of business, law, medicine, or the sciences, career paths notoriously poor in preparing students to reflect critically on their own historical, social, political, or economic conditions. Her approach to the world thus displayed all of the skill and insight of the bench scientist that she was and would forever remain. (This is not a slight at bench scientists, but only at bench scientists who, absent any other training, attempt to shape world history. No one, I presume, would want a social scientist, absent any additional training, performing heart surgery on their parents.)

The same class structure that prevented Ms. Thatcher from acquiring the training she would have needed to adequately address Great Britain’s economic ills delivered to her Conservatives enough poorly educated voters to catapult both her and her Party into power. Put differently, had Ms. Thatcher and her supporters enjoyed the education and economic and social security enjoyed by England’s wealthiest citizens it is inconceivable that either she or they would have viewed England’s economic decline through the magical lens of personal moral weakness and corruption. They would instead have understood that only an even greater investment in the social and economic franchise could lift England out of its economic doldrums. However, given their training and inclination, Ms. Thatcher and her supporters were bound to view their plight through a fog of quasi-theological, pseudo-scientific, moral compensation – just punishment for the sins of ignorance and poverty.

Perhaps it need not be said, but human agents, individuals, are not the same as the structures, processes, and institutions that lend order to our world. This observation is not trivial. For what this means is that, as much as we might wish that it were otherwise, we always inevitably maintain or transform our world through our human agency, through individuals. Therefore, while it is certainly true that we ourselves are structured and shaped by the worlds we live in, it is also true that we ourselves are the agents and individuals who structure these worlds and not otherwise. Every attempt to work around human agents – whether through Soviet or American Fordist bureaucracy or through their more flexible post-Fordist successors – has ended in disaster. We have no alternative therefore but to treat Ms. Thatcher and her followers as agents and individuals; indeed, we would not want to do otherwise.

But what might treating Ms. Thatcher as a responsible agent entail? We should state at the outset what it would not entail. It would not entail ignoring the actual historical and social conditions that shaped Ms. Thatcher’s response to Great Britain’s and the world’s economic and political ills. Nor would it entail proposing possible decision trees that simply were not within Ms. Thatcher’s reach.

Holding Ms. Thatcher responsible means, first, approaching her legacy as though she could respond to rational objections to her actual decisions and their rationale; second, it means that we are free to propose alternative decisions than those Ms. Thatcher made; and, three, it means that we are free to reflect critically on the conditions to which Ms. Thatcher responded as well as those conditions that structured her response with full recognition that we, too, must take cognizance that we, caeteris paribus, share her world and therefore, caeteris paribus, are structured by these same conditions. It is not therefore as though we were trying Ms. Thatcher for a crime to which we ourselves were or are immune; as though we somehow have escaped the conditions by which she also is shaped. Holding Ms. Thatcher responsible means that, albeit post mortem, we are inviting her and her followers to reflect alongside and with us, believing that they are capable of and interested in a more comprehensive and satisfying account of her legacy than the one she herself offers.

But, in order to offer such an account we need to begin at such a point socially and historically that sense can be made of the events that in fact unfolded prior to, during, and following World War II; events that created the world that both she and we are (or in any case were) members.

Ms. Thatcher was born in 1925, which is to say, she was born at a point when the balance of power had already shifted considerably from Great Britain to Germany, on the one hand, and to the United States on the other; and, it had shifted to Germany because and only insofar as it had shifted to the United States. Yes, Great Britain, with considerable assistance from the United States, had defeated Germany, but at such a high cost, both in personnel and in wealth, that her economy and society were left devastated.

