John Boehner, the Republican House leader who will become Speaker if Democrats lose control of the House in the upcoming midterms, recently offered his solution to the current economic crisis: "Liquidate labor, liquidate stocks, liquidate the farmer, liquidate real estate. It will purge the rottenness out of the system. People will work harder, lead a more moral life."
Actually, those weren't Boehner's words. They were uttered by Herbert Hoover's treasury secretary, millionaire industrialist Andrew Mellon, after the Great Crash of 1929.
But they might as well have been Boehner's because Hoover's and Mellon's means of purging the rottenness was by doing exactly what Boehner and his colleagues are now calling for: shrink government, cut the federal deficit, reduce the national debt, and balance the budget.
And we all know what happened after 1929, at least until FDR reversed course.
Boehner and other Republicans would even like to roll back the New Deal and get rid of Barack Obama's smaller deal health-care law.
The issue isn't just economic. We're back to tough love. The basic idea is to force people to live with the consequences of whatever happens to them.
In the late 19th century it was called Social Darwinism. Only the fittest should survive, and any effort to save the less fit will undermine the moral fiber of society.
Republicans have wanted to destroy Social Security since it was invented in 1935 by my predecessor as labor secretary, the great Frances Perkins. Remember George W. Bush's proposal to privatize it? Had America agreed with him, millions of retirees would have been impoverished in 2008 when the stock market imploded.
Of course Republicans don't talk openly about destroying Social Security, because it's so popular. The new Republican "pledge" promises only to put it on a "fiscally responsible footing." Translated: we'll privatize it.
Look, I used to be a trustee of the Social Security trust fund. Believe me when I tell you Social Security is basically okay. It may need a little fine tuning but I guarantee you'll receive your Social Security check by the time you retire even if that's forty years from now.
Medicare, on the other hand, is a huge problem and its projected deficits are truly scary. But that's partly because George W. Bush created a new drug benefit that's hugely profitable for Big Phrma (something the Republican pledge conspicuously fails to address). The underlying problem, though, is health-care costs are soaring.
Repealing the new health-care legislation would cause health-care costs to rise even faster. In extending coverage, it allows 30 million Americans to get preventive care. Take it away and they'll end up in far more expensive emergency rooms.
The new law could help control rising health costs. It calls for medical "exchange" that will give people valuable information about health costs and benefits. The public should know certain expensive procedures only pad the paychecks of specialists while driving up the costs of insurance policies that offer them.
Republicans also hate unemployment insurance. They've voted against every extension because, they say, it coddles the unemployed and keeps them from taking available jobs.
That's absurd. There are still 5 job seekers for every job opening, and unemployment insurance in most states pays only a small fraction of the full-time wage.
Social insurance is fundamental to a civil society. It's also good economics because it puts money in peoples' pockets who then turn around and buy the things that others produce, thereby keeping those others in jobs.
We've fallen into the bad habit of calling these programs "entitlements," which sounds morally suspect -- as if a more responsible public wouldn't depend on them. If the Great Recession has taught us anything, it should be that.anyone can take a fall through no fault of their own.
Finally, like Hoover and Mellon, Republicans want to cut the deficit and balance the budget at a time when a large portion of the workforce is idle.
This defies economic logic. When consumers aren't spending, businesses aren't investing and exports can't possibly fill the gap, and when state governments are slashing their budgets, the federal government has to spend more. Otherwise, the Great Recession will turn into exactly what Hoover and Mellon ushered in -- a seemingly endless Great Depression.
It's also cruel. Cutting the deficit and balancing the budget any time soon will subject tens of millions of American families to unnecessary hardship and throw even more into poverty.
Herbert Hoover and Andrew Mellon thought their economic policies would purge the rottenness out of the system and lead to a more moral life. Instead, it purged morality out of the system and lead to a more rotten life for millions of Americans.
And that's exactly what Republicans are offering yet again.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
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George Lakoff: Why the Democrats' Response to the Pledge Has Been Inadequate
The comment about the use of the word "entitlements" though reminds me of where the real win happens - the right has always been good at creating the language and it's meaning. Liberal, once considered a good thing, a reference to intellectual thought (also now a bad thing) has been all but turned into one of the 7 words we can't say on TV. "Bail Out" ignores the deregulation and bad moves made by the financial industry that nearly killed us and makes the use of the fed to keep money flowing sound like a hand out. It's frustrating.
What is most infuriating to us about Bush is that in his first term he had everything he needed to control spending, and did just the opposite. One reason Obama won so very handily in 2008 was that liberals keep screaming about McCain "four more years of Bush!!!" and conservatives listened to that message, looked at McCain, and said "we don't want that either".
In 2008, McCain was not well liked by many core Republicans, probably because of reaching across the aisle, but I think the party was wise enough to realize that McCain was their best hope. I believe that McCain chose Palin as his running mate because he knew he had to entice the Rep base to get out and vote. But she wasn't enough to bring in voters like yourself.
The Tea Party is changing the Republican party. If fiscal conservatives can keep the upper hand, the change might be for the better. But I'm not convinced that the Tea Party is strictly a grass roots campaign. If it's influenced by corporate interests, as I suspect, then the Tea Party won't change anything. The rhetoric will be fiscal discipline but the reality will be 'les bon temps rouler'.
