Does that sound harsh? Are the Republicans really trying to destroy Democracy? Well, let’s examine the evidence. First, at the risk of preaching, a wise person once said “People who fail to learn from history are doomed to repeat it.” This country wasn’t always powerful with a strong middle class and a healthy democracy. At the beginning of the last century, women and most African Americans could not vote and most people, including young children worked over 60 hours a week in terrible conditions. Writers and academics wrote long essays and novels about the suffering of the working class. The field of economics was still in its infancy but the idea first expressed by Abraham Lincoln, that government was of, by and for the people was revisited and a new concept began to emerge, articulated by men like Maynard Keynes. Keynes is perhaps the most noted teacher of “demand side” economics. This idea: that a strong economy required a strong middle class that could create the demand for goods and services and thus more and more jobs has since that time been supported by over 50 years of evidence that it works. Franklin Roosevelt put these economic theories into practice in the late 1930’s and 1940’s in a program hailed as the New Deal and pulled the country out of a spiraling depression which had scarred generations of Americans. Of course, many factors were involved in this amazing recovery and the wonder years of the 50’s and early 60’s when the middle class grew, most people owned their own homes, children had access to excellent affordable colleges and universities, and Social Security and Medicare provided a safety net for people in their old age. But the key factor was that the federal government, through fiscal and social programs, provided strong support for the middle class, including a progressive income tax that taxed the wealthiest individuals at a higher rate than lower income families.
So what happened? I refer you to excellent analysis on this subject by Norton Garfinkle in his 2006 book The American Dream vs. the Gospel of Wealth The fight for a productive middle class economy. This brief article cannot do this complex subject justice but I would like to touch the high points. First, Mr. Garfinkle shows that there is strong, empirical evidence that the Keynesean ideas of progressive tax policy and programs to support the middle class like unemployment insurance, Social Security and Medicare work. During the period after WWII until the mid 60’s the country was stable with a strong and growing middle class. Things started to go sideways when President Johnson developed the Great Society programs which were designed to support the transition of the poor into the middle class, ideas that were developed by a group of “neo-Keynesian" economists and supported by a large majority of the country. Unfortunately Johnson, who deserves credit for his Great Society programs also forced the country into the Vietnam War without raising taxes. A situation aptly called “Guns and Butter” which forced the government to vastly increase the level of the deficit. The country subsequently lurched from one deep recession to another while the government tinkered and refused to raise taxes. President Reagan did raise taxes slightly but to no avail. The country had to wait for Bill Clinton to finally raise taxes enough to eliminate the deficit and create a national surplus and a rejuvenated middle class. This surplus would have been enough to protect Social Security for the foreseeable future.
But, unfortunately, people are foolish and easily misled. The Republicans had not been asleep during these years. They were busily working on an answer to Keynes and Demand side economics; it was called “Supply side” economics, a theory supported primarily by politicians like William Kristol and earlier by industrialists like Andrew Carnegie. It was a philosophy that said basically the unfettered free market must be allowed to function without government restraint (i.e. taxes and regulations). A cruel second layer to this idea was that the costs of social programs to support the poor and middle class like unemployment insurance, Social Security, Medicare, education and research funding, etc. were too expensive and must be eliminated. The Republicans have been pushing this agenda for decades. But there is zero empirical evidence that these policies work; that the country gains productivity or well-being when these policies are followed. There is strong evidence that the opposite is true; one only has to look at the George W. Bush administration to see what has happened. When Bush slashed taxes on the richest 2%, it wiped out the country’s budget surplus in one year. The country fell back into deep deficit spending mode. When regulations over Wall Street and banks were eliminated, the greedy sharks set up shop to prey on innocent and ignorant ordinary citizens who were trying to live up to the American Dream of their parents by running up huge credit card debt and taking equity out of their homes. Bush also thought he could start two illegal wars and not raise taxes. Sound familiar.
The whole house of cards crashed in 2008 and the country has been mired in the worst recession since the Great Depression of the 1930’s. We now have the strange spectacle of the Republicans frantically trumpeting that the only way out of our situation is to slash social programs for the poor and middle class and reduce taxes on the rich – the exact opposite of what Keynes taught, and presidents Roosevelt, Eisenhower, Kennedy, Johnson, and Clinton believed and followed to the great benefit of the country as a whole. I repeat, there is no evidence that unfettered free market capitalism works. There is ample evidence that unfettered free market capitalism does not work. The Republicans do not want people to know this and spend millions of dollars trying to pull the wool over the public’s eyes. The Republican Party is the party of the elite moneyed class. They use their money to corrupt the debate for the American people, using scare tactics about “terrorism,” and “illegal immigration” and “Planned Parenthood” and phony political arguments like “Supply side economics” and “elimination of the deficit by eliminating social programs” to support their blatant effort to control the country and destroy the middle class.
People! Wake Up! Are we sheep or are we free men and women?” Do not fall for these evil tricks and lies. Look at the evidence. Our economic situation is complex and filled with challenges but clearly giving the most powerful, wealthiest class a free ride not to pay their fair share and letting them spend millions to control the political debate is the wrong path. Listen to Lincoln’s words—that the American promise was universal prosperity and betterment for all. That our government was: “of the people, for the people and by the people.” Do not let it perish!
Good books to read to learn more:
The American Dream vs. the Gospel of Wealth The fight for a productive middle class economy by Norton Garfinkle 2006
Griftopia Bubble Machines Vampire Squids, and the Long Con that is Breaking America by Matt Taibbi 2010
Aftershock The Next Economy and America’s Future by Robert B. Reich 2010
