The Deep Delusions of The GOP Stripped Down
The Republican Party has gone from being a threat to the lives, health and wealth of working people to being a full-on threat to democracy and our republic itself.
Jamie Dimon is whining about Biden’s upcoming tax increases on rich people like himself: screw him. But more about that in a minute.
Ever since the late 1970s and early 1980s, both the Republican and Democratic parties have been operating, in part, on delusion and fantasy.
It really goes back to the 1940s and 1950s, when Franklin D. Roosevelt, Harry Truman and Dwight Eisenhower were putting America back together after the Republican Great Depression and rich people were looking for a way to reduce that 90% top tax rate and get rid of those pesky unions that FDR had legalized.
A few conservative economic “thinkers” like Milton Friedman began promoting the notion that the classical economics the world had operated on for 7000 years, referred to in that era as demand-side economics, Adam Smith economics or Keynesianism, were now out of date. Democracy was also out of date, according to these people.
Prior to this time, everyone pretty much understood that economies were sort of like football games. There were players, rules and referees.
The players ranged from the very rich to the very poor, from factory owners to workers; the rules defined how much the rich could exploit the poor and how society could protect itself from their depredations; and the referees were the government agencies that oversaw those regulations.
The main thing that informs and defines the rules, which Adam Smith wrote two books about during the Revolutionary era — particularly his Theory of Moral Sentiments — is the question, “What is best for society as a whole?”
Is the economy here to serve us, or are we here to serve the economy?
It was the essential question of democracy. The idea laid out in the Declaration of Independence that “governments are instituted among men deriving their just powers from the consent of the governed…”
As various societies have learned over the years, including ours during that time after the Republican Great Depression, having rules that protected the least powerful and most vulnerable of the “players” in the economic game actually worked to the benefit of everybody.
When workers could have unions, financial institutions were carefully regulated, and there were limits to how much wealth and power could be accumulated by an individual company or family (mostly through tax policy), it built, grew and helped society as a whole.
But Friedman and his ilk promoted the idea that in the “modern age” of the 1960s and 1970s, sending men to the moon and flying across oceans in a matter of hours, the slow and methodical process of regulating an economy through government action was out of date.
There was just no way, he said, that any government bureaucracy could have a close enough finger on the pulse of the marketplace to really know what should be regulated, when, or how.
Many of his followers, who spun off into the Libertarian and Objectivist movements before taking over the GOP, even went so far as to say that democracy was merely “mob rule” and should be replaced by an aristocracy of the very wealthy, who clearly knew what they were doing and how things worked or they wouldn’t be as rich as they were.
Friedman argued that instead of democracy — government, bureaucrats, and politicians making decisions about an economy — the largest “players” in the economy (the very, very rich) should be making those decisions because, every moment of every day, they were watching how the marketplace was moving, changing and reacting to new and different circumstances.
The “free market” would always, Friedman and his followers said, be superior to any government in terms of creating and producing the optimal outcome for all members of society. There were a million decisions a second being made in the “free market,” after all; wasn’t that a better base of data than monthly government statistics?
The key to it all, they said, was to get government out of the business of making rules for the economy or enforcing those rules. Instead, just leave that up to the ultra-rich and the barons of industry, who had all the data and knew what they were doing.
The main part of the process they were advocating was called “deregulation.” Ending oversight — regulation — of the economy by government.
Billionaire David Koch was so enamored of it that when he ran for vice president in 1980 he called for the end of virtually all federal regulatory agencies. Just leave it up to the billionaires: everything will get better.
These new economic and political ideologies circulated throughout the western world, and had their first serious tryout in 1973 when Augusto Pinochet took over Chile in a military coup and brought in Friedman and his “University of Chicago” acolytes to advise him.
Pinochet privatized the country’s Social Security program and murdered thousands who protested against him. His favorite method was throwing protesters out of helicopters, a deed memorialized on the Tee-shirts worn by numerous hard-right groups in the US during the George Floyd murder protests.
…Pinochet and his Chicago Boys did their best to dismantle Chile's public sphere, auctioning off state enterprises and slashing financial and trade regulations. Enormous wealth was created in this period but at a terrible cost: by the early 80s, Pinochet's Friedman-prescribed policies had caused rapid de-industrialisation, a tenfold increase in unemployment and an explosion of distinctly unstable shantytowns.
