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Sinister Economics

July 13th, 2010 · 3 Comments · Capitalism, Corporations and Industry, Economics, Lobbying, Politics, Populism, Wall Street

Let’s understand one thing. The economic problems of the country were not caused by “Progressive” or “Liberal” or “Populist” policies. They were caused in the last 30 years and they were caused by an ideology that did not embrace rational thought, either in economics or in politics or in human relationships.

It can only be compared, unfortunately, with a prior period in history when political ideology combined with nationalism to create monstrous political regimes that did the most disastrous damage to world society since, perhaps Genghis Khan or the Huns or Napoleon, depending on your point of view. Fifty million people died because racist and nationalist theories combined with a weak populace to install dictators.

These regimes learned one thing very clearly. If you can ally the powerful forces…the huge industrialists, the military and the government behind a single political group that can control the message going out to the people, you can create an empire. You can destroy your enemies both domestic and global, and take your ambitions just as far as your military might and the continued will of the people will take you. Control no longer flows up from the people, but down, from the rich and powerful.

Most Americans think that this is impossible today in the United States. But if that is so, how is it that some of these same things occurred right here at home, in the last 8 years?

If it is not possible that total control of government did not happen, then how did 4,000 American soldiers and a quarter of a million…at least…innocent citizens die in Iraq? There was no attack on the U.S. There were no weapons of mass destruction. In fact, the idea that Iraq had weapons of mass destruction…that idea…which many Americans had…was not confirmed by the Neocons. It was used by them to create the final hysteria, using the media that they controlled, and the message coming from the Military…that they controlled…and the CIA….that they controlled to spread the lie.

The point is that we were swept into a hugely costly war, which we could not afford…not the least of which reasons was that we had simultaneously, not one but two…tax cuts for those who were paying the bills for the government. This is all incontrovertible. It is all documented, agreed to and accepted. But why should we accept totalitarian behavior?

If we call people war criminals who attack other countries…as Saddam Hussein did in 1991…then why are George W. Bush and Dick Cheney and Donald Rumsfeld…and Paul Wolfowitz…the architects of the Iraq War not war criminals? Because Cheney has a lot of powerful friends in big corporations? Because Bush’s father was President?

The more powerful and politically connected the leader, the more critical we should be. Critical in the sense of examining motives and the results of actions. All the more reason a President who deliberately starts a war of choice should be investigated and, if found culpable, should stand trial.

And why is that important? Aside from the fact that it is important to identify war criminals, people who cause the deaths of hundreds of thousands of people and bring them to justice, it is important from an economic standpoint. This Neoconservatism is essentially an ideological campaign to destroy an economic system here in the U.S. that will provide incomes for a large middle class.

It is hard to understand why anyone would try to hinder that. It seems like a good thing. But there is a segment of the population, born after about 1970, who do not understand what the country was like and where it was headed when Ronald Reagan and Corporate America took over the reins in 1980.

Unions were systematically vilified, using some of the mistaken alliances they had made to label them as thuggish organizations. The fact is that any crimes by unions were basically against their own members and the members eventually got rid of those leaders, or the Justice department did. At the most prosperous time in our history, when we were paying down the more than 100% of GDP we owed from WWII, we were also building a huge middle class, with homes and cars and good educations for their children.

It could be said that almost everything that Ronald Reagan did after his support of Paul Volcker to bring down inflation…which was painful…was wrong. But he was such a popular leader that, despite the fact that he had an average unemployment of only two points less than unemployment today…the Reagan movie-star propaganda machine rolled on.

Reaganomics was not popular because it made sense. He tripled the national debt and did nothing of value for the country. He didn’t defeat the Soviets. They were still using mechanical technology in 1980 when we were using electronic technology. They had their own oil fields and couldn’t keep their tanks running. They couldn’t afford to pay their soldiers. They were already bankrupt in 1980 and intelligence knew it and Reagan knew it. He used that knowledge to his political advantage.

Conservatives knew that as long as Reagan was in office, they would have power, real political power. Reagan took care of his friends. When he went out of office, they were weaker and in 1992 lost power to Bill Clinton.

