Paul Revere by Cyrus Dallin, North End, Boston



Sunday, August 7, 2011

"HOW MY GOP DESTROYED THE U.S. ECONOMY" by David Stockman, Ronald Reagan's director of the OMB

The GOP's sainted president's own financial advisor, David Stockman,  explains how the fiscal mismanagement of the American economy during the Reagan years brought us to this disaster.

By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) -- "How my G.O.P. destroyed the U.S. economy." Yes, that is exactly what David Stockman, President Ronald Reagan's director of the Office of Management and Budget, wrote in a recent New York Times op-ed piece, "Four Deformations of the Apocalypse."

Get it? Not "destroying." The GOP has already "destroyed" the U.S. economy, setting up an "American Apocalypse."

Yes, Stockman is equally damning of the Democrats' Keynesian policies. But what this indictment by a party insider -- someone so close to the development of the Reaganomics ideology -- says about America, helps all of us better understand how America's toxic partisan-politics "holy war" is destroying not just the economy and capitalism, but the America dream. And unless this war stops soon, both parties will succeed in their collective death wish.

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

Stockman rushes into the ring swinging like a boxer: "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 ... will soon reach $18 trillion." It screams "out for austerity and sacrifice." But instead, the GOP insists "that the nation's wealthiest taxpayers be spared even a three-percentage-point rate increase."

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.



An observer said...

Libertarians are against government in all its manifestations. Domestically, they are against social-welfare programs. They favor self-reliance (as they see it) over Big Government spending. Internationally, they are isolationists. Like George Washington, they loathe “foreign entanglements,” and they think the rest of the world can go to hell without America’s help. They don’t care–or at least they don’t think the government should care–about what people are reading, thinking, drinking, smoking or doing in bed. And what is the opposite of libertarianism? Libertarians would say fascism. But in the American political context, it is something infinitely milder that calls itself communitarianism. The term is not as familiar, and communitarians are far less organized as a movement than libertarians, ironically enough. But in general communitarians emphasize society rather than the individual and believe that group responsibilities (to family, community, nation, the globe) should trump individual rights. …

Rational Nation USA said...

In other words, if I read this correctly, altruism realizing full and complete acceptance as the ideal form of societal advancement and global governance.

Octo - I apologize as I had said I would refrain from commenting in this forum. I comment here for no other reason than to seek a better understanding of communitarianism. Specifically from the perceptive of An Observer.

Communitarianism is a concept that is new to me. And as my belief which is to seek first to understand, and then seek to change is what drives this comment.

Octopus said...

Understood and appreciated. My concern has always been a moral and ethical one: That the world is a better place when we care about the health and welfare of our fellow human beings, that there is far more to life than self-interest alone.

The concept of capitalism as understood and advanced by Adam Smith does not resemble contemporary notions. Over two centuries ago, Smith's concept of moral self-interest was based upon his theory of sympathy which posits that the act of observing others makes people aware of themselves and the morality of their own behavior, i.e. a kind of Golden Rule of economics.

More than 2 centuries ago, Smith was perfectly aware of the collusive nature of business, that a true laissez faire marketplace would turn into a conspiracy of business and industry against consumers, the former scheming to influence politics and legislation at the expense of the latter. How prescient because that is precisely what we have evolved into. Ironically, all too many libertarians quote Smith to justify one viewpoint while ignoring these admonitions.

For example, when hedge fund traders earn well over $1 billion a year, yet pay only 15% in taxes while middle class wage earners pay upwards of 25% to 35% on their incomes, then something is profoundly unjust, imbalanced, and immoral for any society to allow this to happen. Inequality perverts the ethics of work and turns the causal relationship between work and reward upside down.

And you wonder why some of us get angry when greed and corruption are ignored … more than merely ignored … justified on flimsy ideological grounds.

It makes me even angrier when I see decent, hard-working people suddenly fall on hard times due to no fault of theirs, lose jobs, lose homes, watch their neighborhoods and schools decline, lose savings and retirement accounts … while thieves and scoundrels (read ‘hedge-fund traders’) get away with economic murder. It gets even uglier when politicians such Orin Hatch defame the unemployed as "deadbeats" and "druggies." It is an insult on top of social injustice!

I am offended when hard right wing ideologues call me a “bleeding heart liberal” or a “socialist.” Do we want to be savages or civilized human beings? This is the crux of the argument.

Andrea Ploscowe said...

And even with his tax increases, Reagan STILL ran up the largest deficit US history, until Dubbya blew Reagan away. How Republicans have gained a reputation as the party of fiscal responsibility is utterly dumb-founding. The Democratic Presidents actually have a much better record for balancing the budget and spending responsibly. "Tax and spend" is much more responsible than "Run up more debt and spend."

Rational Nation USA said...

Octo - I thank you for both your thoughtful and reasoned response to my comment.

There is much in what you say that I can find common ground with.

I find it perplexing and unfortunate that many do not understand my brand of independent conservatism/libertarianism. Of course, having said that, I do accept the responsibility for possibly not explaining it thoroughly enough.

One of the biggest issues that separates many conservtivs and liberals is the concept of self interest, of which I am a strong advocate of. However, self interest is NOT the same as rational self interest which is the springboard from which I proceed.

Rational self interest requites the recognition that the individual does not live in a vacuum which they alone create. That it does require an understanding that interaction between rational {and even irrational} thinking individuals by necessity does occur and thus will naturally require appropriate adjustments to ones course to insure their rational self interests are realized.

I am a limited government advocate. Have been for 40+ years. However, this does NOT mean I fail to see the need for government oversight of society, Especially when government is the result of the process of electing the peoples representatives. Such is the American form of Representative Democracy. The best and most productive system of governance ever devised. Bar none.

Limited government, at least in my option means... Government should serve as the advocate of, and arbiter of the people it represents. It should serve as the watchdog and the enforcer of ethical and moral behavior with respect to the functions of the government AND business/corporate behavior.

It should NOT put obstacles in the way of insuring American competitiveness, it should put in place tariffs on foreign imports so as to level the playing field, it should end government subsidies to businesses, it should close corporate tax loopholes and it should reduce the number of marginal tax rates and enforce collection of same from both corporations and individuals, it should scrap ObamaCare and it should seriously consider the Swiss market based system of universal healthcare. There is certain;y more, but we can save that until a later time.

And then it should get the hell out of the wayand let Americans do what Americans have alwals done best. Being the leader of the Free word.

Thank you Octo {and Shaw) for allowing me the opportunity to express myself further. It is much appreciated.

I may be a independent conservative/libertarian but I really have never had a problem with classical liberalism. Neo-liberalism, as well as Neo conservatism both present the greatest danger to our American way of life.

Maybe it is time for liberals and conservatives/libertarians to start focusing on the things e have in common and find solutions to our problems while ironing out our difference in a rational and productive manner.

Individuals are ultimately important. However humans exist in society and thus actually need to consider a broader picture at times. No?