Monday, December 29, 2008

For the GOP It's 1933 Déjà vu All Over Again

As if the economic news weren't bad enough and getting worse at the moment, with analysis of the near future looking grim, unemployment numbers rising and consumer spending tanking, you'd think a little common sense might kick in somewhere in the GOP. Maybe restoring government regulation and enforcement to combat fraud, deceit and outright bilking and a economic stimulus package might make sense. Right?

Wrong - The fact is, facts simply aren't relevant to Republicans, whose unquestioning adherence to dogma, unyielding opposition to FDR's "New Deal" reforms and veneration of conservative icons such as Ronald Reagan are more appropriate to religious faith than intellectual rigor.

Rather than accept responsibility for the many catastrophes conservative governance and the repeal of FDR's "New Deal" reforms, have foisted upon the nation, Republicans seek to deny blame; President Bush says the Wall Street meltdown isn't his fault, as he tells Charles Gibson,
"I think when the history of this period is written, people will realize a lot of the decisions that were made took place over a decade or so, before I arrived."
Well, to be completely accurate, Bush's conservative legacy of failure directly follows from the conservative prime ideological directive, so well articulated by Ronald Reagan upon his inauguration on January 20, 1981, that "Government is not the solution; government is the problem." What has happened over the last eight years links up to what has been happening over the last twenty-eight years, since Ronald Reagan's inaugural call to dismantle government.

By the time Ronald Reagan was elected president conservative Republicans had spent 50 years unsuccessfully trying to sell Americans on the idea that conservative governance in the 1920's had nothing to do with the economic crisis of the 1930's and that the U.S. economy—whether in recession or booming—was laboring under the shackles of the burdensome taxation and misguided regulation placed upon it by FDR's enduring New Deal legislation.

Arthur M. Schlesinger Jr. writes about FDR's challenges to rescue America through a "new deal" approach to government in his book, "Crisis of the Old Order,"
"The economy FDR inherited in March 1933, delivered to him by 12 years of Republican laissez-faire rule, was a shambles. The Dow Jones industrial average fell 90 percent from its 1929 peak. and gross domestic product fell by more than a quarter between 1929 and 1933. One out of every four American workers lacked a job, hunger marchers, pinched and bitter, were parading cold streets in New York and Chicago, only a small percentage of the unemployed received relief. Americans suffered a degree of long-term financial distress that is almost unimaginable, but Republicans denied that [the conservative philosophy of] laissez-faire [no government regulation or intervention] governance during the 1920's was in any way responsible for the economic crisis."
From the first days of Roosevelt's Administration in 1933 conservative Republicans have viewed FDR's New Deal programs to regulate banking and Wall Street and protect and empower working class citizens as an extreme threat to their interests. Republicans hated FDR's ideas for financial system regulatory oversight, the Social Security Adminstration, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, the Tennessee Valley Authority, the Triborough Bridge program and the Work Projects Administration (WPA) programs.

In the summer of 1933, shortly after Roosevelt's 'First 100 Days,' America's richest businessmen were in a panic. It was clear that Roosevelt intended to push massive "New Deal" economic recovery legislation through congress that would regulate the Banking System and Wall Street and protect and empower working class citizens. Conservatives felt that Roosevelt had to be stopped at all costs and their answer was a political coup, along the lines of the recently successful coups of Adolf Hitler in Germany and Benito Mussolini in Italy. (Hear BBC audio report The White House Coup)

In 1934, Marine Major General Smedley Butler told Congress that a group of wealthy industrialists had approached him to lead a coup to take over the administration of President Franklin D. Roosevelt. It was to be secretly financed and organized by leading officers of the Morgan and Du Pont empires and included some of America's richest and most famous conservative republicans of the time.

Butler pretended to go along with the plot and met other members of the conspiracy, but in November 1934 Butler exposed the plot in secret testimony to the congressional Special Committee on Un-American Activities (the McCormack-Dickstein Committee) that was investigating Nazi and certain other propaganda activities. Butler claimed that the American Liberty League was the main organization behind the plot. He added the main backers were the Du Pont family, as well as leaders of U.S. Steel, General Motors, Standard Oil, Chase National Bank, and Goodyear Tire and Rubber Company. Butler also named Prescott Bush, President G.W. Bush's grandfather, as one of the conspirators.

The plot to overthrow the government of President Franklin D. Roosevelt failed when Butler exposed the coup plot, but conservatives have never ceased their effort to overthrow Roosevelt's New Deal regulation of banking and Wall Street and other protections for working class citizens.

In Reagan, conservatives had finally found someone who could successfully sell the conservative "free market" argument against FDR's New Deal philosophy that Government Safety Net Programs and Regulatory Oversight are required to protect working class citizens against catastrophic financial system boom/bust cycles.

