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Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years
This weekend, House Republican leader John Boehner played out the role of Jude Wanniski on NBC's "Meet The Press."
Odds are you've never heard of Jude, but without him Reagan never would have become a "successful" president, Republicans never would have taken control of the House or Senate, Bill Clinton never would have been impeached, and neither George Bush would have been president.
When Barry Goldwater went down to ignominious defeat in 1964, most Republicans felt doomed (among them the then-28-year-old Wanniski). Goldwater himself, although uncomfortable with the rising religious right within his own party and the calls for more intrusion in people's bedrooms, was a diehard fan of Herbert Hoover's economic worldview.
In Hoover's world (and virtually all the Republicans since reconstruction with the exception of Teddy Roosevelt), market fundamentalism was a virtual religion. Economists from Ludwig von Mises to Friedrich Hayek to Milton Friedman had preached that government could only make a mess of things economic, and the world of finance should be left to the Big Boys – the Masters of the Universe, as they sometimes called themselves – who ruled Wall Street and international finance.
Hoover enthusiastically followed the advice of his Treasury Secretary, multimillionaire Andrew Mellon, who said in 1931: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down... enterprising people will pick up the wrecks from less competent people."
Thus, the Republican mantra was: "Lower taxes, reduce the size of government, and balance the budget."
The only problem with this ideology from the Hooverite perspective was that the Democrats always seemed like the bestowers of gifts, while the Republicans were seen by the American people as the stingy Scrooges, bent on making the lives of working people harder all the while making richer the very richest. This, Republican strategists since 1930 knew, was no way to win elections.
Which was why the most successful Republican of the 20th century up to that time, Dwight D. Eisenhower, had been quite happy with a top income tax rate on millionaires of 91 percent. As he wrote to his brother Edgar Eisenhower in a personal letter on November 8, 1954:
"[T]o attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything--even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon 'moderation' in government.
"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt [you possibly know his background], a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid."
Goldwater, however, rejected the "liberalism" of Eisenhower, Rockefeller, and other "moderates" within his own party. Extremism in defense of liberty was no vice, he famously told the 1964 nominating convention, and moderation was no virtue. And it doomed him and his party.
And so after Goldwater's defeat, the Republicans were again lost in the wilderness just as after Hoover's disastrous presidency. Even four years later when Richard Nixon beat Hubert Humphrey in 1968, Nixon wasn't willing to embrace the economic conservatism of Goldwater and the economic true believers in the Republican Party. And Jerry Ford wasn't, in their opinions, much better. If Nixon and Ford believed in economic conservatism, they were afraid to practice it for fear of dooming their party to another forty years in the electoral wilderness.
By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections.
Everybody understood at the time that economies are driven by demand. People with good jobs have money in their pockets, and want to use it to buy things. The job of the business community is to either determine or drive that demand to their particular goods, and when they're successful at meeting the demand then factories get built, more people become employed to make more products, and those newly-employed people have a paycheck that further increases demand.
Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.
At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!
Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.
Ronald Reagan was the first national Republican politician to suggest that he could cut taxes on rich people and businesses, that those tax cuts would cause them to take their surplus money and build factories or import large quantities of cheap stuff from low-labor countries, and that the more stuff there was supplying the economy the faster it would grow. George Herbert Walker Bush – like most Republicans of the time – was horrified. Ronald Reagan was suggesting "Voodoo Economics," said Bush in the primary campaign, and Wanniski's supply-side and Laffer's tax-cut theories would throw the nation into such deep debt that we'd ultimately crash into another Republican Great Depression.
But Wanniski had been doing his homework on how to sell supply-side economics. In 1976, he rolled out to the hard-right insiders in the Republican Party his "Two Santa Clauses" theory, which would enable the Republicans to take power in America for the next thirty years.
Democrats, he said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too – spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.
There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.
When Reagan rolled out Supply Side Economics in the early 80s, dramatically cutting taxes while exploding (mostly military) spending, there was a moment when it seemed to Wanniski and Laffer that all was lost. The budget deficit exploded and the country fell into a deep recession – the worst since the Great Depression – and Republicans nationwide held their collective breath. But David Stockman came up with a great new theory about what was going on – they were "starving the beast" of government by running up such huge deficits that Democrats would never, ever in the future be able to talk again about national health care or improving Social Security – and this so pleased Alan Greenspan, the Fed Chairman, that he opened the spigots of the Fed, dropping interest rates and buying government bonds, producing a nice, healthy goose to the economy. Greenspan further counseled Reagan to dramatically increase taxes on people earning under $37,800 a year by increasing the Social Security (FICA/payroll) tax, and then let the government borrow those newfound hundreds of billions of dollars off-the-books to make the deficit look better than it was.
Reagan, Greenspan, Winniski, and Laffer took the federal budget deficit from under a trillion dollars in 1980 to almost three trillion by 1988, and back then a dollar could buy far more than it buys today. They and George HW Bush ran up more debt in eight years than every president in history, from George Washington to Jimmy Carter, combined. Surely this would both starve the beast and force the Democrats to make the politically suicidal move of becoming deficit hawks.
And that's just how it turned out. Bill Clinton, who had run on an FDR-like platform of a "new covenant" with the American people that would strengthen the institutions of the New Deal, strengthen labor, and institute a national health care system, found himself in a box. A few weeks before his inauguration, Alan Greenspan and Robert Rubin sat him down and told him the facts of life: he was going to have to raise taxes and cut the size of government. Clinton took their advice to heart, raised taxes, balanced the budget, and cut numerous programs, declaring an "end to welfare as we know it" and, in his second inaugural address, an "end to the era of big government." He was the anti-Santa Claus, and the result was an explosion of Republican wins across the country as Republican politicians campaigned on a platform of supply-side tax cuts and pork-rich spending increases.
Looking at the wreckage of the Democratic Party all around Clinton by 1999, Winniski wrote a gloating memo that said, in part: "We of course should be indebted to Art Laffer for all time for his Curve... But as the primary political theoretician of the supply-side camp, I began arguing for the 'Two Santa Claus Theory' in 1974. If the Democrats are going to play Santa Claus by promoting more spending, the Republicans can never beat them by promoting less spending. They have to promise tax cuts..."