The following chart, showing Debt to GDP in the UK since 1830 perfectly illustrates the economic toll exacted by World War I:

This toll was only partially mitigated, in 1923, by a plan developed by Charles G. Dawes. The plan was to take JP Morgan money and funnel it through Germany to help the Germans pay off their war debt to France and England, who in turn would take the German payments and use them to pay back the war debt they owed to – you guessed it – JP Morgan. There was only one problem, as JM Keynes pointed out in his short 1919 tract The Economic Consequences of the Peace. By bleeding one of Great Britain’s leading trading partners dry, the British virtually guaranteed suppressed consumer demand. What this meant was that Great Britain’s economic fortunes only began to improve once Germany’s fortunes did likewise.

Ms. Thatcher grew up in a Great Britain whose pretensions to empire were underwritten by JP Morgan and whose macroeconomic obstinacy played a not insignificant role in driving Germany, one of England’s leading trading partner’s, into the arms post-democratic politics.

Nothing the Labor Party did or failed to do played any role whatsoever in the shift of the world’s economic center of gravity from London to New York. Rather was this shift provoked – guaranteed – by London’s headstrong pursuit of empire in the nineteenth century; a game which, by any macroeconomic measures, was terribly costly and inefficient insofar as it sequestered Britain’s wealth among the same 1% investor class that had the most to gain, financially, from empire, and the most to lose by extending Britain’s social, economic, and cultural franchise to Britain’s growing laboring classes.

What this meant in practice for Ms. Thatcher’s parents and grandparents was not only that they were denied the privileges enjoyed by Great Britain’s 1%, but that they were also compelled to pay, both in taxes and in personal loss, for an imperial dream from which they individually took home absolutely nothing.

Meanwhile, Great Britain’s trading partners to the west, their former colony America, played their cards more cautiously. Rather than expand their overseas holdings, they simply expanded their territorial sovereignty both westward and southward, extending what the envious Germans would later term Lebensraum. Empire, American investors all seemed to agree, was unnecessarily costly. It was much more lucrative and cost-efficient to finance the empires of others, most especially the British.

All of this was, needless to say, lost on the daughter of the grocery store owner in Grantham who grew up believing that all Great Britain needed to return to its former stature was a strong leader and sufficient moral fortitude.

Two nearly opposing explanations for the Great Depression and World War Two emerged from the ashes. According to the first explanation, the explanation embraced by nearly all economists and social scientists, economic malfeasance and callous disregard for the welfare of the laboring classes had led these classes to embrace solutions offered by ideologues who promised to improve their welfare not through economic or social policies, but through cultural, moral, and racial final solutions. Those social scientists and economists who embraced this explanation for the Great Depression and World War Two recommended a more equitable distribution of the social and economic franchise among the industrialized world’s laboring classes.

According to the second, alternative, explanation, embraced by individuals on the fringes of the policy world, fascism and communism were simply two sides of the same totalitarian coin. Only when economic actors were permitted to act in complete freedom, without the intervention of state agents, under the rule of law; only then could totalitarianism of the sort experienced in Spain, Italy, Germany, and Russia be avoided.

This second, alternative, explanation was roundly rejected by historians, political scientists, sociologists, and economists from one end of the political spectrum to the other. It was simplistic. It ignored the historical record. It imposed an ideologically-tinged template onto history.

And, yet, to individuals who had not benefited from the privileged education enjoyed only by Great Britain’s elites, this second explanation had the advantage of fitting into a moral universe with which they were only all too familiar. Told all of their lives by their class betters that only hard work and moral rectitude would win for them the prize, they were inclined to believe a story that said that they and they alone – not the government, not the community, not the parish, not their neighbors – only they themselves were responsible for their success. Aggregate demand, aggregate supply, all macroeconomic gibberish be damned!

The young Margaret Thatcher sucked up every word of Friedrich von Hayek’s Road to Serfdom. Though it rang hollow and false to every Cambridge and Oxford economist, it rang true to the Oxford student of Chemistry, the daughter of grocery store owners. And, in matters of economics, who are you going to believe? An undergraduate with a chemistry degree or John Maynard Keynes?

