"Read my lips: No new taxes!" the first George Bush proclaimed to an ecstatic Republican National Convention.

Conservative Republicans, galvanized by their candidate's commitment to small government, voted their candidate into the White House, where he proceeded to sign one of the largest tax hikes in history. Bush is now remembered as a hypocrite, a failure and a traitor to the conservative movement.

Yet Bush's hypocrisy was by no means anomalous. Bush followed in the footsteps of Ronald Reagan, a man who lauded the virtues of a free market that he wouldn't allow to exist. Reagan massively increased military spending while failing to cut social spending, creating a massive deficit, the beginning of our modern debt crisis.

Intent on protecting American industry from foreign competition, Reagan raised tariff rates and set import quotas. Free-market economist Sheldon Richman called him "the most protectionist president since Herbert Hoover." And, contrary to legend, Reagan did not cut taxes; he shifted them, lowering one tax as he raised another, so that tax revenues as a percentage of national income remained largely unchanged from 1980 to 1989.

So why do capitalists remember Reagan so fondly and Bush so terribly, if both presidents hypocritically expanded government? Because the economy performed well under Reagan and poorly under Bush. After sustaining a severe recession from 1981-1982, the American economy recovered dramatically, and the '80s became a period of prosperity.

Shortly after Bush entered office, however, financial chaos connected to the savings-and-loan crisis contributed to a global economic slowdown. Reagan did not cause the prosperity of the '80s (most of the credit goes to the Federal Reserve under Paul Volcker, a Democrat), and Bush cannot be blamed for the contractions of a global economy. But Reagan is still associated with prosperity, and Bush with poverty.

By emphasizing Reagan's free-market rhetoric and downplaying his big-government policy, capitalists can associate laissez-faire with prosperity in the public mind. By emphasizing Bush's policies and downplaying his rhetoric, capitalists can associate big government with destitution.

Capitalists, incidentally, have no objections to big government. Government has been an active player in the growth of corporations since the industrial revolution, and our economy is built on government subsidy and regulation.

So if government is so essential to our economy, why all the laissez-faire rhetoric? Corporations can use free-market rhetoric as a weapon against social spending. Government intervention is fine when it means corporate subsidies and protections. But if the government wants to give welfare to the poor, pass environmental laws, or provide universal health care, it has stepped out of line.

Afraid of competing with a public option, the executives of Blue Cross and Blue Shield preach that "the government that governs best governs least." But when the executives want to send their kids to public schools, drive on public roads, retire and collect Social Security, they somehow manage to forget the virtues of limited government.

Capitalists have used this double standard to shape the modern conservative movement. The tea party movement is an excellent example of capitalist philosophy in action.

Tea partiers have impugned President Obama as a "Nazi-communist" because of his health care reform, stimulus package and bailouts. Yet polls show that tea partiers hold a favorable view of George W. Bush, who expanded government more than any of his predecessors, and of Sarah Palin, who would like to massively expand the military-industrial complex through war with Iran.

Tea partiers' views on specific issues are even more telling: They vehemently oppose big government, except when that big government is necessary to invade Iran, occupy Iraq and Afghanistan, pay for Medicare and Social Security, provide public education, build and maintain public roads, actively deport illegal immigrants and execute criminals.

There is a viable alternative to big government: anarchism. Anarchists call for the abolition of the state, envisioning a society run by direct democracy and cooperative economics.

Anarchist theories are actually quite viable; cooperatives have been very successful within our society, and could very well function on a large scale. But anarchism also requires abolishing capitalism, corporations and private property. Conservatives, enamored with their ideals of entrepreneurship and the profit motive, are loathe to consider such a society.

But unless conservatives can embrace the principles of common ownership and cooperation, the conservative movement will remain as it is: committed always to big government for the rich and apathy for the poor.

Andrew Soboeiro is a rising senior at Pinecrest High School.

More like this story

OldPilot 2 years, 9 months ago

Excellent article Mr. Soboeiro, well researched and well written. Wish the regular, middle age to elderly conservative columnists who appear regularly in our precious local newspaper did half as well instead of constantly crying wolf. Be that as it may the 17th amendment was passed by the House and Senate, and ratified by the states, to codify reality, in that the majority of states had adopted the popular election of senators rather than election by legislatures. The tea party arguments raised today for repeal of the 17th amendment are for the most part identical to those raised in support of it's passage and ratification.

blake 2 years, 9 months ago

Andrew, your description of anarchism with abolition of private property and capitalism to be replaced by one large cooperative more accurately describes communism.

