"Fiscal Responsibility", my FOOT!

Shamelessly stolen from Steve Benen:

"1980: Ronald Reagan runs for president, promising a balanced budget

1981 - 1989: With support from congressional Republicans, Reagan runs enormous deficits, adds $2 trillion to the debt.

1993: Bill Clinton passes economic plan that lowers deficit, gets zero votes from congressional Republicans.

1998: U.S. deficit disappears for the first time in three decades. Debt clock is unplugged.

2000: George W. Bush runs for president, promising to maintain a balanced budget.

2001: CBO shows the United States is on track to pay off the entirety of its national debt within a decade.

2001 - 2009: With support from congressional Republicans, Bush runs enormous deficits, adds nearly $5 trillion to the debt.

2002: Dick Cheney declares, “Deficits don’t matter.” Congressional Republicans agree, approving tax cuts, two wars, and Medicare expansion without even trying to pay for them.

2009: Barack Obama inherits $1.3 trillion deficit from Bush; Republicans immediately condemn Obama’s fiscal irresponsibility.

2009: Congressional Democrats unveil several domestic policy initiatives — including health care reform, cap and trade, DREAM Act — which would lower the deficit. GOP opposes all of them, while continuing to push for deficit reduction.

September 2010: In Obama’s first fiscal year, the deficit shrinks by $122 billion. Republicans again condemn Obama’s fiscal irresponsibility.

October 2010: S&P endorses the nation’s AAA rating with a stable outlook, saying the United States looks to be in solid fiscal shape for the foreseeable future.

November 2010: Republicans win a U.S. House majority, citing the need for fiscal responsibility.

December 2010: Congressional Republicans demand extension of Bush tax cuts, relying entirely on deficit financing. GOP continues to accuse Obama of fiscal irresponsibility.

March 2011: Congressional Republicans declare intention to hold full faith and credit of the United States hostage — a move without precedent in American history — until massive debt-reduction plan is approved.

July 2011: Obama offers Republicans a $4 trillion debt-reduction deal. GOP refuses, pushes debt-ceiling standoff until the last possible day, rattling international markets.

August 2011: S&P downgrades U.S. debt, citing GOP refusal to consider new revenues. Republicans rejoice and blame Obama for fiscal irresponsibility.

There have been several instances since the mid 1990s in which I genuinely believed Republican politics couldn’t possibly get more blisteringly ridiculous. I was wrong; they just keep getting worse."

Is there ONE adult left in the GOP?!?

You certainly wouldn't know it from the way the debt ceiling business has gone on...

A simple procedure that was little more than a rubber stamp while Ronald Reagan was tripling the National Debt - and George W. Bush was doubling it - has suddenly become THE WORST THING IN THE WORLD.

To understand what it's all about, read this.

According to the Congressional Research Service, the debt ceiling has been increased by Congress 74 times since 1962. On average, that's about 3 times every couple of years. Under George W. Bush, it was raised 10 times in 8 years. We never heard about it. But now a Black guy is President. Makes you wonder...

But once again, the Republican Party is REALLY hoping you have a short memory. When Americans blamed Republicans for the government shut down in 1995, one would think the GOP learned their lesson. But the eternally short memories of Republicans and their apparent inability to deal in historical fact once again compels them to try something that failed. What is it about the GOP that makes them believe that they can hold America hostage?

As the debt ceiling deadline approaches, Republicans are once again sticking to their guns, refusing any and all deals that include tax increases on the wealthiest Americans.

BIG surprise (rolls eyes).

I have continually said for over a decade that, unless you make over $250K/year,Republicans do not give a damn about you - they seem hell-bent on proving me right.

Their recklessness and general irresponsibility over that span of time has put us in the economic situation we are currently in and once again they are willing to dig us deeper into economic calamity. It’s as if they think that a recession isn’t enough, that what they really want is a second Great Depression.

