The Radical Center We Don't Need

Tom Friedman of the New York Times is at it again, claiming that what America needs to fix our economic and political mess is a radically centrist third party. Radical in this case means conservative when it comes to belt-tightening. Friedman in Sunday's Times urges a third party "to fill the space between the conservative Santorum (or even Mitt Romney) and the left-of-center Barack Obama."

Friedman has written this column before.

This time, he has a coyly undeclared candidate, David Walker, formerly president of the austerity-mongering Peter G. Peterson Foundation. Walker, who served in a previous life as head of the Government Accountability Office, has been barnstorming around the country, denying that he is running for anything, blaming America's woes on Social Security, Medicare, and Federal deficits.

Walker even campaigned hard for votes in Politico's third party preference poll last October, contending that his personal campaign was only to drum up support for the idea of budgetary prudence, and coming in second. But it sure looks to me like the fellow is running for something. And nice to have Friedman as a cheerleader.

Normally, a single-issue crusader like Walker would not get to first base. But this time, a dubious group of Wall Street multi-millionaires has created a vehicle for the likes of Walker called Americans Elect, to reserve a third party spot on the ballot, with the candidate to be selected later. They claim that the goal is to enhance democracy and break partisan deadlock. They also count Friedman as a big booster.

Americans Elect has already raised $22 million, and has qualified its yet-to-be named candidate for the ballot in 14 states including California. With some 6,000 paid and volunteer canvassers, they hope to gain a ballot slot in every state. Later this spring, its 350,000 members will vote via the Internet for their choice of nominee.

However, if the self-appointed steering committee of hedge fund private equity magnates doesn't like the public's choice (Bernie Sanders? Ron Paul?), they get to override it. As Ronald Reagan once memorably said, I paid for this microphone. The brand name is Americans Elect, but it might as well be Money Talks.

If anything, Americans Elect and David Walker epitomize all that's wrong with American democracy. Americans Elect is the creature of multi-millionaires and billionaires, who now have the ability to spend infinite money putting their thumbs on the scales of American democracy thanks to the Supreme Court's Citizens United decision. Walker himself enjoys his enlarged megaphone thanks to the billion dollars that retired private equity mogul Pete Peterson put into the austerity crusade.

The deadlock preventing solutions to America's real problems is not the result of a symmetrical partisan stand-off. Republicans are surely farther to the right than any mainstream party in American history, but today's Democrats are hardly left-wing. The policy stalemate is simply the consequence of Republicans blocking everything Obama proposes.

We already have a centrist party. It's called the Democrats. Obama's Democrats are to the right of Richard Nixon on most domestic economic issues. If Democrats had not joined Republicans in financial deregulation, we never would have had the economic collapse of 2008.

Contrary to the claims of Friedman, Peterson, and Walker, what ails America is not the long term budget projections of Social Security or even Medicare, but the continuing knock-on effects of the financial collapse of 2007-2008. The weakness of the housing sector, combined with lagging wages and persistently high unemployment, is leading to a prolonged period of deflation. More fiscal austerity would only make things worse.

If you want to balance Social Security's books long term, the solution is to increase wages -- the source of payroll taxes. Had wages increased with the economy's productivity for the 30 years after 1979 as they had for the 30 years before, Social Security would be in surplus forever. Alternatively, raise the ceiling on which payroll taxes are levied. Social Security has nothing whatever to do with the current economic crisis. And if you want to fix Medicare, fix the rest of the health system, which is the world's most inefficient because of the dominance of commercial interests.

A secretive independent party financed by hedge fund and private equity plutocrats is not only a blight on the democratic process. It could end up being a dangerous wild card in a momentous election.

If Rick Santorum is the Republican nominee, it's reasonable to expect an Obama win, maybe even by a landslide. Santorum is just too far to the right of most Americans. But if a Wall Street financed independent is on the ballot, running as a conservative on fiscal issues and a moderate on social issues, there's no telling how the election might play out. Such a candidate might draw off Republican votes -- or could attract independents who would otherwise back Obama.

Ross Perot, the last fiscal conservative to run as a pseudo-populist, was running first for several weeks in the spring of 1992. And he was a lot weirder personally than David Walker. As things worked out, the Perot vote helped Bill Clinton, but it could have gone the other way. In 2000, of course, Nader helped throw the election to George W. Bush.

As the Friedman column suggests, a lot of the pundit class laps up this "radical-center" malarkey. The Washington Post editorial page has been an ongoing commercial for fiscal austerity, and Walker has generally gotten a very respectful press. It was the influence of the deficit hawks that pushed Obama into appointing the late and little-lamented Bowles Simpson commission, which in turn compelled the president to waste nearly a year obsessing about budget balance when he should have stayed focused on recovery.

Austerity, as we see in Europe, is absolutely the wrong economic policy. It feeds on itself, driving the economy deeper into a hole. As GDP sags, wages and tax receipts sag with it, making budget balance a vanishing mirage. The more you cut the deficit, the more the economy falters, and the cycle repeats.

The combination of bad economic advice, a ballot slot bought and paid for by secretive private equity and hedge fund players, and a candidate who became a media figure courtesy of Peter G. Peterson, epitomizes everything messed up about our politics. How fitting that Tom Friedman should be its tribune.

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