The conservative movement embraces personal liberty and individualism but this does not equate to :"apathy for the poor."
You might be surprised to learn liberals are markedly less charitable than conservatives. Arthur C. Brooks, a professor at Syracuse University, published "Who Really Cares: The Surprising Truth About Compassionate Conservatism" states that although liberal families' incomes average 6 percent higher than those of conservative families, conservative-headed households give, on average, 30 percent more to charity than the average liberal-headed household ($1,600 per year vs. $1,227).

None 2 years, 9 months ago

I hate to break it to you mauiman, but fail to pay your taxes and see who owns everything that we think we own. In this country there is no common ownership but socialism at it finest. Hopefully we can shread the volumns of tax code all 68+ thousand pages, representatives will represent all the people as opposed to corporate America and their tax-loopholes as well as the most wealthy amongst us.

Until this country embodies a Fair Tax - not a VAT - but pay tax at point- of-sale as opposed to what we earn, our corrupt tax system as we know it today will continue on a path to worthless currency. If the government passes legislation for a Value Added Tax, we might as well give every penny to the government and let them manage our lives ~ we'll be broke.

Link: http://www.fairtax.org

TheNeedle 2 years, 9 months ago

"In this country there is no common ownership but socialism at it finest."

You could always leave.

AJS 2 years, 9 months ago

My age should have nothing to do with it, mauiman. If you aren't willing to debate me on the basis of my arguments, leave me alone.

Yes, a socialist. Or, more precisely, an anarcho-syndicalist. Common ownership by workers is the only way to ensure fair treatment of the labor force. Direct democracy is the only way to ensure that the government acts in the interest of the people, rather than the interests of big business.

I've actually never read Marx. My understanding is that he's a statist, arguing for bureaucratic management of the economy. That isn't socialism. Socialism requires that the workers themselves own the means of production. That does not describe the Soviet Union, Red China, or Cuba. None of those countries were/are socialist.

AJS 2 years, 9 months ago

Prometheus, I gave you my email. If you want to debate me, email me. Otherwise, leave me alone.

And I won't debate you if you insult me. If you can't answer my arguments, don't bother commenting. If you can, leave it to that. I don't appreciate taking abuse. Anarcho-syndicalism is a perfectly respectable political philosophy that has been around for centuries. The fact that it was referenced in Monty Python is meaningless. It was actually successfully put into ACTION in Spain during the civil war, forty years before Monty Python came out.

My "government-provided education" taught me that socialism is always evil and private property is good etc. etc. etc. I am an anarchist and a socialist because I REJECTED the right-wing education that I have been given.

I'll debate you on the rest (socialism, etc.) over email. It's too complicated to debate in a public forum.

Ross 2 years, 9 months ago

Prometheus - never have I read so much that said so little.

Ross 2 years, 9 months ago

Prometheus - and here i thought all this hot air was due to global warming!

yes another "snark".......

Ross 2 years, 9 months ago

btw - i really don't understand much of what you post nor care to as you remind me of a drunk at a bar - rambling on while no one listens!

leftfield 2 years, 9 months ago

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irkim13 2 years, 9 months ago

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JER 2 years, 9 months ago

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moonchild7 2 years, 9 months ago

Haven't any of you read the ANARCHIST"S COOKBOOK or watched THE SON'S OF ANARCHY? There's not a lot going on "upstairs" with those guys.

Sally244 2 years, 9 months ago

For once I'd like to hear these debates with intelligence and thought without succumbing to personal attacks. There are some very intelligent arguments in this thread but as soon as the argument becomes a personal attack everything falls apart. Try following the policies regarding comments, ignore personal attacks and put some thought into your arguments. You discredit yourself when you let your emotions get in the way. Also try acknowledging the good things a person has said before you argue against the negative. Just because we are anonymous here it doesn't mean we have to act like children.

lachm 2 years, 9 months ago

Your statement: "Reagan did not cut taxes- from 1980 to 1989."

****Fed. Tax Rates 1913 - 2009
In the last 50 to 60 years, the rich has gotten more than 50% tax REDUCTION . The Republicans certainly did a great job on RE-distribution of the wealth. OK, President Obama, it's time to balance the scales.