Ed Crane, president of the Libertarian CATO Institute, noted in a memo that year: "When Jack Kemp, Newt Gingich, Vin Weber, Connie Mack and the rest discovered Jude Wanniski and Art Laffer, they thought they'd died and gone to heaven. In supply-side economics they found a philosophy that gave them a free pass out of the debate over the proper role of government. Just cut taxes and grow the economy: government will shrink as a percentage of GDP, even if you don't cut spending. That's why you rarely, if ever, heard Kemp or Gingrich call for spending cuts, much less the elimination of programs and departments."
George W. Bush embraced the Two Santa Claus Theory with gusto, ramming through huge tax cuts – particularly a cut to a maximum 15 percent income tax rate on people like himself who made their principle income from sitting around the pool waiting for their dividend or capital gains checks to arrive in the mail – and blowing out federal spending. Bush even out-spent Reagan, which nobody had ever thought would again be possible.
And it all seemed to be going so well, just as it did in the early 1920s when a series of three consecutive Republican presidents cut income taxes on the uber-rich from over 70 percent to under 30 percent. In 1929, pretty much everybody realized that instead of building factories with all that extra money, the rich had been pouring it into the stock market, inflating a bubble that – like an inexorable law of nature – would have to burst. But the people who remembered that lesson were mostly all dead by 2005, when Jude Wanniski died and George Gilder celebrated the Reagan/Bush supply-side-created bubble economies in a Wall Street Journal eulogy:
"...Jude's charismatic focus on the tax on capital gains redeemed the fiscal policies of four administrations. ... [T]he capital-gains tax has come erratically but inexorably down -- while the market capitalization of U.S. equities has risen from roughly a third of global market cap to close to half. These many trillions in new entrepreneurial wealth are a true warrant of the worth of his impact. Unbound by zero-sum economics, Jude forged the golden gift of a profound and passionate argument that the establishments of the mold must finally give way to the powers of the mind. He audaciously defied all the Buffetteers of the trade gap, the moldy figs of the Phillips Curve, the chic traders in money and principle, even the stultifying pillows of the Nobel Prize."
In reality, his tax cuts did what they have always done over the past 100 years – they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people.
The Republicans got what they wanted from Wanniski's work. They held power for thirty years, made themselves trillions of dollars, cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 8 of the non-governmental workforce today, and left such a massive deficit that some misguided "conservative" Democrats are again clamoring to shoot Santa with working-class tax hikes and entitlement program cuts.
And now Boehner, McCain, Brooks, and the whole crowd are again clamoring to be recognized as the ones who will out-Santa Claus the Democrats. You'd think after all the damage they've done that David Gregory would have simply laughed Boehner off the program – much as the American people did to the Republicans in the last election – although Gregory is far too much a gentleman for that. Instead, he merely looked incredulous; it was enough.
The Two Santa Claus theory isn't dead, as we can see from today's Republican rhetoric. Hopefully, though, reality will continue to sink in with the American people and the massive fraud perpetrated by Wanniski, Reagan, Laffer, Graham, Bush(s), and all their "conservative" enablers will be seen for what it was and is. And the Obama administration can get about the business of repairing the damage and recovering the stolen assets of these cheap hustlers.
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98 Comments so far
Show AllInteresting read:
http://liberalfascism.nationalreview.com/
Rahmbo: http://vodpod.com/watch/1177723-never-let-a-serious-crisis-go-to-waste-wsj
Reagan had nowhere near the gray matter to understand such a scheme. Greenspan's cryptic explanations were understood by nobody, least of all himself. If Wanniski was the brains who was the power broker?
Reagan was the Chief SELLER of "small government...it's individual choice freedom, let the free market do its magic".....where the REAL motive was to RENDER ANY GOVERNMENT IMPOTENT in serving its job , which is to serve the interests of the common welfare or people and prevent them from being exploited by those that THRIVE and RELY on "no regulation" to EXPLOIT others and THEN USE that POWER of "limited REGULATION" of their actions --
TO IN TURN REGULATE the lives of people and society for the sake of PROFIT!
THAT"s the real game of these "small government" SELLERS like reagan. and margaret thatcher.
they are DISCREDITED.
the fact that government has become a handmaiden to CORPORATE POWER is the PROOF , in addition to its having become a WAR MACHINE and POLICE STATE -- a BIG GOVERNMENT -- in SERVICE of CORPORATISM - that the "small government, let the free market do its magic" nonsense is a TROJAN HORSE that people swallowed...........
making people IMPOTENT because the protection and aid of GOOD government has been REDUCED towards the END of removing ANY protection for people FROM exploitation by those who use "small government" as the BAIT and SWITCH it with
BIG POLICE CORPORATE WARFARE STATE and WELFARE STATE for the RICH and POWERFUL --and the MONEYED INTERESTS and those that WISH TO BE LIKE THEM as well as IMAGINE they TOO can be Little Kings and Queens in this world.
period!
this boils down to a matter of philosophy -- towards an economic regime that considers SO:ME to be born to be RULERS and NOBILITY -- hiding behind "small government" BAITING of people .
that's what you all see in FULL DISPLAY in ALL ITS GORY BARBARITY as the economy implodes and in its implosion -- this capitalist "free market -deregulate, and privatize everything" -- leading to unbridled exploitation of the commons - spreads its POISON as the "BOILS" festering in its body explodes and the PUS just poisons everything it touches,,,not LEAST of all HUMAN decency!!!
Nice article and I agree with all of it until the end. I do NOT see Obama doing anything different. His staff choices and policies offer just more of the same. In fact, it seems that he has taken the two Santa theme as his own. Trillions more in deficit spending, trillions more in debt and cheap credit to solve a problem created by debt and cheap credit.
The sad fact is that America's economy needs to collapse completely before any real change can come. The good news is that is not so far away.
