One of the clearest signs that the Republican brand is in for a long stint in the woods is the fact that Republicans continue to shill for the same policies that got us into the financial hole we find ourselves in. George Bush spent eight years making the argument that for any ill that ails the country, the answer was a tax cut, usually for the wealthy. When gas prices soared higher and higher, he said, "Pass my tax cut." As he started a second war after his first one and deficits mounted ever higher, his response was, "Pass my tax cut." Short of stemming the rising waters of New Orleans' Ninth Ward, if there was a problem, a tax cut was the solution.
This of course goes all the way back to Ronald Reagan, the Jesus of Republican economic evangelism. Reagan and his budget director David Stockman latched onto the arguments made by 1940s era economist Arthur Laffer and his belief that when you lower taxes, you increase revenues. Stockman later spilled the beans on the whole con when he let on to Esquire magazine that the point of the plan was in reality just to lower the tax rate on the top brackets, which also happens to be the Republican base. Scratch their backs, and they'll scratch ours, Reagan and Stockman found out, and since that time, the GOP has bought the allegiance of the wealthy lock, stock, and barrel. As Nobel prizewinning economist James Tobin said in 1992, "[the] 'Laffer Curve' idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981."
Sooner or later, the bills had to come due, and when the greed of the mid-to-late 2000s began outstripping even the greed of the Gordon Gekko years of the late 1980s, it became apparent to everyone except those at the tiller that the crash was on its way. As 2008 Nobel economics laureate and New York Times columnist Paul Krugman told a policy maker who asked him why couldn't they see the imminent destruction, "What do you mean 'we,' white man?"
Krugman pointed out that staffers on Capitol Hill were frantically calling him in the days after Sept. 11, because the GOP leadership was trying to shove through a capital gains tax cut. And just last week, Republican majority leader John Boehner was claiming that if the country's economy really needs a stimulus, the best way to do it--stop me if you've heard this one before--is to cut the tax on capital gains, and the corporate income tax.
Why, sure! Because we all know how responsible those corporations are in times of economic crisis? Like the executives of AIG, who, not long after their bailout, went on a fancy corporate retreat and began calculating their annual bonuses. Or those CEOs from the Big Three automakers who flew their corporate jets to Washington from Detroit to argue for taxpayer handouts after their companies have lost billions of dollars while the executives' salaries still rose. The middle class and those less well off can only listen so long to claims that cutting taxes on the rich is good for everybody before they start to notice that the rising tide isn't lifting everybody's boats.
Now here we are at the end of 2008 and the crisis caused by the hijinks of the mortgage loan industry isn't even near its peak yet, but conservatives still argue that the worst thing that could happen would be more and better regulation of the industry. But even now, news emerges about how the Bush administration took the hands-off approach to the loan industry even when experts were warning about the possible dangers.
On Dec. 1, an Associated Press report showed that "[The] Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown." The review of regulatory records showed that a gamut of proposed regulations and sensible guidelines--such as ones that would require bankers tell buyers with bad credit that some "exotic mortgages" were a bad idea, or that bankers put a cap on risky loans so as not to overextend the bank--were stripped from the end product, which didn't even require a presidential signature. In short, back in 2005, the GOP dismantled the handbrake.
Digging ourselves out of the hole the Bushies have put us in may take quite a few years; even longer than it took the Clinton administration to erase the Reagan-Bush deficits from the 1980s. And we can be certain that even in the minority, the Republicans will be using their only remaining microphone--the giant GOP media Wurlitzer of Rush Limbaugh, the Murdoch media empire, Sun Myung Moon, and Matt Drudge--to constantly argue that the way out of the problem is more of the same that got us into it. The fortunate thing about the fact they can only play one note over and over again is that for at least the next two years, they'll be fairly easy to tune out.
812 Park Ave.
Baltimore, MD 21201