Ironically – or so it must have seemed to the young ideologue politician – as Great Britain shed its empire and as it embraced a broader social and economic franchise, its economic fortunes counterintuitively improved. And, yet, Great Britain was no longer in control of its own economic fortunes. When the United States, Great Britain’s successor, elected to finance the rebirth of the industrial world, it also created a global network of markets that would require security and protection, much as Great Britain’s empire had required security and protection, thus raising the price tag back in Washington. Moreover, by rebuilding Germany and Japan, the United States had not only created a ready market for its goods. It had also created worthy competitors; competitors who beginning in the late 1960s and early 1970s would begin to produce and market their own goods at competitive prices around the globe.

Here, however, Germany and Japan enjoyed an advantage not permitted in the United States. From the United States Germany and Japan had learned that by lowering costs of production across the board they could give their private producers a competitive advantage globally. Thus, country after country throughout the industrialized world lowered their private production costs by instituting universal public health care, health care that enjoyed the added advantage of producing a work force that was far more productive. Moreover, given the high cost of oil and transportation, America’s competitors set to work creating transportation networks for both workers and for goods that made getting to and from work far more efficient than America’s clumsy and forever clogged single vehicle highways.

As America’s growing debt from private-public partnerships in health, transportation, and education began to mushroom, and as its war-debt from imperial conflicts around the globe began to bloom, it began to dawn on a handful of economists in the wings of mainstream economics that the real drag on aggregate productivity was not private healthcare, private transportation, private education, and military intervention across the face of the globe; the real drag was government itself. Get rid of government – Locke and Hobbes be damned! – and a thousand balloons will be set aloft.

Never mind that this fit no known or conceivable economic model. Never mind that this fantasy recommended policies that would actually exacerbate and not rectify the overall economic stagnation. And never mind that it was the economies who had broadened the social and economic franchise that in the 1970s were enjoying the greatest prosperity and growth. Could the United States and Great Britain throw their laboring classes completely under the bus, could they completely trash the social and economic franchise, the comparative advantage they might create – relative to nations that had adopted a rigorous social and economic franchise – might just prove enough to tip the balance.

But, for Ms. Thatcher, this was not enough. As she never tired of reminding her admirers, whose minds of numbers and complex economic models left much to be desired, this was not a battle over economic policy. It was a moral battle.

And, indeed, it was. How could it have been otherwise for this daughter of a grocery store owner who had graduated in chemistry? For were it a battle over numbers and economic models; did she really have to master macroeconomics, she could only have failed, and failed quite miserably. Only by shifting the debate to the familiar terrain of good and evil, hard working and lazy, thrifty and profligate, only then could Ms. Thatcher win the day. And win she did, albeit at the expense of the large bulk of her countrymen and much of the world, vid., South Africa, Central America, South America.

So, what is Ms. Thatcher’s legacy? In nearly all respects, it would appear that her legacy is fading. Economists by and large are returning to their neo-Keynesian, neoclassical roots. The United States, though much more violently than Great Britain, is shedding its empire, ceding it to the next hegemon, while those nations who have embraced Ms. Thatcher’s ideology have assumed second or third tier status among the comity of nations.

Ms. Thatcher will always enjoy admirers, particularly among society’s outcasts and tycoons, those on the fringes. But for this Ms. Thatcher deserves less to be demonized than mourned. Of her it might be said that she was never crueler than she was to those who brought her into the world, whom she believed she was liberating, but whom in fact she was condemning to the true road to serfdom.

Joseph W.H. Lough

Even based on the simplest model,

,

substituting $133B for the model’s $100B,
the sequestration, at existing .6 MPC, amounts to a net decline of $332B in disposable income over the course of the year. Any employer or investor who had based her or his investment decisions on a GDP $332B more than its post-sequestration level will not add jobs at the same rate and may even eliminate planned hires entirely based on an anticipated decline in consumption.

According to the Republican leadership’s model, this decline in government outlays will be more than compensated by private sector job growth and investment. The latest job figures offer strong evidence that private sector employers are not buying it.