Republicans Have Royally F**ked Up
The "Two Santa Claus Theory" that helped the GOP win elections and rig the economy for 40 years has officially imploded.
by Justin Rosario
In 1974 Republican strategist Jude Wanniski came up with “The Two Santa Claus Theory” that would ostensibly ensure Republicans could never lose elections again. It is very simple and exceedingly cynical. The theory, as Thom Hartmann writes, works as follows:
First, when Republicans control the federal government, and particularly the White House, spend money like a drunken sailor and run up the US debt as far and as fast as possible. This produces three results – it stimulates the economy thus making people think that the GOP can produce a good economy, it raises the debt dramatically, and it makes people think that Republicans are the “tax-cut Santa Claus.”
Second, when a Democrat is in the White House, scream about the national debt as loudly and frantically as possible, freaking out about how “our children will have to pay for it!” and “we have to cut spending to solve the crisis!” This will force the Democrats in power to cut their own social safety net programs, thus shooting their welfare-of-the-American-people Santa Claus.
Bill Clinton went along with this by declaring the “era of big government is over”, paving the way for almost two decades of Republican economics that had devastating effects on the middle class and poor. After George W. Bush drove the economy off a cliff, Obama was left with such an enormous mess to clean up that it constrained his agenda long enough for Republicans to get back into power.
The Two Santa Claus con in practice delivered 40 years of dividends to the GOP. Record levels of poverty. A devastated middle class. More wealth accumulated by the 1% than at any other time in human history. It has been the greatest redistribution of wealth in history, and everything the GOP could hope for.
But then they got too greedy.
In 2017, Republicans passed their usual huge tax cut for the rich and then spent the rest of their time dismantling vital government programs. A less insane party might have reversed course, even if just temporarily, when Covid struck, but Republicans doubled down, depriving the country of the economic help it desperately needed.
The GOP instead doled out a trickle, giving more to the rich and just enough to allow the country to limp along without collapsing completely. It’s not entirely clear what the thought process here was. Were they hoping to keep things stable enough for Trump to win? Did they assume Trump would lose and hoped Biden would be left with a mess that would make the 2008-2009 collapse look mild in comparison? Or, did they balk at the idea of even letting a Republican president and a Republican Senate help the non-rich?
Regardless of why the GOP refused to do their job, Biden walked in the door of the White House with a wounded economy. But it was Hollywood wounded. You know, where the hero gets shot in the leg, limps for twenty minutes but then somehow shrugs it off and is back up and running full speed in time for the big action scene? We’re about to do that. With three multi-trillion dollar shots of adrenaline just to make it even more exciting.
In fact, the outlook for the economy is so good, we’re starting to hear whining about it being, I kid you not, too good…
Overheating The What Now?
As Biden’s economy starts to take off, you’re going to increasingly hear this phrase: “Overheating (or overcooking) the economy.” The overly simplified idea is that if we peasants have too much money, we’ll do something stupid, like spend it. That will lead to inflation, when the prices for goods spiral out of control, and then we’ll all be poor again.
The funny thing about inflation is that it only seems to be a concern when a Democrat is president. There was an awful lot of hand-wringing over inflation during the Obama years and this fear was used to justify the austerity that hurt millions. In fact, it was almost exactly twelve years ago when economist Paul Krugman noticed the inflation scare-mongers swing into action:….
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