New Deal on Television Watch

A few weeks ago I was writing to defend the New Deal, to show that it did bring the US out of the Depression, and that in any case, spending for WWII (which is often cited as the actual end of the Depression) was also Keynesian. Keynesian stimulus (getting money into the hands of the lower classes, often while hiring them to do useful things by the government, the employer of last resort), is thus doubly proven to be effective. I was pleased to see this week that there was some support for that thesis on the airwaves (where the New Deal is almost never defended). The first was by Rachel Maddow, the smartest television host on today. At about the 3 minute mark in this video, Rachel shows that the New Deal really did work to arrest and turn around the Depression. She doesn’t make the connection that spending on WWII was Keynesian, though. That connection is made here by Jonathan Alter, who also shows the rare ability to just come right out and state that a Republican is talking nonsense. It’s good to see this narrative finally making an appearance. Is it too much to hope that Democrats will now start to tell it?

The Shock Watch, Part 3

We’ve seen that unregulated capitalism enriches the already rich and leads inevitably towards feudalism, with the wealth concentrated at the top of the economic ladder, followed by economic collapse. The corporatists in this country have been following a strategy to achieve this for the last 30 years, using flag-waving, gay-bashing, and abortion as cover, all the while delaying the inevitable collapse by pumping money into a series of economic bubbles to create the illusion of prosperity while moving as much money out of the lower classes’ pockets as they can before the fall.

In fact, the powerful forces of corporations and the rich in this country have turned our federal government into an agency which, instead of moving money back down the ladder, actually moves money into the hands of the already wealthy, at ever greater speeds, in ever greater amounts. This policy means economic disaster for the country, and for many years the traditional Republicans in the party were frightened to go down that path. Witness: Reagan’s “biggest tax cut” in the early 1980s, which was the corporatist’s first big venture into being economically irresponsible in modern times. They were, instead of continuing to fund the redistribution of money, going to keep their money and let it “trickle down” against the natural flow of money upwards. The predictable economic downtown followed immediately, and the Reagan administration, spooked, ordered the largest tax increase up until that time to right matters. But the GOP has learned to embrace irresponsibility, cutting more and more taxes, generating huge federal debt, strangling the federal government’s ability to move money to the lower classes.

We are now on the brink of a terrible economic crash, with essentially only two options: one path includes government taking back on the mantle of redistribution, taking money from the wealthy and putting it back into the lower classes. The other, which at first seems unthinkable, is to go in exactly the opposite direction. Let’s take a closer look at those two options.

In the Stock Market Crash of 1929 and the start of the Great Depression, Hoover’s response was essentially to do nothing. The idea of the government employing people, of giving money to people in need, was anathema to the business class, of which he was part. The country’s response was to elect Franklin Roosevelt, who halted and then reversed the effects of the depression by getting money into the hands of people who needed it – widows and orphans, the maimed, the blind, the elderly. He created Social Security. He employed thousands of the unemployed to repair and build the country’s infrastructure, bringing electricity to rural areas, roads, bridges, trails, buildings. He made the humane move, using government to get people through hard economic times and in essence saving capitalism from its own inevitable end, in feudalism and most likely, revolution.

FDR’s solution was to create MORE social spending, more safety net, more help for people.

Amazingly, though, in many countries around the world, the exact opposite approach has been used; when other economies have gotten in trouble, the response has been to REMOVE the social safety net, to get rid of the minimum wage, to destroy organized labor, to sell off public resources to private interests, to lift regulations and to move towards much more unfettered and brutal pure capitalism.

In those countries, their right-wing regimes have had to use violence and even torture to keep their populaces in line, for of course instead of relieving their pain, they have increased it. These measures have taken various names, including “economic shock therapy” and “strong medicine”. And they have worked out just peachily for the already rich, the multinational corporations, and the politicians willing to front for those interests. Those histories are summarized in Naomi Klein’s book The Shock Doctrine.

So, this country faces a certain binary choice: in the face of economic collapse, and that is surely what we are facing, will we INCREASE social spending, regulation, and the safety net, or will we DECREASE it?