Teddy,
What is your vision for American? Do you think it make sense to put control of the lives of 300 million people and $3 billion to $4 billion dollars in the hands of 537 elected officials? Corporations love the fact that there are so few people with so much power concentrated in one place. Why do you think there are so many lobbyists in DC? Imagine if the lobbyists had to lobby 6,300 representatives instead of 435 (http://thirty-thousand.org/). Imagine if the power was not concentrated in DC, and the corporations had to lobby representatives and senators in fifty states.
Do you think you are more likely to get good government from a one size (does not) fit all federal government or fifty "experiments in democracy?" Do you think it makes sense for citizens in New York and California to send billions of dollars to DC for elected officials from all of the states to determine how to spend it, or would it make more sense to keep the money in the state?
Regarding the "nationalism" of the early Americans, many "Americans" really thought of themselves as citizens of their state rather than citizens of the "United States of America." The consciously limited the role of the federal government. Do you think it is easier to make changes at the city, state, or federal level?
Do you think the federal government's involvement in education has led to "an informed well educated, participatory people."
Do you support Fannie Mae and Freddie Mac? Do you think that the current Social Security legislation could have been passed in its current form, or do you think that the American people were promised one thing and it was gradually changed over time? What about the income tax? Medicare?
Do you cherish freedom?
please don't question me or others about "freedom" AS IF you are the guys who can define it for anyone. you libertarians love to use that word without any real philosophical argument as to EXACTLY what it means and even then -- you promote economic systems that REMOVE freedom from people under the guise of "choice"
.
MY definition is simple. GOVERNMENT is PART of a society - a society can not order itself without GOVERNANCE in some form.
the question of governance is about GOOD , BENIGN governance whether it is by democratic , direct participation or chosen representatives. that is up to PEOPLE and the culture and THEIR notions of "freedom".
i will give you a DIRECT example of the CONSEQUENCES of liberatarians' , "free market choice" , "small limited government" mantra that has led to an explosion of REGULATION BY CORPORATIONS , the business community, the MONEY capitalists of the lives of people:
-------
a man has killed his own wife, his five children and himself - out of despondence at losing his job -- and his wife was also "terminated".
LET ME ASK YOU -- which PRECIOUS WONDERFUL ECONOMIC SYSTEM has DONE THIS, and is effecting it all across the USA and the globe AT THIS VERY MINUTE?
it this precious "magical" free market, let us "privatize everything and leave it to individual choice" nonsense that has left out the COMMONS and COMMON WELFARE -- by giving up POWER to a FEW individuals who hide behind CORPORATISM -- which is the CHILD of this very wonderful "libertarianism" . !
that Newt Gingrich "NATIONAL REVIEW" website? that's already DISCREDITED as ANOTHER of those proclaimers of so-called "free market fundamentalism" --- who try to EQUATE "socialism" with
Fascism BECAUSE the Nazis called themselves "NATIONAL SOCIALISTS".....
EVEN IF socialism as OWNERSHIP of the commons BY the people and NOT by corporations and private businesses -- is VASTLY different from FASCISM
which as Mussolini described ,and APPLIES to Italy and Nazi Germany CORRECTLY was:
"FASCISM SHOULD MORE PROPERLY BE CALLED -- CORPORATISM -- FOR IT IS THE WEDDING OF STATE POWER WITH THE CORPORATION TO CONTROL NATIONAL RESOURCES -- IN FAVOR OF THE FAR RIGHT".
THE libertarians -- you can GO to JUSTIN RAIMONDO -- of Antiwar.com -- for the proper defintion of his and similar minded "Rightists" - are nothing more than MASQUERADERS for RIGHTWING FASCISM and CORPORATISM
disguising themselves as "freedom" lovers..when in reality -- that principle puts PERSONLA PROFIT above COMMONS.
and that is UNCIVILIZED - for IT leads into tyranny as much as anything -- and removing it from ordinary people under the instrumetns of state and corporation ....
EXACTLY as is seen today with BANKS , FINANCE, MONEY CAPITALISM "left free" to do "their magic of the market place" .
A SOCIALIST ECONOMY -- mind you =- ECONOMY - is better. it places PROFIT MAKING in its PROPER PLACE --
SECONDARY to the COMMON WEALTH of people! PERIOD!
Do you really think that the banks were not regulated? What are your thoughts on Fannie Mae and Freddie Mac? Do they deserve any of the blame for the current financial situation? Do you recognize that government had a hand in creating our current financial situation?
Do you think that the founders of this country would support the type of government that you promote? Can you provide evidence?
You have no issues with bankers taking home hundreds of millions in remuneration, while running their banks into the ground? You have no issues with bankers saddling their their banks with who the hells knows how much bad debt, and then requiring the public to bail them out?
One last question: if you subscribe to the free market idea, should the banks not be allowed to go bankrupt? The free market has demonstrated that the banks, and the people who ran them, are incompetent at best, cheats at worst.
Fannie Mae and Freddie Mac are one of the reason that the banks saddled themselves with bad debt. The banks operated under the expectation that if things with south the federal government would bail them out because of Fannie and Freddie.
Banks should definitely be allowed to go bankrupt.
The market is not free. There is still plenty of regulation, and some of the regulation is to blame for the current financial problems.
Your last sentence could be applied to the federal government as well. The federal government has demonstrated that it, and the who runs it, are incompetent at best, cheats at worst.
What everyone is forgetting: Who caused this financial crisis???
The TRUTH is Pres. Carter and Clinton!! Remember the law that was passed to MAKE banks give loans to people who could not afford the homes they were buying?? Freddie Mac etc. ?? THAT is what caused this problem and the liberals will not ever admite that THEY made this happen!! What made this country great WAS the individual who worked hard WITHOUT government interference to succeed or fail by HIS own drive. CAPITALISM is what made this counrty the GREATEST in the world. It was the people not the government. IF we proceed on this course of "socialism" we WILL FAIL.
