Posted by: David Offutt | August 16, 2011

Plutocracy: The Great Jobs Depression and Grover Norquist – President de facto

President Obama allowed the Fox-Republican-TEA Party to change the Number 1 Priority away from job creation in favor of deficit reduction by way of spending cuts. They snookered him in their effort to make him a one-term president by assuring that high unemployment percentages will surely get higher. He should have known better.

The Great Recession, which began in December 2007 and supposedly “ended” two years later in December 2009, quickly morphed into what I call the Great Jobs Depression. The Bush administration bailed out the rogue banksters with no strings attached and supposedly staved off a complete economic meltdown. The Obama administration saved thousands of jobs by preventing the collapse of the American auto industry. It also implemented an unpopular stimulus bill, which was deplorably underfunded and only marginally successful. But where are the absolutely essential jobs creation programs? And why has there been no public outcry demanding them?

From 2001 into 2011, we have continued the always-catastrophic policy of making the rich richer and the poor poorer by initiating and foolishly continuing the Bush tax cuts for the wealthy. No matter what you call it – trickle-down economics, Hooverism, supply-side economics, Reaganomics, Bushonomics – it has never worked, and it’s inconceivable that it ever will.

JFK, during the campaign of 1960, called the Republican platform “the power of positive thinking.”

When Democratic presidential candidate John F. Kennedy ran against Richard Nixon in 1960, he called the Republican platform “the power of positive thinking.” Seeking the Republican presidential nomination in 1980 – unsuccessfully – George H. W. Bush accurately described Ronald Reagan’s economic platform as “voodoo.” When he eventually became President, he did it on a platform of continuing voodooism. “Read my lips: No new taxes.” When he raised taxes, his party abandoned him.

Today the Fox-Republican TEA Party is still spouting the same nonsense: “the wealthy are the job creators” and if you keep the Bush tax cuts or cut their taxes even more, some of that money will slowly trickle down to the people in form of jobs. For eleven consecutive years, we have once again seen the abject failure and absurdity of that policy.

The CCC boys worked in state and national parks and forests building trails, cabins, campgrounds, and various other worthwhile and lasting projects. They are needed again.

In December 2009, I wrote that the Obama administration needed to apply three tried and proven methods to promote job creation: (1) re-create a modernized Civilian Conservation Corps that worked so well during the Great Depression; (2) re-create the Works Progress Administration to modernize our highways, bridges, railways, waterways, and energy infrastructure; and (3) resurrect Richard Nixon’s revenue sharing program to prevent states from laying off or freezing the salaries of public servants, which only makes a bad situation worse, and to implement any long-delayed state-wide projects.

They were needed because the plutocracy (the few who are very wealthy) had not created the jobs that Bush had promised, but history has taught us that they wouldn’t do it anyway. Also, Bush’s irresponsible, deficit-creating tax cuts for the super rich were due to expire at the end of 2010. It was possible that something positive could finally be done. Sadly, the tax cuts were extended, and we are still waiting for those desperately needed jobs programs! So what happened?

Grover Norquist, possibly the most influential of the “Wizards of Was,” opposes any federal spending that might result in increased taxation of the plutocracy. He promotes huge spending cuts so as to reduce taxes on the wealthy even more than the Bush 35% rate.

Grover Norquist effectively ascended to become the de facto President of the United States. Economically, he is much more powerful than Barack Obama who is only the President de jure. President Norquist has worked relentlessly for a quarter of a century to return the nation to the 19th century Gilded Age when the robber barons paid no income taxes at all. Virtually every Republican in Congress has signed an oath to him promising to never raise taxes – no matter what the reason.

Recently, during a Republican debate among presidential hopefuls inIowa, the eight candidates were asked if they would support a deficit-reduction bill that was 10 parts spending cuts and 1 part taxation. All opposed it. Does Norquist own these knights of the plutocracy or what? They all owe fealty to him and his fellow robber barons. Regardless of the crisis or need, Norquist and his Fox-Republican-TEA Party are determined that those who control 90 percent of the wealth in the United States will play no additional role in helping the nation.

With $21 billion each, the Kochs have TEA Partiers defending them against higher taxes and have governors and state legislatures, like in Wisconsin, doing their bidding.

In a half-hearted defense of President Obama, it should be pointed out that back in early 2009 when thousands of workers were daily losing their jobs, there were few rallies demanding that he or the government do something about it. Most rallies were just the opposite. The billionaire Koch brothers, Charles and David, put their political arm – Americans for Prosperity – to work organizing rallies of people who defended the extremely rich and opposed the government doing anything about the economic disaster. They believed the wealthy were TEA, “Taxed Enough Already” – hence, the formation of TEA Parties.

The people who really need help have been frustrated but mostly silent. One of the reasons for this has been their confidence in the safety-net programs of FDR’s New Deal of the 1930s and LBJ’s Great Society of the 1960s. Social Security, unemployment insurance, the minimum wage, food stamps, Medicare, and Medicaid have all been so successful that panic has not yet set in.