INCREASING the government’s response to the crisis is surely the path of sanity. That way would keep this country from becoming a third-world shithole, and it seems to be Obama’s stated objective. Most of America would probably back this path (if our citizenry were educated better and not propagandized), and most experts with a slice of sanity or humanity back it.

DECREASING the government’s response is now being proposed, though, by the GOP. They are on the floor of Congress, spinning tales about how the New Deal didn’t work. They are trying to make the federal government, which has already been turned into an instrument for funneling more and more money to the already rich (witness: Bush’s tax cuts, the incredible boondoggle in Iraq with its “missing” trillions, the blatant and outright theft by the rich that is TARP - - is anyone objecting to those?), even more so with MORE tax cuts. They are already saying that gee, since everything is so bad, we are going to have to cut Social Security and Medicare because people need to “sacrifice”.

Other bad signs for this country going down the sane path are:

1) There has been a constant propagandizing against New Deal type spending ever since the New Deal, to the point where many Americans have a dog-whistle negative response to anything called “socialism”.

2) There is no sign that the anti-corporatist sentiment in this country has any real power at all. Sure, we can elect a nominally populist President to preside over a bankrupt nation about to go up in flames, but there is zero sign that that President or any of the members of Congress, can stop the looting of the treasury or strengthen our safety net. They are incapable of even prosecuting corporatist war crimes.

3) It is clear that the entire GOP and about half of the Democratic party are on board the corporatist money train, and those that aren’t have been spied on by our NSA for at least the last eight years and are either vulnerable to or already under extortion and control.

4) The corporatists have been quietly preparing for the inevitable popular uprising which will follow the crash and the “shock therapy”. They have gutted Posse Comitatus, created new crowd control weapons including microwave and robotic weapons, tested American’s knowledge of and commitment to their civil liberties and found them almost non-existent (Jose Padilla, a US citizen, was held without charges and tortured into insanity with nary a peep from the citizenry), and set up a surveillance system that captures virtually all communication. When the uprising comes, they will be ready.

5) Our national media is completely on board with the corporatist program. For example, every time things start to get tough in this country, our media elite start asking whether we shouldn’t start gutting Social Security. Duh! That is exactly the opposite of the right thing to do.

6) Even though some Democrats in Congress talk a pretty good game, the party leadership is completely feckless, weak, and frightened. They “allow” themselves to be outmaneuvered constantly by the GOP, even when Republicans are in extreme minority. True populist victories are few and far between.

7) The most ominous sign of our country’s coming economic demise is the appointment of Larry Summers as the head of the National Economic Council under Obama. Summers and Robert Rubin worked towards deregulation of the financial industry under Clinton, and Summers as the head of the World Bank, shepherded the economic shock therapy in Russia as the Soviet Union fell apart. That really worked out well for the people of Russia:

It was also the year that Summers, and his Harvard protégé Andrei Schleifer (who worked with Summers on the Lithuania economic transformation), began their catastrophic "rescue" of Russia's crisis-ridden economy. It's a complicated story involving corruption, cronyism and economic devastation. But by the end of the 1990s, Russia's GDP had collapsed by more than 60 percent, its population was suffering the worst death-to-birth ratio of any industrialized nation in the twentieth century, and the financial markets that Summers and Schleifer helped create had collapsed in what was then the world's biggest debt default ever. The result was the rise of Vladmir Putin and a national aversion to free markets and anything associated with Western liberalism.

Summers, and Geithner, who are cut from the same Chicago-school, Milton Friedman-ite cloth, will surely engineer the dissolution of our social safety net in the next few years.

8) Our only hope for some kind of economic upturn in the immediate future is that Obama and the one or two Democrats who understand what is going on can wrest some dollars out of the hands of the rich and give them to the poor. And I don’t see that happening. The redistributionist argument is not even being made, let alone defended, and the ever increasing wealth and power of the wealthy and powerful make their money that much harder to get at. The idea that the mighty CEOs would except even the smallest tax increase, even to help out their fellow Americans, seems almost laughable.

