It’s been over three decades now since a prominent Republican politician referred to his competitor’s trickle down economic plans as a sham and gave them a deserving name: voodoo economics. After losing to the trickle down huckster in the primaries however, George H.W. Bush gladly jumped at the opportunity to join his opponent’s ticket in the VP slot and conveniently forgot all about his critique of voodoo economics; opting instead to support and promote those very policies for the next eight years as our vice president, followed by four more years as our 41st president.
That April 1980 slag during a stump speech in Pittsburgh, Pennsylvania, where he also referred to Ronald Reagan’s tax cut philosophy as “economic madness”, appears to have been the last time any prominent politician on the right dared to utter a word against an economic policy that soon became their mantra, their religion, their raison d’etre. Businessmen and economic experts still extol it, the Republican base consider it an Unwavering Truth on par with the Constitution and the Bible, and hapless media lapdogs parrot its points uncritically despite all evidence to the contrary.
So here we are, three decades later, with a thoroughly wrecked and twisted economy after following that foolish plan through five administrations. Record levels of national debt, record levels of wealth and income disparity, record levels of economic immobility for the American worker. And instead of questioning the very premise of its assertions, instead of drawing the obvious conclusions to be gleaned from the reams of data staring out at us, we continue to allow the crazed adherents of this cult to prattle on about it and give it legitimacy despite all evidence to the contrary.
What is even more alarming is how we enable the cultists to get away with suggesting that the reason we’re all in such dire straights economically is because we haven’t followed it correctly, haven’t followed it enough. In other words, that what we need to do is to cut the tax rates on the investor class even further, eliminate the regulatory ‘burden’ on businesses entirely, slash domestic non-military spending further, and enact the painful medicine of austerity further, to get out of our present situation.
And for reasons far beyond my humble level of comprehension, these people and their fantastical nonsense somehow aren’t laughed out of the room as soon as the words leave their mouths so that the national conversation can continue in a rational manner. Rather, they’re allowed to keep talking; they’re invited back on the program, they’re treated as experts. The rare guest who dares to suggest that the Earth is actually round and that the lowest marginal tax rates in over sixty years for top tier earners has been disastrous to our economy is either treated dismissively as one who simply doesn’t understand the economy or is piled on by water-carriers always ready to regurgitate their Heritage Foundation talking points.
In a healthy democracy, the overwhelming majority of the news anchors, op-ed writers, politicians and even the general citizenry would be informed and educated enough to see through the charade for what it really is: a free market disciple’s fabrication, an oligarch’s fantasy come true. Instead, we continue to be hypnotized by the lure of voodoo economics and austerity.
Fans of austerity measures just can’t wrap their heads around basic historical and proven facts. Chief among those pesky facts is the reality that the more you pull money out of the general population’s circulation, be it through fewer jobs, reduced pay and drastically reduced local budgets, or whether through tax cuts, subsidies and wealth redistribution in favor of the wealthy few, then the less people are going to actually spend in the total economy. This then affects millions of other individuals, households and businesses who rely on that spending to take place, which then in turn adversely affects the businesses and service providers that those people buy from. Looked at another way, if you continue to reduce or choke off the creeks, streams and rivulets that feed the river, then that river is going to be a lethargic shadow of its former self. Advocating for further damage to its tributary sources won’t help the river recover, it will only hasten its drying up.
For example, proponents of austerity love to hack away at the budgetary allotments for lower income and needy families for things such as unemployment benefits or food stamps. Yet every $1 doled out via food stamps generates $1.73 throughout the nation’s economy. In the same way, the outsourcing of one company’s jobs overseas (by the ‘job creators’, of course) eliminates all of the income from wages that those U.S. workers would have spent in their local economies, as well as getting rid of all of the contributions they would have made to their respective state and federal tax reserves. This reduces the income that that company’s former domestic suppliers would have made and then paid to their workers (which they also would have spent in the economy), and eliminates or reduces the income made by the outsourced company’s local freight, sales team, insurers, lawyers, and leasers; so now all of those folks are making less and putting less back in the domestic economy as well. It’s a vicious cycle, a downward spiral of doom.
Austerity does not work, especially in times of economic duress and uncertainty. Nor does voodoo economics. It’s really time for a new national conversation on the matter, and we need to put in place some sound and effective economic policies before we can expect any kind of economic turnaround. Given the three decades of trickle down fairy tales and propaganda we’ve been forced to swallow about self-correcting free markets, lowered tax rates on the wealthiest citizens (always skipping over the fact that America’s top marginal tax rate was 70-90% from the mid-1940’s through the early 1980’s), and the practice of privatizing profit and socializing the losses for our largest multinationals, it’s going to take a while just to get over our ingrained misbeliefs and get everybody at the table.
Meanwhile, until that sobering conversation takes place, the nation suffers, as does the global economy. And thirty-two years after George H.W. Bush derided Reagan’s trickle-down economic policies as “economic madness”, everyone is still waiting for the next conservative who is brave enough, patriotic enough and sensible enough, to break free from partisan dogma and decry it as well. For the benefit of their constituents, and for the benefit of the nation.
For more food for thought, here’s an interesting recent chat on the state of our economy from Paul Krugman, who is presently making the rounds after the release of his new book “End This Depression Now!”.