Swinging In the Hammock

Trickle Up Economics Redux

Our nation is approaching a tipping point.

We are at a moment, where if government’s growth is left unchecked and unchallenged, America’s best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.

Depending on bureaucracy to foster innovation, competitiveness and wise consumer choices has never worked – and it won’t work now. (Paul Ryan, leading intellectual light of feudal Tea Party Republicanism.)

Newt Gingrich

Newt with his Peeps

Newt Gingrich is another leading intellectual lantern of Conservatism it is believed and said by some.

Despite all the ideological pieties leading Republicans wrap themselves in, and wish to ensnare ‘us’ by, I can reduce their ‘end’ to six words: Cheap Labor, and, Show Me the Money.

These are the values inspiring those brave workers in Poland … They remind us that where free unions and collective bargaining are forbidden, freedom is lost. (Ronald Reagan)

Lazy

Cheap labor. I do wonder about the psycho-social factors in political behavior. The point remains that in our current climate the proponents of the miniaturize-the-government ideology are looking for culprits to punish. Actually, they’re looking for the usual culprits: liberals, labor, the professional classes, cosmopolitans, homosexuals, non-Christians, immigrants, teachers, professors, the unemployed, minorities.

Track: the affect-laden and rhetorical language/artifacts moved to explain why all sorts of groups need to be sacrificed, need to be summarily tossed from their, as Ryan puts it, hammocks. (h/t to the psychohistorian Lloyd DeMaus.) But, sure, if the people will have a plutocracy, then so it will be. I do note the awesome bait-and-switch pulled off recently by Mr. Ryan. This could get ugly, but then there is the Mittster!

Labor has it goof

From another perspective, it’s all Object Relations. Donald Trump, a laughing stock who doesn’t appreciate to any degree that he is so, said something revealing. He said that America needs a leader who will restore the world’s respect for America. Daddy’s home! This calls to mind the certain fact that Mr. Trump is surrounded by people who fawn over him.

Every candidate is surrounded by Yes people. No doubt Newt’s handlers affirm his assertion that Islam is posed to infiltrate and take over the U.S. No doubt Pawlenty’s people affirm that, ‘yes, Tim, supply side economics really works.’

Tea Party Logic

The overarching plan is diabolical. Can the Republicans do enough to sink the economy and then attach blame for their own accomplishment to President Obama? They are greatly advantaged by Obama’s apparent own inability to understand that his opponents sincerely and doggedly wish to destroy him, and his kind.

 

Reagan's AmericaReagan's America

(DeMaus was on to something.) Given this prospect for wringing out the ‘socialistic’ impurities by delivering diverse culprits into the noose of this budget cutting device, we can expect an uptick in pundits and thought leaders joyfully explaining how the banks, General Motors, Fannie and Freddie, should have been allowed to devolve and disappear. This would be them speaking of scapegoats who weren’t sacrificed, as a way of sadistically offering a sneak preview about those who remain and are to be sacrificed.

The third phase of the business cycle, the Time of Sacrifice, is usually seen as a reversal of the manic, or inflationary, phase, but it actually is a continuation of its guilt-reducing process, only now all economic activity is “depressed” rather than wildly sped up. A fantasy is shared during this phase that things had gotten “out of control.” The nation is imagined to be a giant body with two parts: a top, which must be fed, and a bottom, which must be punished. The role of the top part of the body is taken by the rich, and the fantasy is the familiar “trickle-down theory”-that if the rich are fed, the poor might somehow benefit. It is the same fantasy expressed by the primitive Anyi of Africa, when they used to say as they brought gifts to their king and his court in time of trouble, “When the king’s breasts are full of milk, it is his people who drink.”(24) All “supply-side economics is based on this magical fantasy, whether carried out by David Stockman in the 1980s or Andrew Mellon in the 192Os. What we wanted was to “let the hogs feed,” as Stockman phrased it,(25) to make the rich fatter, under the delusion that we were all infants dependent upon their maternal breasts for our sustenance.

That the “supply side” argument for feeding the rich-supposedly as a way to increase investment-was thoroughly irrational was revealed by studies made by the Federal Reserve Bank, Business Week and others(26) which showed that America’s investment rate was actually at its highest in decades, that there existed “a record $80 billion pile of ready cash” available for investing whenever the demand existed and that money shifted to the wealthier part of the nation at the expense of everyone else would only dry up demand further and produce lower, not higher, in-vestment. Few were surprised, then, when, as the Reagan plan took effect, investment plunged rather than rose. “Supply side” tax cuts for business and the wealthy had only felt right; few claimed it could be demonstrated as right. As Senator Howard Baker admitted when he passed the program, “What we’re doing is really a river boat gamble. we’re gambling that this new economics will work.”(27)

The other task of the Time of Sacrifice, that of “punishing the bot-tom,” involved a similarly delusional fantasy shared by most of the nation – that we were bad in enjoying so much prosperity and that part of us must suffer for our badness. Just as when we were children it was our bottoms which had to be punished, so too the bottom half of the body politic-the poor, the unemployed, women and children on welfare-would have to be punished for the indulgences of the rest of us. The first thing which was necessary was to strangle our economic bloodstream, our money supply. We suddenly “discovered” monetarism and reversed the growth of our monetary supply, “bleeding” our economic system of its life – giving blood, precisely as doctors used to bleed their patients to remove the “polluted” blood which they imagined had been produced by “overindulgences in food and sex.”(28) It was, of course, not just a “mistake” for the Federal Reserve Bank to allow too much money in the Seventies and then suddenly to squeeze the money supply so hard that interest rates went to 20 percent and no one could buy cars or houses. It was, rather, the purpose of the Fed to produce these erratic swings in money supply, in accordance with the manic-depressive cycle. If they hadn’t done so, we would never have had a Time of Sacrifice, and within a few decades our steady growth in productivity would soon have produced so much surplus that everyone in America would be living comfortable, and we would have no poor whom we could make suffer for our guilt.

In a similar vein, it is only when the sacrificial, “purging” nature of Reaganomics is taken into account that what seemed to be its conflicting parts can be viewed as a coherent whole. It has often been demonstrated that the two parts of Reaganomics-monetarism and “supply side” tax cuts – don’t make sense hitched together. Economist James Tobin states the case clearly:

The idea that money and prices can be detached and delegated to central bankers while Congress and the executive independently take care of budget, taxes, employment and output is the kind of fallacy that makes exam questions for freshman economics, a fallacy now elevated to presidential doctrine. If Amtrak hitches engines at both ends of a train of cars. . . one engine heading west to New York, the other east to Boston, and advertises that the train is going simultaneously to both destinations, most people would be skeptical. Reagan is hitching a Voicker engine at one end and a Stockman-Kemp locomotive to the other and telling us the economic train will carry us to full employment and disinflation at the same time.

What Tobin overlooks is that providing a train with two engines going in different directions is a plan designed to produce a train wreck, i.e., purposely set up to reduce surplus, sacrifice productive capacity and provide victims of the crash. The “supply side” tax cuts of Stockman were the “feed the rich” fantasy and the monetarism of Volcker was the punish the poor” fantasy. Reagan implemented both at the same time as a way of insuring the sacrifice of the minority to relieve the conscience of the majority. The only question which remained was, as Stockman told one reporter, “How much pain was the new President willing to impose? ”

When Stockman put his budget figures into the computer and found that even with the most optimistic assumptions Reagan’s actions would produce deficits in excess of $100 billion, he told the Atlantic Monthly reporter that he found the figures “frightening – ‘absolutely shocking,’ he confided – yet he seemed oddly exhilerated by the bad news.”(31) Why exhilarated by the bad news”? Because he knew we had hired him to produce bad news, to produce a Time of Sacrifice, to produce 150,000 victims. (Lloyd DeMaus, Reagan’s America)

Cash Reserve

We learn Paul Ryan was partly inspired to get into politics my Ayn Rand. Alright, this means the author of the novels that constitute the capitalist version of Mein Kampf, may have had something to do with the swinging hammocks.

Again: Cheap Labor. Randian Hayekalistic yokelism. Hey, didn’t save up the quarter million dollars for your cancer treatment? Too bad. Go die. Didn’t sock away a couple of year’s worth of salary for the years after we shipped your job off to Pakistan? Round up some cardboard. I fully expect Mitt and Tim to endorse a supercharged social Darwinism and get behind a Randian red in tooth utopia.

Did I really read that a majority of Republicans in Mississippi believe inter-racial marriage should be against the law?!? Because it is possible to find Republicans who join together: young earth creationism, neo-Birtherism, belief that Obama is a jihadist, racism,  who think liberals are Marxists; reject climate science; understand the founders were evangelicals; despise the enlightenment; are TENthers; blame the real estate implosion on poor black folk who didn’t read the fine print, I do wonder about what would be the equivalent to this ripe melding of irrationality and ignorance on the other, leftward side.

All I could come up with was figuring there probably are a bunch of Democrats who think bringing Geithner and Summers into the halls of power was a good idea. But, it is hard to then enumerate some long list of daft beliefs and find actual Democrats who hold them all, as-it-were, together.

And people thought the birthers would go away! We’re to reassert the holy idea of American exceptionalism in this context of super-charged ignorance, paranoia, resentment, and, irrationality–where it became known in public that Ayn Rand inspired a budgeteer to go into politics? And, then, having claimed he (and his ‘own’) represent a sea-change in what “Americans want,” he shamelessly pulls a bait-and-switch. The only thing missing is Ryan hissing, “You suckers.”

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