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Karl Rove On Obama Extending Bush Tax Cuts: We’re All Supply-Siders Now!

by on Sunday, December 19, 2010 at 4:47 pm EDT in Politics, Tax Policies

The new tax cut bill, signed into law Friday by President Barack Obama, will surely come back to haunt him in his 2012 reelection campaign.  His quick capitulation to the Republicans, and aggressive advocacy for this fiscally irresponsible bill helps to further erode his credibility to one-time supporters.

First came his health care ‘reform’ bill — a backroom giveaway to BigPharma and the health insurance industry.  Then came his watered-down financial reform plan, his escalation in Afghanistan, his refusal to close Guantanamo Bay, his green-lighting the assassinations of American citizens abroad without trial, his complicity in shielding Bush war crimes, etc. etc.

Extending George W. Bush’s destructive ‘supply side’ tax policies only solidifies this President’s reputation as one who has no core principles to speak of.

Candidate Obama promised his supporters repeatedly that he would end, once and for all, the deep tax cuts for the wealthiest 2% of Americans.  To extend these tax cuts at a time when we are engaged in two wars, and with deficits skyrocketing, poses a serious threat to our country’s fiscal health.

Moody’s recently threatened to downgrade the United State’s AAA credit rating if this tax bill was signed into law.  The effects of a credit downgrade during a deep recession could be quite significant:

For the United States, a loss of the top Aaa rating, reduce the appeal of U.S. Treasuries, which currently rank as among the world’s safest investments.

“From a credit perspective, the negative effects on government finance are likely to outweigh the positive effects of higher economic growth,” Moody’s analyst Steven Hess said in a report sent late on Sunday.

After Obama announced his plan, Treasury prices fell sharply in volatile trade last week and yields have hit a six-month high, in part due to concerns over the effect the package will have on government debt levels.

If the bill becomes law, it will “adversely affect the federal government budget deficit and debt level,” Moody’s said.

Moody’s believes this tax bill will add an additional $700 to $900 billion in new national debt.  A downgrade in the US credit rating could push interest rates upwards, thereby prolonging this deepest of all recessions.

The President never even attempted to make a compelling case to the American people for Keynesian economic principles — the ones he ran on; the ones he was elected on — but instead cowardly embraced the failed trickle down policies that helped to create much of our country’s problems: including runaway debt, and redistribution of wealth from the middle class to the highest earners over the last 30 years.  His Democratic party still controls the Presidency and both Houses of Congress, and yet he is too timid to use the bully pulpit to promote any progressive policies.

The irony is, he will personally wear the new debt this bill creates around his neck like a noose.  And the blame for it will be leveled by the very Republicans to whom he capitulated.  After all, they were blaming him for Bush’s debt just ONE MONTH after he was sworn in as President.

The Republicans will shamelessly pick up where they left off a month ago: screaming that Obama has created runway deficits, and pointing out the urgency for government spending cuts.

Having caved in on extending Bush’s tax cuts for the richest 2%, he will be forced to offset the new debt by cutting important programs like Social Security, Medicare, and Medicaid.  In addition, new government spending cuts will ‘trickle down’ to impact state budgets, in the form of more layoffs for school teachers and police officers.

Instead of writing the epitaph on Bush’s failed ‘trickle down’ economic policies, Obama has instead resurrected them from the grave.

So we as a country — governed by a Democratic President — will continue to endure a deepening divide between the rich and the poor, and will continue to watch our national debt escalate in a way that won’t create a single job, but will only threaten our country’s most cherished social programs.

Karl Rove is jumping for joy over this turn of events.  After the signing of the bill, he jubilantly Tweeted:

Judging by remarks from Geithner, Hoyer & others celebrating Bush tax cut extension; we’re all supply-siders now!

Perhaps Obama should tap Rove to run his 2012 Presidential Campaign.  They appear to be on the same page on just about every issue.

War Of Words: Why Failed Theories, Like Reaganomics, Continue To Linger

by on Tuesday, December 1, 2009 at 2:55 pm EDT in Politics

The Republicans have long engaged in historic revisionism as a means of covering up a long record of failed policies and blunders.  Some of their most disastrous ideological experiments over the years, like Reaganomics, have been successfully re-framed into mythological successes.  Democrats have no one to blame for this, but themselves.  They’ve done next to nothing in setting the record straight on their own accomplishments, much less in casting Republican failures in stone.  Though the Democrats have a far superior governing record, many Americans today would never know it.

Democrats have lacked a coherent rhetorical strategy in defining their opposition.  The Republican Party’s two core ideological imperatives: Supply-Side economic policies, and neo-con foreign policies should now both ring synonymous with ‘abysmal failure’ in the American psyche.  The calamity inflicted upon this country over the last eight years by a Republican President and a Republican Congress is — politically speaking — something akin to a perfectly lobbed volleyball — set up for a game-winning spike — only to find no Democrat there to slam it home.  Democrats contend they are looking forward, not backwards.

