Exclusive: The only practical way to get the U.S. back on track economically is to raise taxes on the rich and use the money to rebuild the country. But anti-government extremists have taken over the Republican Party and won’t let go. So, what can be done to save the GOP from itself, asks Robert Parry.
By Robert Parry
Having been raised in a family of pro-business Republicans in Massachusetts, I sometimes wonder what it would take to restore the GOP to its earlier status as a reasonable and responsible political organization like it, more or less, was during the days of Dwight Eisenhower.
Back then, the Republican Party was skeptical of too much government but recognized government’s vital role in building a strong nation. Eisenhower and Republicans of his time would have understood President Barack Obama’s comment about the importance of publicly financed roads, bridges and other infrastructure in helping business succeed.
Those Republicans wouldn’t have ripped the “you didn’t build that” line out of context, attached the “that” to the wrong antecedent the building of individual businesses and then made the distortion the centerpiece of a national convention.
Unlike Eisenhower’s GOP, today’s breed of Republican displays a willful know-nothing-ism, a determination to wallow in a swamp of anti-intellectualism and made-up facts. In my youth, the Republicans were considered the more reasonable ones.
These troubling Republican trends have gotten worse over several decades but only recently has this reality penetrated the consciousness of the Washington Establishment, finally prompting two committed centrists, Thomas E. Mann and Norman J. Ornstein, to detect the reality.
Earlier this year, they penned a Washington Post Outlook article entitled “Let’s just say it: the Republicans are the problem”: “In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party.
“The GOP has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”
At the top, Republican leaders from Ayn Rand ideologues to neoconservative warmongers believe in elitist concepts like “perception management,” i.e. using lies and propaganda to manipulate the rank-and-file. Among the rank-and-file, there’s almost a pride in being manipulated.
So, despite all evidence, high percentages of Republicans believe that Obama is a Muslim born in Kenya, that Iraq did have weapons of mass destruction, that Saddam Hussein was involved in the 9/11 attacks, that the science on global warming is a hoax. Instead of anger over being misled, today’s adherents to GOP orthodoxy react to the truth by hugging the lies more tightly.
If this were the behavior of some fringe group on the Right or the Left, it might not matter much. But the Republican Party is part of the governing structure of the United States, the world’s most powerful nation with a bristling arsenal of nuclear weapons and a vast array of other exotic weapons.
Bolstered by an extraordinary propaganda system reaching from newspapers, magazines and books to radio, TV and well-funded Internet sites the Republicans have shown they can win elections, especially in times of fear and anger, and cause great harm from starting unnecessary wars to tanking the global economy.
George W. Bush, one recent example of Republican arrogant ignorance, took the United States from an era of general peace, prosperity and, yes, budget surpluses to a desperate time of war, financial collapse and trillion-dollar deficits. Bush’s ineptitude is still being felt by millions of jobless Americans and a struggling world economy.
Yet, the Republicans and their impressive propaganda machine have convinced large numbers of Americans that what is needed is a bigger dose of George W. Bush in the person of Mitt Romney, who, despite his mincing steps contrasted to Bush’s swagger, represents Bush’s policies on steroids, i.e., more tax cuts, more global belligerence.
Romney is trusting that the combination of true-believers and the truly confused will get him over the hump, and some polls show that he remains within range of reaching his goal, the White House. But what would happen if he gets his “50.1 percent”?
Misdiagnosing the Problem
Though Romney sees his experience as a venture capitalist as his top qualification to be President, he misdiagnoses the biggest problem facing the U.S. economy, a lack of consumer demand. That resulted from the middle class suffering three-plus decades of decline, mostly under GOP tax and trade policies favoring the rich and the outsourcers.
The crisis reached a critical point in the last two years of George W. Bush’s presidency when the ability of middle-class families to borrow against their home equity was devastated by the financial crash, massive layoffs and a drastic drop in home prices.
That forced millions of American consumers to forego purchases and left manufacturers with little incentive to ramp up production. Instead, companies kept trillions of dollars on the sidelines, seeing no reason to send their cash into the game.
Yet, what does Romney advocate as a solution? He wants another 20 percent tax cut aimed primarily at the wealthy. But non-partisan budget experts say the Romney plan would require higher taxes on middle-class families. In other words, Romney is likely to depress consumer spending even more.
Another mistaken judgment is spelled out in his campaign book, No Apology, where he describes the key challenge confronting the U.S. economy as “productivity,” i.e. the ability to produce more goods per hour of work.
He wrote: “Productivity is so central a concept, so crucial an ingredient to national well-being, that a focus on productivity should be a constant in the media and in the minds of citizens.”
But that’s not entirely true. A healthy economy depends on a mix of factors, including a strong middle class that can afford to buy items being manufactured. If an economy raises productivity, it will still stagnate if people can’t afford to buy the products.
