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Republican Economics as Social Darwinism

Picture 7 By ROBERT REICH

John Boehner, the Republican House leader who will become Speaker if Democrats lose control of the House in the upcoming midterms, recently offered his solution to the current economic crisis: “Liquidate labor, liquidate stocks, liquidate the farmer, liquidate real estate. It will purge the rottenness out of the system. People will work harder, lead a more moral life.”

Actually, those weren’t Boehner’s words. They were uttered by Herbert Hoover’s treasury secretary, millionaire industrialist Andrew Mellon, after the Great Crash of 1929.

But they might as well have been Boehner’s because Hoover’s and Mellon’s means of purging the rottenness was by doing exactly what Boehner and his colleagues are now calling for: shrink government, cut the federal deficit, reduce the national debt, and balance the budget.

And we all know what happened after 1929, at least until FDR reversed course.

Boehner and other Republicans would even like to roll back the New Deal and get rid of Barack Obama’s smaller deal health-care law.

The issue isn’t just economic. We’re back to tough love. The basic idea is force people to live with the consequences of whatever happens to them.

In the late 19th century it was called Social Darwinism. Only the fittest should survive, and any effort to save the less fit will undermine the moral fiber of society.

Republicans have wanted to destroy Social Security since it was invented in 1935 by my predecessor as labor secretary, the great Frances Perkins. Remember George W. Bush’s proposal to privatize it? Had America agreed with him, millions of retirees would have been impoverished in 2008 when the stock market imploded.

Of course Republicans don’t talk openly about destroying Social Security, because it’s so popular. The new Republican “pledge” promises only to put it on a “fiscally responsible footing.” Translated: we’ll privatize it.  

Look, I used to be a trustee of the Social Security trust fund. Believe me when I tell you Social Security is basically okay. It may need a little fine tuning but I guarantee you’ll receive your Social Security check by the time you retire even if that’s forty years from now.

Medicare, on the other hand, is a huge problem and its projected deficits are truly scary. But that’s partly because George W. Bush created a new drug benefit that’s hugely profitable for Big Pharma (something the Republican pledge conspicuously fails to address). The underlying problem, though, is health-care costs are soaring.

Repealing the new health-care legislation would cause health-care costs to rise even faster. In extending coverage, it allows 30 million Americans to get preventive care. Take it away and they’ll end up in far more expensive emergency rooms.

The new law could help control rising health costs. It calls for medical “exchange” that will give people valuable information about health costs and benefits. The public should know certain expensive procedures only pad the paychecks of specialists while driving up the costs of insurance policies that offer them.

Republicans also hate unemployment insurance. They’ve voted against every extension because, they say, it coddles the unemployed and keeps them from taking available jobs.

That’s absurd. There are still 5 job seekers for every job opening, and unemployment insurance in most states pays only a small fraction of the full-time wage.

Social insurance is fundamental to a civil society. It’s also good economics because it puts money in peoples’ pockets who then turn around and buy the things that others produce, thereby keeping those others in jobs.

We’ve fallen into the bad habit of calling these programs “entitlements,” which sounds morally suspect – as if a more responsible public wouldn’t depend on them. If the Great Recession has taught us anything, it should be that.anyone can take a fall through no fault of their own.

Finally, like Hoover and Mellon, Republicans want to cut the deficit and balance the budget at a time when a large portion of the workforce is idle.

This defies economic logic. When consumers aren’t spending, businesses aren’t investing and exports can’t possibly fill the gap, and when state governments are slashing their budgets, the federal government has to spend more. Otherwise, the Great Recession will turn into exactly what Hoover and Mellon ushered in – a seemingly endless Great Depression.

It’s also cruel. Cutting the deficit and balancing the budget any time soon will subject tens of millions of American families to unnecessary hardship and throw even more into poverty.

Herbert Hoover and Andrew Mellon thought their economic policies would purge the rottenness out of the system and lead to a more moral life. Instead, it purged morality out of the system and lead to a more rotten life for millions of Americans.

