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Blame Republicans for the Depression

Two fresh news items arrive to remind us again how extreme today's Republican Party is in both its policies and its tactics. If on this point I'm getting to sound like a broken record (when will we have to retire that metaphor?), sorry, but I'm not the one who cracked the vinyl. So I'll tell it and think it and speak it and breathe it, as the song says, until that fabled hard rain falls and washes these reprobates out to sea.– Daily Beast, Michael Tomasky

Dominant Social Theme: Party infighting is dooming America to a Great Depression.  

Free-Market Analysis: Michael Tomasky, a fairly partisan columnist for the Daily Beast, has written a column called "The Party of Predators" (see excerpt above) that supports the idea that America's economic difficulties are aggravated by a lack of cooperation between the Republicans and Democrats. 

This is a kind of sub-dominant social theme, that the US's fiscal and monetary situation would be much better if only America was supported by the kind of wise, elder statesmen that the electorate used to send to Washington DC. In fact, such backward-looking reminiscences are specious and confusing.            Republicans

Once upon a time, America produced 50 percent of the world's finished goods and bestrode the globe like a colossus. But that was after World War II, when almost no other significant industrial force confronted the US. It was thus easy to be a statesman, especially in the mid-20th Century.

You just had to keep your mouth shut and let the ole globe keep spinnin' along. One, in fact, only had to accept the corporatist, monetarist, militarist status quo and pretend that America's prosperity was the result of its "free-market" makeup rather than the continental decimation of two world wars.

Of course, that was then and this is now. Something has gone terribly wrong with the American exception and with the Western paradigm for prosperity generally. We have speculated that this unraveling is premeditated. The great central banking families that want one world government seem to be driving the West toward bankruptcy in order to get their way.

Yes, perhaps the economic degeneration will not cease until global governance is achieved. People will be forced to cry out in grief and pain, accepting the political, monetary, military and judicial centralization that is being planned. They will be driven toward one world government like beasts herded toward an abattoir.

Is there some other explanation that makes sense? This economic system with all its dysfunction and ruin is premeditated. It didn't just "evolve." There are central banks all over the world now, where 50 years ago there were not. Most of these report to the Swiss-based BIS. And what the heck is the BIS? Most people know more about their favorite pop stars and sports heroes than this pre-eminent organizer of international finance.

Did you ever hear a news item about the BIS? Did you ever see a reporter standing in front of the BIS, explaining what was going on inside? The BIS may as well not exist. It is part and parcel of a system that does not explain itself, or the truth of its evolution or the calculated reality of its increasingly Draconian actions.

In the place of reality, numerous memes are floated to explain the inexplicable, expanding ruin of the world. One such meme is that capitalism itself is unstable and prone to systemic breakdowns. Another is that the systems in place have not yet been perfected and more globalism is the cure.

And then there is the idea that bickering, dysfunctional leaders are causing the problems afflicting the world today. This theme is one that is promoted on and off, depending on the news events of the day. When events seem to justify it, the theme is rolled out to distract people from the real destruction that is taking place.

The real destruction has to do with an almost pathological (at this point) overprinting of paper money. Combine this debasement of currency with sky-high taxes of up to 50 or even 75 percent in some Western countries, along with a tidal wave of regulations drowning what is left of any small entrepreneurial glimmers in America and Europe and you have a recipe for ongoing global ruin.

We are not supposed to notice. We are supposed to blame the unraveling on other issues. In America, one such issue is the partisan divide between Democrats and Republicans. Tomasky is good at reporting on this divide and writing columns about how political partisanship is helping to wreck the US economy.

Tomasky has picked sides. In many of his recent columns at the left wing Daily Beast run by British import Tina Brown, Tomasky rails against Republican intransigence. The problems in the US, he tells us, would be alleviated with a dose of bipartisanship that Republicans clearly reject.

In this article, in particular, Tomasky is in fine form, calling the Republicans the "Party of Predators" and listing ways that Republicans are obstructing the business of government. In his column, he focuses on two issues. First is the difficulty that California Governor Jerry Brown is having in balancing the California state's budget.

Tomaksy points out that Brown had proposed a "perfectly fair solution: $12.5 billion in cuts, and $12.5 billion in revenue." Brown got the cuts but is upset that Republicans are refusing to raise revenue, perhaps through tax hikes.

Then there is the letter sent by senior, federal GOP officials to central banker Ben Bernanke, demanding that he cease to aggressively expand the money supply. Expanding the money supply – were currency to actually circulate – can give people the impression that they are wealthier than the really are. Their bank accounts swell, and only later does price inflation and business failure become a problem. Tomasky, however, believes in such pump priming and he is indignant that Republicans are seeking to prevent it. Here's some more:

In The New York Times, Adam Nagourney reports that California Gov. Jerry Brown has been shocked at how different the state's Republicans are, on both tactical and substantive grounds, from how they were during his first term back in the 1970s ... That's just normal Republican crazy. Our second item is abnormal Republican crazy, even for this infamous bunch. The four GOP congressional leaders – John Boehner, Mitch McConnell, Eric Cantor, and Jon Kyl – sent a letter to Fed chair Ben Bernanke warning him against further intervention in the economy.

They released the letter the day before the Fed is to announce its next steps Wednesday afternoon. "We have serious concerns," the letter said, "that further intervention by the Federal Reserve could exacerbate current problems or further harm the U.S. economy." What that sentence actually means, of course, is that they have serious concerns that an interventionist monetary policy might help the economy in the next 14 months, and thereby help Barack Obama's reelection chances.

From Robert Reich, on his blog: "To say it's unusual for a political party to try to influence the Fed is an understatement. When I was Secretary of Labor in the Clinton Administration, it was considered a serious breach of etiquette—not to say potentially economically disastrous—even to comment publicly about the Fed. Everyone understood how important it is to shield the nation's central bank from politics."

In the face of things like this, it's supposed to be controversial that Obama has decided to stop trying to meet the Republicans halfway? Meeting today's GOP halfway is like letting a sexual predator take your clothes off. You haven't been touched yet, but things are unlikely to end happily for you. Jerry Brown has learned the hard way.

Tomasky is righteously indignant, but from our point of view the problems the world is facing have little or nothing to do with a lack of leadership – even Republican leadership. This seems a hoary old chestnut promoted by the powers-that-be – that sociopolitical and economic failures stem from not having the proper wise men in power. It justifies top-down, command-and-control systems like central banking.

Tomasky is paid to disseminate this sort of meme, but we don't have to believe it. Unfortunately, if he and others like him are effective enough, perhaps at some point in this weary world's travails, a new and charismatic leader shall rise up to "lead" us to a better place. It's happened before; the elite families are happy to sponsor these sorts of destructive individuals, to fund them and help them on their way to the top.

Of course, it inevitably ends in tragedy. The best government governs least and the free market and the Invisible Hand itself are the inevitable defining elements of prosperity. Interfere with them and you have only misery and, eventually, violence. Violence (war) is doubtless on the way ...

Conclusion: Tomasky believes the US economy can be "fixed" if the Republicans would just stop playing politics and become less obstructionist. In fact, the world's woes have nothing to do with a lack of effective leadership. The problem is as always a plethora of leaders and a corresponding lack of freedom. But that's a counterintuitive idea and one the Daily Beast – led by British royalty worshipper Tina Brown – will never embrace.

SOURCE: Daliy Bell

© Copyright 2008 - 2011 All Rights Reserved. The Daily Bell is an informative compendium of independent economic views and analysis, which is published by The Foundation for the Advancement of Free-Market Thinking (FAFMT).

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