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Voodoo Economics Versus Outright Fraud

July 16th, 2010 · No Comments · Capitalism, Politics, Populism, Wall Street

Here’s what “Voodoo Economics” is all about. Voodoo Economics refers to a theory put forth by economist Arthur Laffer in 1980…and perhaps remains his personal approach…that says that when you cut taxes the economic benefits that will accrue from that greater spending capacity will so greatly increase the domestic output that the resulting taxes will be more than the lost revenue of the severed taxes.

Here’s what “Fraud” means. It means an act done with the intention to deceive. Of course, “Piltdown Man” was a fraud but it did not result in trillions of dollars being removed from society and put into the hands of about 2 percent of the population of Great Britain.

Piltdown Man was merely a hoax, albeit a long-running one. Voodoo Economics was a criminal fraud involving the theft of half or more at least of the national debt we have accrued since 1981.

Now it is quite possibly that Dr. Laffer knew less about the fraud than he does about Piltdown Man. The fact is, however, that the Conservatives in the Republican Party finally saw an economic theory that made them look good for a change and made them appear to be in the mainstream.

The idea was that the unsuspecting American people would not understand…especially with the way the message was framed and even more especially with the trusted Ronald Reagan espousing it…that they were courting disaster.

The Conservatives realized that they could offer tax cuts, more “efficient” privatizing of some government functions, growth in the economy (there are always more people being born than die and we are always allowing millions of immigrants into the country) and prosperity for all. Is this a great country or what?

But in reality the country was slowly draining its resources. Every year, we were losing $500 billion. Some of it we hid, by simply not declaring certain “off-budget” items. And the economy didn’t grow its way out of debt. The Conservatives like to claim that under Reagan the economy grew and grew. The fact is that the first several years of Reagan, just like Bush II, the jobs fell and fell. The average unemployment for the entire 8 years of the Reagan Presidency was 7.5% only 2 percent lower than we have right now in the worst economic period the last years of the Great Depression.

So what does this mean and why is it important? Well, first it means that we have dug ourselves into a huge and very dangerous financial hole under the Conservatives and their corporatist camp followers, the current Neocon Obstructionists, the “Party of No.”

In the Roosevelt-Truman terms, between 1944 and 1952, the national debt started out, because of the war spending at 115% of GDP. That is government actually spent 15% more than we had coming in. But by 1952, we had brought that down to 71% of GDP. By the end of the Eisenhower era, 8 years later, at the end of 1960, we had cut the national debt to the point that we had debts that were a little less than the overall economy was generating. By the end of the Eisenhower era, we had cut that to 55.2%.

Under Kennedy, Johnson, Nixon, Ford and Carter it was brought down to only 32.5% of GDP. It was well on its way to being extinguished completely within 30 years. Under Reagan, Bush, Clinton and Bush II, however, it went from 32.5% of GDP to 83.4%!

And it must be pointed out that under Bill Clinton, the deficit started at 66.1% but he actually reduced it to 56.4% by the time he left office. So George W. Bush actually inherited a budget that was structured to go down, as it had been structured, at least somewhat similarly between the Truman and Carter Administrations.

In his four years, Nixon reduced the national debt during war time, as had Lyndon Johnson, and they did so substantially, even with the costs of the Viet Nam war. But the aftermath of the war and the ensuing inflation meant that Gerry Ford, a fiscal conservative (who had Cheney and Rumsfeld advising him) was not able to bring down the debt but saw it increase very slightly.

So the big “tax and spend” accusations that the current crop of Neocons make against the Democrats simply do not hold water. In fact they make no sense because the evidence is exactly the opposite. Exactly the opposite.

Again, it is necessary to stop and make a point not exactly on the deficits and the national debt. The accusations that are made by the Neocons must be characterized as “lies.” They are not misstatements; they are not interpretations of fact. They are lies that are made deliberately for political purposes, a simple direct technique of propagandists since the 1930s.

A man named Adolph Hitler, head of the National Socialist Party in Germany and his chief of political propaganda, Dr. Herman Goebbels developed a technique that was actually called the “Big Lie.” They understood that with so much chaos and turmoil in the financially hyper-inflated German society at that time, that to make up one big lie that could be attributed to all the problems would cut through the clutter of all the political messages of the time. That big lie, the biggest, was that everything was the fault of the Jews.

