When George H. W. Bush was contending for the Republican nomination for president against Ronald Reagan in 1980, he referred to Reagan's economic plan, which Reagan referred to as "supply side economics" as "Voodoo Economics."
He was right. The only way Reagan's economic policies could have worked was in a fantasy world where magic works.
This is all too relevant today, as Mitt Romney has managed, by clever ads, the bullying tactics he used in the first presidential debate, and by making vague promises based on utterly specious arguments, to make the current election for President much closer than it should be.
It is fascinating in a rather appalling way, to see (according to polls) millions of Americans who were underwhelmed by Mitt Romney for at least a year while he was campaigning for the Republican nomination and even after he won the nomination now being swayed by his feel-good ads and speeches, and by his fact-free attacks on President Obama's performance.
The facts are this: Mitt Romney has always promised, no matter how he dresses it up, to bring back voodoo economics. Call it supply-side economics, or call it what many people have called it for decades: trickle-down economics. It is the same thing. And it doesn't work. It has never worked. It didn't work for Ronald Reagan; it didn't work for Herbert Hoover; it didn't work for George W. Bush. And when I say "bring back voodoo economics" that isn't really true. Because as long as the Bush tax cuts continue in force, we are still operating on a voodoo economics system, thanks to our Republicans in Congress.
Voodoo economics works for the people who are already wealthy. Which suits Mr. Romney and his base--the very wealthy--just fine.
Recently, he has decided, in a brilliant campaign strategy, to claim that he represents "Change." Not just change, but big change. Which might be humorous if it wasn't so utterly false and self-serving.
In fact, what he proposes is not change at all. He proposes more of what has gotten us into the economic doldrums since the Bush tax cuts. He wants more tax cuts. For everyone. And he makes it sound as if his plan would benefit the middle class. Whereas in fact, the way he has structured his tax cut, the people who would benefit the most are the people who have already been benefitting from the George W. Bush tax cuts: the very wealthy, and it would actually end up costing middle-class people because the loopholes that would be closed and the deductions that would be eliminated would cost middle-class people more than they would save from his announced across-the-board 20% tax cut.
His tax cut would decrease the amount of money that would be available for essential government programs, while giving yet bigger tax breaks for the very wealthy.
Moreover, part of his plan calls for eliminating deductions and loopholes. He would eliminate tax deductions that would hurt the middle class more than they hurt anyone else. I'm referring to deductions like the deduction for interest payments people make for their mortgage. Also, deductions for college tuition payments would be eliminated. And deductions for charitable contributions. I haven't seen any more specifics about deductions he would eliminate, but one thing that is clear is that Romney's tax plan would still benefit the very wealthy.
I'm writing this blog partly because I saw Bill Clinton's video about Romney's $5 trillion tax cut plan --which is the core of his economic plan. I recommend that video. It is a cogent and clear explanation of the problem with Romney's plan. If you have seen my facebook post last night about that video, you know something about this already. But it is important to put his plan in historical perspective, in perspective relative to his campaign for the Republican nomination, but most importantly, in perspective relative to the George W. Bush administration's economic policies.
What is so unnerving about hearing Mr. Romney saying that he is for Big Change is that his change, as noted above, is to, as Rachel Maddow would say, to simply double-down on the same basic economic policy as George W. Bush. Bush's mantra was that we needed to cut taxes for the very wealthy people at the top of the income scale, the "job creators." And they in turn would use that tax cut to hire more people for their businesses. Republicans continue to this day to use the "job creator" mantra when referring to the people with vast wealth in the country.
There is only one problem with this logic. As stated before, it doesn't work. If it did work, we would not have had the Great Depression; if it did work, Reagan would not have gotten us out of the recession in his administration by raising taxes (and raising taxes did help the economy.) If it did work, we would not have had such a low rate of job creation during George W. Bush's administration, and--because the Republicans, by their extreme intransigence in legislative matters--during the present administration. Luckily, President Obama has been able to pass some legislation, despite the Republicans' attempts to block everything he proposes. There was a stimulus in 2009--which Republicans reviled, and which they have unfailingly taken credit for when they go home to their constituencies. The stimulus, which Republicans in Washington always refer to as the "failed stimulus," was not nearly as much stimulus as Obama and the Democrats would have liked. In a desperate attempt to get Republicans to vote for it, the Democrats cut the amount of money actually going to stimulus and instead included tax cuts as part of the legislation.
When Romney talks about change, he gets a certain amount of traction with people who want to believe that voting for him will make things better for them. And lots of people would like things to get better--I think we would all like things to improve. Let's face it: it is taking a long time to recover from Bush's tax policies. But while Mitt Romney blames the slow economic growth on President Obama and his policies, it is not President Obama's fault. It is the fault of the Republican Congress that has blocked almost all of the President's proposed legislative initiatives that are intended to create jobs: transportation bills; farm bills; job-training bills; infrastructure bills . . . there are others, but I'm not trying to list every one, just a few examples.
I apologize in advance for repeating the following, but it is extremely relevant: Republican Senator and Senate Minority Leader Mitch McConnell said publicly in 2009 that his most important goal during President Obama's presidency was to insure that the President would be a one-term president. What I didn't say the last time I wrote those words was that there was also a meeting of key Republican congressional leaders after the 2008 election, in which those leaders --as reported by Sam Stein, based on Robert Draper's book Do Not Ask What Good We Do: Inside the U.S. House of Representatives--met on the night of Obama's inauguration to set a direction for their legislative agenda during his presidency.