If Americans weren't clear about Republican intent before, they damn well better have clarity now. The Republicans have thrown hissy fit after hissy fit over the insistence of Democrats (and over 2/3 of the American people) that raising taxes on the wealthy and closing tax loopholes on large corporations be part of any debt ceiling deal. Their refusal to agree to revenue increases of ANY KIND means that they are negotiating in bad faith. President Obama, despite taking heat from his own party, put Social Security and Medicare cuts on the table and that still wasn’t good enough for the GOP. As the President stated earlier, Can Republicans say yes to anything? Republicans expect Democrats to cave in and givhttp://www.blogger.com/img/blank.gife Republicans everything they want, and at the same time refuse to give Democrats anything in return. It’s a dishonest and dangerous game. It reminds me much of Yasser Arafat in 2000 - the Israelis made him an offer that gave the Palestinians over 90% of what he said he wanted, and he walked away, throwing Middle East peace away with both hands. That is precisely what Speaker Boehner is doing to the US Economy.

Republicans are already trying desperately to lay the blame at the feet of the Democratic Party in an attempt to spin away from the fact that they have been intentionally sabotaging the economy for political and personal gain. Eric Cantor is set to gain financially if the economy crashes and it is likely that many other Republicans have something to gain as well. They have made bets that the United States will fail, and they are doing everything they can to bring it to ruin. The Republican Party is using fear over the economy to advance their agenda and gain power. Their main goal is to make President Obama fail and has been since the day he won in 2008.

That’s why they won’t say yes.

But their plan is beginning to backfire.

As things get worse, the American citizenry is waking up to realize that the Democrats are the adults in Washington and that Republicans are acting like children that can’t have everything their way. Speaker John Boehner rejected a grand bargain that would have required compromise from both sides. He has also claimed that Democrats haven’t offered anything, which is a flat-out lie. Eric Cantor stormed out of the debt talks simply because taxes were brought up. Mitch McConnell continues to accuse Democrats of not negotiating in good faith. But all Democrats have asked for is that the wealthy pay only a bit more in taxes and that the tax subsidies for Big Oil and other corporate tax loopholes come to an end.

Republicans have continually sided with corporations and the wealthiest 2% of Americans. They have spent all of their time in Congress tearing down programs that benefit the other 98% of the American people. They have managed to spend every single moment in the House of Representatives focusing on their social agenda and have not spent any time on jobs and the economy. In fact, they have contributed to the unemployment rate by slashing government jobs and have destroyed jobs that depend on government funding such as Planned Parenthood. Their biggest campaign issue in 2010 was job creation, and now they don’t want to take it seriously.

When August 2nd arrives and America defaults, it will absolutely, no doubt about it, be the fault of the Republican Party. When Social Security checks fail to go out, senior citizens WILL notice. When our men and women in uniform go unpaid for their sacrifices, they WILL notice. And when businesses come to a standstill because the government shuts down, small business owners and even greedy CEOs WILL notice. And who will they all blame you ask? Surveys are showing that most Americans will blame the GOP for a government shut down. 71% of Americans disapprove of Congressional Republicans. And even if Congress kicks the can down the road, Republicans will still be blamed for not negotiating in good faith and for their irresponsible political posturing on behalf of the wealthy and corporations that results in no real solution to the big issue. Republicans are ignoring the vast majority of the American people at their own peril and may even take heat from their own masters since their profits ultimately depend upon a stable economy. Default is not good for anyone in these troubled times and Republicans are only making things worse (as usual).

The Republicans had the spending cuts they wanted on the table and they rejected them solely on the grounds that their corporate masters would see an increase in taxes. The way I see it, if the Republicans got the spending cuts they demanded, Democrats should get to close some tax loopholes for the rich like they’ve demanded. Of course in a perfect world, Democrats would take Social Security and Medicare off the table, and replace them with cuts to defense instead. The silver lining in all of this is that Republicans will get the blame. They actually believed that history wouldn’t repeat itself and that they could turn the tables on the Democrats this time. But just like they were in 1995, Republicans are being stubborn, uncompromising, and insensitive to the majority of Americans that demand a raise in taxes. As long as Republicans continue to demand spending cuts and reject revenue increases, they are finished politically and THAT is without a doubt something to look forward to, as this version of the GOP needs to go down HARD and be replaced by adults.

Wow - a Republican talking SENSE...

...too bad she'll be labeled a RINO (Republican In Name Only) and run out of the party on a rail.