Shock Watch, part 2

Unregulated capitalism rapidly concentrates wealth into the hands of a small, powerful minority, which is why one of the most important functions of a government is to move money back down the Wicked Witch of the West’s hourglass. This is done either directly, with payments to people who cannot exchange their labor for income (the aged, the sick, the orphaned, the widowed, the recently unemployed – these payments also have the salutary effect of - usually – preventing people from literally dying of need), or indirectly, by enacting and enforcing labor regulations that move enough money back down into the pockets of the lower classes.

There are, however, people in this country that lay awake at night, awash in a feverish sweat, afraid that some of their money is going to find its way into the pocket of a poor person someday. They have seen the government moving the sand back down to the bottom of the hourglass, and they don’t like it. Some of it was once, after all, their sand. And even though the government redistribution keeps the whole system going and flowing, they’ve decided that they’d like to keep their money and try feudalism for a change.

They have used their political power, which is considerable because of their wealth, to cut taxes for people at the top. They attack and weaken labor laws, they weaken the department of labor, they fight raising the minimum wage, they try to ship jobs overseas, where they can again dictate the wages. They begin dismantling the safety net, by trying to lower Social Security payments, or raising the retirement age. They try to limit Medicare because it “costs too much” (which is doubly evilly ironic because this same class of people keeps the rest of us locked into the most expensive medical system on earth) They cut unemployment benefits. They try to weaken the power of the government in general, by starving it of money and by buying up all of the bribable public servants until there are very few left who understand/care about the government’s important redistributive function. In short, they do everything the Republican party (and about half of the Democratic party) has been doing for the last 30 years.

This creates two distinct problems, though. The first is the problem of perception. Because their policies will ultimately result in feudalism and economic collapse, and because our capitalist system is grafted onto a democracy where the people have some indirect control over the policies we follow, the corporatist polices have had to be sold to the public with one of the most dazzling and thorough PR campaigns ever waged. Dressing up raw, ugly, and destructive greed is not easy. But the steps have been fairly obvious. First, they play up tax cuts as if everyone in the country is getting something great, when most people see an insignificant change while the rich get huge cuts. But that charade only goes so far. The real trick has been to fan anti-government sentiment by linking the government to social policies that deal with real world issues, but that make people squeamish. So, for example, they rail against abortion. And gay rights. And treating people with other cultures and languages like people. And gun control. And they wrap themselves in the bible and the flag, and sell their suicidal policies to the masses. They have been largely successful in getting people to sell out their own economic interests in exchange for Neanderthal social values. This is the thesis for What’s the Matter with Kansas?, Thomas Frank’s book, which is currently being turned into a movie. They have also created negative feelings towards unions, liberals, diplomacy, even human rights through propaganda, all for the ultimate goal of stopping the government from redistributing wealth. It’s working like a charm.

The second problem corporatist policies create is the actual economic collapse. It’s obvious to people like Alan Greenspan that without the government moving money back down the chain, this country will soon collapse, and then all of their hard PR work will be exposed for the fraud it is. And so what they have done is to delay the inevitable. The wealthy have used their new found surpluses to create bubbles: first the dot com bubble, then through manipulation of interest rates and deregulation of lending practices, the housing bubble. All this maneuvering has delayed the inevitable economic collapse, by creating the illusion of growing wealth, by allowing people to take the money out of their homes and use it to continue to push money up to the top of the hourglass. The business powers have figured out ever more ways for people to get themselves into debt to continue the economic flow of money up the chain. But we are coming to the end of that. People are maxed out on their credit cards, and have taken all of the money out of their houses. And their incomes are dropping away by the thousands. The economic engine is grinding to a halt, and without money coming from the top down to the lower classes, we will have achieved the ultimate goal: feudalism and economic collapse.