The problem is there is a missed lesson here.  By neglecting to set the record straight (i.e. targeting failed Republican strategies) our country is bound to repeat these mistakes.  They are granting Republicans an opportunity to re-impose their failed policies on us at a later time.  Democrats MUST provide a ‘moral’ to the end of this failed Republican ‘story’.  They need to put together simple, memorable, talking points to brand the opposition in a way that conjures up their failures.  Not only would this help to provide some governing longevity for the Left, it would more importantly force Republicans to come up with new (and hopefully better) ideas.

Republicans are famous for spinning themselves away from their failures.  They are a well-oiled misinformation machine (lie, spin, repeat; lie spin, repeat; everyone on message — from Fox News to Talk Radio to political pundits).  Their greatest political achievement to date has been to sell main stream America on one of the most disingenuous branding campaigns in modern history: namely, that Republicans advocate for fiscally-sound policies (i.e. “fiscal conservatism”), and Democrats are fiscal misfits (i.e. “tax and spend liberals”).  This branding effort was so successful that Democrats were eventually forced to distance themselves from the ‘liberal’ tag in favor of the new ‘progressive’ tag.

But when you look at the historic record — and actually compare the fiscal performances (as measured by the increases in national debt) of the last five U.S. Presidents — you see these stereotypes are clearly unfounded:

Democrats (in blue), Republicans (in red)


Years As

National Debt
at Inauguration

National Debt
at End of

% Increase in Debt
Over Entire Presidency

% Increase in Debt
Per Each 4-Year Term
Jimmy Carter 4 $706 billion $994 billion 41% 41%
Ronald Reagan 8 $994 billion $2867 billion 189% 94.5%
George H.W. Bush 4 $2867 billion $4351 billion 52% 52%
Bill Clinton 8 $4351 billion $5769 billion 33% 16.5%
George W. Bush 8 $5769 billion $10413 billion 81% 40.5%

Over the last 30+ years, Democrats have clearly demonstrated sounder fiscal policies than Republicans.  In fact, Republicans have proven to be so fiscally irresponsible (Ronald Reagan, in particular ) that they can almost resoundingly be blamed for the lion’s share of our entire national debt.

The two Democratic Presidents (Carter and Clinton) created $1.706 trillion in national debt over a 12 year period, or $142 billion in debt added per year, on average.

The three Republican Presidents (Reagan, and the two Bushes) created $8.001 trillion in national debt — 80% of our entire national debt — over a 20 year period, or $400.1 billion in debt added per year, on average.

On average, Republican Presidents add between two to three times more debt per year than Democratic Presidents.

The evidence is a resounding indictment of the Republican Party’s prized economic theory — Supply-Side Economics, AKA “Trickle Down Theory,” AKA  “Reaganomics.”  And yet, there’s been no concerted effort by the Left to vocalize this fact to the public; to ensure this failed theory gets its proper cremation — its ashes tossed to the wind.

Ushered in by Ronald Reagan in 1980 to stimulate the broken economy, and abandoned by George H.W. Bush during his Presidency (he astutely labeled it “Voodoo economics” ), Supply-Side policies were given a new lease on life eight years later by George W. Bush (who pushed trillions in tax cuts for the wealthiest Americans at a time of increased federal spending).  And once again — second time around now — it resulted in MASSIVE, STAGGERING, UNMANAGEABLE DEBT!

And yet, ‘Conservatism’ as a brand, and ‘Reagonomics’ as a theory, are still somehow portrayed by the media as the the ultimate in fiscal responsibility — a depiction which barely gets challenged, even by Democrats.  Consider this: when you hear Republican pundits and politicians refer to themselves as “Reagan Republicans” how often do you hear the Democrats or media pundits call Reagan out as the fiscal disaster he actually was — a President who tripled our national debt in eight years?  It never happens.  Democrats sheepishly cede the Reagan point, as if they themselves have bought into it.  In doing this, they have given the Republicans a mythical figurehead — one they can reliably rally around, even after a disastrous calamity, like George W. Bush’s tenure.

Why didn’t the Democrats chisel out the epitaph onto the ‘Reaganomics’ hedge stone years ago?  Reagan’s tripling of the national debt should have been a key talking point after his Presidency — repeated over and over again — until it became figuratively branded onto the hide of the Republican elephant; until the real Ronald Reagan (instead of the mythical one) was etched forever into the public consciousness.  This may very well have prevented George W. Bush from vigorously reinstating the very same failed economic policies, some twelve years later.