And that’s exactly what Republicans are offering yet again.

 Robert Reich served as the 22nd United States Secretary of Labor under President William Jefferson Clinton from 1992 to 1997.  He blogs regularly at robertreich.blogspot.com, where this post first appeared.

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27 replies »

  1. I do agree with all the concepts you’ve introduced in your post. They are very convincing and can definitely work. Nonetheless, the posts are very brief for beginners. Could you please prolong them a bit from subsequent time? Thanks for the post.

  2. Man, the banter is just lame at what is to be a health care blog. Both parties live and breath by their extremist elements these days, and those of us being squeezed in the middle despise them both!
    Liberals want to allegedly provide for everyone, just not from their own wallet at the end of the day, and Conservatives, well, they really would prefer the indigent and disabled would just go away, but that is not socially correct, so they cloak it with terms that are more acceptable.
    Moderates, well, I can only speak for myself, but I would like to help others learn and help themselves, and then spread the wealth of the experience so it has a positive domino effect. Some people need to be helped up, figuratively, but in the end, don’t you and the person you’re propping up resent just standing there just existing? And equally, don’t you resent the person who just throws a buck at your feet and then walks away, muttering, “spend it well”?
    This thread, moreso this post that started it, needs to be closed. It was more than offensive, it was bigoted and mean spirited. Not the environment for problem solving, EH!!!

  3. Nate, you are mixing up terms here.
    Back when the projects were built (thirties to early sixties) segregation was in full force and racism cut across party lines. The Democrats that wanted to keep whites and blacks separated were not liberal. Many Democrats today are not liberal. That’s probably why even with a majority in both Houses and a President in the White House, Democrats couldn’t manage to pass a liberal version of health care reform.
    As to the projects, you may want to look up a history of Cherry Hill in Baltimore (not that it makes any difference, but the Mayor was Republican) to understand the cross-party blatantly racist reasons why we have the mess we have now.
    You should listen to liberals because a true unconstrained liberal agenda has never been implemented. It was always some watered down compromise with conservatives, like the current “reform”.

  4. Margalit your the one that said;
    “including lily white neighborhoods where the tea party folks were growing up at that time.”
    It was lily white liberals in Democrat controlled big cities that decided to not only create housing projects but where to place them. How you and Peter manage to project any of the problems with housing projects on conservatives and the tea party is beyound me. I challenge either of you to coherently make an argument that conservatives and baby tea partiers had anything to do with it. Your projecting your racism and failure on others and I simply called you both out on it.
    “What put poor black folks into high rise ghettos, not community based housing.”
    Lily white liberals feeling morally superior to everyone else cause they were helping the poor as long as helping the poor didn’t include putting them in their lily white liberal neighborhood. Liberals own this mess, black community has no one but the democrats to blame for that. No matter how hard Margalit and Peter try to project the guilt.
    “day-care or pre-school is not a place to warehouse kids”
    Apparently that is the role of inner city public schools. 40% graduation rates, social advancement, please Margalit lecture me on how I should listen to liberals when it comes to matters like this.
    “According to you Nate”
    I can’t even follow what your trying to say Peter, why don’t you link to where I said that then maybe I’ll understand, guessing though your projecting arguments again.

  5. “And this was????”
    What put poor black folks into high rise ghettos, not community based housing.
    “Medicare I know is paid by taxes then a monthly premium. Where is this free Medicare?”
    According to you Nate the huge gap between what Medicare costs us and what we pay is what – deficit financing. Isn’t that the free part?

  6. Nate, sometimes I’m wondering if you even read what you yourself are writing….
    I know where they don’t have housing projects… That was exactly the point.
    I don’t know how much you know about raising kids, but just giving birth to a couple does not automatically qualify you to nurture multiple others. Early childhood education is a profession and day-care or pre-school is not a place to warehouse kids who get in the way of your employment.
    And it does take a village to raise a well adjusted, productive citizen. Some are fortunate enough to be able to reimburse the village. Others need to be helped temporarily by the village, so that better villages can exist in the future.