There are some Neocons who will tell you that Progressive policies were the originating cause of our current troubles. They will tell you that our economic troubles began before the middle of the Bush Administration. And some of that is true. Some of the troubles began with Reagan. But the problem of worthless pieces of paper being sold as investments and then when people found out that they were worthless, selling them off as fast as they could, causing basically a Depression (until the Obama stimulus brought it to a halt)…that all happened after 2005.

It is true we had serous deficits before Bush. But Clinton had balanced the budget to the point that he was able to start bringing down the deficits and pay off some of the national debt and put some money back into Social Security…which at that time was solvent.

What is the dual problem we have now? It is government debt and unemployment.

Government debt has been caused…no matter how you slice and dice and try to reconstruct it, by maintaining the foolish system that Reagan, the actor turned dilettante economist created (but so politically popular that no one challenged him…a new kind of dictator model perhaps.) He simply kept government at the same level and cut government income in half and ran a big deficit. He put the country in much, much greater debt…three times as much debt as before. But worse was yet to come.

His advocates who saw that they could continue to spend and not have the money to pay for things became Neo-conservatives. They took Conservatism and turned it on its head. Pretend to want to cut spending, but do not do it. But always, always, tell the public that we are paying too much in taxes, and if we must expand the economy, higher taxes will kill it and only (the very popular idea of) lower taxes will solve the problem.

In other words if you have diabetes, eat more sugar. If you have lung cancer, smoke more often. You will be cured. Yet, when they invoked the magic words “Ronald Reagan did it” no one spoke up and said…”Yes, but he set up a system where we now go in debt by half a trillion every year.”

The current talking points by the Neoconservatives that…with no evidence whatsoever…that Progressives have “destroyed” economies simply flies in the face of all facts. European countries, and anyone who has lived, rather than merely traveled, in Europe can tell you, are basically more or less Socialist. That is to say, they are modifications of a basic Socialist model…some more capitalistic than others, some more people oriented…but all modifications not of Progressive but of Socialist systems.

The rise and fall of those economies are less germane to what we do here, than is, for example, the Canadian economy. The Canadian model is more like our own, but has a very strong underpinning of social values that make them somewhat more environmentally conscious and socially conscious than Americans. They have an economic system similar to our own but also have many of the features of a European society. They are a hybrid of true conservative and true liberal economics.

So when Neoconservatives, Neocons, talk of Progressive, they often mix Liberalism, Socialism and Communism all together and select from those whatever aspects suit their current argument. That is, by the way, Neocons argue. It is simply by making up their own facts and then arguing against their own model.

For example, it is very common for Neocons to argue that Barney Frank was responsible for the problems at Fannie Mae and Freddie Mac, the two quasi-governmental organizations responsible for taking on and underwriting mortgages. But the fact is that the Neocons, not Barney Frank’s Democrats were in power from 2001 through 2008.

George W. Bush embarked upon a—perhaps—truly sincere effort to increase home ownership. He stood in the living room of a man in Atlanta in 2002, a man who was buying a $130,000 townhouse with a sub-prime mortgage and a $20,000 down payment loaned to him from the government. It was part of Bush’s plan to increase low-income home ownership by 5.5 million citizens. Barney Frank was nowhere in sight.

But Lawrence Lindsay, economic advisor to Bush, Secretary Snow, Secretary of the Treasury after Paul O’Neill, both said…maybe we were being a little too ambitious.

Meanwhile, in Congress Barney Frank and Mike Oxley (a Republican) were trying to get through Congress some regulation that would put some controls on the speculation that was occurring in the housing market. But Republicans voted down the bill, even though Frank and Oxley persuaded their fellows in the Finance Committee to bring it to the full house for a vote.

Do you see how long it takes to dispel one little lie? And the Neocons drop twenty or thirty like that every single day. Truth does not matter. Outcomes, like people dropped from unemployment with nowhere to turn to feed their families, do not matter. Only politics matters. When Karl Rove put a man into a U.S. Attorney’s office, he expected that U.S. Attorney to attack Democrats when he or she was told to, or be fired.