Her name is Nancy Argenziano, and she served as a Republican state representative and state senator in Florida whose districts included Citrus County. After serving in the Legislature, she served on the Florida Public Service Commission.
Here's some of what she had to say:

"Make no mistake: This is not about liberals vs. conservatives — or Republicans vs. Democrats; it’s about what is right and what is wrong. The legislation and policies of the governor and legislative leadership are wrong.

It’s about shouting a warning to Floridians that their elected leaders are selling them down the river, saying one thing, but doing another.

In my 16 years in the Florida House, state Senate and Public Service Commission, I have tried to inform people about what was going on in their government and provided the inside scoop that political leaders did not want you to know about. I have been warning for years, and providing examples of our representative government/democracy being sold to the highest contributors, the slush funds, the corruption — that it really is about money.

I have been a Republican, and believe in the Republican principles of long ago: Less government in my private life; don’t tax us to death; personal freedom; personal responsibility; the right to protect myself and family; and for allowing business to do what it does best — do business, without excessive or unnecessary regulations.

But, contrary to the current crop of Republican leaders, I do not want Halliburton in charge of the Pentagon, BP heading up the Department of Environmental Protection, or Enron making energy policy.

In recent years I have seen much corruption; so much so that a grand jury ranked Florida No. 1 in corruption.

I have a problem with those who have hijacked the Republican Party to use it for their own self gain; those who wouldn’t have a clue what a Republican platform is and who have mutated the “R” philosophy beyond recognition.

I take offense that they use the hard-working grassroots level Republicans to help promote a philosophy that they do not practice. Many good Republicans who worked hard for this party have written books telling us what was happening, apparently to no avail. It cannot be that all that matters is that our side wins at any cost. I refuse to believe anyone could not see the harm in doing that."

See the rest of Ms. Argenziano's impressive rant here.

Harry Truman - a man of foresight...

He said this in 1948:
"Republicans approve of the American farmer, but they are willing to help him go broke.
They stand four-square for the American home--but not for housing.
They are strong for labor--but they are stronger for restricting labor's rights.
They favor minimum wage--the 'minimumer' the better.
They endorse educational opportunity for all--but they won't spend money for teachers or for schools.
They think modern medical care and hospitals are fine--for people who can afford them.
They consider electrical power a great blessing--but only when the private power companies get their rake-off.
They think American standard of living is a fine thing--so long as it doesn't spread to all the people.
And they admire of Government of the United States so much that they would like to buy it."
Amazing how it's still 100% truth.

How the Tea Party is killing the GOP

This from a REPUBLICAN named Bruce Bartlett, author of Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy:,

Republicans in Congress have reached a crossroads – they must decide if they are a governing party or one so beholden to its ideological fringe that it is incapable of doing the basic work of a legislative body. How the party answers that question will determine not only the direction of policy on key issues and Republican prospects for reelection next year, but who will be president in 2013.

It is obvious that the Tea Party phenomenon has rocked Republican politics; pushing an already conservative party much further to the right and bringing into it a vast number of new members who are highly energized and deeply ideological, but very inexperienced at politics and not very knowledgeable about how Congress operates on a day-to-day basis. This has proven deeply frustrating to many veteran Republican legislators.

I have long sought a good explanation for where the Tea Party came from and the source of its intensity. Toward this end, I have been reading newly-elected Sen. Rand Paul’s (R-KY) book, “The Tea Party Goes to Washington.” He is, of course, a Tea Party favorite; son of another Tea Party favorite, Rep. Ron Paul (R-TX); and someone who got elected by opposing the GOP establishment in Kentucky, including Senate Minority Leader Mitch McConnell.


According to Sen. Paul, much of what drives the Tea Party is sort of a delayed reaction to the disappointing presidency of George W. Bush. In a revealing passage from his book, Paul says:

“Imagine this – what if there had never been a President George W. Bush, and when Bill Clinton left office he was immediately replaced with Barack Obama. Now imagine Obama had governed from 2000 to 2008 exactly as Bush did – doubling the size of government, doubling the debt, expanding federal entitlements and education, starting the Iraq war – the whole works. To make matters worse, imagine that for a portion of that time, the Democrats actually controlled all three branches of government. Would Republicans have given Obama and his party a free pass in carrying out the exact same agenda as Bush? It’s hard to imagine this being the case, given the grief Bill Clinton got from Republicans.”