SOURCE...............IRS       Fed. tax rates from 1913 - 2009

Income tax in the United States - Wikipedia, the free encyclopedia

During the 8 years that Reagan was the president, He DECREASED the top bracket from 70% to 28%) 1981 - 1989. He INCREASED the bottom bracket (the POOR)

       SOURCE...............IRS

Applicable Year Income brackets
lowest - highest 1913-1915 - 1% 7%
1916 - 2% 15%
1917 - 2% 67%
1918 - 6% 77%
1919-1920 - 4% 73%
1921 - 4% 73% 1922 - 4% 56% 1923 - 3% 56% 1924 - 1.5% 46% 1925-1928 - 1.5% 25% 1929 - 0.375% 24% 1930-1931 - 1.125% 25% 1932-1935 - 4% 63% 1936-1939 - 4% 79% 1940 - 4.4% 81.1% 1941 - 10% 81% 1942-1943 - 19% 88% 1944-1945 - 23% 94% 1946-1947 - 19% 86.45% 1948-1949 - 16.6% 82.13% 1950 - 17.4% 84.36% 1951 - 20.4% 91% 1952-1953 - 22.2% 92% 1954-1963 - 20% 91% 1964 - 16% 77% 1965-1967 14% 70% 1968 - 14% 75.25% 1969 - 14% 77% 1970 - 14% 71.75%

Reagan decreased the tax of the rich from 70% to 28% and raised the tax on the poor.

1971-1981 14% 70%
1982-1986 12% 50% 1987 11% 38.5% 1988-1990 15% 28%

1991-1992 15% 31% 1993-2000 15% 39.6% 2001 15% 39.1% 2002 10% 38.6% 2003-2009 10% 35%

lachm 2 years, 9 months ago

I believe (at least that's what seems to be happening in Washington, among the elected RNC crowd) that the Republicans and the TEA-PARTY-(right wing Republicans= tea party crowd) are the American citizens enemy. They block everything in Congress and the Senate. The only reason they do this, is to bring down our President and in so doing, they have bought down America. The Republicans care ONLY about themselves and their wealthy friends. To me, they are evil.

Read it for yourself. It's written in the Holy Bible. (King James version)

Matthew 19:23-25

And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.

Mark 10:24-26

It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.

Luke 18:24-26

For it is easier for a camel to go through a needle's eye, than for a rich man to enter into the kingdom of God.

lachm 2 years, 9 months ago

part 1................_check out some of Reagan's record___

   Reaganomics clearly decimated the American economy.

Bibliography

Bunch, Will. Tear Down This Myth: The Right Wing Distortion of the Reagan Legacy. New York: Free Press, 2010.

Cannon, Lou. Actor, Governor, President, Icon, Washington Post 6 June 2004: A1.

Coates, David. Answering Back: Liberal Responses to Conservative Arguments. New York: Continuum International Publishing Group, 2010.

Ivins, Molly. Deregulation: High Prices, Bad Service. Miami Herald 31 August 2001, 9B.

Jackson, Brooks. During the Clinton administration was the federal budget balanced? Was the federal deficit erased? Factcheck.org. http://factcheck.org/... (15 March 2010).

Kuttner, Robert. The Bubble Economy. The American Prospect 24 September 2007.

The Reagan Myth is not a myth -- it's a LIE and Republicans repeat it over and over Ronald Wilson Reagan is, at once, a deity to conservatives and Satan to liberals. He was the fortieth President of the United States and is arguably the most divisive modern political figure. Conservatives tout his accomplishments as leading to a new Pax Americana they point to what they see as the ending of the Cold War due to Reagan s diplomacy, and believe that Reagan s fiscal and economic policies led to a renewed American economy.

lachm 2 years, 9 months ago

part 2.......... According to conservatives, Reaganomics which represent a sharp turn from the government s fiscal policies of the previous forty years before Reagan is probably the best economic program in American history. They contend that these policies improved living conditions for all Americans and brought the economy out of the stagflation and recession of the 1970s and early 1980s.

Upon thorough examination, however, it is clear that Reaganomics was actually detrimental to the United States, and even ultimately led to the severe late 2000s recession.

The hallmark of Reagan s fiscal programs that the average American was supposed to rally around was tax cuts. Reagan in many ways tried to forge a war on taxes, which he believed would stimulate the American economy. The first part of his tax cut program was the Economic Recovery Tax Act of 1981. President Reagan signed it into law on August 12, 1981, amid a grayish-brown California haze from the waves of the Pacific Ocean crashing onto the coast of Reagan s estate. By signing the bill at his ranch, Reagan tried to create an image of himself as an ordinary American who felt the pains of ordinary Americans. Unfortunately, however, most ordinary Americans did not feel the tax cuts.

