President Reagan's former Office of Management and Budget Director, David Stockman, recently wrote an op-ed piece in the New York Times. Mr. Stockman chastises his party for its irresponsible and reckless fiscal policies.
Four Deformations of the Apocalypse
Not only does Mr. Stockman pin the blame for today's economic hardships squarely on Republican policies and ideologies but he also revealed the Republican Party has absolutely no intention of deviating from its present addiction to serial financial bubbles and Wall St. made havoc that have driven us into the present chasm. The Wall St. gambling casino practices, by the way, resulted in the biggest looting of the public purse in U.S. history. Do Republicans embrace the endless looting of U.S. taxpayers to bail out Wall St.?
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 - if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 - will soon reach $18 trillion. That's a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase.
More fundamentally, Mr. McConnell's stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. 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. But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance - vulgar Keynesianism robed in the ideological vestments of the prosperous classes.
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As far as I am concerned the GOP is addicted to the above because all GOP lawmakers work for big moneyed elitists, aka Richistan. Few if any care about about the needs and plights of working and middle class Americans. Their voting patterns and obstructionist behavior in Congress over the last 18 months leave little doubt that the Republican Party is one of, for and by the wealthy. Indeed, over the past few days various members of the GOP have been throwing their bodies across the halls of Congress as well as in the mainstream media all in protest of eliminating the Bush tax cuts for the upper 1-2% of income earners. And yet these very same Republican politicians voted against extending unemployment benefits for the jobless because God forbid, an outreach program for the jobless would drive up the deficit.
Among those leading the charge for protecting tax cuts for the uber rich is none other than Karl Rove. In his usual disingenuous fashion, cites voodoo math, junk statistics and outright lies by insisting that tax cuts create jobs.
It must be nice to have a total tool of a cable TV "news" channel in the mainstream media that will allow a guest or analyst to lie and misinform the public on national TV. Maybe Karl Rove should have been asked precisely how and why the Bush Administration losted 3.2 million jobs during W.'s term in office.
So much for tax cuts for the rich and new job creation.
The Reckless and the Irresponsible.
According to Mr. Stockman the irresponsible and reckless Republican economic policies started with President Richard Nixon.
The first of these started when the Nixon administration defaulted on American obligations under the 1944 Bretton Woods agreement to balance our accounts with the world. Now, since we have lived beyond our means as a nation for nearly 40 years, our cumulative current-account deficit - the combined shortfall on our trade in goods, services and income - has reached nearly $8 trillion. That's borrowed prosperity on an epic scale.
Cheney/Bush/GOP doctrine: Deficits don't matter when Republicans are in power and when tax cuts create deficits. But deficits do matter all of the time when Democrats are in charge.
The second unhappy change in the American economy has been the extraordinary growth of our public debt. In 1970 it was just 40 percent of gross domestic product, or about $425 billion. When it reaches $18 trillion, it will be 40 times greater than in 1970. This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts.
Stockman charges the GOP tax cutter zealots with abandoning the Party's core fiscal ideology and he admonishes Republicans for their deranged fixation on deregulate, baby, deregulate.
The third ominous change in the American economy has been the vast, unproductive expansion of our financial sector. Here, 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. As a result, the combined assets of conventional banks and the so-called shadow banking system (including investment banks and finance companies) grew from a mere $500 billion in 1970 to $30 trillion by September 2008.
How the GOP killed jobs.
The fourth destructive change has been the hollowing out of the larger American economy. Having lived beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore. In the past decade, the number of high-value jobs in goods production and in service categories like trade, transportation, information technology and the professions has shrunk by 12 percent, to 68 million from 77 million. The only reason we have not experienced a severe reduction in nonfarm payrolls since 2000 is that there has been a gain in low-paying, often part-time positions in places like bars, hotels and nursing homes.
Stockman concludes by asserting that the Republican Party has no solutions for repairing our current economic condition or for creating means and mechanims with which to rebuild a robust economy. The GOP remains mired in the irrelevant and the useless.
...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.
This is what happens when a Party sells its soul to the money devil to the extent it will throw everyday and hard working Americans into the streets.