This argument hits close to home for me because after 30 years of working in Republican politics, including for Ronald Reagan and Rand’s father, I became deeply alienated from the party for the very reasons Rand explains. The final straw for me was the way Republicans rammed the Medicare Part D program into law in 2003. This took place at the very moment when the Medicare program was starting to seriously hemorrhage money. It was grossly irresponsible to add massively to its deficit largely for the purpose of buying re-election for Bush and his party in 2004.

This year, Medicare Part D will add about $55 billion to the deficit – far more than can be saved with all the budget cuts Republicans can possibly hope to achieve in fiscal 2011. Furthermore, it annoys me to see so many of those who voted for Medicare Part D, such as House Budget Committee chairman Paul Ryan (R-Wisc.), treated as if they are paragons of fiscal responsibility. In fact, their concern for excessive spending is highly selective, directed almost entirely at programs supported by Democrats primarily to undercut their political support, not because they care so much about deficits.

My disgust with the GOP became so intense after the Medicare Part D debacle, I wrote a bookon the subject. I thought if conservatives broke with Bush at that time and adopted a more Tea Party-like approach to getting our fiscal house in order that it might stave off the political disasters I saw looming in 2006 and 2008.

Republicans preferred to kill the messenger, leading to my permanent estrangement from both the party and the conservative movement. But perhaps my effort wasn’t entirely for naught. Apparently, one of the few readers of my book was Rand Paul, who quotes me saying this:

“The point is that George W. Bush has never demonstrated any interest in shrinking the size of government. And on many occasions, he has increased government significantly. Yet if there is anything that defines conservatism in America, it is hostility to government expansion. The idea of big government conservatism, a term often used to describe Bush’s philosophy, is a contradiction in terms.”

So why is it that I have been disdainful of the Tea Party from its first manifestation in early 2009? The main reason is that so many of its members simply don’t know what they are talking about; they seem to think that strong opinions are a substitute for facts, research and analysis. Consequently, many Tea Party members hold views on various topics that are, frankly, nuts, and these views have been embraced by some Republican voters as well.


For example, a March 15, 2011, poll by Public Policy Polling found that 25 percent of Republicans expect that a group called ACORN is going to steal the election for Obama next year and 31 percent aren’t sure; only 43 percent of Republicans believe this is false. In point of fact, ACORN no longer even exists, and it’s doubtful that it could have stolen a local election for dog catcher even if it wanted to.

An August 27, 2010, poll by Princeton Survey Research Associates International found that 52 percent of Republicans believe that Obama sympathizes with Islamic fundamentalists and favors imposing Islamic law around the world; only 7 percent thought this was definitely untrue.

A March 24, 2010, Harris poll found that 67 percent of Republicans believe that Obama is a socialist, 61 percent think he wants to take away the right to own guns, 57 percent believe he is a Muslim, 45 percent say he was not born in the U.S. and has no right to be president, and 41 percent think he is just looking for an excuse to seize dictatorial power.

As a consequence, even solid conservatives like Sen. Orrin Hatch (R-Utah) are considered dangerous liberals. And slightly less conservative Republicans such as former Utah Gov. Jon Huntsman are treated as dangerous radicals. In a March 14 New York Times report, Utah Tea Party leader Jacqueline Smith said of Huntsman, “On a good day, he’s a socialist. On a bad day, he’s a communist.”

This sort of rhetoric serves no useful purpose and is at best distracting. It also elevates minor differences on policy or strategy among Republicans into deep disagreements over principle. This has made it impossible for Congress to finish work on the 2011 budget, which should have been done last summer. Hard line Tea Party members keep insisting on impossibly large budget cuts despite the fact that the vast bulk of the budget is effectively off limits.

Not surprisingly, a March 16 Pew poll found that Republicans are losing ground rapidly. Backing for their approach to the budget has fallen even with Republicans and Tea Party members. Support among the former has fallen from 69 percent last November to 52 percent now; among the latter it has fallen from 76 percent to 52 percent. Support among independents is down from 37 percent to 17 percent.

For these reasons, I think Republicans are blowing it. They are rapidly using up their limited political capital for getting control of the budget on trivial spending cuts, such as defunding National Public Radio, that will have no long-term impact. Furthermore, we know from experience that the public’s support for budget cuts quickly ran out in 1981, leading inevitably to tax increases. And according to a February 16 Harris poll, there is less support for spending cuts today than there was back then.