The cuts reduced taxes by 25% in all income brackets. This meant that income tax rates for the top bracket went from 70% to 50%. The working class tax bracket saw a much less significant reduction, from 14% to 11%. Despite what looked like a rate cut, those who could have actually benefited from a tax cut really saw their own taxes increase due to bracket creep. As inflation increased salaries, many were forced into a higher tax bracket that did not deserve to be, because their real purchasing power had actually remained the same as the price of goods also went up due to inflation.

lachm 2 years, 9 months ago

part 3... Meanwhile, the only people benefiting from the tax cuts were the wealthy, as their tax rates were slashed by the Act. Corporations and other special interests also greatly enjoyed the 1981 tax cuts to the tune of billions of dollars. As Will Bunch wrote, Reagan may have signed the law [the Economic Recovery Tax Act of 1981] as if he were auditioning for a role in High Noon, but the benefits accumulated for the gray-flannel-suited urban cowboys of Wall Street and high finance.

Conservatives claim that the Economic Recovery Tax Act of 1981 led directly to the end of 1970s and early 1980s stagflation, a period of economic stagnation coupled with inflation. They cite the soaring Dow Jones as evidence, as though the Act was the transformative act that caused [this] to happen. In reality, immediately after the Act was signed, America went into a deep economic recession that included a 10.8% unemployment rate by December of 1982. Eventually, however, the economy did recover, but this had little do with Reagan. Instead, the recovery was precipitated by a decline in oil prices and natural turnaround from the poor 1970s and early 1980s economy. Reagan simply could not control those factors.

It quickly became clear that the tax cuts for the wealthy went too far. This is why, less than one year after the Economic Recovery Tax Act of 1981 was signed into law, Congress passed a tax increase the Tax Equity and Fiscal Responsibility Act of 1982, which Reagan signed. Reagan also signed tax increases in 1983, 1984, and 1986.

Even with the incremental increases (although, overall, taxes still decreased the small increases did not make up for the big decrease), the government budget deficit soared during the Reagan years. This is because as Reagan lowered taxes, government spending increased. Despite campaigning on a platform of smaller government, defense spending was dramatically increased at Reagan s behest. A new cabinet agency, the Department of Veterans Affairs, was also created. By the end of Reagan s presidency, the national debt had increased from $700 million in the beginning to $3 trillion dollars.

lachm 2 years, 9 months ago

part 4.... The other major part of Reaganomics was deregulation. Deregulation, Reagan believed, would lead to freer markets, which was a positive American value. However, deregulation of markets had in the past had a bad effect on consumers. Instead of increasing competition, the 1978 deregulation of the airline industry led to increased monopolization of the industry. Consumers felt the crunch for profits as major airlines abandoned routes that involved smaller airports in favor of streamlining schedules. Overall, the airline deregulation before Reagan turned out to be a debacle.

President Reagan could have learned from the mistake of airline deregulation. Instead, he embarked on an even more dangerous trek of deregulation: this time, the target was the financial industry. On October 15th, 1982, he signed a law that deregulated the savings-and-loan industry. He hailed the new law as a jackpot. This led to new industry standards for the S&Ls, including bigger mortgages. High-risk commercial real estate was a common investment made by the savings-and-loans. It was a recipe for disaster.

Savings-and-loans collapsed. By 1989, hundreds of S&Ls failed due to poor management and loan practices, and a lack of good government oversight to prevent problems. Ultimately, the taxpayers were forced to pay the price, as the government bailed out the industry for one hundred and fifty billion dollars. The crisis also caused the housing market to decline, resulting in the lowest number of new homes constructed since World War II in 1991. Overall, it was clear that the deregulation hurt.

The tax changes, coupled with the budget deficits, and deregulation led to a massive economic demographic shift. The number of millionaires in the United States took a huge jump during the Reagan years, but at the expense of the middle class, as their wages barely kept pace with inflation. Wages for those who earned between twenty thousand dollars and fifty thousand dollars during the 1980s increased by 44%--although this figure is not adjusted for inflation, meaning a real increase much lower than 44%. Simultaneously, incomes for the very wealthiest increased by an amazing 2,184%! The fact was, the income gap was sharply widening.

lachm 2 years, 9 months ago

part 5... After these disasters, the American people seemed to reach a conclusion: Reagan s economic programs had failed. By the time George Bush left the presidency in 1993, and most of the last vestiges of the Reagan administration had left office with the notable exception of Federal Reserve Chairman Alan Greenspan America appeared to be done with Reaganomics.