Even the most efficient factory that makes something that no one can afford will soon go out of business. That was the insight of car manufacturer Henry Ford who insisted on paying his assembly-line workers enough so they could buy his cars. On a macro level, the same is true for countries. Productivity without demand is a recipe for failure.
In the Great Depression, the federal government expanded on Henry Ford’s insight with New Deal programs to help the unemployed get back on their feet. After World War II, other initiatives were designed to benefit returning war veterans and to build the country.
In essence, the Great American Middle Class was a creation of the federal government, through programs like the GI Bill, laws to protect unions, and major investments in transportation, power generation and science. That era’s Republicans might have been more cautious about government spending, but many projects had bipartisan support.
This golden era of the U.S. economy occurred while the top marginal tax rate for the wealthy ranged from 70 percent to as high as 91 percent. During the Eisenhower administration, the rich got to keep less than 10 percent of their top tranche of income.
This tax money was then “redistributed” to make America stronger and more prosperous. In the process, many businesses succeeded.
While the 70 to 91 percent top marginal tax rates might be excessive in today’s more fluid world where the rich can offshore themselves as well as their money, the excessive tax cutting that Republicans have pushed since Ronald Reagan’s presidency now down to 15 percent for capital gains on investments hasn’t achieved a healthy economy. Quite the opposite.
A Needed Pragmatism
So, the pragmatic approach would be to look at this history and raise taxes on the rich to some reasonable level President Bill Clinton set the top rate at 39.6 percent while investing some of that money in projects that can hire the unemployed and give the United States, once again, a world-class infrastructure.
In other words, use the tax structure to transfer some super-profits from the U.S. owners of foreign factories and from businessmen who have profited from government-backed technology to create middle-class jobs for Americans, who can then buy stuff.
If done wisely by putting people to work on building infrastructure, advancing research, and educating the U.S. population this “redistribution” can have multiple benefits, not just expanding the middle class but helping new businesses prosper.
That was what happened with President Eisenhower’s Interstate Highway System, with President John F. Kennedy’s space program (which spurred the development of computers and microprocessors), and with any number of other government-sponsored innovations, from pharmaceuticals to the Internet.
But that is the opposite of what Romney, the Tea Party and other anti-government extremists want to do. Indeed, “redistribution” has become Romney’s new curse word in the campaign, citing a 14-year-old clip of Obama as a state senator supporting some level of redistribution to give everyone “a shot.”
For Romney and today’s Republicans, it’s all about rewarding the “winners” and forgetting the “losers,” the “47 percent” whom Romney disparaged in a secretly recorded meeting with donors. These anti-government zealots want a return to the Social Darwinism of the Gilded Age and the “laissez-faire” model that failed.
After all, facts and logic have little place in the land of modern Republicanism. Instead of recognizing the wisdom accumulated over the past century reinforced by the harsh realities of Bush’s crash of 2008 the GOP insists on doubling-down on bad bets. More tax cuts tilted to the rich, less regulation of Wall Street, more “free trade.”
The simple truth is that the only way to rebuild the Great American Middle Class and to begin getting the federal debt under control is by taxing the rich more. Yet, today’s brand of Republican Party won’t take even the smallest step in that direction, citing pledges made to anti-tax radical Grover Norquist.
So what can be done? How do you save a party that has embraced anti-government extremism, that proposes tax cuts as the cure for all ills, that rejects science if it goes against ideology, that promotes crazy conspiracy theories to delegitimize opponents, that makes its case to the American people through outright lies, that tries to win elections through racially tinged voter suppression, and that relies on TV ad carpet-bombings to get votes?
How can the GOP be salvaged when its philosophical leaders are the likes of Rush Limbaugh and Ann Coulter? How can Americans intervene to remake the Republican Party into a constructive and necessary counterweight to the Democrats?
The only answer appears to be a series of crushing electoral defeats for this Republican Party. Not just one or two disappointing cycles but a consistent repudiation of this extremist organization until its more moderate elements can reclaim leadership and redirect not simply repackage the policies.
Like a person suffering from a violent split personality, the traditional Republican Party cannot coexist with the right-wing radicalism that has taken over my dad’s GOP. Only a determined intervention from the outside from the American electorate over several election cycles can give the old Republicans a chance to reemerge.
If the Tea Partiers and the neocons are repudiated again and again, the Republican Party could get back in touch with its earlier traditions of thoughtful policies, those bipartisan ideas that helped build a great nation.
Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Neck Deep: The Disastrous Presidency of George W. Bush, was written with two of his sons, Sam and Nat, and can be ordered at neckdeepbook.com. His two previous books, Secrecy & Privilege: The Rise of the Bush Dynasty from Watergate to Iraq and Lost History: Contras, Cocaine, the Press & ‘Project Truth’ are also available there.
