Ruling Elite: Anti-Democratic Fiscal Conservatives

I was trying to explain why democracy matters to a conservative, but I was having a hard time.

Even though he believes in representative democracy, he has an elitist strain in that he doesn’t trust the average American, especially not the poor and minorities (even though he isn’t overtly/consciously classist and racist). He seems to think most Americans who don’t vote are simply lazy or something. He blames those who are disenfranchised rather than blaming the system that disenfranchises them. And he seems to think that the majority of Americans who support liberal policies (such as progressive taxes and social security) are simply stupid, ignorant or manipulated (in particular, what he perceives as stupid and ignorant poor minorities being manipulated by the liberal elite). But when average Americans stop being mindlessly apathetic and organize through grassroots democracy, he trusts them even less (Protesters are just violent thugs or potentially so, using force or the threat of force to unfairly get their way. How dare they try to force their majority opinion on the minority ruling elite! How dare they stop submitting to the paternalistic aristocracy that knows what is best for them!).

He does mean well (and I honestly mean that, no sarcasm implied). But he is an upper class white guy who grew up when the country was booming, when Americans were proud of their post-war global dominance, and when few would question the cultural dominance and political rule of whites and Christians. On the other hand, it was also an era of reigning liberalism (the whites and Christians ruling then were an entirely different breed than our present right-wingers). People at that time were joyfully and licentiously freed from the oppression of World Wars, the Great Depression, and Prohibition. This particular conservative and others of his generation benefited from the liberal and progressive policies that made this country great: public-funded infrastructure that helped create a massive manufacturing industry and high paying jobs, public-funded education that created a well-educated generation that didn’t go into debt becoming educated, a progressive tax rate that built the middle class, and on and on. He even worked in public-funded state universities for much of his career. But he sees none of this… or else just dismisses it or somehow sees it as not very important.

From his viewpoint: Fiscal liberals are simply naive despite having have accomplished all of these great things that he personally benefited from. And fiscal conservatives are somehow being realistic despite their policies (Starve the Beast, Two Santa Clauses theory, trickle-down economics, tax cuts for the rich, massive military spending, corporate subsidies, etc) having created and grown the permanent debt (and having eliminated the surplus when a Democrat created it with no help from Republicans)… along with, after decades of fiscal and social conservative rule, having created a society that is heading in the complete opposite direction from where society was heading during the era of liberalism and progressivism.

He basically is a libertarian, although more of what I’ve heard called an Establishment libertarian (ya know, the type that is represented by the billionaire corporatists at the CATO Institute: Rupert Murdoch, Koch brothers, etc; i.e., the plutocratic ownership class). As an upper class white man, he is largely detached from the experiences of most Americans. He is reluctant to admit that most Americans disagree with him. But even when admitting this he still dismisses that majority position. Despite his valuing freedom and fairness, despite his being personally moral, he just can’t bring himself to trust the dirty masses. He genuinely fears ‘mobocracy’. He is fine with a minimal democracy as long as it is run by a ruling elite that dismisses and ignores the majority (which is what our present government does). As someone invested in The Establishment, he has much to lose if real democracy were implemented. He seems to somewhat hold to the right-libertarian position that the rich don’t need government and the poor don’t deserve government.

Last night, I heard a perfect example of this type of person. It was on NPR and one of the guests was from the Heritage Foundation which is ultra-conservative. He argued that it would be wrong for a minority of workers to be allowed to force unionization on a majority of workers who didn’t support unionization. That is fine as far as it goes. However, it is hypocritical for someone like him to make this argument as he doesn’t trust democracy in the first place. Even if a majority of workers voted for unionization he would still consider it suspect because a majority is mobocracy (two foxes and a sheep voting on what to have for dinner; the opposite view being it’s better to have one fox and two sheep with a ‘representative’ government where the fox is the representative who decides what is best for all). Also, these kinds of right-wingers are perfectly fine with a minority ruling elite forcing their views on the majority of the population. They are being disingenuous in picking and choosing when they do and don’t want to support democracy, rather conveniently they tend to only support it when it favors their own positions and power.