In 1992, Americans elected Bill Clinton to be President. Clinton attempted to actually mimic Reagan s smaller government ideas, except in a way that actually worked and were real. He began to take down Reagan s failed economic plans. By the end of the 1990s, Clinton s government managed to do what seemed impossible: balance the federal budget. In fact, in 2000, there was a budget surplus of $236 billion.

Americans were, according to Will Bunch, eager, even excited, about paying down the debts accumulated under Reagan. Despite this, Republican George W. Bush ran for President in 2000 on a platform of tax cuts. He lost to Al Gore, but in a stunning act of anti-democracy, became President, in essence appointed to the post by the Supreme Court. Now President, Bush attempted to imitate Ronald Reagan.

Bush could not have done it without Alan Greenspan, who remained Chairman of the Federal Reserve, having been appointed by Reagan in 1986. In 2001, Greenspan gave his blessing for a huge $1.85 trillion tax cut. Immediately, the ill effects of Reagan s tax cuts were felt once again. The majority of the tax cuts were for the very wealthiest: this time, the top 1% received an astonishing 52% of the tax cuts! From 2001 to 2005, the earnings of the average worker fell by 3.2%. Income inequality was on the rise once again. The policies that failed under President Reagan were in full swing all over again.

lachm 2 years, 9 months ago

part 6... Deficits were on the rise again as well. Debt accumulated. In the first six years of the Bush administration, public debt grew by $3.33 trillion. Bush cut taxes even during war; he took Reagan s tax policies to the extreme. He cut more taxes in 2003, with the Jobs and Growth Tax Relief Reconciliation Act. Bush never seemed to want to stop cutting taxes, and the economy suffered. The dollar lost one third of its value. Despite all of this, the desire to cut more just continued.

Reagan s policy of decreasing regulation also arose again. Throughout the 2000s, Alan Greenspan was warned of a housing bubble but declined to regulate the market. Federal regulators continued to allow exceptions to the Glass-Steagall Act of 1933, which prevented companies from being both commercial and investment banks. Credit flowed easily through deregulated real estate mortgage markets. Subprime loans allowed people to buy houses that they perhaps could not really afford. The economy was poised for disaster.

Indeed, in 2008, the bottom fell out. Banks failed. Unemployment skyrocketed. The American economy was significantly weakened due to a financial unwinding caused by neglecting to regulate financial markets. Greenspan, in a 2008 hearing, even admitted that deregulation had a significant impact on causing the financial crisis, saying that he had been at least somewhat wrong on the issue. It was a sharp rebuke of a key element of Reaganomics.

The failure in 2008 highlighted an underlying issue: a return to the fiscal policies of Ronald Reagan. Lowering taxes failed in the 1980s, and it failed again in the 2000s, significantly increasing debt, deficits, and the gap between the rich and the poor. Deregulation was the key element that ultimately led to the late 2000s recession. The late 1980s failure of the savings-and-loan industry was a preview of what was to come later due to the same disastrous policies.

lachm 2 years, 9 months ago

By Paul B. Farrell: MarketWatch

http://www.marketwatch.com/story/reagan-insider-gop-destroyed-us-economy-2010-08-10

By Paul B. Farrell, MarketWatch

Reagan Insider: 'GOP Destroyed U.S. Economy' by Paul B. Farrell Tuesday, August 10, 2010
MarketWatch ARROYO GRANDE, Calif. (MarketWatch) -- "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."

Article found on: MarketWatch website

Reagan Insider: 'GOP Destroyed U.S. Economy' by Paul B. Farrell Tuesday, August 10, 2010
MarketWatch

Commentary: How: Gold. Tax cuts. Debts. Wars. Fat Cats. Class gap. No fiscal discipline

"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.