Next: the current crisis, and our prospects for getting out of it

Shock Watch

There is a huge problem with capitalism, and it is this: like the Wicked Witch of the West’s hourglass, the money in capitalism flows up, from the people who don’t have much of it to the people who already have a lot of it. This suits the “haves” just fine, of course, because they become richer and more powerful over time, but it isn’t good for the system overall because of two negative consequences: first, people with little money run out of it quickly, and people with no money are a huge problem. Secondly, the money soon stops flowing and you have economic collapse. When the music stops you are left with a feudalistic society; money and power concentrated in the hands of a few overlords, with serfdom for the rest of us.

So, unfettered capitalism leads to people with no money and economic collapse. That unhappy outcome is as old as capitalism itself, and so humans, being clever little monkeys, have put on our thinking caps and devised ways to avoid it.

What do we do about people with no money? For one thing, we promote the social virtue of people living within their means. People running themselves into penury do nobody much good, and so we encourage people to save, to budget, to scrimp, to be careful, to plan for education and retirement costs, to earn, and to take care of themselves. When people run out of money or are in danger of doing so, we have set up systems to provide it for them so they can take care of their basic needs: aid to widows and orphans, Social Security, unemployment benefits, bankruptcy, Medicare and Medicaid, disability, food stamps. All of these systems provide a safety net for people who are unable to exchange their labor for money sufficiently, including but not limited to people who cannot do so because of their age or illness or sudden loss of employment.

The other thing that we do to keep economic collapse at bay is to slow down the rate at which money flows upward by making sure that it goes from the haves to the have-nots at a sufficient rate. So the government enforces things like the 40-hour work week, overtime rules, the minimum wage, and other labor laws including support for unions, which ensure that the captains of industry reward work enough to get money back down to the bottom, to keep the system flowing.

In a capitalistic society, therefore, one of the government’s most important jobs is to take money from the top of the hourglass and put it back on the bottom, either directly through progressive taxation to support the safety net, or indirectly by forcing capital to exchange enough money for labor. It takes from the rich to give to the poor (where have I heard that before?), but the upside is that people aren’t rioting in the streets, we have a generally good standard of living, and (most) people don’t live in economic slavery.

Rich people hate that. A fair chunk of their income (and in some cases their wealth) is taken by the government to give to needy people, and many of them are forced – horrors – to pay living wages to their employees. Shortsightedly, many of them don’t see the benefit of living in a society where the government intermediates on behalf of the have-nots. What is worse is that we have designed our corporations to behave like sociopathic rich people on steroids. And as corporate power has grown, the rich have been eying and opting for feudalism and economic collapse. We are in another Gilded Age, and they just might get it.

For corporations and some rich people (for convenience, let’s call this mindset “corporatist”), feudalism and economic collapse aren’t bad things to be avoided, but rather features. The government can be starved into impotence, the safety net can be taken apart, and the less wealthy will then have to rely on the largess and good will of the rich. Of course, the great unwashed won’t be happy about this, but the corporatists will also have private armies and crowd-controlling weapons, so there is nothing to worry about. And what’s left of the government can be used to serve them as well.

Next: implementing the plan so far

Supply Side Voodoo Watch

This essay by Thom Hartmann is the best explanation I've found for the budget/deficit/politics situation in this country in the last 30 years. (Emphases mine)

Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years

by Thom Hartmann

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 LBJ in 1968 [sic - Nixon beat Hubert Humphrey in 1968, thanks Jeff M.], 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.

Defending the New Deal Watch

After the Great Depression, a large portion of our population understood that FDR’s policies of government spending to stimulate the economy actually worked. It was Keynesian economics, in which the government in times of economic downturn becomes the employer of last resort. FDR created programs to put people to work, building infrastructure (dams, roads, electric power plants and grids) and doing just about every other damn thing under the sun. Painting murals. Maintaining hiking paths. Halting soil erosion.