It really sucks, though, to be this kind of conservative at this point in history, despite all the power conservatives wield. My conservative discussion partner mistrusts the poor, the working class (especially if unionized), minorities, traditional social conservatives (i.e., religious minorities who consistently vote Democratic), protesting activists, and the “Liberal Elite” (that he perceives as controlling the government, the media and academia). He even has some strong suspicion about big business when its involved in politics, but more because he is worried about government controlling businesses rather than the other way around. I guess the only people he truly trusts are people just like him: upper class or upper middle class, fiscally and socially conservative (i.e., right-wing) WASPs. This, of course, combines with the general conservative mistrust and sometimes outright fear of change. He is part of a shrinking demographic and all of the types of people he mistrusts are growing demographics. The fastest growing demographics are hispanics and blacks (both groups tending to be social gospel Christians), atheists and the non-religious, progressives and social liberals.

Such right-wing WASPs know they are losing political power and social influence, but they aren’t willing to relent with grace and generosity of spirit. They believe this is their country. They believe they deserve their position as the ruling elite and deserve their social and cultural dominance. This is why they’ve fought so hard in the culture wars which was their last stand and they’ve lost that war. The Tea Party was their final battle, their Last Hurrah. The average Tea Party supporter is to the right of the average Republican. And the average Republican, of course, is to the right of the average Democrat (and also to the right of the average Independent). But what many don’t know is that the average Democratic politician is to the right of the average American. These right-wing WASPs are so far right that they are starting to fall off of the end of the political spectrum.

They have good reason for worrying about their own growing irrelevance and obsolescence (aging implied as many are of an older generation). They maybe can’t save themselves at this point (at least not in their traditional role), but they sure can do massive damage to our democracy in trying to save themselves from having to share power equally and fairly with others. Pushing further to the right in reaction only guarantees and quickens the demise of their rule.

So, what is their plan to counter this seemingly inevitable trend? Obviously, democracy (including a functioning representative democracy) is the greatest enemy of their desire to maintain power and influence. But how to effectively undermine democracy while keeping a facade of democracy to keep the masses docile and obedient?

Well, propaganda is their best tool, especially considering they have the most influence over both mainstream politics and mainstream media (i.e., corporate media conglomerates). As Chomsky and others have pointed out, the propaganda model has been effectively used for a very long time. Unlike the past, ruling right-wingers can’t solely use and overtly rely upon violence to oppress the US population. More subtle methods are required: controlling the narrative of public discussion and of perceived consensus reality.

Another method is to shift the location of the reigns of power. When they ruled society through majority force and ruled culture through majority dominance (i.e., majority of WASPs), they could rule the government and so a functioning representative democracy was in some ways less of a danger. But they now mistrust the government since it has been for much of the 20th century becoming more egalitarian (by which I mean less dominated by the single demographic of male WASPs).

The neo-conservatives and neo-liberals (Establishment libertarians fitting in the latter category) have a similar strategy with only a slightly different emphasis. Both seek to privatize power or to otherwise control government by outside manipulation. This is how corporatocracy has shifted to inverted totalitarianism (a banana republic that continues to go through the motions of democracy, a puppet government ruled by a shadow government).

Other more average right-wing WASPs (such as the libertarian-leaning social conservative I was interacting with) aren’t among the ruling elite, although as upper class Americans some of them have a fair amount of influence on the ruling elite, and so they instead have a strategy of disempowering the federal government (that has been, at least in the past, the greatest force of civil rights). They do this by localizing power which means concentrating power at the local level where it can be better controlled (local religious and business organizations that are tied into the local Establishment of ruling elites, and yet also — unknowingly to the average conservative — more loosely and covertly (through professional and personal relationships) tied into the national and international Establishment of ruling elites; this being a way of ruling behind the scenes far away from the sanitizing sunshine of democracy). This is an attempt to return to pre-Progressive 19th century crony capitalism when local politicians and businessmen regularly colluded for power and profit (a time when the private army of Pinkerton agents was larger than the US military).

I should clarify an issue. Yes, there are conspiracies in the world. But most of this isn’t conspiracy. It’s just people acting in accord with other people (often family and friends) who share their interests, who share their way of viewing the world, who share their background. Humans have the tendency to identify with those like themselves and research shows this is even more true for right-wingers who are predisposed to groupthink and identity politics. The Establishment isn’t necessarily nefarious in a conscious or intentionally planned way. It simply represents the relationships shared by the upper classes (personal and professional, political and business, community and religious). The upper classes socialize with other upper class people. There is nothing surprising about that. The poor do the same, but it’s just that the poor don’t have the power and influence to form a similar establishment.