It would be easy to think this is true, sounds plausable on face value, but, the deeper truth is no matter what dems do, we're called communist elitists who hate america. We don't discuss ideas, we don't work together. The GOP has grown govt and increased deficits for decades, but somehow, they've sold the public persona that they don't. If truth and facts don't matter, what hope is there in solving the problems we face? I suspect we will soon bowdown to a nation run, openly, by Corporations, where govt only works for Corporations & military growth. God help us then.
No it won't, Mr. Reich. The republicans will merely repeal EMTALA (Federal Emergency Medical Treatment and Labor Act) and hospitals will dump patients on the street if the wallet biopsy shows they're dealing with a terminally uninsured patient. Then we'll have real Darwinism, with the sick poor dying off while well-funded private hospitals will continue to provide care to the well-born, well-connected and, yes, the well-insured.
The last year of Bush's administration, of course, was an unmitigated disaster in a fiscal sense, as in pretty much any other sense, and that was a direct result of the effects of age-old Republican economic policies having been put into effect over the last 30 years (with tacit acceptance by Democrats surrendering to the reaganite snake oil sales job bought into by the American public).
Republicans have a plan to bankrupt government. They've been executing their plan since Reagan. They believe that if they can do that it will effectively kill the federal government and they can create a new constitution, designed to engineer society to their financial and theological fantasies. Democrats may often spend too much, but they believe that our existing Constitutional government needs to be preserved, so they care about things like structural deficits, and take action to reduce
I think the Rep leadership is actually very glad to have a Dem president and congress at this time because it gives them a scapegoat. Just convince enough voters that the bad economy is due to Dem policies and actions and the Reps get voted back in. The problem is that many voters fall for this.
Dem voters believe that government can and should do some things and, occasionally actually gets it right. Rep voters believe that government can't be trusted to do anything right. Both Dem and Rep elected officials generally try to meet the expectation of the voters.
As an aside, the Great Depression was not ended by WWII. Most of the unemployed or underemployed labor force joined the military, and factories were employed by the government to produce for the war effort. That's why there are always post-war recessions. The Depression did not really end until the turn of the '50s when the war was over and industries finally returned to making consumer products and GDP reached the same level as pre-crash 1929.
The only freedom which can be induced in a market requires a regulatory power over the players in the market by an agent who is not involved in the business of the market - a disinterested party. This 'free' market myth has become extremely annoying over the last 30 years. Look, Reagan had no idea what he was talking about. His mouth spewed propaganda ceaselessly, but he didn't write the propaganda either. He knew nothing whatsoever about business except what he had been taught at GE, and they were determined to ensure that he learned nothing but the fantasies he was hired to sell.
what would be wrong about lossing another failed leftist program.
we'd have to take care of our sefls,,,OMG the terror.
poverty belongs to the left, it's a history thing.
If the Wall Street casino were not a ponzi scheme, it wouldn't crash. Because profit from Wall Street cash inflow is based entirely upon the expectation of a 'win' driving up the apparent value of a piece of paper, once people stop buying the paper at higher prices, everybody suddenly loses money as the prices fall. How is that not also a classic ponzi scheme? We have to keep buying into it with larger amounts of money until it crashes when we stop doing that.
In fact, U.S. Treasury bonds are not a ponzi scheme; and that is what your Social Security payroll deductions are buying. Those bonds function in a way very similar to CDs at a bank. If, for example, the U.S. government could not pay off those Treasury bonds, it would have to cut other spending - and/or raise other taxes - in order to do so, or else suffer a very long term collapse of the financial system along with both the remainder of the economy and most of the ability to engage in international trade.
Unemployment is high because Wall Street used to invest in America for profits, resulting in jobs. Now they have complex financial instruments that BYPASS that entire system entirely, giving them profits but without having to actually invest in America to do it. Hence the facts they have profits and unemployment keeps rising. They bleed us dry and don't produce anything of tangible or intangible benefit for Americans. And they own the politicians.
30 years of declining savings:
http://sg.wsj.net/public/resources/images/OB-BJ505_ROI_Sa_20080501170150.gif
George Carlin knew what the score was:
http://www.youtube.com/watch?v=hYIC0eZYEtI&feature=related
Here's a tip: do the math for yourself. If you get Social Security, you around $1200 per month ... around $14,000 annually. But if you had kept the money you paid into SS and invested it yourself, you'd have over $3 million socked away, and could live off the investments, making making over $200,000 annually. So all you retirees: are your really better off?
So....get your government out of peoples business and don't borrow money, and your insurance problems evaporate.
If Bush had been able to privatize SS back in 2003 like he wanted to do, I and nearly everyone else would have lost our SS retirements 40 years before I could even apply for it when the market collapsed in 2007. Oh wait, that's just a lie I told, huh? Because as you just said investments always bring back the principal plus interest. No one ever loses money on an investment.
Pure genius.
George Carlin can explain it ALL so much better than me:
http://www.youtube.com/watch?v=hYIC0eZYEtI&feature=related
Commissioner of Labor, opposed a proposal to subsidize the wages of poor workers
for this reason. Meeker preferred a wage floor because it would disemploy unfit
workers and thereby enable their culling from the work force."
http://www.princeton.edu/~tleonard/papers/retrospectives.pdf
Commissioner of Labor, opposed a proposal to subsidize the wages of poor workers
for this reason. Meeker preferred a wage floor because it would disemploy unfit
workers and thereby enable their culling from the work force."