Although Republicans today are confident that they will retake the Senate and the White House next year, I think their current strategy of pandering to Tea Party extremists is undermining these hopes. Polls show Democrats up for reelection next year, such as Sen. Sherrod Brown of Ohio, to be rapidly improving their chances. And Republicans should remember that one reason they controlled the White House during most of the postwar era is that the American people don’t really trust either party to control the entire government. Moreover, the lousy job Republicans did when they controlled Congress and the White House from 2001 to 2006 is still a recent memory.

It’s possible that the Tea Party will turn out to be a force for good, but increasingly it looks like populist movements of the past that quickly burned out without having a lasting impact on policy. The more quickly the movement matures, learns patience, and becomes sophisticated about the nature of politics, the better its chances of achieving its goals.

I remember, so I'm NOT voting Republican.

This needs to be seen by LOTS of people...

An example of what's happened to the GOP...

...and why it's driving itself off a cliff at full throttle. You would think, from previous postings in this space,that I would rejoice in this. Instead, I lament it. A viable opposition party is absolutely necessary for the health of any kind of democracy, and the Republicans are taking themselves out of the game.

Read the whole article in Newsweek:

In the year and a half since Barack Obama was elected president, Republicans nationwide seem to have given up on the whole governing thing and chosen instead to play a long, rancorous game of "I'm More Conservative Than You Are." They've been playing it in Utah, where incumbent Sen. Bob Bennett—lifetime American Conservative Union rating: 84—lost a primary battle this past weekend. They've been playing it in Florida, where moderate Gov. Charlie Crist was forced last week to abandon his bid for the Republican Senate nomination and run as an independent instead. And they've even been playing it on the national stage, where the RNC recently toyed with the idea of imposing a purity test on potential GOP candidates. Comply with eight of the party's 10 "Reaganite" principles, the thinking went, and you're worthy of funding. Fall short, and you might as well be Leon Trotsky.

Conservatives would claim that the Republican Party can only regain power by "returning to its roots" and banishing heretics. But a funny thing happened on the way to winning national elections again: the GOP has drifted so far right that it's retroactively disqualified the only Republicans since 1960 who've actually managed to, you know, win national elections. Based on their public statements, policy proposals, and accomplishments while in office, none of the modern Republican presidents—not Richard Nixon, not Gerald Ford, not George H.W. Bush, not even Ronald Reagan or George W. Bush—would come close to satisfying the Republican base if they were seeking election today.

The point is not that these guys were liberals. It's that the GOP is at risk of becoming so dogmatic that it would exclude even its most iconic members. Preemptively ruling out the sort of pragmatic policies that have worked in the past is a novel strategy, and it clearly plays to the passions of the moment. But unless the demographic evidence is wildly inaccurate and the country is, in fact, growing more and more right wing over time, it's probably not a strategy that's going to work particularly well in the future.

Could I have a show of hands AGAINST finance reform?

This from the Huffington Post:

Goldman Sachs put its own interests ahead of its clients in trying to profit off the souring housing market of 2007, documents released Monday show.

The firm, which had profited handsomely off packaging and selling securitized subprime home mortgages to investors during the housing boom, switched directions in early 2007, furiously shedding its home mortgage-linked risk and buying as much insurance as it could, effectively shorting the market throughout the year -- a move that netted the firm "billions and billions" at the expense of its clients, according to the documents released by the Senate Permanent Subcommittee on Investigations.

"Goldman Sachs made billions of dollars from betting against the housing market, and it placed those bets in some cases at the same time it was selling mortgage-related securities to its clients," said the committee's chairman, Carl Levin (D-Mich.). "They have a lot to answer for."

Goldman says it always puts its clients' interest first. It's a position the firm has stuck by as Levin's investigation has produced emails and internal documents apparently showing otherwise.

Despite the fact that 67% of the American public favors action to reform the financial markets, Republicans in the Senate voted UNANIMOUSLY yesterday to prevent such a bill even being discussed on the floor of the Senate. Ironically, these same senators, who were VERY loud in proclaiming (about healthcare reform) how "we should not go against the will of the American People", have now voted against a 67% majority...is there any more doubt that the GOP is aligned with corporate interests, AGAINST the American Public?