The Republican prescription for feeding the hungry is to put a pan of scrambled eggs on the stove and wait for the room to heat up.
Keynesianism was dead on arrival and Iâ€™m getting really tired of the blasted zombie crawling out of its grave. The government cannot create NET jobs. http://www.americanthinker.com/2011/08/the_keynesian_fraud.html :
â€œAided by Keynesian economics, the political class cultivated and promoted the myth that government was responsible for economic success, especially the notion that more government means more success.
Government is like the rooster who believed his crowing caused the sun to rise. More accurately, the propaganda-conditioned voters see government as this rooster.
Government cannot cause the economic sun to rise. It can, however, prevent it from rising. That is the point this country has reached. Government has crippled the economy with an unbearable burden of poor policies, unnecessary regulations, and overspending.
Now the rooster crows but the sun does not rise. The economic crisis persists and worsens, despite unprecedented government crowing (spending).
The economic solution is simple: pare back government and its burden on the economy. Get government out of the way and the economy will recover. The economic sun then will again rise.â€
The acceptance of an insane theory, that had already been discredited when Keynes set pen to paper is one reason for my sig:
Atlas Shrugged was supposed to be a warning, NOT a newspaper!
The writer assumes that there exists somewhere a reservoir of ‘moderate republicans’ ready and willing to take over when the Limbaugh/Coulter/Ryan leaders are defeated and discredited. If this group exists, it has managed to keep a very low profile. A few have left the Republican party in disgust, but the current generation seems to be made up entirely of radicals inspired by Ayn Rand and Barry Goldwater (although BG would today be drummed out of the party as being too liberal). What the country needs is a new organization based on working men and women who want a better society and a healthy environment for all. I don’t see that coming from the existing corporatist parties.
PRESIDENT ALBERT GORE, JR
AL GORE WON AND WAS ELECTED( NOT SELECTED)
A LOOK AT A DIFFERENT 2010
He would have continued Clinton/Newt Fiscal Policies of Pay Your Way
We would continue to have Surpluses not Debt as far as the eye can see
Debt today would be 6000B not 15000B
2010 Budget would be 3000B not 3800
Unemployment would be 5% not the real 17%.
Food Stamp Roll would be 10% not 46%
Unemployment Insurance Roll would be low
Redistribution of Wealth back to Middle Class would have continued
The top 1% would own 20% not 43% of Total Financial Wealth
He would have continued Taxing the top 1%
Wall Street Regulators would be under experts not Partners In Crime
We would have 400 military bases not 800 worldwide
We would not have two wars
We would not have lost thousands of lives of young youths
Hundreds of thousands of Muslims would still be alive
Thousands of young Muslims would still have legs feet and minds
America would still be the most admired nation on Earth not the most despised
We would go back to behaving as a Christ-Like nation via our national policies
Millions would own homes not foreclosure notices
States would not be laying off hundreds of thousands in such important jobs as
Teaching and Policing California would have a balanced budget
John Kerry would be President.
Sound common sense policies would continue.
Just to take one point, and a most serious one at that, about Muslims dying – see here:
Most of the deaths of Muslims who died after sanctions were imposed on Iraq (1990-2000) took place under your vaunted Mr Clinton’s Administration. If your accuracy on that claim is typical, I doubt the rest will stand up to closer scrutiny…
Tell that to the neanderthals in the south and mid-west. The Reagan democrats, the white working class. I have no sympathy; they deserve whatever is happening to them.
20 years 3 R presidentsâ€”18 years R Senateâ€”12 years-R House- 6 years Total Control
took 600B budget to 3500B (less wjc itsy)–1000B Debt to 10,000Bâ€”surplus to 1400B Deficit–
99,0000 jobs per month compared to Carter + Clinton 222,000â€”initiated our involvement in 10 foreign conflictsâ€”costing billions and loss of many thousands of lovesâ€”Smashed S&L Industryâ€”Housing Industry-Banking Industry from Local to Wall Street Controlâ€”Great Recessionâ€”50,000 plants were closed 2000-2010– unjust dumb invasions of two poor, unarmed nations to remove leadership and place ours in power creating animosity throughout the Muslim world.
Folks! We must get good Leadership and it cannot be neo-con Republicanism
We have the wealth + income to pay off our debt and create millions of new jobs.
It will take tax policies like 1945-1980 that paid off WWII Debt.
We can do it. Romney and Republican control of House/Senate will never do it. Republicans are owned by Wall Street wealth.
I wonder why either of the branches of the capitalist 1% or less party needs to survive, since neither of them remotely represents the people. Do Mercans sometimes wonder why the level of voting is so low in the USA compared with democratic countries? The two parties are so far to the right that the terrifying word “socialist”, used with pride in places with a choice, is invoked in the USA without the slightest idea of social democracy.