The TRUTH needs no capitalization. Nor am I aware of any law that MAKES banks give loans to people who cannot afford the homes they seek to buy.In fact brokers were pushing homes and falsifying the value of those homes in order to increase their commissions, in addition they were lying as to the terms of those mortgages. Thus what you claim to be the cause of our current mess is, in reality, nothing more than the ravings of a sadly uninformed person.
CAPITALISM ( do you honestly think that capitalizing gives you an unearned credibility?) which was freed by the deregulation policies of Reagan and Bush to invent bundled derivatives, made legal and free of government scrutiny by REPUBLICANS ( does that work for you), is what led to the collapse of that market. As to your inference that we are embarked upon a course of "socialism" ( shouldnt that be capitalised?) perhaps you might elucidate ( that means explain) as to what course and what socialism?
But thanks ever so much for playing.
"Most people would sooner die than think, in fact they do so. Bertrand Russell
Rather than talk about who is right or wrong I would like to add a little math to the argument.
Banks take deposits and pay less than 2% PER year.
Banks borrow money from the federal reserve for less than 2% per year.
Banks loan the money at between 5-11% per year.
Banks make 4-8% per year or approx. $50,000.00 for every $1,000,000.00 loan every year.
Less than 10% of the homes per year go into foreclosure. Over 90% pay the loan back or the bank is guaranteed more than $45,000.00 for every $1,000,000.00 loaned and will be able to write off 100% of the loss on foreclosed homes. But they really do not lose money because the home still sells for something. All the bank has to do is pay the interest to customers or federal reserve.
So they are not losing money on foreclosed homes so why are they going bankrupt?
The banks need the money to pay for all of the corporate loans to build factories overseas and to buy each other out and in general just keep letting rich people get richer. It is a never ending tale of borrowing money to be able to live richer and richer.
The math is simple. Less than 1 million homes foreclosed last year at an average per month payment of less than $2,000.00, means less than 2 billion per month of total loses. Or $24 billion loses for the total industry not taking into account the fact that over $2,000,000,000,000.00 was taken in for the people who did pay there mortgage payment with a profit on that of over $100,000,000,000.00.
So again the media, the banks, our legislators are all lying.
The banks do not need to be bailed out.
The corporations and billionaires need to go bankrupt for building all of those factories in third world countries.
The banks need to go bankrupt for letting them steal Americans money.
The legislators need to go to jail for bailing the banking system out!
New banks will take there place and be happy to make 4% on every dollar they loan to Americans. For doing nothing but hitting a computer keyboard.
Again the math does not lie. But bankers and politicians do.
You betray a lack of understanding of the cause of this current mess. It is not the simple mortgage loan that is the culprit, but instead the bundling of many,many such loans into packages called derivatives and then sold and resold, splintered, reassembled and resold again. Today noone knows for certain who holds the mortgage on a particular home,or for that matter what those bundled derivatives are really worth given the plunging value of the homes contaned within them, thus making rather difficult the methodology by which one reduces the payments to save the homeowner from foreclosure.
"Most people would sooner die than think, in fact they do so. Bertrand Russell
i will answer your questions with QUESTIONS:
do you think that if there were no "representatives" in congress or there is NO congress -- where it applies in america -- LOBBYISTS among PROFITEERS borne out of the DOGMA of "free enterprise" would NOT SEEK AND FIND A WAY TO TAKE CONTROL OF COMMONS WEALTH just the same?
do you think that the government has NO business serving the needs of the COMMONS -- which is PEOPLE _- where PEOPLE , left intheir "individuality" UNDER the excesses -- which are INEVITABLE under the free market system -- can NOT defend THEMSELVES from this barbaric practices of exploitation?
do you think that PEOPLE as represented in their own government SHOULD NOT SEE TO IT THAT THEIR PARTICIPATION and contribution to society as a whole is embedded in the ability of their PUBLIC INSTITUTIONS to generate and maintain policies that look after THEIR COMMON WELFARE or LEAVE IT to the exigencies of your wonderful "free market?"
i have NO problem with people paying taxes and the RICH ought to pay MORE ....as part of maintaining a decent society.
it is only those who think that they OWE SOCIETY in which they function and make their wealth - NOTHING -- who love this idiotic idea of "free market" and "deregulation" and "no or small government spending"
because in REALITY _- what they REALLY hate is PUBLIC SPENDING throguh government institutions -- IF they are truly benign and under the watchful eye of CIVIC MINDED people (unlike what is under capitalism) - for COMMON WELFARE....
and in reality what they DESIRE and LUST after is the "freedom" to FEED on the TROUGH of PUBLIC COMMONS and without ANY responsibility TOWARDS the society from which they TAKE their WEALTH!! and their ENTIRE existence!
that is what this idea of libertarianism really tries to foster but COVERS up with high-falutin notions about 'freedom'....
when in reality they couldn't care LESS about freedom FOR OTHERS -- but ONLY FOR THESMELVES to EXPLOIT public commons for THEIR S0-called "personal choice" and "freedom"!
public spending on health care is PROVEN by every other industrialized country in the world to be FAR FAR MORE Efficient and Cost-effective THAN privatized -- FOR PROFIT -- "free market" health care nonsense!
it should be DISMANTLED in its entirety and rendered ILLEGAL and CRIMINAL for such a thing -- profiteering on ILLNESS - has NO PLACE in a decent society!
Your questions did not answer my questions. Were you educated in public schools?
furthermore -- the PUBLIC SCHOOL SYSTEM in teh USA has DETERIORATED NOT because the government has "spent too much" -- even if there IS waste -- but because the government under the "free marketeers" has TRANSFERED PUBLIC WEALTH in taxes TO PRIVATE schools through grants and "rich neighborhood" transfers of WELFARE system FOR THE RICH! while having their powerful media -- LIKE NATIONAL REVIEW -- proclaim it is the fault of the public system ...when in reality
THEIR lobbying AGAINST the public system HAS caused the Destruction and deterioration of education for americans BY MAKING PROFITMAKING the HOLY GOSPEL of "education" -- RENDERING the majority of ALREADY LOW PAID AMERICANS -- also under the free market system -- UNABLE to afford proper education!
so -- there you go!
it's ALL traceable to this "conservatism" -- this "small government" mantra -- and hiding behind it this self-styled "libertarianism"........