What these minarchist conservatives and right-libertarians don’t understand (or, in some cases, maybe understand perfectly fine) is that plutocrats, corporatists, crony capitalists, corrupt politicians and manipulative elites can control a small government just as easily as they can control a big government. In some ways, especially in a multiculturally diverse democracy, it probably is even easier for them to maintain their power on the local level of small government. Similarly, they can control an unregulated market just as easily as they can control a regulated market. The only thing that can stop corruption and concentration of power is a functioning democracy. The greater the democracy (i.e. the more it involves direct democracy, civic participation and grassroots activism) means the greater the protection against those who don’t want democracy.

All of this obviously makes me sad, even despairing at times. It almost makes me lose all hope in humanity. I was trying to explain to this particular conservative why a functioning democracy matters, why the majority matters. Thinking further about it, I came up with a way of explaining it which maybe conservatives could understand. It uses free market economics which they claim to love so much. Here it is:

Trying to have a democracy that ignores and dismisses the majority on a consistent basis is like trying to have a free market that ignores and dismisses the majority of small business owners and workers. A free market works (at least in theory) because there is competition. Likewise, a democracy can only work if there is competition. However, if the ruling elite clamps down on political competition by disenfranchising the majority, then that is no longer a free political system, no longer a functioning democracy. An economy where two corporations nearly monopolized every market couldn’t accurately be called a free market. So why, in context of a government where two parties nearly monopolize all politics, do we insist calling it a free democracy (or even a free republic for that matter)?

To claim the US is a functioning democracy is a convenient fiction used to assuage the guilt of our individual and collective moral failings, a way of avoiding the awareness of our individual and shared responsibility that would otherwise require individual and shared action to alleviate the injustice.

This free market metaphor for democracy might be close to reaching him in a way he could understand, but I still have doubts that he (and those like him) can be reached. His fear of commoners is just too great. He knows in his heart that most Americans disagree with him (because if he didn’t know this on some level, he wouldn’t respond with such gut-level mistrust). He’d rather disempower the majority than to risk genuine democracy (with all of its messy civic participation). As a well educated professional, he sees himself as having earned his wealth and power. Therefore, he believes his opinion is worth more than the opinion of the poor and the working class, maybe worth more than the opinion of even most of the middle class that is now struggling (the conservative belief in meritocratic rule where meritocracy is conflated with plutocracy). He isn’t entirely detached from the lower classes. He didn’t grow up super rich, but neither did he grow up poor. He just doesn’t understand, maybe can’t understand. Most importantly, he doesn’t comprehend on a gut level all of the privileges and opportunities of being a well off white male and all of the public-funded programs and polices that have allowed him to succeed. He lives in a fantasy shared by many other well off white males.

It saddens me because he is so normal, so typical. If you met him, you’d just think he was a genuinely kind and friendly person (which would be an accurate assessment on the personal level). He goes to church and he volunteers. He is always helping other people. For certain, he isn’t a greedy narcissist, a soulless sociopath, or anything like that. He simply is blind to those who are different from him. Or not exactly blind. On some level, he fears those who are different and fears what he thinks they would do to this (to ‘his’) country that he believes was built by WASPs like him. He is intelligent and well educated, but he just can’t understand.

This kind of moral split reminds me of Derrick Jensen’s analysis. In his books, Jensen describes how people become dissociated between different parts of their lives. For example, someone can do things at work that others would find emotionally distasteful or morally horrifying, and yet these people often can go home to play with their kids without any thought about what they were doing a few hours before. The two parts of their lives are absolutely split. I think a similar thing happens with personal life and politics. People can make political decisions (as politicians or as voters) about strangers that they could never make about their own loved ones or their own neighbors or the members of their own church.

When that dissociation breaks down, people make very different decisions. An example is that data shows social conservatives tend to vote against stem cell research, but if they personally know someone who could be (or could have been) saved by stem cell research they tend to vote for stem cell research. Morality can’t function when there is no personal investment and many people aren’t able to connect personally to strangers. Research, however, has shown liberals are better at and conservatives worse at empathetically connecting with strangers (it’s even a criticism conservatives make of liberals because they see caring about strangers such as foreigners as implying a split loyalty). Conservatives are what Ernest Hartmann calls thick boundary types. What this means is that a conservative makes a great surgeon in being able to disconnect their emotions from their work but also can make morally questionable decisions for the same reason of that disconnection.

As usual, I’m left with no clear conclusion, no understanding of how to move forward.