It's worth pointing out that, prior to FDR and the New Deal, we had unregulated financial markets, and a "panic" every 20-30 years: 1797; 1819;1837(followed by a 5-year depression); 1857 (full effect didn't let up until the Civil War) 1873 (followed by a 6 -year depression);1893 (3-year depression); 1907, and 1929(perhaps you've heard of that one...).
Then came Franklin Roosevelt, and common-sense market reforms. There was not a major financial crisis in the USA from 1934 until the 1980's, when, under Reagan, moves were made to deregulate the financial industry. Then in the mid-late '80s, we had the S&L crisis/scandal, and in 2008 - well, you know.

Hmmm...crisis every 20-30 years (deregulated), or steady growth with no panic (regulated)? Seems the GOP likes the former...

"Two Santa Clauses" by Thom Hartmann

Thom Hartmann is the author of "SCREWED: The Undeclared War on the Middle Class".

Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years
by Thom Hartmann

This weekend, House Republican leader John Boehner played out the role of Jude Wanniski on NBC's "Meet The Press."

Odds are you've never heard of Jude, but without him Reagan never would have become a "successful" president, Republicans never would have taken control of the House or Senate, Bill Clinton never would have been impeached, and neither George Bush would have been president.

When Barry Goldwater went down to ignominious defeat in 1964, most Republicans felt doomed (among them the then-28-year-old Wanniski). Goldwater himself, although uncomfortable with the rising religious right within his own party and the calls for more intrusion in people's bedrooms, was a diehard fan of Herbert Hoover's economic worldview.

In Hoover's world (and virtually all the Republicans since reconstruction with the exception of Teddy Roosevelt), market fundamentalism was a virtual religion. Economists from Ludwig von Mises to Friedrich Hayek to Milton Friedman had preached that government could only make a mess of things economic, and the world of finance should be left to the Big Boys – the Masters of the Universe, as they sometimes called themselves – who ruled Wall Street and international finance.

Hoover enthusiastically followed the advice of his Treasury Secretary, multimillionaire Andrew Mellon, who said in 1931: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down... enterprising people will pick up the wrecks from less competent people."

Thus, the Republican mantra was: "Lower taxes, reduce the size of government, and balance the budget."

The only problem with this ideology from the Hooverite perspective was that the Democrats always seemed like the bestowers of gifts, while the Republicans were seen by the American people as the stingy Scrooges, bent on making the lives of working people harder all the while making richer the very richest. This, Republican strategists since 1930 knew, was no way to win elections.

Which was why the most successful Republican of the 20th century up to that time, Dwight D. Eisenhower, had been quite happy with a top income tax rate on millionaires of 91 percent. As he wrote to his brother Edgar Eisenhower in a personal letter on November 8, 1954:

"[T]o attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything--even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon 'moderation' in government.

"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt
[you possibly know his background], a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid."

Goldwater, however, rejected the "liberalism" of Eisenhower, Rockefeller, and other "moderates" within his own party. Extremism in defense of liberty was no vice, he famously told the 1964 nominating convention, and moderation was no virtue. And it doomed him and his party.

And so after Goldwater's defeat, the Republicans were again lost in the wilderness just as after Hoover's disastrous presidency. Even four years later when Richard Nixon beat LBJ in 1968, Nixon wasn't willing to embrace the economic conservatism of Goldwater and the economic true believers in the Republican Party. And Jerry Ford wasn't, in their opinions, much better. If Nixon and Ford believed in economic conservatism, they were afraid to practice it for fear of dooming their party to another forty years in the electoral wilderness.

By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections.

Everybody understood at the time that economies are driven by demand. People with good jobs have money in their pockets, and want to use it to buy things. The job of the business community is to either determine or drive that demand to their particular goods, and when they're successful at meeting the demand then factories get built, more people become employed to make more products, and those newly-employed people have a paycheck that further increases demand.

Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.

At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!

Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.