He fired 8 U.S. Attorneys but we are still sorting out the damage that the other 42 U.S. Attorneys did while in office. We know what one of them did. She trumped up charges after many phone calls with Rove and her Republican counterparts to indict the Governor of Alabama, a Democrat.

With a kangaroo court of Republican judges they convicted the Democratic governor, Don Siegelman for things that had never been charged as crimes before and put him immediately…right from the courtroom…into prison so that he could not talk to the press or anyone from the public.

If it had not involved that disgusting clown of a human being, Rove, and if it were not so terribly damaging to one human being, Siegelman, whose only mistake was being a popular governor, it would be amusing to see how far the Neocons will go.

So it should not be surprising that Neocon Senators and a very Neocon Democrat from Nebraska should have held up unemployment benefits for a million or more people. They have no humanity. Governing is not about the people, it is about corporate power for those who can wrest control away from the People.

One of the most sinister aspects of the Neocon myths about Progressive, as they call it, economics is that the Democrats are big spenders. Let’s hear the facts again. In 1980, the deficit was $800 billion.

It was only that high for some specific reasons…again having to do with wars and our problems (which President Carter addressed and Reagan later dropped) with so much foreign oil debt. By 1993, the debt was about $5 trillion. When Bill Clinton left office it had only grown to about $5.6 trillion. Bush took it from $5.6 trillion to $13 trillion.

During the one Democratic administration of that whole period, the budget deficit was reduced and was so small that the national debt did not increase. One of the reasons was something called Paygo, which Clinton and Gore introduced and the Democrats as well as Republicans supported. Why wouldn’t the Republicans support it? They went home to their districts and said that their opponents were not doing anything for their constituents. Many Democrats sacrificed their offices to support fiscal responsibility. As soon as the Neocons returned to power in 2001, they began to spend like drunken sailors.

Between 2002 and 2005 the top 1% of all income earners made 75% of all income increases. That is a staggering amount. That is like saying that of all the batters in the American and National leagues, ten guys were given credit for all the home runs.

In this, the most serious economic crisis in our history, the Neocons have tried to defeat health care reform, which they know will reduce health care spending by half over ten years when the entire program is enacted. They are now working with Wall Street lobbyists to water down…and they have watered down…financial reform. Imagine…working to keep regulations out of the financial system that just caused a massive Recession for lack of those very regulations and supervision!

Even if you supported something like a Neocon version of economics, how could you trust them? They have filibustered 290 times in the Senate in this most recent session of Congress alone. They have called the moderate and far less Liberal Democratic policies of the President “dictatorial” and “tyrannical.” Those comments are both stupid and nonsensical, but they were made by members of Congress and the Senate and by, for example, the wife of a Supreme Court justice!

They can certainly colloquially be referred to as “crazy.” That a government elected by 54% of the people (the President) and 59% of the people (the Democratic Congress) should be referred to as “tyrannical” really begs the question of whether Neocons are 100% propaganda or 100% just plain stupid.

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3 Comments so far ↓

  • John Manning

    Thanks for the really informative post. Great work. I was aware of most of the history you referred to, but seeing it all in one place with the supporting details you provided is very enlightening. But here’s the big problem. Most of the people you and I are trying to convince have little or no patience for depth or careful analysis. And at least some depth is required for them to dispel the myths they cling to. The people have little regard for empirical fact. Perhaps we need our own Reaganesque, rock-star type who will expose the bumper-sticker tea-partiers to another point of view by using the right smile and platitudes.

  • WebAngelex

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  • KenR

    As I have been living in Europe since 1972, I can assure you that precious few Europeans even remember Reagen’s “Mr. G tear down that wall” speech. The main factors were the Poles and “Solidarity” as well as the East Germans (both broad spectrum, left, center, religious , right popular movements) that evolved from the failed Communist economic policies. The Czechs and Hungarians came along for similar and also ethnic-nationalistic reasons–as well as previous humiliations from the Russians. It was a people’s uprising and had nothings whatsoever to do with Ronnie’s rhetoric–they didn’t even know he’d said it!

    We exeperienced it here in Austria without any connex to US or Reagen policies.

    Kennedy’s Berliner speech was an entirely different matter–the Repulsives needed something to match that–well, in Europe they failed miserably.