Remember Trickle-Down? Supply Side? Voodoo Economics? These Days They Call It Austerity-- And It Works No Better Under Its Latest Moniker
Successful car thief-turned-congressman Darrell Issa, was tweeting away yesterday, digitally yammering about all the legislation he's voted for over the past decade that has destroyed the middle class is somehow President Obama's fault. I 'm not singling out Issa. He isn't any different from any of his delusional right-wing colleagues. When they're not complaining about Jimmy Carter or lionizing Bill Clinton-- who almost all of them (including Issa) voted to impeach-- they're trying to blame the results of the Bush/Republican Party economic agenda on President Obama. Or they say he hasn't fixed the problems they caused fast enough... as they plot to reinstate the policies that brought on the greatest economic collapse of most of our lives.
Inconveniently for Issa and his cronies, though, the Wall Street Journal ran a different kind of analysis not long ago (and still accessible online)-- one explaining why former Ronald Reagan Budget Director David Stockman says his own party, the Republicans, destroyed the U.S. economy. Stockman was a conservative Michigan congressman before Reagan made him Director of the Office of Management and Budget in 1981. He was an avatar of supply-side economics-- even though he caught on pretty quickly that trickle-down economics wasn't going to help anyone but the very rich. His post-Reagan career has been mostly one of failed investment schemes and an indictment for defrauding investors. About a year ago he had a short brush with fame again when he was quoted saying "The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility. They're on an anti-tax jihad-- one that benefits the prosperous classes." Paul Farrell piece for MarketWatch predates that:
"How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, Four Deformations of the Apocalypse.
Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."
Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider-- someone so close to the development of the Reaganomics ideology-- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.
But why focus on Stockman's message? It's already lost in the 24/7 news cycle. Why? We need some introspection. Ask yourself: How did the great nation of America lose its moral compass and drift so far off course, to where our very survival is threatened?
We've arrived at a historic turning point as a nation that no longer needs outside enemies to destroy us, we are committing suicide. Democracy. Capitalism. The American dream. All dying. Why? Because of the economic decisions of the GOP the past 40 years, says this leading Reagan Republican.
...Stockman rushes into the ring swinging like a boxer: "If there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation's public debt ... will soon reach $18 trillion." It screams "out for austerity and sacrifice." But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase."
In the past 40 years Republican ideology has gone from solid principles to hype and slogans. Stockman says: "Republicans used to believe that prosperity depended upon the regular balancing of accounts-- in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses too."
No more. Today there's a "new catechism" that's "little more than money printing and deficit finance, vulgar Keynesianism robed in the ideological vestments of the prosperous classes" making a mockery of GOP ideals. Worse, it has resulted in "serial financial bubbles and Wall Street depredations that have crippled our economy." Yes, GOP ideals backfired, crippling our economy.
...Stockman continues pounding away: "The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector." He warns that "Republicans have been oblivious to the grave danger of flooding financial markets with freely printed money and, at the same time, removing traditional restrictions on leverage and speculation." Wrong, not oblivious. Self-interested Republican loyalists like Paulson, Bernanke and Geithner knew exactly what they were doing.
They wanted the economy, markets and the government to be under the absolute control of Wall Street's too-greedy-to-fail banks. They conned Congress and the Fed into bailing out an estimated $23.7 trillion debt. Worse, they have since destroyed meaningful financial reforms. So Wall Street is now back to business as usual blowing another bigger bubble/bust cycle that will culminate in the coming "American Apocalypse."
Stockman refers to Wall Street's surviving banks as "wards of the state." Wrong, the opposite is true. Wall Street now controls Washington, and its "unproductive" trading is "extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives." Wall Street banks like Goldman were virtually bankrupt, would have never survived without government-guaranteed deposits and "virtually free money from the Fed's discount window to cover their bad bets."
Finally, thanks to Republican policies that let us "live beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore," while at home "high-value jobs in goods production ... trade, transportation, information technology and the professions shrunk by 12% to 68 million from 77 million."