Ronald Reagan was the first national Republican politician to suggest that he could cut taxes on rich people and businesses, that those tax cuts would cause them to take their surplus money and build factories or import large quantities of cheap stuff from low-labor countries, and that the more stuff there was supplying the economy the faster it would grow. George Herbert Walker Bush – like most Republicans of the time – was horrified. Ronald Reagan was suggesting "Voodoo Economics," said Bush in the primary campaign, and Wanniski's supply-side and Laffer's tax-cut theories would throw the nation into such deep debt that we'd ultimately crash into another Republican Great Depression.

But Wanniski had been doing his homework on how to sell supply-side economics. In 1976, he rolled out to the hard-right insiders in the Republican Party his "Two Santa Clauses" theory, which would enable the Republicans to take power in America for the next thirty years.

Democrats, he said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too – spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.

There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

When Reagan rolled out Supply Side Economics in the early 80s, dramatically cutting taxes while exploding (mostly military) spending, there was a moment when it seemed to Wanniski and Laffer that all was lost. The budget deficit exploded and the country fell into a deep recession – the worst since the Great Depression – and Republicans nationwide held their collective breath. But David Stockman came up with a great new theory about what was going on – they were "starving the beast" of government by running up such huge deficits that Democrats would never, ever in the future be able to talk again about national health care or improving Social Security – and this so pleased Alan Greenspan, the Fed Chairman, that he opened the spigots of the Fed, dropping interest rates and buying government bonds, producing a nice, healthy goose to the economy. Greenspan further counseled Reagan to dramatically increase taxes on people earning under $37,800 a year by increasing the Social Security (FICA/payroll) tax, and then let the government borrow those newfound hundreds of billions of dollars off-the-books to make the deficit look better than it was.

Reagan, Greenspan, Winniski, and Laffer took the federal budget deficit from under a trillion dollars in 1980 to almost three trillion by 1988, and back then a dollar could buy far more than it buys today. They and George HW Bush ran up more debt in eight years than every president in history, from George Washington to Jimmy Carter, combined. Surely this would both starve the beast and force the Democrats to make the politically suicidal move of becoming deficit hawks.

And that's just how it turned out. Bill Clinton, who had run on an FDR-like platform of a "new covenant" with the American people that would strengthen the institutions of the New Deal, strengthen labor, and institute a national health care system, found himself in a box. A few weeks before his inauguration, Alan Greenspan and Robert Rubin sat him down and told him the facts of life: he was going to have to raise taxes and cut the size of government. Clinton took their advice to heart, raised taxes, balanced the budget, and cut numerous programs, declaring an "end to welfare as we know it" and, in his second inaugural address, an "end to the era of big government." He was the anti-Santa Claus, and the result was an explosion of Republican wins across the country as Republican politicians campaigned on a platform of supply-side tax cuts and pork-rich spending increases.

Looking at the wreckage of the Democratic Party all around Clinton by 1999, Winniski wrote a gloating memo that said, in part: "We of course should be indebted to Art Laffer for all time for his Curve... But as the primary political theoretician of the supply-side camp, I began arguing for the 'Two Santa Claus Theory' in 1974. If the Democrats are going to play Santa Claus by promoting more spending, the Republicans can never beat them by promoting less spending. They have to promise tax cuts..."

Ed Crane, president of the Libertarian CATO Institute, noted in a memo that year: "When Jack Kemp, Newt Gingich, Vin Weber, Connie Mack and the rest discovered Jude Wanniski and Art Laffer, they thought they'd died and gone to heaven. In supply-side economics they found a philosophy that gave them a free pass out of the debate over the proper role of government. Just cut taxes and grow the economy: government will shrink as a percentage of GDP, even if you don't cut spending. That's why you rarely, if ever, heard Kemp or Gingrich call for spending cuts, much less the elimination of programs and departments."

George W. Bush embraced the Two Santa Claus Theory with gusto, ramming through huge tax cuts – particularly a cut to a maximum 15 percent income tax rate on people like himself who made their principle income from sitting around the pool waiting for their dividend or capital gains checks to arrive in the mail – and blowing out federal spending. Bush even out-spent Reagan, which nobody had ever thought would again be possible.