Please listen with an open mind, no matter your party affiliation: This makes for a powerful history lesson, because it exposes how both parties are responsible for destroying the U.S. economy. Listen closely:

Reagan Republican: the GOP should file for bankruptcy

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."

lachm 2 years, 9 months ago

part 2.. 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's indictment warns that the Republican party's "new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one:"

Stage 1. Nixon irresponsible, dumps gold, U.S starts spending binge

Richard Nixon's gold policies get Stockman's first assault, for defaulting "on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world." So for the past 40 years, America's been living "beyond our means as a nation" on "borrowed prosperity on an epic scale ... an outcome that Milton Friedman said could never happen when, in 1971, he persuaded President Nixon to unleash on the world paper dollars no longer redeemable in gold or other fixed monetary reserves."

Remember Friedman: "Just let the free market set currency exchange rates, he said, and trade deficits will self-correct." Friedman was wrong by trillions. And unfortunately "once relieved of the discipline of defending a fixed value for their currencies, politicians the world over were free to cheapen their money and disregard their neighbors."

And without discipline America was also encouraging "global monetary chaos as foreign central banks run their own printing presses at ever faster speeds to sop up the tidal wave of dollars coming from the Federal Reserve." Yes, the road to the coming apocalypse began with a Republican president listening to a misguided Nobel economist's advice.

Stage 2. Crushing debts from domestic excesses, war mongering

Stockman says "the second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40% of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970." Who's to blame? Not big-spending Dems, says Stockman, but "from the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts."

lachm 2 years, 9 months ago

part 3.. Back "in 1981, traditional Republicans supported tax cuts," but Stockman makes clear, they had to be "matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration's hastily prepared fiscal blueprint, however, was no match for the primordial forces -- the welfare state and the warfare state -- that drive the federal spending machine."

OK, stop a minute. As you absorb Stockman's indictment of how his Republican party has "destroyed the U.S. economy," you're probably asking yourself why anyone should believe a traitor to the Reagan legacy. I believe party affiliation is irrelevant here. This is a crucial subject that must be explored because it further exposes a dangerous historical trend where politics is so partisan it's having huge negative consequences.

Yes, the GOP does have a welfare-warfare state: Stockman says "the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending, exempted from the knife most of the domestic budget -- entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans' fiscal religion."

When Fed chief Paul Volcker "crushed inflation" in the '80s we got a "solid economic rebound." But then "the new tax-cutters not only claimed victory for their supply-side strategy but hooked Republicans for good on the delusion that the economy will outgrow the deficit if plied with enough tax cuts." By 2009, they "reduced federal revenues to 15% of gross domestic product," lowest since the 1940s. Still today they're irrationally demanding an extension of those "unaffordable Bush tax cuts [that] would amount to a bankruptcy filing."

Recently Bush made matters far worse by "rarely vetoing a budget bill and engaging in two unfinanced foreign military adventures." Bush also gave in "on domestic spending cuts, signing into law $420 billion in nondefense appropriations, a 65% percent gain from the $260 billion he had inherited eight years earlier. Republicans thus joined the Democrats in a shameless embrace of a free-lunch fiscal policy." Takes two to tango.

lachm 2 years, 9 months ago

part 4..

Stage 3. Wall Street's deadly 'vast, unproductive expansion'

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."

Stage 4. New American Revolution class warfare coming soon

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.

Warning: This black swan won't be pretty, will shock, soon.

lachm 2 years, 9 months ago

part 5.

His bottom line: "The day of national reckoning has arrived. We will not have a conventional business recovery now, but rather a long hangover of debt liquidation and downsizing ... it's a pity that the modern Republican party offers the American people an irrelevant platform of recycled Keynesianism when the old approach -- balanced budgets, sound money and financial discipline -- is needed more than ever."

Wrong: There are far bigger things to "pity."

First, that most Americans, 300 million, are helpless, will do nothing, sit in the bleachers passively watching this deadly partisan game like it's just another TV reality show.

Second, that, unfortunately, politicians are so deep-in-the-pockets of the Wall Street conspiracy that controls Washington they are helpless and blind.

And third, there's a depressing sense that Stockman will be dismissed as a traitor, his message lost in the 24/7 news cycle ... until the final apocalyptic event, an unpredictable black swan triggers another, bigger global meltdown, followed by a long Great Depression II and a historic class war.

So be prepared, it will hit soon, when you least expect.

Sally244 2 years, 9 months ago

I'm sorry Lechm, it's a little overwhelming to deal with so many posts. Could you in the future send them out as needed and let us absorb them as they come? We might be able to have an interesting conversation that we can all appreciate. You've really put an end to any interaction on this subject.