From the beginning, the business and moneyed interests in this country hated the New Deal and its works programs. They began and continue to this day to employ a disinformation campaign that has left the current American public of today not knowing if the New Deal was a good thing. This ignorance never would have worked on the public in the 40s and 50s, when people understood exactly what the stakes were to Hoover’s “continue to do nothing” strategy (there are still idiots in the same mode today). They understood because FDR explained it to them. He told them that his programs were going to end the Depression, and that his opponents had done nothing and didn’t care about them. How horribly rude and partisan his speeches seem in today’s climate, when merely giving the GOP the richly deserved blame for the financial crisis gives our media the vapors.

Any analysis of economic health from the era shows that the recovery was slow, but after a few years the economy was back about where it was when the downturn began during Hoover’s administration. But the economy didn’t start to boom until WWII. The difference was that before the war, FDR didn’t have the political capital to really spend and employ his way out of the Depression the way he wanted to. His opponents watered down his spending proposals, demanded that he try to balance the budget, hindered him. When it comes to killing people, though, no expense is too large for the US of A. (and, to be fair, Japan and Germany did present a real risk to our nation and to our European allies). Once in the war, the government could deficit spend to its heart’s content, put people to work, etc. And it worked like magic.

Today people say “the New Deal didn’t work” or they say that the New Deal failed and it was only WWII that worked to really end the Depression. I’ve even heard people say that FDR’s policies actually prolonged the Depression and that Hoover’s “do nothing” strategy would have worked faster. But the proof is in the pudding: the government employing people on a massive scale really boosts the economy.

But, I hear you object, that was the war, not the New Deal. Pretending that there is some qualitative difference to war spending and other stimulative spending is the real fallacy.

Corporatists and conservatives weep and gnash their teeth about the government paying people to paint murals or build roads (in the current go-round, the GOP has objected strenuously to money for the Park Service to maintain the National Mall). And so they pretend to scrutinize every penny to judge its stimulative effect. The truth is, anything that employs someone to do anything is stimulative, and highly so.

In the Keynesian spending to fight WWII, we employed a huge number of people to build battleships, fighters and bombers, munitions, aircraft carriers, supplies,etc. And where did all of that stuff go? Most of it is at the bottom of the sea, rusting and poisoning the environment. Yet, the stimulative effect was very high. We could have had people building ships and sending them to the bottom of the sea ourselves in the absence of Japan, and it would have had the same effect. What’s the difference? Just that in the case of making weapons everyone can see that it is a smart thing to do when you have an enemy.

So, you can employ people to do anything and boost the economy doing it if you employ enough of them. The smart thing is to have them do something useful, or beautiful, or necessary, or leaving you with something valuable afterwards, like a greatly improved infrastructure. But WHAT they do isn’t what boosts the economy, as the GOP wise men who rub their chins now like they know something would like to pretend. Only THAT they do it, and get paid, and get that money circulating.

My advice for the Obama team? Fashion a bill that employs a huge number of people, spending a vast amount of money on our infrastructure, and EXPLAIN what you are doing to the American people, so that they aren’t left wondering if more tax cuts (god forbid) would have been better.

Waiting for Presidential Jujitsu Watch

Well, Obama managed to pull it off and get himself elected despite having to run against a clearly mentally inferior Republican, a disadvantage which defeated both Gore and Kerry. Hooray USA. It seems that a small group of Democrats decided to actually pay attention to how campaigns could be won and lost, used a lot of very smart media buys, innovated in fundraising, followed Howard Dean's gameplan for competing in all fifty states, and had an incredibly disciplined candidate who was excellent at framing - something that Republicans have traditionally been very good at and Democrats not so much. Obama's team was incredibly savvy about the media. Here, for example, is a great analysis of a truly inspired move by our new WhiteHouse spokesman against raging idiot Sean Hannity.

So, ok, Obama's people know how to campaign, which is totally great and unexpected in a group of Democrats. But what about governing? As George W. Bush tragically demonstrated, winning elections and governing competently are two entirely different things. And the track record of Democrats in fighting evil and incompetence is not reassuring. The Democratic leaders in the Congress are terrible, full of the most cowardly, unprincipled, puling wretches who couldn’t be bothered to defend the law, the Constitution, or our freedoms if their livelihoods depended on it. They continually make choices that are not only bad policy but bad politics. The way they act is a continual source of shock, outrage, and disappointment to their base. It’s like trying to fight Darth Vader with a limp lasagna noodle. There are only a few, such as Marcy Kaptur, Dennis Kucinich, Russ Feingold, and Bernie Sanders (who isn’t a Democrat, of course) who break through the nod-and-wink charade of pretending free market capitalists are not the lying thieves they have proved themselves to be.