When Paul O’Neil, George W. Bush’s Treasury Secretary, argued against a second round of tax cuts for the wealthy (the first round had been over $1 trillion dollars, ultimately added onto the national debt), Dick Cheney was quoted as having responded:

“You know, Paul, Reagan proved that deficits don’t matter. We won the mid-term elections, this is our due.”

Cheney was, essentially, correct in pointing out that Reagan paid no political price (not even after the fact) for running huge deficits.  Reagan proved to Dick Cheney that there would be little if any political backlash (as engineered by the opposition) for writing such fiscally irresponsible — though politically popular — economic policies.

In fact, it could be said that Ronald Reagan paid no price for any of his Presidential failures.  Here was a President who deployed American troops into a Lebanese Civil War against the advice of most of his military leaders.  Then on October 23, 1983, the U.S. Marine barracks in Lebanon was bombed, and 243 U.S. servicemen immediately lost their lives.  Within a few months after that, Reagan ordered all U.S. troops to make a hasty retreat.  (Note: can you even imagine how the neo-cons would portray a Democratic President who ordered troops to flee under fire?  He’d be caricatured as spinelessly weak on defense; one who humiliated the country by choosing flight over fight, in a way that displayed cowardice and could only embolden the enemy).  And yet, Jimmy Carter is the one who is ostracized to this day by the Right as weak on defense, because 53 American embassy workers were taken hostage during the Iranian revolution; never mind the fact Carter eventually secured their safe release!

Furthermore, Reagan illegally sold arms to Iran (the same regime that had just taken our 53 embassy workers hostage), laundered the money, and diverted it to the Contra terrorist group in Nicaragua.  Each of these covert operations were felonious — in clear violation of U.S. law.  The scandal resulted in 14 indictments and 11 convictions of high-ranking members of his administration.  Not only did Reagan’s administration violate numerous U.S. criminal laws, but also international laws — as ruled by the International Court of Justice

And yet Republicans routinely tout Reagan’s Presidency as one defined by fiscal responsibility, strength, fearlessness, and of high-moral clarity.  They successfully changed the name of Washington-National Airport to Ronald Reagan Airport, and then named a newly constructed federal building in our nation’s capitol after him — the most expensive building ever constructed at the time.  The Ronald Reagan Building today remains the second largest federal building, in size, after the Pentagon.

Somehow Republicans have managed to elevate this leader — a leader who had failed so dramatically on every front — to a near mythical status.  Count the number of times Republican politicians, conservative talk show hosts, Fox News pundits, Joe Scarborough, George Will, etc. evoke Ronald Reagan as the very pinnacle of conservative greatness.

The Right is already laying the groundwork to shift the blame for much of the calamity they themselves unleashed over the last eight years.  On April 15, 2009 — not even three months into Barack Obama’s first term — Republicans took to the streets in their so called ‘Tea Parties,’ laying blame for all our country’s fiscal woes at his feet.  Their vitriol bypassed their beloved George W. Bush — and instead leveled its scope directly at Obama, whom they claimed stole their country, destroyed its fiscal health, and ruined their children’s futures — all within two plus months of being sworn in.  They hope to conflate Obama’s spending to clean up Bush’s catastrophic messes with Bush’s actual catastrophic messes so that one day, they might be able to peg the Bush disaster, at least in dollar terms, on Obama.  And when confronted about George W. Bush actually deserving these honors, these Tea Partiers — while waving signs of President Obama donning a Hitler mustache — claim they are actually apolitical; just frustrated ‘fiscal conservatives,’  and add, “Bush was not a true conservative.”

This is a blatant attempt by the Republican Party to salvage its ‘fiscal conservative’ brand, after their fiscal ‘train wreck’ policies over the last eight years.  The fact of the matter is Republicans and Conservatives alike supported each and every one of Bush’s spending bills and ‘trickle down’ tax cuts for the rich.  In fact they STILL advocate for the EXACT same failed policies whenever they’re asked what policies should be implemented.  It’s all “tax cuts,” “stay in Iraq and Afghanistan,” “attack Iran,” and kill “Obama care.”

Democrats can no longer afford to let dishonest Republican rhetoric go uncontested.  The Left needs to control the narrative on the Bush years, to ensure the truth doesn’t slowly get propagandized into another work of fiction.   The Left must formulate a rhetorical strategy that targets key failed Republican ideologies: namely, supply-side economics and neo-con ideology.  These are the ideologies that created the Bush disaster, and these ideologies are still fanatically embraced by everyone on the right (outside of Ron Paul): Republicans, ‘Tea Partiers,’ and ‘Conservatives.’

Labeling and setting the record straight on failed economic theories and foreign policies is crucial to our country’s future.  As our economy continues to tank, and the Left continues to become disenchanted with President Obama as a change agent, I fear Republicans may actually get a chance at returning to power in 2012.  There will never be a more perfect time to define the opposition by its failed ideologies.  The Left must win the war of words, or else …