  7. “lily white neighborhoods where the tea party folks were growing up at that time.”
    Wow and Margalit takes a heaping double serving of ignorance and scarfs it all down. Seeing as how many tea party members are actually minorities I don’t see how that is possible and further basic observation would tell you most tea party members are from rural and suburban towns. They don’t have housing projects in the farm lands. Projects are strictly big city montrosities, not many tea party members from Cleveland, Detriot, and other big cities. Nice try though Margalit, you managed to waste 3 minutes.
    “government is now into employment and lifestyle arrangements.”
    Welfare and unemployement is not employement and lifestyle arrangements already? Capitalist model, what exactly do you know about that?
    ” I would prefer that someone qualified watches over those kids”
    If these moms are so bad they can’t watch kids one day a week in a supervised structure why are you allowing them to keep their own kids? That will keep you busy for a few days.
    “What needed to be done was to provide public day-care
    You mean the Clinton it takes a Village way of raising kids, just pop the kids out and government will raise them?

  8. “”But conservative white racism prevented the best solution.” And this was????”
    This was not to segregate black people in high-rise low quality crappy buildings. This was to provide nice housing all over town, including lily white neighborhoods where the tea party folks were growing up at that time.
    “Where can we find someone to watch these kids…hint peter look at the first two sentences.”
    So you would create a government structure to create special jobs that allow such arrangement and the government is now into employment and lifestyle arrangements. Not quite the capitalist model…..
    And I would prefer that someone qualified watches over those kids, just like someone qualified watches over white people’s kids in day-care.
    What needed to be done was to provide public day-care, that would be free and would be very high quality. Yes, it would have been expensive, but it would have saved lots of money and misery in a generation or two.
    Seems to me that conservatives are so terribly watchful about not having debt passed on to future generations that they forget to make any investments on behalf of those generations.

  9. I almost feel bad arguing with you Peter, like taking advantage of a disabled person.
    No idea what Clinton’s record had to do with Obama’s deficit but I think your trying to make the argument that since bush increased the national debt 4 trillion in 8 years it is then ok for Obama to increse in 2+ trillion in 2. I think they call that liberal math
    4/8=2/2…at least in Peter’s world.
    “But conservative white racism prevented the best solution.” And this was???? I love arguments so general and empty of fact you don’t have any idea what the person is talking about.
    “Yes, but if you wanted them to work then who would look after the kids?”
    Only a liberal would be to stupid to figure this out. Let me break it down in small steps you might get.
    1 million moms must stay home and can’t work becuase they have kids that need watched
    In order to work someone needs to watch the kids
    Where can we find someone to watch these kids…hint peter look at the first two sentences.
    Have them work five days at a job then one day a week at a child care center watching other kids while those mothers work.
    How much simplier of a solution could you ask for….yet Liberals never grasp it. In Las Vegas when school started there were sob stories about not having enough money to hire crossing guards and how kids were going to get ran over and killed. 100K unemployed collecting state benefit to not work and the dumb ass liberals in the state couldn’t figure out where to find some crossing guards.
    “No, we tried to expand insurance coverage.”
    No Peter Obama specifically said many times they were going to make insurance more affordable. We were promised healthcare reform would make insurance more affordable.
    “free Medicare”
    Not sure what Free Medicare is Peter, could you point me to what your talking about. Medicare I know is paid by taxes then a monthly premium. Where is this free Medicare?

  10. “President Clinton announced Wednesday that the federal budget surplus for fiscal year 2000 amounted to at least $230 billion, making it the largest in U.S. history and topping last year’s record surplus of $122.7 billion.”This represents the largest one-year debt reduction in the history of the United States,”
    “We might not be better off but we would be 1 trillion less poor.”
    Really?
    http://www.cbsnews.com/8301-500803_162-4486228-500803.html
    http://zfacts.com/p/318.html
    “We tried to help the poor minorities with housing projects.”
    Yes, we did try. But conservative white racism prevented the best solution.
    “We tried to help single moms with welfare”
    Yes, but if you wanted them to work then who would look after the kids? Child homelessness and hunger I guess is a better conservative option.
    “We tried to help the kids with public education”
    Yes, the poor were aspiring wealthy professionals prior to public Ed which stole that dream away from them.
    “We tried to lower the cost of healthcare with reform.”
    No, we tried to expand insurance coverage. Talk to the providers (like Pharma and Med PartD) and those with tax free employer coverage or free Medicare about why we didn’t cuts costs and/or add funding.