Is it simply a matter of people never changing? Is it true that change only happens when the old generation dies and new generations gain power and influence? If so, that is sad. Does this mean that in hoping for change I have to hope for the death of people like this conservative along with the death of the old generation of narcissistic Boomers (and those on the cusp of the Boomer generation) who have held onto power for far too long? That is a depressing thought. I don’t wish harm on them, but I do wish that their harm against others would end. I see the right-wing reign coming to an end and yet I fear that the after-effects of their reign could last for the rest of my life.

A Fundamental Flaw of Free Markets

This video is an explanation of the type of issue I often consider. Listening to it, it got me thinking about why this needs to be explained.

Going by the data I’ve seen, this explanation seems obvious. I honestly can’t see any other convincing explanation. Yes, some rich people are deserving, but many aren’t deserving of being as rich as they are or aren’t any more deserving (in terms of talent, intelligence, ambition, etc) than many less advantaged people.

So, why doesn’t this seem obvious to many conservatives? What keeps them from seeing it? I suspect many refuse to seriously consider the data because it contradicts their beliefs and assumptions. That is understandable. If they get all their news from Fox News, Wall Street Journal, and right-wing talk shows, they probably never (or, at least, very rarely) would even come across any data that contradicts their beliefs and assumptions. That is sad, but understandable.

Still, I doubt that this explains it all. There has to be many conservatives who are familiar with the data and yet still support the rich having advantages. Why?

Is it just team sports mentality, just rich people defending other rich people that they personally identify with as being part of their group? That makes sense psychologically. Poor people do the same thing, although less effectively since they less power.

Another explanation is that some people believe that, despite inequality being morally wrong or less than perfect, is still better than the alternative. Maybe it’s a belief that the egalitarian vision is dangerous. It’s better to have an imperfect system than to risk its destruction by trying to improve it. Certainly, some conservatives do believe this, but I find it a bit too convenient that they many rich conservatives just so happen to support the analysis that benefits them personally.

Yet another explanation is that some people are just cynical. They have theirs. Fuck everyone else. They are on top of the wall and so they kick the ladder away to ensure no one can challenge their position of power. I wonder about this. How many conservatives are this cynical? Or, if not quite this cynical, how many conservatives are to varying degrees motivated by cynicism?

I don’t ask this as a way to dismiss all conservatives and all rich people. I genuinely want to understand what motivates people, want to understand why inequality keeps growing in this country. I can’t believe it’s a mere accidental side effect of an otherwise moral system. There is a class war going on, but I don’t know how many people even see it. For those who don’t see it, what is their incentive in remaining blind to the suffering of others?

National Debt, Starve the Beast, & Wealth Disparity

See the actual cartoon at this link.

http://www.lafn.org/gvdc/Natl_Debt_Chart.html

Bill Clinton steadily reduced the debt increase while he was in office, thanks largely to the 1993 Debt Reduction Act* that was OPPOSED BY EVERY SINGLE REPUBLICAN IN CONGRESS, led by Newt Gingrich! The Republicans claimed that the Debt Reduction Act would result in HIGHER deficits and also result in an economic recession during President Clinton’s term. Obviously, with hindsight they were completely wrong. Republicans don’t seem to be very good at math, or economics.

Now, after 20 years of huge Republican deficits and Republican recessions, the National Debt has increased from $937 Billion — LESS than $1 Trillion — the day Ronald Reagan took office to ALMOST $10 TRILLION!!! The Debt has increased more than TEN TIMES what it was when Ronald Reagan promised to reduce the National Debt by 1983! We and our children and their children will be paying off the debt added by Ronald Reagan, George H.W. Bush and George W. Bush for the next 100 years and more! For what !?!? Services have been cut across America. Police and Fire Departments haven’t grown nearly as fast as our population. Even the number of troops in the military has been cut while military spending has skyrocketed!

[ . . . ]

Back in the 1980s Senator Daniel Patrick Moynihan repeatedly complained that Ronald Reagan was running up the national debt in order to bankrupt the USA so that the Federal government could no longer afford any of its social programs, from Aid to Families with Dependent Children to Social Security to Medicare to veterans’ benefits. He was right, but hardly anyone listened.

The Republicans are still trying to bankrupt the Federal government and they’re still trying to eliminate every Federal social program, not only the remnants of FDR’s New Deal but even going back to Teddy Roosevelt’s conservationist programs.

