2009

25 February 2009: Republicans carping cut against conclusions

Republicans carping cuts against conclusions

If you are what you eat, carp has become the seafood du jour for Republicans.

In Colorado up to 2004, Republicans pretty much had their way and steered it into a pothole, literally and metaphorically.

At the national level, George W. Bush’s policies were the epitome of trickle-down Reaganomics—massive deficits brought on by huge tax cuts for the financial elite—and for six years, he and the Republican Congress made a complete mess of it all.

Now the Republicans in the legislature are in a huff because Sen. Dan Gibbs and Rep. Joe Rice are trying to do something about the roads.

In Washington, John McCain is having a hissy fit because, in addition to loving to throw temper tantrums, he is upset with President Obama’s lack of bipartisanship despite Obama’s efforts to include Republicans in his Cabinet and as partners in solving the financial crisis. So, he voted no on the stimulus package in lockstep with every other Republican, save three senators.

Republicans are again demonstrating the reason they cannot be trusted to run government: they don’t want it to work.

Let’s go with a hypothetical:

Jon Caldera, the President of the Independence Institute, does not like government action, but he does love the II.

I, on the other hand, acknowledge the munificence of positive government action, but find the positions of the II often foolhardy.

So, put me in charge of the II and see how long it lasts until collapsing. Like Kurt Vonnegut writes, “So it goes.”

The primary role of government, of course, is to protect the rights of the minority, but government also acts to provide services necessary for the commonweal the private sector cannot or is unwilling or temporarily unable to.

The old ways have gone the way of Reagan and Bush. Trickle-down economics will not satisfy an economy parched in the desert of layoffs, foreclosures, and bankruptcies.

We often hear the canard it was World War II and not the New Deal that cured the Great Depression.

A perverse but rigidly logical conclusion to the line of thought suggests we should thank Hitler and Imperial Japan for putting Americans back to work.

In 1933 when FDR took office, the unemployment rate was 24.9 percent; in 1940 after two terms and the New Deal, it was 14.6 percent, a 10.3 decline. By 1942, it dropped to 4.3 percent.

Two powerful actions caused that: federal government spending and improvements in workers’ support.

Some economists, such E. Cary Brown of MIT, posit if FDR had been bolder in terms of spending in the New Deal, he would have been able to break the back of the depression sooner.

Two significant improvements in workers’ rights contributed to re-employment.

The Social Security Act of 1935 and the Fair Labor Standards Act of 1938 that provided for a minimum wage of 25 cents—those were the days—assured income for the elderly, workers, and working poor, the demographic most likely to spend in a downturn because they spend their income immediately on life’s necessities rather than save or invest it.

By 1940 union membership had risen to nearly 28 percent of the work force, and the right of unions to negotiate paid holidays, health insurance, and working conditions had become legally enshrined.

Scott Lehigh of the Boston Globe notes that the evidence about the line being pushed by conservatives that the New Deal failed “cuts against their conclusions.”

Pointing out the spike in unemployment in 1938 was a consequence of FDR’s cut in government spending in 1937, Lehigh writes, “The resulting spike in unemployment prompted him [FDR] to shift courses and expand spending again, whereupon unemployment again fell.

“Gross Domestic Product tracks the same way, notes economist Dean Baker, who has matched the increase in federal spending during each Depression year with the following year’s growth in GDP. A 23.7 percent increase in federal spending in 1933 was followed by a 10.8 percent increase in GDP in 1934, for example, while a 34.2 percent increase in 1934 was followed by an 8.9 percent GDP increase in 1935. But when FDR retrenched and spending fell by 10 percent in 1937, the next year’s GDP shrank by 3.4 percent.”

It was massive government spending, both for social and military programs, that brought the American economy back from the brink, a lesson well-remembered today.

As one local commented, “If they [Republicans] were smart, they would give people time to forget what has occurred the last 8 years before asserting themselves again.”

Right on.

But don’t expect the carping to end, so, instead, how about a fish fry?

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