As the apocalypse draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes: No wonder "that during the last bubble (from 2002 to 2006) the top 1% of Americans-- paid mainly from the Wall Street casino-- received two-thirds of the gain in national income, while the bottom 90%-- mainly dependent on Main Street's shrinking economy-- got only 12%. This growing wealth gap is not the market's fault. It's the decaying fruit of bad economic policy."
Get it? The decaying fruit of the GOP's bad economic policies is destroying our economy.
Ryan and Issa and Romney have no idea how to answer this kind of critique and no idea how to move forward from it. Progressive Democrats certainly do and Prosperity Economics, the antidote to their latest trickle-down/voodoo theory, explains it step by step. Santa Clarita surgeon Lee Rogers, running for a seat currently occupied by Voodoo Warrior Buck McKeon is one of the 16 progressive challengers backing Professor Jacob Hacker's program for the renewal of American Prosperity. Roger's own website statement on the deficit sounds like he's paid close attention o both Hacker and Stockman:
Irresponsible spending by politicians has created our fiscal crisis. Congressional inaction and grandstanding creates uncertainty that makes markets cautious. Investors don’t trust that Washington will be able to resolve our fiscal crisis in a manner that will prevent a worsening recession. We need to send people to Washington who will work together to fix the economy and not wait until the last minute, when things are on the brink of collapse, before acting.
We all know you can’t spend more money than you bring in. Through taxes and other income sources, Washington brings in about $6.9 billion every day and spends about $10.5 billion. In 2011, the government spent about $1.27 trillion more than it made.
This imbalance must be repaired. Now, some in Washington want the burden of paying off the deficit to fall on the shoulders of the middle class and the poor.
We can’t let Medicare lose out to corporate tax breaks and subsidies for the richest companies. We can’t let defense spending on wars, which we’ve already won, threaten the future of Social Security. We shouldn’t let foreign aid to rich nations keep us from providing healthcare to our own poor.
Reducing the deficit is important, but it shouldn’t be done at the expense of growth in America. In order to grow, we need to invest in our own country’s infrastructure. The World Economic Forum ranked US infrastructure at 24th out of 142 nations, a downgrade from 10th five years ago. Infrastructure (which includes transportation, energy, water/waste management, and communications) is paramount to US prosperity and global competitiveness. These serious deficits in our infrastructure are already having dire effects on the economy and on our safety.
Financing infrastructure should not be seen as an expense, but an investment that will have far-reaching beneficial effects beyond just the short-term job growth it causes.
...[W]e face a different threat from within: a runaway defense budget that threatens the fiscal security of our nation. Our civilian leaders who govern the defense budget don’t know how to reduce spending as our overseas obligations approach the projected reductions. We have our budgeted defense spending and our war spending, which is not budgeted. We’ve spent nearly $1.3 trillion on wars since 2001, adding it directly to our deficit. We have achieved our objectives in the conflicts in Iraq and Afghanistan and should make steps to immediately end the wars and bring our troops home.
Budgeted defense spending is being subject to automatic reductions since Congress failed to achieve agreements on deficit reduction. However, the reductions are not really reductions at all, but rather a slower rate of growth. Defense spending will only increase by 16% over the next 10 years, instead of 23%. Some defense hawks in Congress have made outrageous claims to avoid the slow down, such as that our military will be at pre-WWI levels, or that we’ll have to bring back the draft. We can reduce defense spending while still remaining vigilant to emerging and changing threats.
We don’t need to spend money on engines for planes with canceled contracts, for unneeded technologies, or to maintain some of our 700 military bases around the world. The US spends more on defense than every other nation on the planet combined. We can keep necessities, cut waste, save money, and be more secure.
Please consider contributing to the election efforts of Lee and other pro-Prosperity Democrats at the Americans For REAL Prosperity ActBlue page. Even Republican David Stockman admits the alternative is very, very bleak.