ALL OF THEM with NO respect whatsoever for the COMMONS and COMMON WELFARE but ONLY for PERSONAL PROFIT which they define , ERRONEOUSLY and MISLEADINGLY and DECEPTIVELY as "freedom and choice".
such a funny, twisted kind of thinking. it's aberrational and irrational and selfish!
Where are the facts that support your arguments?
Please explain how this transfer of wealth applies to the public schools in Washington DC. Washington DC spent about $24,000 per student in 2008. This is money spent in the public schools. This was not money transferred private schools through grants. Do you think that the DC schools are successful?
Why do you think that the cost for a college education is outpacing inflation?
Unmitigated bull. You have a right to your own ideas, but not to misrepresent the facts.
Over 27 years I have taught- half at a parochial high school in Connecticut and the other half at an inner city school.
First, the government provides NO meaningful funding for private schools- not even tuition tax deductions. Some Districts provide busing, some textbooks, some public library resources. That's it. Your statement is ignorant.
Second, at a time maybe a decade ago, the parochial high schools in Connecticut were spending just over $8,000 per student; the public school system was spending over $12,000 at that same time. (I do not have current comparisons handy- look it up- you will discover the same).
YOU WANT TO IMPROVE THE QUALITY OF EDUCATION FOR POOR AND MIDDLE CLASS KIDS (which are the kids are current system is failing); GIVE THEM AND WHAT PARENTS THEY HAVE THE SAME CHOICE IN EDUCATION THAT THE WEALTHY KIDS HAVE- PUBLIC # FOR VOUCHERS.
Question: What country has the best post secondary education system in the world? Answer: United States.
Question: Why, then, is K-12 in the U.S. hurting so badly. Answer: Teacher Unions like mine care more about protecting their workers than they do about kids- so they fight the necessity of schools having to compete- the way colleges do.
Unmitigated bull. You have a right to your own ideas, but not to misrepresent the facts.
Over 27 years I have taught- half at a parochial high school in Connecticut and the other half at an inner city school.
First, the government provides NO meaningful funding for private schools- not even tuition tax deductions. Some Districts provide busing, some textbooks, some public library resources. That's it. Your statement is ignorant.
Second, at a time maybe a decade ago, the parochial high schools in Connecticut were spending just over $8,000 per student; the public school system was spending over $12,000 at that same time. (I do not have current comparisons handy- look it up- you will discover the same).
YOU WANT TO IMPROVE THE QUALITY OF EDUCATION FOR POOR AND MIDDLE CLASS KIDS (which are the kids are current system is failing); GIVE THEM AND WHAT PARENTS THEY HAVE THE SAME CHOICE IN EDUCATION THAT THE WEALTHY KIDS HAVE- PUBLIC # FOR VOUCHERS.
Question: What country has the best post secondary education system in the world? Answer: United States.
Question: Why, then, is K-12 in the U.S. hurting so badly. Answer: Teacher Unions like mine care more about protecting their workers than they do about kids- so they fight the necessity of schools having to compete- the way colleges do.
Teddy,
You seem to have it all figured out. Your use of capital letters makes your arguments so much more powerful. As one who cherishes freedom, I would be quite content to let the people in the fifty states choose the type of government they want within their state. Keep the federal government limited to the Constitution (but repealing the 16th and 17th amendments).
Why do you feel the need to impose your idea of good government on many within a population of 300 million people who have no desire to live in a collectivist/statist/socialist society? Do you think that you are that much smarter than everyone else? Are those who disagree with you just too ignorant to know what is good for them?
Why wouldn't you agree with having fifty experiments in government? Do you think that those who disagree with you should not have the choice of the kind of government that they want?
When do you think slavery started in the North American continent? States rights did not give us slavery. There was slavery when the states were colonies of England. During the creation of the Constitution, the slave states wanted to count slaves as people. It was the non-slave states that did not want them counted. They compromised on 3/5ths. The non-slave states did not want the slave states to gain representation in Congress by counting the slaves. Most educated people can agree that slavery was a travesty, and it is an unfortunate stain on the history of America. However, some argue that we are all becoming slaves (http://townhall.com/Columnists/WalterEWilliams/2008/06/11/are_americans_pro-slavery).
Regarding "universal" health care. I lived in England for two years. I really enjoyed reading the stories of the extremely ill and elderly who were being denied hospital beds because of the shortage of space. The government had decided they were expendable. Their lives were no longer worth the cost to the public. The beds had to be used for those whose lives were more valuable.
You know, reading your comment I kept thinking, "Okay. I disagree somewhat with this person, but I think we could have a rational, sane, agreeable - even friendly - discourse." I even got over the speed bump of your sort-of-arrogant, demeaning question to Teddy; the one that starts "Do you think that you are that much smarter..."
And then: WHAM! slavery was just a travesty!? Do you KNOW what travesty means? If so, please tell us what slavery is a travesty OF? And what is it about slavery that you find comical?
And THAT was followed by the "unfortunate stain". Man, you had better do some research on what is is to be a slave, both today and 200 years ago. Especially if you equate the slavery of then with the political slavery you equate with federalism. What hubris!
And by the way, an anecdotal story about some extremely ill or elderly person having to wait for a bed is just that: anecdotal. In retort, I can give you worse horror stories of people in this country with full insurance coverage (the very notion that one needs to purchase insurance from a third party that sits between me and my doctor and is there just to make money is DISGUSTING!) who were denied treatment and died because it would have been too expensive for said insurance company.
In Denmark, if you have to wait more than 30 days for treatment due to demand or scarcity of resources, the government will allow you to receive treatment in the country of your choice. There IS a better way, and it's called single-payer!
"no gods, no masters" --m. sanger
I would welcome a sane and friendly discourse.