Any student of recent politics knows that the GOP excels at being very effective in opposition. Here's what they do: they demand and demand and demand compromise on legislation, which the Democrats always give in to, always too much and too early. Then, when the legislation has been made completely ineffective, they vote against it anyway. This is exactly what they are doing with the stimulus bill. A recent piece by the Rude Pundit puts it this way:

We don't know what Barack Obama actually said to Republican members of Congress in his closed-door meetings with them yesterday regarding his stimulus plan. But we do know one thing for sure: it accomplished nothing. This is the way it's gonna go, and if you've paid attention at all, you know the steps: Obama will concede shit and Republicans will ask for more (even though they already got more tax cuts than anyone fucking needs), Obama will concede more shit and Republicans will ask for more (even though they're gonna get the family planning funding taken out), Obama will concede more shit and Republicans will ask for more, and then when the vote comes, Republicans will vote against it, saying that no one listened to them and fuck that Obama for lying about bipartisanship. Yet the legislation will have passed in a watered down form from the deep infrastructure and other spending so desperately needed to, you know, create jobs, which will, you know, create taxable income, which will, you know, help actually pay for shit some day.

Now, long after the thieving horses have left the barn, they are closing the barn door. In a pattern repeated many times in history, a regime that tortured people and spied on their own citizens has left, leaving a popular new regime saddled with debt and a bunch of Chicago School economic advisors to forbid them from doing anything useful about it. This happened in Poland, in South Africa, in Russia, in country after country in South America . . . and now it is happening here, right on schedule. Read “The Shock Doctrine” by Naomi Klein, if you haven’t already.

We await evidence that the Obama team is just as smart about governing the GOP as they were at campaigning against them. The only effective way to approach this stimulus bill is to devise it with no compromises, to make it an actually effective bill, to reject yet more tax breaks, and to pass it without the GOP. Obama doesn’t need them.

Tomorrow, how we know that stimulus spending actually works.

Lieberman Watch

Holy Joe Lieberman is in deep do-do. After betraying the Democrats and actively campaigning for John McCain, the Democrats can do whatever they want to him.

The Republicans purportedly want him to caucus with them, but won’t give him the minority leadership role in any committees. (And I doubt very much that they really like him. No one likes a mealy mouthed turncoat.) And even if he caucuses with them, it’s not like he’s going to go all anti-choice, anti-gay, anti-democrat. He votes with Democrats most of the time, with the bizarre exception of the Iraq war. So, even if he caucuses with the repubs, he will tend to vote against the repubs most of the time.

I think the Democrats should strip away all leadership roles. After all, he’s not a Democrat any more and he didn’t support the party when they needed him – in fact, he supported the Republican instead of the Democrat. And he showed Obama no respect and blatantly lied about Obama – despite the fact that Obama endorsed Lieberman during Lieberman’s own primary. Holy Joe took a dump in his own shorts; now he should be made to wear them.

-John Locke

Shame Watch

OK. So I know no one reads this blog, and I know that no one really cares what I think, but I am using this opportunity to vent my extreme frustration and anger at California voters. On Tuesday, Californians were given the opportunity to vote on several propositions. It now appears that Californians have voted to write discrimination INTO the California Constitution.

Proposition 8 was a very simple proposition – “Only a marriage between a man and a woman is legal or valid in California.” This is exactly the same language as Proposition 22, which in 2000 illegally modified California law to preclude same-sex unions (this language was ruled unconstitutional in the spring of 2008 by the California Supreme Court). So, less than six months after the California Supreme Court ruled that the laws that precluded same-sex couples from marrying was unconstitutional, a proposition to change the Constitution to allow discrimination against same-sex couples was approved by the voters.