According to Draper, the guest list that night (which was just over 15 people in total) included Republican Reps. Eric Cantor (Va.), Kevin McCarthy (Calif.), Paul Ryan (Wis.), Pete Sessions (Texas), Jeb Hensarling (Texas), Pete Hoekstra (Mich.) and Dan Lungren (Calif.), along with Republican Sens. Jim DeMint (S.C.), Jon Kyl (Ariz.), Tom Coburn (Okla.), John Ensign (Nev.) and Bob Corker (Tenn.). The non-lawmakers present included Newt Gingrich, several years removed from his presidential campaign, and Frank Luntz, the long-time Republican wordsmith. Notably absent were Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader John Boehner (R-Ohio) -- who, Draper writes, had an acrimonious relationship with Luntz.
Thus was born the policy that led to the filibusters and threats of filibusters; the challenging of every legislative initiative; the attempts to discredit or otherwise diminish the legislative clout of various Democratic members of congress. As noted by Stein in his article and Draper in his book, some opposition to the Democratic agenda was undoubtedly genuine idealogical disagreement. But the now-tiresome proclamation of "legislative gridlock" since the election of President Obama is undeniable evidence of the determination of the Republican leadership to keep Obama from succeeding. In Draper's book he asserts that the Republicans at that inauguration-night meeting was to do everything possible to make Obama fail, specifically so that they could defeat his re-election bid in 2012.
And that is where we are right now. But that will only happen if all the independents who have to decide whether they can believe Romney's claim that he will improve the lot of most Americans are swayed by the virtual avalanche of advertising that paints him as a benevolent, effective leader, despite the reality--that his tax and economic policy are simply an extension of George W. Bush's tax and economic policy.
A few brief facts that also apply here:
Another part of Mr. Romney's tax plan entails eliminating the Estate Tax. That is the tax on money left by someone who dies to his or her heirs. Currently, there is an exemption on the first $250,000 that someone might inherit. I don't know about you, but most middle-class people are not seriously affected by this tax. And George W. Bush tried repeatedly to eliminate this tax. It is a tax on the very wealthy.
Yet another part of Mr. Romney's tax plan calls for eliminating the Capital Gains tax. In a speech he has given recently, and in one of the debates as well, Mr. Romney mentioned very briefly that his tax plan would ease the burden on the middle class, partly by eliminating the tax on their capital gains. I am sure Mr. Romney must think of himself as the typical American. Certainly for him, eliminating Capital Gains tax would be very helpful to his fortune. But how many middle-class families really have to worry about tax on their capital gains. On their investments. He's not talking about the middle class. He's talking about the wealthy--those who already have enough money so that they can afford to invest money that can grow from capital gains, that is an increase in the value of stocks and bonds that they already hold. Once again, as is true of so many of his proposed policies, he is thinking of what he would benefit from, but not what will benefit most Americans. It is all part of his Conservative philosophy, and Paul Ryan's philosophy, which is informed by the writings of Ayn Rand--the greatest influence over Ryan's political philosophy, as he stated on more than one occasion, until the Catholic Church criticized him for espousing policies that were not at all Christian in their effects on those who most need help in the world. Ryan then renounced Ayn Rand, denying he had ever espoused her "godless," "atheistic" philosophy. But he has not really renounced it. He still requires all his legislative aides to read her works. Her philosophy, "objectivism" basically says that one must think first of oneself in order to to the most good in the world. This is not a precept that agrees with the concept of the United States which has enabled people to rise from poverty into the middle class and become productive members of society. It is a philosophy that is beneficial to those who already have what they need. For all others, this philosophy says, effectively, "Sorry. I got mine. If you would just try harder, you'd get yours, too." It's a philosophy that is appealing to the haves of the world. Like Mitt Romney, who famously, when talking about his cars, spoke blithely of his cars, and his wife Ann's cars. She only has a couple Cadillacs.
In what world do most couples have at least four cars, two of them Caddys?
Romney also has claimed that he would save Medicare, and that President is destroying Medicare. For the record, Obamacare calls for savings to Medicare that come from increased efficiency, not from reduced benefits to patients, while Romney's plan--really Paul Ryan's plan, but one must assume that if they win, it will be Romney's too--would change Medicare by introducing vouchers that would be given to seniors annually, approximately $8000, with which the seniors then would have to purchase private health insurance from insurance companies.
This policy would essentially, for everyone who is currently younger than 55 years old, end Medicare as we have known it for the past decades. No matter what Romney says, that is what his plan means.
The differences between Romney and Obama are so huge it is terrifying to me that so many people have been so ensorcelled by his propaganda that they no longer can see how destructive his policies would be to their lives. I am reminded of the very funny, very sad Onion headline from just after Election Day, 2004: "Millions re-elect Bush, Voting Against Their Own Best Interest." That may not be an exact quotation, but that was the gist. It would be tragic if the same happened this year, if Mitt Romney wins. Millions tricked into believing he is for them would rue the day as soon as he was able to get any legislation passed.
And lastly: Not only did Ronald Reagan abandon his "supply-side" economics in favor of tax increases to stimulate the economy and to attempt to balance the budget. His budget director, David Stockman, repudiated the policy years after the Reagan administration.
It just doesn't work.
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