And it all seemed to be going so well, just as it did in the early 1920s when a series of three consecutive Republican presidents cut income taxes on the uber-rich from over 70 percent to under 30 percent. In 1929, pretty much everybody realized that instead of building factories with all that extra money, the rich had been pouring it into the stock market, inflating a bubble that – like an inexorable law of nature – would have to burst. But the people who remembered that lesson were mostly all dead by 2005, when Jude Wanniski died and George Gilder celebrated the Reagan/Bush supply-side-created bubble economies in a Wall Street Journal eulogy:

"...Jude's charismatic focus on the tax on capital gains redeemed the fiscal policies of four administrations. ... [T]he capital-gains tax has come erratically but inexorably down -- while the market capitalization of U.S. equities has risen from roughly a third of global market cap to close to half. These many trillions in new entrepreneurial wealth are a true warrant of the worth of his impact. Unbound by zero-sum economics, Jude forged the golden gift of a profound and passionate argument that the establishments of the mold must finally give way to the powers of the mind. He audaciously defied all the Buffetteers of the trade gap, the moldy figs of the Phillips Curve, the chic traders in money and principle, even the stultifying pillows of the Nobel Prize."

In reality, his tax cuts did what they have always done over the past 100 years – they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people.

The Republicans got what they wanted from Wanniski's work. They held power for thirty years, made themselves trillions of dollars, cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 8 of the non-governmental workforce today, and left such a massive deficit that some misguided "conservative" Democrats are again clamoring to shoot Santa with working-class tax hikes and entitlement program cuts.

And now Boehner, McCain, Brooks, and the whole crowd are again clamoring to be recognized as the ones who will out-Santa Claus the Democrats. You'd think after all the damage they've done that David Gregory would have simply laughed Boehner off the program – much as the American people did to the Republicans in the last election – although Gregory is far too much a gentleman for that. Instead, he merely looked incredulous; it was enough.

The Two Santa Claus theory isn't dead, as we can see from today's Republican rhetoric. Hopefully, though, reality will continue to sink in with the American people and the massive fraud perpetrated by Wanniski, Reagan, Laffer, Graham, Bush(s), and all their "conservative" enablers will be seen for what it was and is. And the Obama administration can get about the business of repairing the damage and recovering the stolen assets of these cheap hustlers.

"The Closing of the Conservative Mind" -Bruce Bartlett

It seems the conservative movement is eating its own now.
As a follow-up to Mr. Frum's writing below:

As some readers of this blog may know, I was fired by a right wing think tank called the National Center for Policy Analysis in 2005 for writing a book critical of George W. Bush's policies, especially his support for Medicare Part D. In the years since, I have lost a great many friends and been shunned by conservative society in Washington, DC.

Now the same thing has happened to David Frum, who has been fired by the American Enterprise Institute. I don't know all the details, but I presume that his Waterloo post on Sunday condemning Republicans for failing to work with Democrats on healthcare reform was the final straw.

Since, he is no longer affiliated with AEI, I feel free to say publicly something he told me in private a few months ago. He asked if I had noticed any comments by AEI "scholars" on the subject of health care reform. I said no and he said that was because they had been ordered not to speak to the media because they agreed with too much of what Obama was trying to do.

It saddened me to hear this. I have always hoped that my experience was unique. But now I see that I was just the first to suffer from a closing of the conservative mind. Rigid conformity is being enforced, no dissent is allowed, and the conservative brain will slowly shrivel into dementia if it hasn't already.

Sadly, there is no place for David and me to go. The donor community is only interested in financing organizations that parrot the party line, such as the one recently established by McCain economic adviser Doug Holtz-Eakin.

I will have more to say on this topic later. But I wanted to say that this is a black day for what passes for a conservative movement, scholarship, and the once-respected AEI.

"Deem and Pass" is UNCONSTITUTIONAL!!!

To put it politely - horse puckey.

This is just another one of those things, like reconciliation, obstructionism, the filibuster, federal spending, marital infidelity, etc. that are only bad when Democrats do them.

Republicans don't want to admit that they want NO reform of health care at all, so they make it about whatever distraction they can. Today it's "deem and pass", which Republicans used 202 times while they controlled the House from 1995-2007, but is, suddenly, "unconstitutional". Guess the Republicans use the "IOOKIYAR" rule
(It's Only OK If You're A Republican)for such things.

How do I know Republicans want no reform? Very simple. What did THEY do about it when they had control of Congress for 12 years? Two things: "Diddly" and "Squat".