Compared to the 11 other propositions on the ballot – one of which was 22 pages long in dense, six-point font – this one was so simple that the summary of the proposition was as short as the actual legal language. Proponents had deceptively wanted to call it the “California Marriage Protection Act”, but the California Attorney General re-wrote the title to more accurately reflect its content: “Eliminates Right of Same-Sex Couples to Marry. Initiative Constitutional Amendment”. So there is really no doubt what Californians voted for. They voted to write discrimination INTO the fucking California Constitution.

Without hyperbole, no Proposition could be more vulgar or offensive or hateful. The Constitution is intended to protect the rights of all Californians, so writing discrimination INTO the Constitution is clearly an affront to both the letter and the spirit of the document.

Though the majority of votes for the proposition came from white Californians, I am deeply saddened by the role that other minorities played in the passage of Prop 8. Polling indicates that 71% of African Americans and more than 60% of Latinos voted for the proposition. Of all the people who might understand what discrimination really means, one would think African Americans and Hispanics would; these are the people who have been repeatedly marginalized and discriminated against by society. Yet African Americans and Hispanics turned out in droves to discriminate against a smaller minority. Does being a minority mean that it’s okay to pick on another minority??? SHAME ON YOU! Jesus.

Literally – Jesus. With respect to Prop 8, the role of churches – the Catholic Church and the Mormon Church – is truly atrocious. Together they funded most of the pro-Prop -8 ads. Over $35 million was contributed by the religious right to pay for misleading ads for Prop 8. Imagine what good $35 million could have been used for! Homeless people could have been given shelter, hungry people could have been fed... Instead, the $35 million was used to take a cheap shot at a vulnerable minority. SHAME ON YOU, MORMON AND CATHOLIC CHURCHES! When did Jesus ever condemn homosexuality??? Quite simply, religious people who voted for Prop 8 are a fraud and a pox upon society. Bigots and homophobes all. If there is a hell, I hope you rot/fry/decay in it with your petty hates for ever and ever, amen.

So, faced with a number of propositions, what did Californians do? A plurality of Californians demonstrated that they are bigots and assholes and voted to give rights and protections to chickens via Prop 2 and strip rights from gays and lesbians via Prop 8.

Nice. REALLY FUCKING NICE. SHAME ON YOU, CALIFORNIANS!

-John Locke

Palin Watch III

See! Abstinence-only sex-ed really works... some of the time, anyway!

Living proof is offered by Ms. Sarah Palin, who, as we all know, runs a staunchly conservative state and household, and who offers her family up as the pinnacle of religiousity and moral uprightitudiness!

Democrats noted, before and after today's announcement, that Palin took a hard line on a question in 2006 from the conservative Eagle Forum Alaska:

Q: Will you support funding for abstinence-until-marriage education instead of for explicit sex-education programs, school-based clinics, and the distribution of contraceptives in schools?

SP: Yes, the explicit sex-ed programs will not find my support.

As we found out today, religious-based abstinence-only sex-ed really works, except when unmarried teens have sex -- and then it don't work so good.

Ms. Palin's decision to place her unmarried pregnant daughter in the limelight by accepting the VP position on McOld's ticket further emphasizes her firm commitment to her family. "I'm going to make a very difficult situation that much worse for my daughter," Ms. Palin stated. "The whole world will now know that my daughter got knocked-up by a boy named after a popular brand of jeans! And since we still have the right to bear arms, the whole world is now invited to her shotgun weddin'!"

So far, however, the mainstream media is not picking up on the scandals and is certainly not questioning McUnstable's judgment...

The fact that this woman deliberately had an amniocentesis, found out her child has Downs, and then decided to have the child anyway (when 90% of women who find this out decide to abort) makes me fear this woman as either a TrueBeliever (which is very scary) or so politically motivated that she would decide to have a severely retarded child in order to further her political career (which I suspect is the case, and which scares me even more)... Can you spell right-to-life-martyr?

-John Locke