That seemed to be working out for the elites, so in 1978 when Margaret Thatcher came to power as Prime Minister of Great Britain she tried to follow a similar path. She smashed the nation’s largest union, the coal miners, and deregulated and then sold off much of the nation’s rail infrastructure, among other things.
That was the year some Democrats started thinking maybe there was something to this stuff. In the last two years of his administration, 1979 and 1980, Jimmy Carter deregulated the trucking and travel industries, among others.
(I speak from first-hand experience: Louise and I jumped into this “new marketplace opportunity” with a travel business in Atlanta that we started from scratch in 1983, then sold in 1986 and took a year off in Germany to do international relief work.)
In 1981, when Reagan was sworn in as president, deregulation became the official policy of the US government as he slashed regulations across whole and huge industrial sectors and begin the process of aggressively dismantling America’s unions and other worker, environmental and consumer protections.
In 1993, figuring “If you can’t beat ’em, join ’em,” Bill Clinton and the New Democrats pursued similar policies, proudly declaring an end to “welfare as we know it” and “the era of big government.” (In the UK, Tony Blair destroyed the Labour Party by doing the same thing.)
Clinton brought in slightly more liberal versions of Friedman as his economic advisers and close friends — Jamie Dimon, Lawrence Summers and “the Davos crowd”; their consensus was to keep taxes and regulations low, to stop pushing for unions, and to embrace a new policy called “austerity.” It was simply a thinly-veiled system for stripping assets and protections from poor and working-class Americans and handing them off to the very rich, some of whom were then supporting Democrats as enthusiastically as Republicans.
But here we are in 2021.
The Republican embrace of these economic delusions remains unshaken. Working class Republicans will tell you that unions are a terrible thing and that the government needs to stay out of regulating business or protecting the environment. They recite right-wing talking points about how unemployment insurance produces sloth and laziness, but tax cuts for billionaires actually energize them to do more for all of us.
Democrats, however, largely appear to be waking up. Thankfully, there was a strain of clearheaded people within the Democratic Party throughout this entire period of time.
The Paul Wellstone, Bernie Sanders, Jan Shakowsky, Sherrod Brown wing of the Democratic Party that has always supported workers’ rights, been skeptical of “free trade” and “free markets,” and knew that without good, strong rules for the game of economics the richest people will always steamroller rest of us.
As noted earlier, Clinton’s old buddy Jamie Dimon is now out there squealing about how his taxes are going to go up after his bank took billions in bailouts (some of which ended up in his pocket), but, thankfully, Democrats generally are ignoring him and his ilk. Lawrence Summers is similarly crying in his beer. They’re dinosaurs and their time is past.
In the past two weeks Joe Biden has repeatedly proclaimed, “Trickle-down economics has never worked.” He’s openly rejecting Friedman’s ideas, Reagan’s policies, and the austerity economics that the leadership of the Democratic Party have danced with for the last 30 years.
This is a Very Good Thing.
As Democrats are waking up, the GOP is sinking deeper and deeper into delusion, now embracing the idea that the losers of elections (Trump) should be declared winners and Republican-controlled state legislatures should be deciding who won elections rather than voters (the new FL/TX/IA/AZ laws).
The leadership of the Republican Party clearly understands the con they’re running, and the Big Lie that Trump is promoting and to which they’re swearing fealty. But rank-and-file Republican voters, indoctrinated by billionaire oligarch Murdoch’s Fox so-called News and other right-wing sources, are keeping to their crazy, bot-flooded Facebook rooms and sinking deeper and deeper into delusion.
The Republican Party, still clinging to Friedman’s ideas and celebrating Pinochet and Thatcher, has gone from being a threat to the lives, health and wealth of working people to being a full-on threat to democracy and our republic itself.
Thankfully, the Democratic Party is returning to its progressive FDR roots. Time will tell if the GOP returns to the real world, but the Democratic Party is off to a good start at bringing this country back to rational economics and political sanity after 40 years of crazy that even they dabbled with.
While my “daily rant” will always be free, with no advertisements, you can support our work by upgrading to a full subscription:
Ask Thom Anything: Meet with Thom and other paid subscribers in a private, zoom chat at Noon-ET/9am-PT on the first Saturday of every month. No question is off the table, and no FCC rules!
I’m also now recording my “daily rant” as an audio podcast; it goes out every day to paid subscribers just after the daily free written version is published, and can automatically push out to your podcast player.
Plus, paid subscribers, in addition to supporting our work (thank you!), can post comments on my daily rants. It’s a great way to hear from people who actually care, while keeping out the trolls and spammers.