2011.01.12 05:47
Reagan insider: 'GOP destroyed U.S. economy'
David Stockman and Ronald Reagan - from Ronald Reagan Library Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse." Jobs recovery could take yearsIn the wake of Friday's disappointing jobs report, Neal Lipschutz and Phil Izzo discuss new predictions that it could be many years before the nation's unemployment rate reaches pre-recession levels. 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 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 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 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. Stage 3. Wall Street's deadly 'vast, unproductive expansion' 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 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 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. About Paul B. Farrell |
2011.01.12 05:59
2011.01.12 09:30
As a registered Republican, it's a sorry story to read.
They did their best with vision(of something).
I cannot write like this because I still love the party
as long as we have Sarah Palin, my heroine.
(Please, don't ask me Why)
2011.01.12 11:33
From the Internet:
For those, who are interested in this kind of stuff...
Please take this story and accompanying articles with a grain of salt.
This is deep in politics. But, there's still something to learn.
David Alan Stockman (born November 10, 1946) is a former U.S. politician and businessman, serving as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget (1981–1985).
Stockman was elected to the United States House of Representatives for the 95th Congress and was reelected in two subsequent elections, serving from January 3, 1977, until his resignation January 27, 1981, to accept appointment as Director of the Office of Management and Budget under U.S. President Ronald Reagan.
Stockman emerged as one of the most powerful and controversial OMB directors ever during a tenure that lasted until his resignation in August 1985. Committed to the doctrine of supply-side economics, he took the lead in directing passage of the "Reagan Budget" (the Gramm-Latta Budget), which Stockman hoped to be a serious curtailment of the "welfare state", gaining a reputation as a tough negotiator with House Speaker Tip O'Neill's Democratic-controlled House of Representatives and Majority Leader Howard Baker's Republican-controlled Senate. During this period, although only in his early 30s, Stockman played a central and highly visible role as the ultimate "budget guru" in the fierce debate and contentious political wrangling over the future direction of the role of the federal government in American society.
After Stockman's first year at OMB and on the heels of "being taken to the woodshed by the president" over his candor with Atlantic's William Greider, Stockman became inspired with the projected trend of increasingly large federal deficits and the rapidly expanding national debt. On 1 August 1985, he left OMB and later wrote a memoir of his experience in the Reagan Administration titled The Triumph of Politics: Why the Reagan Revolution Failed, in which he specifically criticized the failure of congressional Republicans to support a reduction in government spending as necessary offsets to the large tax cuts, in order to avoid the creation of large deficits and an exploding national debt.
President Jimmy Carter's last signed and executed fiscal year budget results ended with a $79.0 billion budget deficit, ending within the period of David Stockman's and Ronald Reagan's first year in office, on October 1, 1981, and provided the benchmark of where the national debt stood at the beginning of the Reagan administration. The gross federal national debt had just climbed to the $1.0 trillion level in October 1981 ($998 billion on 30 September 1981), which was the cumulative fiscal budget results of 205 years as a nation (1776–1981). Four and a half years into the Reagan administration, upon Stockman's resignation at the OMB in August 1985, the gross federal debt level had nearly doubled with the national debt standing at $1.8 trillion on 9 September 1985. Stockman's OMB work within the administration in 1981 up to August was dedicated to negotiating with the Senate and House on the next fiscal year's budget, executed later in the fall of 1985, which resulted in the national debt reaching $2.1 trillion at fiscal year end 30 September 1986 and reaching $2.6 trillion at fiscal year end 30 September 1988.
"(Extending the Bush tax cuts is) rank demagoguery. We should call it for what it is. If these people were all put into a room on penalty of death to come up with how much they could cut, they couldn't come up with $50 billion, when the problem is $1.3 trillion. So, to stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves."