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David Stockman was President Ronald Reagan’s supply side OMB director in 1980s. He wrote an impressive article titled Four Deformations Of The Apocalypse in the New York Times that everyone including those in the media should read carefully. For him to make these statements now shows the fear he has that we may return to the irresponsible supply-side policies of the Republicans over the last 30 years.
The media has been obsessed with whether President Obama would let the tax cuts for the wealthy expire and in effect raise taxes. They have adopted the narrative of the Right Wing not letting Americans understand specifically that when the Bush tax cuts expire it is a law passed by Republicans that is actually effecting said change in tax rates. Democrats as usual have addressed the narrative from the Republican point of view instead of the factual point of view. In effect Republicans borrowed money to give to the wealthy and want to continue borrowing money to give to the wealthy while the average American pays the interest on said debt.
But I digress. David Stockman’s article had four distinct tenets in which he hits Republican’s hard. In effect the demise of our economic system is predicated mostly to all the supply side policies driven by them under cover of Economist Milton Friedman.
Failure #1:
Milton Friedman persuading Republican President Nixon to abandon the Bretton Woods agreement to balance our accounts and printing money not back by anything but faith.
Failure #2:
The explosion of the debt beginning under President Reagan in 1981. His specific passage:
This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.
In 1981, traditional Republicans supported tax cuts, matched by spending cuts, to offset the way inflation was pushing many taxpayers into higher brackets and to spur investment. The Reagan administration’s hastily prepared fiscal blueprint, however, was no match for the primordial forces — the welfare state and the warfare state — that drive the federal spending machine.
Soon, the neocons were pushing the military budget skyward. And the Republicans on Capitol Hill who were supposed to cut spending exempted from the knife most of the domestic budget — entitlements, farm subsidies, education, water projects. But in the end it was a new cadre of ideological tax-cutters who killed the Republicans’ fiscal religion.
Failure #3:
The unabated expansion of the financial sector with a corrupt shadow banking system that brought us corrupt financial instruments like credit default swaps to insure junk securitized mortgages.
Failure #4:
The avid support of policies (deregulation though he did not say that specifically) that outsourced our jobs, both high and low end.
Most importantly the article provides a glimpse of who benefited from these policies as well as illustrated the decaying effect of the gap between the rich and the poor. It is imperative that this paper gets coverage as the narrative being put out is a disservice to every American. It has allowed Republican failed policies seem plausible though they are devoid of reality.
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