A travesty of human justice and the ideals expressed in the Declaration of Independence. I do not find slavery comical, and I was not trying to minimize slavery in any way. I was simply trying to refute Teddy's suggestions that it was "states' rights" that gave us slavery. I was also not equating slavery then with the current situation, but I was pointing out that others have. Did you read Walter Williams' column?
My question to Teddy was not arrogant. I am quite aware that I do not have all the answers. I am also quite aware that the 537 elected federal officials do not have all of the answers. That is one of the reasons that I prefer limitations on the federal government. Fifty experiments in democracy give more opportunity to find out what works and what does not.
Denmark's health care has often been used as an example the United States should imitate. Denmark is a mostly homogeneous society of 5.5 million people located in a country of approximately 17,000 sq. miles. The United States is a heterogeneous country of 300 million people and an area of approximately 3.8 million square miles. What works for Denmark may not work for the United States. The population and area of Denmark is more on the scale of one of our states. Since the money for single payer health care comes from the people, let each of the states, if they decide to, implement "single payer" health care. Again, it would give fifty experiments in government, and the states could learn from one another what works and what does not.
Never could understand why the democrats didn't deflate the "lower taxes" slogan with the retort that they are not really lowering taxes but just putting it on the credit card for future (non-wealthy) generations to pay. Naturally this is tied up with the "starving the beast" technique that was mentioned.
In the world of simple advertising slogans one must fight back with simple more truth telling ones. Thus "tax and spend liberals" would be countered with: "paying as you go (cash and carry) is much better then 'spend and charge republicans' who always put us further in debt.
Have you looked at the proposed "stimulus" package? Would you describe it as "paying as you go" or "spend and charge?"
Do you really think only one party is to blame for putting the government in debt?
Let's see. first read my comments above concerning Thom's article.
Then consider the results of supply-side economics:
1962- Kennedy supply side tax cut----federal government revenues exceed projections, we have an economic boom. Social spending (Great Society) and Vietname war spending cause government expenditures to radically exceed projections. (Some of that spending may be worthy- but that's off point): What caused the chronic deficits by the 1970s- tax cuts? or SPENDING.
1981- Reagan's 25% "cut" in marginal tax rates over three years.--------federal government revenues exceed projections, we have an economic boom. Dramatic increases in Defense spending in the 80s, while maybe hastening the demise of the Soviet Union and helped save money in the future, as well as the "spending" deal the adminstration engaged with Congress (Defense spending in inflation adjusted dollars in the eighties and as a percentage of the federal budget was greater than we have now- including what we spend on Iraq and Afghanistan) (Some of that spending may be worthy- but that's off point): What caused the chronic deficits by the 1970s- tax cuts? or SPENDING.
2001- Bush's tax cut-----federal government revenues exceed projections withing 3 years, we have an economic boom. Social spending ($400 billion for prescription drug coverage not paid for, September 11, two wars- not paid for- cause government expenditures to radically exceed projections. (Some of that spending may be worthy- but that's off point): What caused the chronic deficits by the 1970s- tax cuts? or SPENDING.
Spending increases are sometimes necessary. But this argument is partisan bull. We need to return to, let's see.....the approriations of the REPUBLICAN Congress (1994-2000, Congract w/ America) and the DEMOCRATIC President Bill Clinton who worked with them- read about Dick Morris' triangulation strategy for Bill Clinton).
DIVIDED GOVERNMENT WORKS. AND WE ARE GOING TO HAVE IT AGAIN. REAL SOON.
Dear Readers:
If you think a revolution isn't coming, think again. Everywhere I turn hard working people have taken the hit (many of my fellow workers seeing retirement funds crash with losses of 80K to 120K. If you think america isn't about class warfare, think again. What goes around, comes around. If your a rich person living on our backs, I have got news for you. We will take you out. So hide in your gated communities all you want. Just wait for the clamoring at the gate. I often wonder what the French Monarchy thought as they saw there world turned upside down?
If you believe that a violent revolution will come to America and resolve our problems, or that ,if it did, that would be a good thing I suggest that you rethink your position.
There are other, less bloody forms of revolution, and ones that are far more desirable.
There may very well be riots should this economy continue its slide, and, while that would be unfortunate and result in much spilled blood, I see no alteration in our government or for whom that government serves resulting from said riots.
We obviously need change, and badly. The world needs us to change in fact. But I very much think that lasting and permanent change must come peacefully.
"Most people would sooner die than think, in fact they do so. Bertrand Russell
There are a lot people with a lot of good comments.
I think now we need to come up with some good solutions.
I think we all need to start doing the math.
Foreclosures are a simple math problem. We have less than 1,000,000 foreclosures per year. The average monthly payment needs to be lowered by less than $1,000.00 so that the mortgage holder can be around the 30 percent mark on gross family income and continue to stay in the home.
The goverment could loan the homeowner the $1000.00(or less) per month and have the homeowner pay at the end of the original loan at the same interest rate back to the federal government until the loan is paid off.
Cost is 1mill * 1k or about 1 billion per month or 12 billion per year.
YES, 12 billion will stop every single foreclosure.
Jobs again are simple math.
We have about 3 million people per year losing there job at an average of $40,000.00 per year. 3mill * 40k or about 120 billion per year.
So 120 billion could be given to the existing unemployment system to put these people to work.
Again wipe out all unemployment and foreclosures with less than 200 billion.
We have given trillions yes trillions to the banking system and they are not loaning it out because NOBODY is borrowing, because everyone is losing there job!
Economic Expansion comes from building more with less people and less material and less environmental impact.
We have had Economic Expansion not because of left vs right or republic vs democrate but because of legislation that forces corporations to build more with less people, less material and less environmental impact by using constant gains in America with American technology.
Now corporations and wall street made short term gains by offshoring everything.
We Americans must demand legislation to stop all corporations from doing business in America unless they follow all American laws, like child labor, slave labor, minimum wage and environmental no matter were they produce the goods. That includes food.
Then the economy will right
itself within ONE MONTH.
Do your own math, math is a funny thing the solutions are singular and real!
