Wednesday, January 30, 2008

GOP Economics: Keep on Doing Whatever Makes You Sick!

You can't understand the Bush legacy until you come to grips with the GOP mentality best summed up thus: just keep repeating failed strategies, just keep on doing whatever makes you sick, just keep on drinking from the poisoned well.
Only this president could look out over a vista of 3,008 dead and 22,834 wounded in Iraq, and finally say, “Where mistakes have been made, the responsibility rests with me” — only to follow that by proposing to repeat the identical mistake ... in Iran.

--Keith Olbermann

It's not only in Iraq that the GOP hitched its wagon to a falling star. "It's the economy stupid". Though every GOP tax cut since 1982 are causally connected with huge deficits, slow growth and obscene inequalities, the GOP is on the stump for tax cuts. Naomi Klein reports that "the fix is in" and the National Association of Manufacturers must be ecstatic to know that whomever the GOP nominates, he will put more tax cuts at the top of "to do" list. Given Ronald Reagan's record and given the Chinese origin of the crap I find in Wal-Mart, I am somewhat surprised to learn that there remains in this country enough "manufacturers" to make up an association!

A GOP sacred word is "stimulus" and people naively support them expecting a trickle down effect which never comes. Dogs are trained by giving them a treat at the end of a trick. It is doubtful that a dog will jump through the hoop if there is nothing on the other side. Humans and especially the GOP inclined are not nearly so smart. Year after tiresome year, those susceptible to GOP propaganda will fall for the same old GOP bullshit: let's give business a "stimulus" and wait for the trickle down that never comes. I am weary of posting, year after year, the cold hard stats from the Bureau of Labor Statistics (primarily) that prove conclusively that there has never been a "trickle down" effect from any of those sacred GOP stimuli. GOP "stimuli" never work because they are always inequitable. They never reach nor benefit the people whose work and purchases drive the economy. GOP "stimuli" stop trickling at the bottom of an increasingly tiny elite who simply squirrel them away in ways that never trickle down.

It was Nixon who turned Republicans into "liberals". When he acceded to a significant deficit, Nixon famously said "We are all Keynesians now!" That's not entirely true. Keynes never proposed that tax cuts that would benefit only the very wealthy. Keynes, like every real economist, subscribed to the "labor theory of value". That is most certainly the reason he is reviled by the American right wing. The right wing not only hates labor as a class, it associates the "labor theory of value" with Karl Marx, though every other reputable economist had already done so. Marx was not all that revolutionary.
The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.... Labour was the first price, the original purchase-money that was paid for all things.

--Adam Smith, Wealth of Nations

To this day, Adam Smith, of "invisible hand" fame, is the guardian angel of conservative economics. Since that time Ricardo articulated the most clear-cut, effective statement of the labor theory in Principles of Political Economy and Taxation
The produce of the earth—all that is derived from its surface by the united application of labour, machinery, and capital, is divided among three classes of the community; namely, the proprietor of the land, the owner of the stock or capital necessary for its cultivation, and the labourers by whose industry it is cultivated.


The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not as the greater or less compensation which is paid for that labour.

-David Ricardo, The Principles of Political Economy and Taxation

Ricardo eliminated the confusion between labor, a source of exchange-value, and wages, as a component of price. Modern conservatives will never forgive Ricardo his having been cited by Karl Marx, the American right wing's boogie man of choice for some 150 years.
Insofar as modern socialism, no matter of what tendency, starts out from bourgeois political economy, it almost without exception takes up the Ricardian theory of value. The two propositions which Ricardo proclaimed in 1817 right at the beginning of his Principles, 1) that the value of any commodity is purely and solely determined by the quantity of labour required for its production, and 2) that the product of the entire social labor is divided among the three classes: landowners (rent), capitalists (profit), and workers (wages)--these two propositions had ever since 1821 been utilized in England for socialist conclusions, and in part with such pointedness and resolution that this literature, which had then almost been forgotten and was to a large extent only rediscovered by Marx, remained surpassed until the appearance of Capital.

--Statement of the Classical Labor Theory of Value

American capitalists, otherwise called "robber barons", never really subscribed to "laissez-faire" economics. Rather, they preferred monopoly if they could pull one off or, failing that, oligopoly.

Bush's failures in Iraq as well as his numerous calamities in the economic sphere are bound up with one another as well as with his every other failure. The panoply of right wing calamities cannot be considered in isolation. All parts make up a gestalt, a whole of many parts --lies, myths, tortured logic, simplistic homilies, slogans, platitudes, claptrap, propaganda, and class warfare. The Iraq quagmire, for example, is not merely a war of naked aggression, it is an economic vampire sucks the life out of the US economy, harming the middle and lower income class most. Bush is unconcerned. His job has been to make Iraq safe for the robber barons of big oil. Bush proposes to do it with permanent bases. Trickle down theory will be disproved yet again. The oil profits that will ensue will only enrich the Dick Cheneys of this word. The "people" will continue to pay higher prices at the pump, they will continue to lose ground vis a vis the upper ten percent of the upper 20 percent (the upper quintile). That's why we fought the war.

Should --God forbid --another Republican steal the White House, he will go back to well. Indeed, the GOP candidates are on the stump preaching the same old crap. Nothing, absolutely nothing has been learned from the Bush debacle. Republican remorse is akin to crocodile tears. Republican are, indeed, sorry; they are sorry that Bush got caught. They are sorry that the failures and inadequacies of right wing economics have been laid bare.
But of all the cynical scrambles to package pro-business cash grabs as "economic stimulus," the prize has to go to Lawrence B. Lindsey, formerly President Bush's assistant for economic policy and his advisor during the 2001 recession. Lindsey's plan is to solve a crisis set off by bad lending by extending lots more questionable credit. "One of the easiest things to do would be to allow manufacturers and retailers" — notably Wal-Mart — "to open their own financial institutions, through which they could borrow and lend money," he wrote recently in the Wall Street Journal.

--Naomi Klein, Why the Right loves a disaster

Klien has picked up the trail, researching "a little-explored area of economic history". She is interested in how manufactured "crises" are exploited by the right wing and, in fact, have "paved the way for the march of the right-wing economic revolution across the globe." Social Security, as I have pointed out repeatedly, is a case in point. The GOP will break Social Security in order to "fix" it. But the fix will enrich only Wall Street Insiders and leave retirees worse off. Even now lemmings in the financial establishment are demanding that because Bush's deficits are so huge, "spending" on Social Security will have be cut dramatically. I wonder --does this include the benefits already being paid to current recipients? If so, how is this justified morally? Or --is it a threat to those who, because of GOP lies and fiscal incompetence, have only Social Security to look forward to?

Thanks to the Bush's immoral blunder in Iraq, this issue will loom large. Bush, if he indeed leaves the White House, will leave the nation this horrible legacy, a stench that will befoul the air and hang around, like an unwelcome, unkempt guest who moves in, stays, and refuses to just go away. Down and Out in Beverly Hills comes to mind.

Addendum: Bush's Legacy in Official Stats (you might want a drink before you look at this)

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