10/15/2012 07:13 pm ET Updated Dec 15, 2012

Ryanomics: The Emperor Has No Clothes, and the People are Losing Their Shirts

"The Emperor's New Clothes" is a cautionary tale for voters who are flirting with Ryanomics as the solution for America's financial crisis.

In the story, a vain emperor uses the bully pulpit of wealth and power to promote a self-serving deceit. The citizens buy in... much as America bought (and failed to pay for) the delusional theory of "trickle-down economics."

It is staggering that so many Americans continue to believe that tax cuts spawn middle class jobs, against all logic and without empirical evidence. Case in point: The Obama administration extended the Bush tax cuts -- but job growth has been weak, and last year alone, median household income reportedly dropped 4%, while the cumulative wealth of the Forbes 400 increased by $200 billion.

We the people must open our eyes and dispel the delusional thinking that is undermining our financial security.

As Paul Ryan argued in the vice presidential debate, Republicans expect tax cuts to create somewhere between 7 and 12 million jobs, grow the tax base and yield a balanced federal budget. But in a global economy, who's to say tax windfalls will be invested in America? They could as easily wind up in China or India, or in companies that outsource there. So-called "job creators" may sink tax benefits in credit default swaps, commercial or residential real estate or the currency markets -- which, from the perspective of job creation, is as effective as stuffing it in a mattress.

David Stockman, who was Ronald Reagan's budget director and economic guru, says Ryanomics is a "fairy tale." Stockman was one of the architects of "supply side" economics (aka trickle-down). Today he states unequivocally that trickle-down doesn't work.

Yet, many Americans still believe the doctrine on faith, like they did in 1980. Back then, voters thought pied piper Ronald Reagan could increase defense spending, cut taxes and balance the budget (or was it leap tall buildings in a single bound?) George H.W. Bush called the plan "voodoo economics." The deficit burgeoned, Stockman saw the light and resigned after the first term:

Stockman kept asking and answering the right questions. The more he considered it, the more he moved away from the radical vision of reformer, away from the wishful thinking of supply-side economics, and toward the "old-time religion" of conservative economic thinking. --William Greider, Atlantic Monthly, 1981

Still, the trickle-down camp remained faithful when George W. Bush attempted a feat of "triple voodoo" -- massive tax cuts, foreign wars and wanton domestic spending (under the guise of conservatism).

Democracy is founded on the premise that we the people make good decisions. Yet history tells us that the people are easily duped. European aristocrats claimed they ruled by divine right -- and for centuries, the masses believed the conceit to their own demise. Aztec rulers claimed divine lineage and what's more, conferred on themselves the right to cut out people's hearts on a regular basis, ensuring a flow of tribute to the oligarchy and quashing opposition.

Today's white collar oppression is more subtle, certainly, but similar insofar as people willingly shoulder (and place their hopes in) fallacies that skew benefits to the ruling elite.

In Hans Christian Andersen's wry tale, a child breaks the spell with clear perception and common sense. (Bill Clinton might call it "arithmetic.")

We the people should demand nothing less from Washington.

A vain Emperor who cares for nothing hires two swindlers who promise him the finest, best suit of clothes from a fabric invisible to anyone who is unfit for his position or "hopelessly stupid". The Emperor cannot see the cloth himself, but pretends that he can...his ministers do the same...the Emperor marches in procession before his subjects, who play along with the pretense, until a child in the crowd...blurts out that the Emperor is wearing nothing at all... -- from "The Emperor's New Clothes" (Wikipedia)