Once you start telling lies, it becomes easier and easier. Karl Rove, a man with political scruples similar to those of the National Socialists, and his predecessor, Lee Atwater, who began the era of dirty politics on a large scale. Rove took the big lie even further than his mentor always calling Democrats “Liberal” a word that he reinvented meaning, in his terms, wanting “more government, more taxes, more spending, more regulations, and more interference in our lives. And the only thing they want less of is defense, which is the only thing that we (Neocons) want more of.”

Well, of course, Rove has turned out to be right by accident. We do need more government to insure that BP Oil continues to pay reparations and costs for the damages it has done to the citizens of Louisiana and Florida. We need more taxes on the rich, Rove’s supporters, so that we don’t have to kill or drastically reduce Social Security and Medicare. We do need more spending to jump-start the economy. The stimulus created 2.5 million jobs. We need to create another 5 million and then the economy, as it always does, will take off on its own. And as far as “interference in our lives” what could be more interfering that to tell women when they can have sex and when they become pregnant, when or if they can decide not to have a baby.

We do all know by now that the Neocons want more “defense” by which they mean two things. Wars to support their international corporate friends in their transgressions abroad and for oil…and…more support for military contractors who kick back to the Neocons from non-bid military contracts to people like Halliburton and Blackwater.

So what have we learned? We’ve learned, if we were paying attention, that money corrupts politics. The theory put forward by Dr. Laffer was not designed to ruin the country. The political use of that theory as revised and turned into propaganda, that in some quarters is still believed as something other than a nonsensical political ploy has indeed been devastating to the middle class.

Reagan’s idea and his followers’ idea was to enrich a large segment of the population…and 1 or 2% is still a lot of people, while reducing the other 99% or 98% to lower middle class status. The idea was to eliminate the unions and the working class…reduce their incomes and their job opportunities to the point that they would almost be begging for jobs. Certainly some top managers do want them to be literally begging for jobs.

The Neoconservatives who followed Reagan and Bush I, made no bones about it. When they brought Bush to the table…a dunce…a puppet…they were letting us know that this is a movement, a political movement. It is no longer an economic theory. In spending $7 trillion more than they received in tax revenues from 2001-2008, and deliberately creating a huge recession. They probably wanted a real Depression but some Neocon Congressmen and Senators perhaps got weak-kneed at the thought of facing their real constituents at home and voted for the TARP bailout.

So that is what Voodoo Economics means. It means fooling the public. Especially those who are more concerned about religious fanaticism than economics or owning guns than economics, or listening to racist “coded” hate speech than economics. Here’s how it works.

One guy, a paid stooge, is telling the hicks that Strom Thurmond was a wonderful human being, despite the fact that he obliged his family’s maid to have sex with him for years and then paid her off to keep quiet about it. While this guy, often a preacher, is extolling Strom’s virtues, another Neocon, a Congressman is quietly introducing a bill to cut taxes some more on BP Oil or Exxon. Or perhaps he is introducing a bill to cut the regulations on how mining companies can blow the six-story tops off mountains and scatter the slag into creeks and rivers polluting streams and drinking water, ball fields and playgrounds for miles around.

And then, at the very time the hick-racists should be wondering why their fixed incomes don’t seem to keep up with the cost of living, and when they begin to see that it is not about raises any more but about keeping your job or maybe starving…right here in the United States…the Neocons bring out their tried and true Voodoo Economics message.

We pay too much in taxes in this country, they say, as we read that our tax revenues are the lowest since 1950, when we had only 125 million people, not 300 million. We need to be more “austere” they say, while the top 1% of income earners made 75% of all wages between 2002 and 2005. We need to cut back on unemployment, they say, after engineering the greatest economic collapse since 1929, and causing the loss of 8 million more jobs (15 million in all) since 2008.

Voodoo economics is real. It is really hurting this country. It is the plan of the Neoconservatives, the Neocons, to support the rich and support rich international corporations who will take your jobs overseas and then, using “Voodoo” economic rationales, tell you why it is good for you that they do it. The average CEO makes 262 times what the average worker makes. Look in the mirror and see if you can get the words out: “This is not voodoo. These people are really concerned about me.”

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