[ . . . ]

The last non-conservative Republican President, Dwight D. Eisenhower, actually DECREASED the National Debt three of his years in office. Eisenhower’s predecessor, Democratic President Harry Truman ALSO DECREASED the National Debt three times, but by far more than President Eisenhower did, in the years following the Second World War.

[ . . . ]

* (1996) A number of Republicans have sent e-mails complaining that the Congress was Democratic while Ronald Reagan was President. Unfortunately, only half the Congress was Democratic during President Reagan’s first 6 years in office, when the entire National Debt more than DOUBLED. The upper house of Congress, the U.S. Senate, had a Republican majority during those six years, which comprised most of President Reagan’s time in office. That’s why Bob Dole was the Senate Majority Leader while Reagan was President. Those Republicans also don’t seem to know that any Bill passing out of Congress had to be approved by BOTH Houses of Congress, even by the Republican Senate! Furthermore, to go into Law a Bill must be signed by the President — none other than Ronald Reagan during those critical years! President Reagan almost TRIPLED the National Debt during his eight years in office!

(1996) Other Republicans have written that the above chart couldn’t possibly be correct, because the “National Debt Clock” clicks UP all the time! Well, whoever programmed that “Clock” set its algorithm to INCREASE every second. But whoever maintains the Web site surreptitiously “adjusts” the numbers every evening after the Bureau of Public Debt publishes its new, up-to-the-minute, National Debt figures. For instance, in October 1996 the National Debt actually went DOWN over several weeks, but the “National Debt Clock” ticked UP every second of those weeks. Yet, from one day to the next the National Debt Clock’s level was often LOWER than the day before, without the “Clock” ticking backwards once!!! Must be post modern math! Perhaps that’s why the CBS finally stopped showing that “Clock” on its Evening News! Also, based on the records of recent Presidents, the “National Debt Clock” should tick upwards at a much faster rate for Republican Presidents, which it doesn’t. If you want to see the true level of the National Debt, just visit the Bureau of Public Debt website. (That text was written for the 1996 version of this chart; it is even more apt after eight years of “President” George W. Bush.)

http://counterpunch.org/pollin02222006.html

This decline in real wages, beginning in the late 1970s and accelerating sharply in the 1980s under Reagan, is also a crucial link in understanding why inflation did not rise up as unemployment fell in the 1990s, contrary to expectations of virtually every single economics textbook. The standard theory held that when unemployment gets too low, workers gain in bargaining strength. They then push up wages, and businesses pass along these additional costs in the prices they charge consumers. This means rising inflation. But beginning in the 1990s under Clinton, unemployment fell, to as low as 4.0 per cent in 2000, but inflation stayed low. What happened?Former Federal Reserve Chair Alan Greenspan’s own answer to this question (as reported by Bob Woodward in Maestro, his book-length hagiography of Greenspan) was that U.S. workers had become increasingly “traumatized” in the 1990s, and as such did not feel sufficiently secure to attempt to bargain up wages even at low unemployment. …if one would have to pick the single most important turning point over the past 30 years in the treatment of U.S. workers, I would choose Ronald Reagan’s decision to summarily fire more than 11,000 air traffic controllers who, as members of PATCO, the air traffic controllers’ union, went on strike eight months into Reagan’s presidency, in August 1982. This early attack by Reagan was followed by eight years of relentless hostility to the organized working class.

But Reagan did not attack the organized working class only. More broadly, Reaganomics entailed a dramatic new framework for fiscal policy, the area in which Mr. Roberts was likely to have primarily involved as a Treasury official. Reagan’s fiscal program was fundamentally about tax cuts for the rich, a massive expansion in military spending, sharp reductions in social expenditures, and an acceptance-or better still, an embrace-of large-scale federal government fiscal deficits on these terms. All of this should have a familiar ring to those who have followed the course of economic policy under George W. Bush.

