Failed GOP Logic

Despite unemployment being stuck at 9 percent, wages stagnating at best for many American workers, and a global competition for economic dominance, the GOP claims that their so-called “mandate” from the midterm elections is “to rein in uncontrolled spending”.  The GOP’s stated main objectives are to “make Obama a one-term president” and to “repeal Obamacare”.  Their claims of determination to stimulate job growth are symbolic at best.

What are the Republicans claiming as their “mandate“?  The midterm elections certainly brought forth a fervor of discussions for change, but that change does not necessarily mean a change to GOP ideals.

Former President G.W. Bush’s sold Americans the notion that homeownership is an American Dream in which anybody should be able to attain.  The Bush Administration utilized their Supply-side economic theory.  In other words, by flooding the market with available products (in this case, homes), housing developers found themselves without an adequate amount of demand (customers).  To bridge this gap, Bush’s administration used governmental programs to lower restrictions for mortgage seekers.  By allowing more people access to affordable mortgages, despite any credit risks the new homeowners held, fed the demand for high risk mortgages.  These high risk mortgages were bundled by the financial industry as a sellable commodity, despite a zero net worth, and were sold to other financial institutions as investments.  This led to a unsustainable housing bubble, which eventually burst.  To cover the losses incurred by our financial system, TARP was instituted to provide relief for the banks and mortgage companies, not the homeowners who were preyed upon with predatory mortgages.  The victims of these predatory practices were then denounced as the cause of the crisis.

Supply-side economic theory is not a new creation.  Reagan began supply-side economic theory in 1981.  To spurn economic growth at a time of stagnation, reducing the cost to produce goods and services will benefit the consumer through lower pricing.  This is more of a tool to stave off inflation than it is to spark economic growth.  The missing factor in this theory is the ability of customers to buy.  In order to effect customer demand for the newly lower priced goods and services, debt is used to drive purchasing ability.  The crux of this theory rests on the equation, use debt to finance spending and lower taxes on manufacturing to effect lower costs goods.  Once the economy stabilized and inflation is staved off, starve the beast and drastically reduce debt.

Thirty years of supply-side theory has left consumers with a mountain of debt.  In other words, the businesses are making their profits off of the backs of indebted Americans.  Tax cuts for the upper class grew in popularity.  After all, isn’t the American dream all about gaining extreme wealth in order to pay as few taxes as possible?  Conservatives make the claim that everyone is entitled and empowered to make wealth and all it takes for economic success is hard work.  Wealth redistribution is something to be condemned.  Yet it is precisely wealth redistribution when taxes for wealthy Americans are reduced and executives enable themselves to earn 300 to 500 percent more than their average worker.  Wealth redistribution does not only apply when the wealth is from the top down, but also when it is from the bottom up.

Where will businesses find customers when the majority of Americans are barely scraping by?  The wealthiest 2 percent of Americans is simply not a sufficient enough base to sustain economic growth.  There plainly is not enough demand driving our economy.  But this is a fact which eludes GOP logic.  So long as they have theirs, that’s enough for them.  However, that is not enough for America.  Instead of seeking ways to broaden their customer base, Republicans propose lowering production costs.  Instead of seeking new job creating policies to reduce the poor, Republicans propose to deny heating assistance to reduce the poor, by allowing them to freeze to death.  But the worst offense in the Republican logic lies in how they address the issue.  Republicans ignore facts, evidence, and rely solely upon strong, sticking talking points, yet refuse to have a serious discussion over their concerns.  They have clung to the notion that they are closer to god, on faith, and they have a monopoly on effective ideas.  In other words, the Republicans believe they know best and everyone else should be damned.  Or at the least, they have not proven themselves to believe any differently.  It’s not logical; it is only reactionary.  Thus the GOP’s logic failed.