One citizen's solution:
http://www.npr.org/templates/story/story.php?storyId=100326109
Economy
Marks Is His Name, Avoiding Foreclosure His Aim
by Chris Arnold
Morning Edition, February 6, 2009 · One of the more colorful characters in the ongoing financial crisis is Bruce Marks. He runs a housing nonprofit that helps people avoid foreclosure. And he has some unorthodox tactics. Over the years, Marks has camped out on the front lawns of CEOs, made big scenes at their country clubs and dug into their personal lives to embarrass them. Marks has even been called a "bank terrorist."
"Most people would sooner die than think, in fact they do so." Bertrand Russell
Mr. Hartmann, Nixon never beat LBJ. LBJ chose not the run. Nixon beat Humphrey in 1968.
If we want to have economic recovery, we need to cut tax rates (despite Thom's article- cutting rates will produce a boom that will result in lower unemployment again.
If we want to fix the economy over the long term, we have to address the fundamental causes:
Government action that excessively promotes mortgage extensions to individuals who cannot afford them- the Freddie Mac Fannie May policies of Clinton and G.W. Bush-which behind the excessive real estate boom- need to be curtailed. Your idea will simply exacerbate the policy.
Adapt and increase current regulatory policies for security exchanges, which date to the 1980s, for the global economy we have now.
Get the Federal Reserve to do its regulatory job in this area (not to mention the SEC, which was too incompetent to even control the Enron's (misrepresentations began by Enron in 1998) and Bernie MaDolph's of the world.
Get the Federal Resserve to do its monetary job, i.e., gradually end the "free money" policy it maintained even when the economy was growing, 2001-2007. Which means, to do that without astronomical interest rates one needs to....
Get Congress and this president to stop spending $, Just as the last Congress and W. should not have gone off on a drunken sailor spree.
You are mixing supply-side and demand-side economics here.
Remember - cheap and easy loans are all part of the supply-side scheme.
Thom,
My friend Jim Simpson is an economist with an interesting background. I’ve copied him here.
[Jim Simpson is a former White House staff economist and budget analyst. His writings have been published in American Thinker, Washington Times, FrontPage Magazine, DefenseWatch, Soldier of Fortune and others. His blog: http://truthandcons.blogspot.com/]
I read your article: “Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years,” published recently on Common Dreams- http://www.commondreams.org/view/2009/01/26-0
It seemed to me it contained errors. So I asked Jim for his expert analysis. (Jim: Thom’s contact information below.) Here is Jim’s reaction to your article. :
“Thom misrepresents several matters. Look up Wanniski on Wikipedia. The "two Santa Claus" theory is not at all as described. It is instead exactly what we have been doing: offering an alternative (a different kind of Santa) than the Democrat vote buying method. (To garner votes, Dems offer us increases in spending, all the “goodies” and “promises”, and the GOP offers up tax cuts.)
Supply side economics is not what he described, showing how ignorant he is of economics. Supply side economics is classical economics with a 1980's buzz word attached. It is the only economics firmly grounded both in theory and practice.
Hoover wasn't a supply-sider or conservative. It was HE who started all the programs that FDR grew. And it was his idiotic policies that got us the Depression. FDR grew those policies, using Keynes’ discredited theory to justify it. (Obama is a Keynesian/demand sider eh?) It is Keynes demand side economics that has been discredited and was a novel economic theory in the 1930s. Its attractiveness to Democrats lies in its advocacy of government spending.
Reagan tried to cut spending. He found two enemies: 1. Democrats and 2. His own party in Congress!
Greenspan wasn't even appointed until 1987. It was Paul Volcker during most of Reagan's tenure. Also, budget director David Stockman did NOT advocate spending and tax cuts. He tried desperately to cut spending but was thwarted, as I mentioned by both Congressional Democrats and Republicans. He wrote a book about it: The Triumph of Politics. He quit in 1985, and was long gone when Greenspan arrived.
I would like to see where Republicans made trillions?!? The only politicians in recent memory to make any money from it were the Clintons.
Clinton didn't cut anything. Republicans did all that!!! He reluctantly signed as he couldn't override.
There are so many other falsehoods in this article it really makes me angry. I would like to meet some of these people publicly to confront these misrepresentations.”
Here are a couple more logs for the fire:
ENTIRELY DIFFERENT SIDE TO THE STORY
http://www.hillsdale.edu/news/imprimis/archive/issue.asp?year=2008&month=05 Today’s Economy in perspective: Greatest Story Never Told
http://allanerickson.wordpress.com/2009/02/06/reaganomics-versus-obamanomics/
My Note: It boils down to this it seems to me: get government out of the way (very Jeffersonian) and let people freely create, and prosperity is created for everyone; but if you allow government to play a dominate role, it taxes and spends and stifles prosperity. History appears to prove this out. Thom, this paragraph in your article, and your headline, indicate to me you are more interested in pandering to your audience than you are engaging rational debate.
“Odds are you've never heard of Jude, but without him Reagan never would have become a "successful" president, Republicans never would have taken control of the House or Senate, Bill Clinton never would have been impeached, and neither George Bush would have been president.” Ludicrous statement.
One little fact just to upset your apple cart: 85% of income tax revenue is paid by the upper 25% of income earners in the country. So much for tax cuts for the rich.
I'm sure you are aware, but in case others are not, FrontPage, American Thinker, and Washington Times are all heavily conservative and will naturally only espouse conservative views and beliefs, such as supply-side economics. And as for this ridiculous line:
"One little fact just to upset your apple cart: 85% of income tax revenue is paid by the upper 25% of income earners in the country. So much for tax cuts for the rich."
Income tax is FAR from the only tax paid in this country. EVERYONE pays payroll taxes (Social Security and Medicare), sales taxes whether local, state, or federal (is gasoline tax federal?), plus fees and charges for public services. You conservative morons try to make it seem like income taxes are the only taxes in the country (besides of course business taxes!) and that your poor, unfortunate upper-class people are carrying the burden of the whole country.