No doubt Mr. Roberts recalls President Reagan’s frequently recounted stories about “welfare queens” driving to pick up government checks in their Cadillacs. It was through repeating stories like this that Reagan was able to build support for an assault on even the minimal welfare state programs that had been operating prior to his taking office. It is no surprise that the individual poverty rate rose from 11.9 per cent under Carter to 14.1 per cent under Reagan. ..large-scale fiscal deficits create persistent pressure for a permanent contraction in social spending by the federal government… Remember the Reaganites, as with the Bush group, apparently experienced few qualms about throwing more money to the military while cutting taxes for the already overprivileged

http://www.forbes.com/2010/05/06/tax-cuts-republicans-starve-the-beast-columnists-bruce-bartlett.html

I believe that to a large extent our current budgetary problems stem from the widespread adoption of an idea by Republicans in the 1970s called “starve the beast.” It says that the best, perhaps only, way of reducing government spending is by reducing taxes. While a plausible strategy at the time it was formulated, STB became a substitute for serious budget control efforts, reduced the political cost of deficits, encouraged fiscally irresponsible tax cutting and ultimately made both spending and deficits larger.

http://www.post-gazette.com/pg/10054/1037783-109.stm

Ever since Ronald Reagan, the GOP has been run by people who want a much smaller government. In the famous words of the activist Grover Norquist, conservatives want to get the government “down to the size where we can drown it in the bathtub.”

But there has always been a political problem with this agenda. Voters may say that they oppose big government, but the programs that actually dominate federal spending — Medicare, Medicaid and Social Security — are very popular. So how can the public be persuaded to accept large spending cuts?

The conservative answer, which evolved in the late 1970s, would be dubbed “starving the beast” during the Reagan years. The idea — propounded by many members of the conservative intelligentsia, from Alan Greenspan to Irving Kristol — was basically that sympathetic politicians should engage in a game of bait-and-switch. Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government’s fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit.

So the beast is starving, as planned. It should be time, then, for conservatives to explain which parts of the beast they want to cut. And President Barack Obama has, in effect, invited them to do just that, by calling for a bipartisan deficit commission. [ . . . ]

Why are Republicans reluctant to sit down and talk? Because they would then be forced to put up or shut up. Since they’re adamantly opposed to reducing the deficit with tax increases, they would have to explain what spending they want to cut. And guess what? After three decades of preparing the ground for this moment, they’re still not willing to do that.

In fact, conservatives have backed away from spending cuts they themselves proposed in the past. [ . . . ]

At this point, then, Republicans insist that the deficit must be eliminated but they’re not willing either to raise taxes or to support cuts in any major government programs. And they’re not willing to participate in serious bipartisan discussions, either, because that might force them to explain their plan — and there isn’t any plan, except to regain power.

But there is a kind of logic to the current Republican position: In effect, the party is doubling down on starve-the-beast. Depriving the government of revenue, it turns out, wasn’t enough to push politicians into dismantling the welfare state. So now the de facto strategy is to oppose any responsible action until we are in the midst of a fiscal catastrophe.

http://www.thefiscaltimes.com/Blogs/2010/07/14/Bartletts-Notations-Do-Tax-Cuts-Starve-the-Beast.aspx

In another Fall 2009 article, University of Mississippi economist Andrew T. Young found, contrary to starve the beast theory, that “tax increases-even temporary-may serve to decrease expenditures by forcing the public to reckon with the cost of government spending.”

In the Spring 2009 issue of the Brookings Papers on Economic Activity, University of California, Berkeley, economists Christina Romer and David Romer published an article examining the history of tax changes, which found “no support for the hypothesis that tax cuts restrain government spending; indeed, they suggest that tax cuts may actually increase spending.”In a Summer 2007 article, I thoroughly reviewed the history and development of starve the beast theory. I identify Alan Greenspan’s July 14, 1978, testimony before the Senate Finance Committee, shortly after passage of Proposition 13 in California, as the point at which starve the beast theory started to become Republican orthodoxy. Said Greenspan on that occasion, “Let us remember that the basic purpose of any tax cut program in today’s environment is to reduce the momentum of expenditure growth by restraining the amount of revenues available and trust that there is a political limit to deficit spending.”

In a Fall 2006 article, Cato Institute economist Bill Niskanen found three major problems with starve the beast theory: “(1) it is not a plausible economic theory; (2) it is inconsistent with the facts; and (3) it has diverted attention away from the political reforms needed to limit government growth.” He concluded that it is a “fantasy” to think that tax cuts would even restrain spending growth.

In a November 15, 2004, article, Brookings Institution economists William Gale and Peter Orszag looked at whether the tax cuts of the George W. Bush administration were restraining spending and found no evidence; on the contrary, they found that the abandonment of fiscal discipline on the tax side of the budget encouraged a reduction in fiscal discipline on the spending side as well.

http://www.salon.com/technology/how_the_world_works/2010/07/14/starving_the_beast_works/index.html

But decrying Republican “invincible ignorance” on the connection between tax cuts and deficits misses the point about what’s going on here. We just haven’t reached the endgame that determines whether starving the beast really works. But if California’s experience is any guide, that day will come.