Although it was government deregulation of the banking industry that helped lead to the Great Recession, it was primarily the Bush tax cuts, the unfunded Iraqi and Afghan wars, and the unfunded Medicare drug plan boondoggle that ran up the debt. This made the deficit-spending that was needed to recover from the recession impossible to get through Congress, especially with Republicans continuing to be the Party of Hell No. Now, because of the Elections of 2010, with so many TEA Party representatives in Congress and a Republican majority in the House, recovery may well be beyond reach before things get really bad.

Ronald Reagan’s first term ended with 9 to 10% unemployment. His second term had the largest bank failure and stock market crash since the Great Depression. He still remained popular, and today hardly anyone recalls his true record.

President Obama caved in to Republican demands for spending cuts in the midst of high unemployment. He seems to forget that the personally popular Reagan has been the only President reelected with 9 to 10 percent unemployment. If the Fox-Republican-TEA Party gets its way with cutting funds for regulatory and service agencies, workers’ and consumers’ livelihood, health, and safety will be jeopardized. Also, thousands more public servants will be unemployed, and the downward spiral of the economy will be exacerbated.

To run up the national debt so that it’s impossible to serve the people’s needs has been the Republican goal since the election of Reagan. Norquist calls it “starving the (government) beast.” This, in turn, will allow Big Business to do as it pleases without regulations.

People who serve the public are not their only targets. The primary marks on their hit list are the safety-net programs, which they’ve always opposed. You may think things are bad now, but if Norquist & Company succeeds, hunger and anger may at long last awaken the quietly dying middle class. We may eventually get those job programs, but they will come much too late for far too many.

by David Offutt
A version of this essay was published September 19, 2011, in the El Dorado News-Times as a Guest Column.

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Responses

  1. Great essay, David. I agree with almost everything you said, though I may disagree with what you didn’t say but should have said, about you know who. :-)

    The economy was indeed awful in the early 80’s, but unemployment had been declining since 1982. From a voter’s point of view, it looked like things were getting better.

    Here’s the data leading up to the 1984 election, from this link:
    http://research.stlouisfed.org/fred2/data/UNRATE.txt
    1982-12-01 10.8
    1983-01-01 10.4
    1983-02-01 10.4
    1983-03-01 10.3
    1983-04-01 10.2
    1983-05-01 10.1
    1983-06-01 10.1
    1983-07-01 9.4
    1983-08-01 9.5
    1983-09-01 9.2
    1983-10-01 8.8
    1983-11-01 8.5
    1983-12-01 8.3
    1984-01-01 8.0
    1984-02-01 7.8
    1984-03-01 7.8
    1984-04-01 7.7
    1984-05-01 7.4
    1984-06-01 7.2
    1984-07-01 7.5
    1984-08-01 7.5
    1984-09-01 7.3
    1984-10-01 7.4

    As you know, there are several different measures for unemployment, U-3, U-6, etc., plus the accounting rules have changed over the years, so it is possible that you are correct about the 9%+ rate at the end of Ronnie’s first term, depending on whose data you are looking at. Regardless, the important thing is that it was trending down.

    Likewise, FDR was re-elected in a period of high unemployment, but it was trending down, so voters thought the country was headed in the right direction — except for the double dip in 1937-38, which FDR addressed quickly. Even so, congressional Democrats took a beating in the 1938 mid-terms.

    Back to those things you didn’t say but should have …… none of O’Hoover’s economic advisers are Keynesians. Instead, they’re mostly Neoliberals. The advisor who pushed for the 2009 stimulus, Christina Romer, is middle of the road, yet she resigned in frustration because the Obama administration was too conservative for her taste. That ought to tell you something.

    I especially agree with your last sentence: “We may eventually get those job programs, but they will come much too late for far too many.”

  2. More on the things you didn’t say, but should have:

    WSJ is reporting that Obama wants to cut safety net programs even more than what is called for in the Grand Bargain. Obviously, O’Hoover is not a liberal being held hostage by Grover Norquist. http://www.marketwatch.com/story/obama-to-offer-more-than-15-trillion-in-cuts-2011-08-17?siteid=rss&rss=1

    The article also mentions an unspecified jobs plan, but bear in mind that neoliberals like Obama believe that jobs are created by free trade, privatizing government services, lowering taxes, and reducing regulations. Most likely he’ll extend the payroll tax cut — which threatens the viability of SS — and call for more free trade agreements.

    That’s why I call him O’Hoover.

  3. Relevant essay on why Grover Norquist’s extremist strategy works while Obama’s centrist strategy fails.
    http://digbysblog.blogspot.com/2011/08/no-consequence-for-extremism.html

    In a 2 party system, the 2 parties take turns ruling and then playing defense, similar to a football game. Neither party can stay in power forever due to the inevitable fumbles, interceptions, and penalties.

    “Winning” means passing as much of your party’s agenda as possible while you are in power, and then preventing the other party from scoring while you are out of power.

    The R’s “get” this.

    Eventually the GOP’s extremist agenda may get them voted out of power, but then they play defense and prevent D’s from scoring. You may call them psychopaths, but they call it playing to win.

    Then it’s just a matter of time before D’s fumble and R’s regain control of the ball. In a 2-party system, there’s no where else to go. R’s then play an aggressive offense and score as many points as possible. Instead of playing defense, D’s try to be bipartisan. That may seem nice, but nice guys don’t win.

    There’s a lot more to it, of course, but there’s some truth to Atkins’ essay.


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