"My Note: It boils down to this it seems to me: get government out of the way (very Jeffersonian) and let people freely create, and prosperity is created for everyone;"
Really? So, the government not regulating those retarded derivatives created by the upper-income fools in the finance industry let to prosperity for everyone? Or did it blow up in their faces and threaten economic destruction for everyone?
Read http://en.wikipedia.org/wiki/Supply_side_economics. Supply side economics is not classical and it is not mainstream thought. In fact, NO RESPECTABLE ECONOMIST currently believes in supply side economics. It is, as Bush 41 once said, voodoo.
Wow! I'm impressed! Jim Simpson said it, so it must be true! What a fugging crock. "Classical" economics, just like "classical" liberalism, is a rewriting of history to reinvent conservatives as something other than the Tories who opposed the revolution and sided with King George.
The U.S. was founded on the principles of (small r) republican democracy. NOT on crapitalism. In fact, Jefferson distrusted not only banks, but ALL corporate pigs.
"Hoover wasn't a supply-sider or conservative. It was HE who started all the programs that FDR grew. And it was his idiotic policies that got us the Depression. FDR grew those policies, using Keynes’ discredited theory to justify it."
Really? The depression stared in 1928 under Hoover by 1932 when FDR was elected, the banks were about to collapse (thus the bank holiday) and unemployment was at 25%.
Hoover exasperated the depression with his policies. FDR reversed course and started getting us out of the depression.
Anyone who lies about FDR and the Depression can not be trusted.
By the way, one little fact that is not mentioned: The top marginal tax rate on incomes over $400,000 was 91% under
.... wait for it...
EISENHOWER!!!!!!!!
and there were no bank failures and people had jobs and people made good salaries and, one person could work and afford a house and buy a car and not be in total debt.
The Reagan scam is so transparent that only a moron could fail to see through it. Unfortunately, there are a lot of them, and they vote.
Wrong. And anyone who accepts the fundamental thesis of Thom's aricle, as you apparently have is NOT a moron, they are just ignorant of relevant history.
Read my other commentary if you care. Or check the progressivity of the tax code NOW - even before the Bush cuts expire; do some research into the 1986 changes, not only in the federal individual income tax code, but in how the Social Security tax increases were developed (and overwhelmingly passed by a highly Democratic Congress). This article is garbage.
Hey Thom - please do correct the election of '68. I'm not sure how you could have even gotten that out off your keyboard!
Cheers.
Read your article about Jude Wanniski and Arthur Laffer at the commondreams site. It's political spin in the guise of scholarship.
It takes the concurrence of related concepts held by a school of economists by the 1970s and the principles of Ronald Reagan- held for decades-from BEFORE his 1964 speech in support of Goldwater (Read Reagan's speeches for GE in the 1950s) when they were unpopular to after their successful implementation in 1989. Wanniski had nothing to do with the FORMATION of Reagan's belief in less government, lower taxes and the market. Neither Wanniski nor Laffer had anything to do with Reagan's election. They simply provided the theoretical underpinnings for Reagan's position among the intellectual elite.
Likewise, Reagan, Wanniski, Laffer had nothing to do DIRECTLY with the policy behind the increase in the Social Security taxes in 1986. That proposal was put forth by a BIPARTISAN commission because neither Reagan Republicans nor Tip O'neil Democrats wanted to take the actions necessary to make the program (supposedly) solvent when the boomers hit retirement in the 21st century. As Fed chair, Greenspan (AND HIS PREDECESSOR PAUL VOLKER- on whom Obama relies) supported the tax changes because they knew solvency was a good idea.
Reagan got elected in part because we had unemployment as high as now in 1980 and double digit inflation. He implemented his long held proposal- cut MARGINAL tax rates (yes, returning REAL tax levels and PROGRESSIVITY of the code to what it was in 1978- taxes had gone up on everyone with increasing progressivity because tax brackets were not then indexed for (double digit) inflation).
The federal income tax, in real inflation dollar terms, return to near 1978 progressivity levels by 1984 (Reagan’s 3 year, 25% tax cut). Until the code was changed in 1986, Reagan's policy only reduced real taxation on the wealthy to 78 levels (corporate income tax reductions aside).
And, along with Volker-Greenspan monetary policy, it worked: until last year, we did not face the economic crisis lack that we endured in the 1970s. If the Laffer curve is bad theory, WHY WHEN MARGINAL TAX RATES WERE CUT BY KENNEDY, REAGAN, AND BUSH, WERE GOVERNMENT REVENUES HIGHER than what had been projected?
The deficits came from ever greater spending, not the tax cuts.
This article takes facts, asserts cause-effect relationship as part of POLITICAL SPIN.
Friday, February 5, 2010 at 10:00 AM UTC
Wow, like I didn't see the inaccurate attacks coming from the supply-siders coming.
Reagan had always believed in lower taxes and lower government, the laughable Laffer curve and Wanniski just enabled the Republicans to have a silly theory to sell the idea to the public that cutting taxes would be good for everyone. In a little over a year it was such a disaster Reagan pushed through the largest tax increase in history to stop the ballooning deficit.
more than 1/3 of our current deficit is attributed to the recent Bush || tax cuts
Kennedy was the only democrat in the last 50 years that increased the deficit. He later admitted his mistake of cutting taxes after bad advise from the GOP
What's worse is that the GOP convinced many people that government programs intended to help people such as medicare and social security are bad. Why? Because they are failing financially? Why? Because the GOP continues to cut these programs or block necessary funding. A "Self-fulfilling prophecy".
When supply is artificially drummed up beyond demand you create bubbles. Case in point - housing, .com, and S&L of the last 30 years.
QUOTE: "Even four years later when Richard Nixon beat LBJ in 1968, Nixon wasn't willing to embrace the economic conservatism of Goldwater and the economic true believers in the Republican Party."
What are you talking about, Nixon defeating LBJ in 1968? That's not the way I remember it. LBJ chose not to run for re-election. You've confused me here but the rest of what I've read is excellent, good work.