If you judge the point of “starving the beast” as a strategy not to cut spending, but to break government, it all starts to make sense. By making it essentially impossible to raise taxes in California on those most able to pay, conservatives ensured that when the state hit hard times, it would have no tools to deal with a severe downturn in state revenues. California is headed for another big budget shortfall this year, and there will inevitably be more cuts in state services — particularly those aimed at the most vulnerable sectors of society, but also at the guts and sinew of basic government infrastructure — schools, police, firefighters.

For the GOP, that’s not a bug in the program, it’s a feature! We haven’t yet reached that point with the federal government, due to the fact that the U.S. can run a deficit, and California can’t, in combination with the low cost at which the U.S. can currently borrow money. But if Republicans hold the line on no new taxes, and at the same time continue their pattern of decades of failure at making politically unpopular cuts in entitlement spending, the U.S. will someday reach a point at which it is no longer so simple to operate in the red. Borrowing costs will rise, threatening either severe inflation, or the requirement of real spending cuts.

And then the U.S. government will break, just like California has. In that scenario, “starve the beast” succeeds.

http://www.informationclearinghouse.info/article15455.htm

If government can create conditions that cause a middle class to emerge, by implementing fair rules for business, progressive taxation, and free public education, the opposite is also true: government can create a corporatocracy by deregulating business, by cutting taxes on extreme wealth, and by privatizing as much of the commons as possible. Cons call this “starving the beast.”

Here’s how you starve the beast: you put through tax cuts for the rich, which cuts back the revenues of the federal government to the point that, if you got rid of all the social programs, you’d have a balanced budget. No more Social Security, no more spending for education, no more spending for Medicare and Medicaid; have the government simply keep the armies, prisons, and police. Let’s shrink government– that’s their philosophy.

When you cut all those social programs, you lose the middle class and in its place create a very small, very wealthy elite and a large underclass of starvation-wage workers. You lose democracy and instead create corporatocracy. You change the rules of the game; We the People lose, and the feudal lords win.

Cons have been winning this particular game of “starve the beast” since Reagan first started seriously playing it in 1981. They’ve done it in large part by lying to the American people; and they’ve had to do that because if they told the truth the majority of Americans would throw them out of office.

This is, after all, still a democracy. If the majority of us agree to get rid of Social Security so that only the wealthy can have retirement benefits and the old are left to fend for themselves, so be it. If a guy breaks his back and can’t work and the majority of us decide not to help people who are disabled, and as a result he has to beg on the street, well, we can democratically decide to screw him and ourselves.

But the cons are not having this debate in an open and honest fashion. They are not asking We the People if we want to get rid of, for example, the Head Start program. They could ask, “Do we want to invest in our youth now or not?” We know that if we invest in educating the very young, fewer of them will become criminals. It will save us money over the long term. But if the majority of us say, “No, we would rather pay $50,000 to imprison them later than pay $300 to put them in Head Start now,” then fine, it’s a democracy.

But that’s not the way the cons are doing it.

Instead of explaining why it would be better for Americans to give all their money to a corporate elite, they’re giving huge tax cuts to the rich while pretending that the tax cuts benefit all Americans.

Instead of arguing that Americans should not expect the right to health care or security in their old age, they are prompting a government crisis by handing to the rich money they’re borrowing from China, Japan, and Korea in the name of our grandkids. We are borrowing so much money from these countries that if they so much as blink, our currency could crash.

And that’s just what the most ideological of the con elite want. They want an economic crisis because they figure that’s the only way they can force a cut in spending on social programs.

In 2004 they thought they had starved the beast enough and sent Bush out on the campaign trail to advocate getting rid of Social Security– privatizing it, putting it in the hands of Wall Street. But it didn’t work. Turns out We the People apparently like Social Security. So the cons went back to starving the beast. Bush instead passed a new series of tax cuts, with more to follow.

The cons are trying to play the game so that the rich benefit while the rest of us lose out. They get tax cuts, and we get program cuts. That’s not the “free” market. That’s a market that’s being created for the benefit of the rich at the expense of the middle class.

George Lakoff, Moral Politics, pp 194-6:

The conservative political agenda, for example, is not merely to cut the cost of government. The conservative agenda, as we shall see, is a moral agenda, just as the liberal agenda is.