Those lazy good for nothing European socialists. I wish you could hear me expectorate the word, ‘socialist.’ Boy I hate that word. Europe has more Fortune 500 companies than America. How can that be? I read an article the other day pointing out that America is 7th in economic competitiveness. I don’t know how to classify Hong Kong, but the other five are European ‘socialist’ countries like Germany and the Netherlands. How do those lazy dependent good-for-nothings do it? The big reason Europe is in trouble is our capitalist banksâ€”all hail. (Canada is not in trouble despite universal health care because they did not buy the toxic mortgages we tried to sell them) I may be wrong here, but I know of no European CEOs that make over $50/hr more that the average worker in their companies (In Sweden it is around $28/hr). American CEOs receive over $300/hr more than their average workers. Capitalists yell ‘unfair advantage’ when nations like China support their companies, but it works. It may be that American capitalists are afraid we of the 47-99% might put two and two together. I do find it strange that government is not creating jobs per the capitalist line, but I wonder where the defense industry would be today if not for the government. If corporations are the job creators, profits are higher than ever, and worker production is very high, where are the jobs? It can’t be the 35% corporate tax rate, because the transnationals have so many loopholes, they don’t pay anywhere near 35% and some even get refunds. Without some tax break (I do not understand how it works; see Taibbi’s article in Rolling Stone), venture capitalists like Bain could not operate. It can’t be the oppressive government regulations because companies ignore them, which is why we have pipeline explosions, refinery explosions, oil spills, Massey mine explosion, etc. Even Hitler tried to give every one a Volkswagen, a people’s car, and he was a Fascist. Those socialists! That word again. It’s not a rant; I’m just havin’ fun.
Dude, up the meds.
Save Gods Own Party? How about destroy it, shame it, and educate our children on the destruction this theo-fascist cult has caused to our country and the world.
They are within reach of their starve the beast stradegy, and Karl Roves plan of turning this country into a one party rule is so,close that he can taste it. Maybe when all their supporters end up working for $3.00/hr, and are living under our crumbling bridges with their hungry uneducated children, they will listen to the republican leaders boast that America is the wealthiest country in the world and maybe, just maybe, they will realize that they were played for fools. But then again, maybe not.
The “loonies” started taking over the Gullible Old Phools with the support of Goldwater by the John Birch Society.
It has been down-hill ever since.
The Republican extremists have figured out how to “work within the system” to the point that they have almost destroyed the system. The Democratic extremists demonstrated in 1968 and their hubris defeated Humphrey and got Nixon likely extending the Vietnam War by 6 years and another 28,000 American soldiers killed. They tried it again with Ralph Nader and got George Bush elected which led the the Iraq War of Retribution and 4,000 dead American soldiers plus our current screwed up economy.
Hopefully the Democrats have learned their lesson and the Republicans will self-destruct.
Why would you want to save those assholes? The Democrats are already to the right of Nixon. We need a left wing party not two freaking corporatist conservative parties.
Until the GOP manages to find a way to kick the Pat Robertson crowd out of their bed, they’re doomed. Republicans have steadily painted themselves into an ideological corner for a generation now with free market absolutists and religious fundamentalists swinging the paint brushes.
Oh, so true. I remember a time when it was the conservative Republicans who scorned lunatic religion as irrational superstition and prized science and education as the pathway to continued technological progress. America had a reputation to uphold. Today, America’s religious right has become the Taliban of the western world. What’s true doesn’t matter: it’s what you believe that counts. Anyone who’s ever tried to persuade someone that a superstition is false, unfortunately, knows you can’t argue with faith. Until something really tragic, catastrophic or horrific occurs, I’m afraid the “believers” will stay in charge. A “Hale-Bopp” suicidal cult-like strategy is what we embrace now. The really mind-boggling thing is that I know damn well many of the proponents of this nonsense don’t really believe it themselves. But they know the suckers will go along. If Americans realized how many right-wing politicians are secretly atheists, they’d go into convulsions. Religion is the most efficient crowd-control technique they have. So…brace yourselves for social Armageddon.
By the way, I forgot to mention: the economic solutions you propose are nearly EXACTLY what Webster G. Tarpley proposes on his website, http://www.tarpley.net as an economic recovery strategy. But since his position is well known he has been tarred and feathered as a communist and a conspiracy theorist, any attempt to implement what you propose is likely to be painted with the proverbial “paintbrush dipped in shit”. You’ll be labeled a communist, a socialist, a subversive, etc. I’m afraid it will require a “black swan” event of cataclysmic magnitude to get our system working. In the meantime, homeland security has apparently purchased millions of rounds of hollow-point ammunition to maintain order should such an event occur. We live in those proverbial “interesting times” referred to in that old Chinese philosopher’s curse.