During the twenty-eight years following Reagan's inauguration conservatives relentlessly pushed to eliminate government safety net and oversight programs in every corner of America under the canard that "unfettered free markets work best." It was conservatives, both Republican and blue dog Democrat, who pushed repeal and elimination of any and all government safety net and regulatory oversight legislation, following Reagan's inaugural pronouncement.

So, President Bush is correct to say that, "a lot of the decisions were made before I arrived." Yet, it is an ultimate act of denial for Bush to deny that his Blind Conservative Faith In Unregulated Banking And Markets and his directives to oversight agencies that they must not enforce regulations congress had not yet repealed, did in fact stoked our economic crisis.

President Bush is not alone in his denial that the conservative philosophy of governance is the root cause behind the desperate circumstances Americans face today. In their denial many conservatives say that President Bush betrayed conservatism or that President Bush and the Republican leadership in congress were not conservative enough or they lost focus of the "true" core conservative values articulated by President Reagan.

The truth is, President Bush and the Republican leadership in congress faithfully executed both the Republican party’s divisive tactics of political leadership and its governing philosophy. Together they implemented the vision President Reagan articulated in his inauguration speech 28 years ago. And that vision was the repeal of the FDR's New Deal government protections for working class America.

In James K. Galbraith’s book, "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too" Galbraith makes the case that,
America is in the grip of an economic orthodoxy defined by Ronald Reagan and embraced ardently by George W. Bush. This orthodoxy rests on four pillars: 1) Cut taxes on the wealthy, 2) Reduce regulation, 3) Fear inflation above all else, and 4) Insist on free-floating currency rates. Yet mainstream economists have spent much of the past decade examining the results, and declaring them false; Supply-side stimulation is a mirage. In plain English, Galbraith shows that the Republican Party has been hijacked by political leaders who long since stopped caring if their message conforms to reality.
Obama's ambitious plans to repair the American economy have drawn comparison to the massive New Deal reforms and programs pioneered by President Franklin D. Roosevelt. Conservative Republicans, unable to intellectually accept or unwilling to honestly admit that conservative governance has led to financial calamity twice in a period of 70 years, are signaling that they are as opposed to President Obama's new "New Deal" legislation as their conservative forefathers were to FDR's New Deal legislation.

In recent weeks conservative media figures on TV and radio and conservative Republican lawmakers have attempted to counter media comparisons of Barack Obama to Franklin Roosevelt or assertions in the media that a "New Deal level of government intervention" is necessary to resolve the current economic crisis, by falsely asserting that Roosevelt's New Deal reforms and programs caused the 1930's economy depression. Assertions that the New Deal rather than Republican conservative governance during the 1920's caused the 1930's depression is flatly rejected by economists and historians. New York Times economic writer Daniel Gross debunks these false assertions writing:
It was only with the passage of New Deal efforts--the SEC, the FDIC, the FSLIC--that the mechanisms of private capital began to kick back into gear. Don't take it from me. Take it from Federal Reserve Chairman Ben Bernanke, who wrote the following in Essays on the Great Depression: "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."...

The argument that the New Deal's efforts "perhaps had prolonged, the Depression," is a canard. One would be very hard-pressed to find a serious professional historian--I mean a serious historian, not a think-tank wanker, not an economist, not a journalist--who believes that the New Deal prolonged the Depression.
Senate Minority Leader Mitch McConnell, the most powerful conservative Republican in Washington, has said he intends to delay Obama's proposed economic stimulus legislation of $1 trillion in spending and tax cuts by demanding that the Democratically controlled Senate hold lengthy committee hearings. McConnell has the ability to use his 41 Republican Senator cloture vote filibuster to block Obama's legislation, should Democrats not acquiesce to his stall tactics.

GOP House of Representatives minority leader John Boehner is also looking for ways to delay Obama's legislation with lengthy House committee meetings. Boehner is using his website to solicit opposition to Obama's new New Deal saying, "if there are any credentialed economists who are willing to say negative things about stimulus plans, please contact me."

Conservatives in the RNC are also working to exert their influence against Obama's new New Deal with a resolution circulated during the last week of December: (PDF of the resolution.)

Nobel prize winning economist Paul Krugman says, "The New Deal wasn’t as successful in the short run as it was in the long run. And the reason for FDR’s limited short-run success, which almost undid his whole program, was the fact that his economic policies were too cautious." FDR listened too much to conservatives of his day telling him to ease up on the reforms and safety-net programs.

The Republicans have begun their national introspection over the real causes of their electoral wipe out on Nov. 4, with party "leaders" debating how far right - or left - the party needs to go to regain respectable, if not winning, status. Perhaps the fastest path to respectability is for Republicans to accept responsibility for the current economic problems and join Obama in a true bipartisan venture to rebuild America.

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