Consider, for example, the issue of the deficit. How did it get so large?

Liberals like to think of Ronald Reagan as stupid. Whether he was or not, those around him certainly were not. While constantly attacking liberals as big spenders, the Reagan and Bush administrations added three trillion dollars to the national debt by drastically increasing military spending while cutting taxes for the rich. They could count; they saw the deficit increasing. They blamed the increases on liberal spending, but Reagan did not veto every spending bill. Moreover, Reagan’s own actions acounted for much of the deficit increase. Had financial responsibility and the lessening of spending been Reagan’s top priorities, he would not have allowed such an increase in the defiicit, simply by not cutting taxes and not pushing for a military buildup far beyond the Pentagon’s requests.

While the deficit was increasing, there was a vast shift of wealth away from the lower and middle classes toward the rich. Liberals, cyncally, saw this shift as Reagan and Bush making their friends and their political suporters rich. Certainly that was the effect. It is hardly new for the friends of supporters of politicians in power to get rich. This is usually seen as immorality and corruption, and with good reason. Many liberals saw Reagan that way.

But Ronald Reagan did not consider himself as immoral. Certainly he and his staff could tell that their policies were producing vast increases in the deficit, when they had come into office promising a balanced budget. Reagan was not forced to pursue deficit-increasing policies. Why did he do so?

I would like to suggest that he pursued deficit-increasing policies in the service of what he saw as overriding Moral goals: (1) Building up the military to protect America from the evil empire of Soviet communism. (2) Lowering Taxes for the rich, so that enterprise was rewarded not punished. Interestingly, for President Reagan as for any good conservative, these policies, however different on the surface, were instances of the same underlying principle: the Morality of Reward and Punishment.

What was evil in Soviet communism, for Reagan as for other conservatives, was not just totalitarianism. Certainly Soviet totalitarianism was evil, but the U.S. had supported capitalist totalitarian dictatorships willingly while overthrowing a democratically elected communist government in Chile. The main evil of communism for Reagan, as for most conservatives, was that it stifled free enterprise. Since communism did not allow for free markets (open to Western companies) or for financially rewarding entrepreneurship, it violated the basis of the Strict Father moral system: the Morality of Punishment and Reward.

Adding three trillion dollars to the deficit actually served a moral purpose for Ronald Reagan. It meant that, sooner or later, the deficit would force an elimination of social programs. He knew perfectly well that the military budget would never be seriously cut, and that a major increase in tax revenues to eliminate the deficit would never be agreed upon. In the long run, the staggering deficit would actually serve Strict Father morality – conservative morality – by forcing Congress to cut social programs. From the perspective of Strict Father morality, Ronald Reagan looks moral and smart, not immoral and dumb as many liberals believe.

http://en.wikipedia.org/wiki/Income_inequality_metrics

File:Share top 1%.jpg

Share of pre-tax household income received by the top 1%, top 0.1% and top 0.01%, between 1917 and 2005.[9][10]

http://www.businessinsider.com/15-charts-about-wealth-and-inequality-in-america-2010-4#the-gap-between-the-top-1-and-everyone-else-hasnt-been-this-bad-since-the-roaring-twenties-1

half-of-america-has-25-of-the-wealth_0b13c_0.jpg

http://www.huffingtonpost.com/2011/05/20/bush-tax-cuts-debt_n_864812.html

http://www.cato.org/pubs/journal/cj26n3/cj26n3-8.pdf

http://www.huffingtonpost.com/lawrence-jacobs/deficits-social-security_b_630215.html

http://www.commondreams.org/view/2009/01/26-0

http://www.thomhartmann.com/blog/2009/01/transcript-obamas-economic-speech-and-two-santa-claus-theory-rant-08-january-2009

http://blogs.alternet.org/theparagraph/tag/two-santa-claus-theory/

http://www.capitalgainsandgames.com/blog/bruce-bartlett/1701/jude-wanniski-taxes-and-two-santa-theory

http://www.capitalgainsandgames.com/blog/bruce-bartlett/1705/all-time-fiscal-fallacy-tax-cuts-starve-beast

http://tibu2.blogspot.com/2009/02/republicans-iraq-and-santa-claus.html

http://d-day.blogspot.com/2009/04/two-santa-claus-theory.html

http://www.calitics.com/diary/8718/the-two-santa-claus-theory