  11. ” My response was to answer aanon who seems to have the opinion that we would be better off with Republicans in control.”
    We might not be better off but we would be 1 trillion less poor.
    What does the forthcomming liberal beating mean Peter? Sounds like the electorate saying oops we weren’t happy in 06 and 08 but damn it was better then it is now.
    ” are due to 100% obstinacy from Republican Congress members on any issue”
    With 60 votes Wendell you don’t need even a single Republican to agree, why weren’t your supposed issues resolved, ignoring the fact the overwhelming majority of Americans disagree with you and don’t want what you said to happen.
    “At least the Obama Administration tries”
    Yes Wendell and his liberal catch all excuse.
    We tried to help the poor minorities with housing projects.
    We tried to help single moms with welfare
    We tried to help the kids with public education
    We tried to lower the cost of healthcare with reform.
    Yes Wendell we all know how hard you liberals TRY….the problem is you ALWAYS fail.
    “In other words the budget set by the Hoover Administration (in 2005 dollars) went from 161 billion in 1930 to 157 billion in 1933, a decrease, not a “doubling”.
    I thought smart people knew to always compare federal spending to GDP as a percent….
    15, 18, 20, 22, 22
    For the Wendells out there. To be fare the last two were 22.5 and 21.9 so technically the last year he did reduce spending

  12. In regard to the impact on voting patterns of the average voter for the elections in November, Peter’s point “Voters though expect their problems to be solved with no pain and other peoples taxes in about 6 months.”, although exaggerated, is correct. That is the fundamental cause of existing political stasis.
    The Obama Administration has made many policy mistakes: continuation of the occupations in Afghanistan and Iraq, federal government propping up of large banking companies, rather than taking them over, failure to close the concentration camp in Guantanamo Bay, etc., but most of those mistakes (with the exception of the federal bailout of large banks that has redounded to the benefit of the employees of the banks, not to the tax-payers) are due to 100% obstinacy from Republican Congress members on any issue as well as from too many Democratic Congress members.
    At least the Obama Administration tries to accurately assess conditions, then act on them, as opposed to the know-nothingness and desire to destroy all social legislation enacted over the past 100 years on the part of virtually all Republican legislators all the time. More of the same after the elections, no matter what the outcome.
    More utter nonsense from PharmerJoshua. First and foremost: according to him: “President Hoover didn’t listen to the advice of his Treasury secretary. How do I know this? Because he INCREASED spending dramatically by essentially doubling it”
    President Hoover was in office full years 1929-1932 inclusive. Federal spending and USA GDP in constant (2005) dollars from 1929-1933 were as follows. 1930-1933 would have been the years that the Hoover Administration set the federal budget:
    Year Federal budget GDP
    1929 146 billion 977 billion
    1930 161 billion 893 billion
    1931 168 billion 835 billion
    1932 163 billion 726 billion
    1933 157 billion 716 billion
    In other words the budget set by the Hoover Administration (in 2005 dollars) went from 161 billion in 1930 to 157 billion in 1933, a decrease, not a “doubling”.
    The remainder of PharmerJoshua’s comment is the usual extreme rightist nonsense that is repeated endlessly everywhere by similar individuals, always contrary to any fact and void of any knowledge or competent analysis of anything.

  13. Well Nate I guess the voters thought they didn’t fair too well as Republicans had their ass kicked in 2006 and in 2008 they voted against John McCain. I also guess that Bush’s attempt to privatize SS didn’t get much public support – aren’t we glad now. My response was to answer aanon who seems to have the opinion that we would be better off with Republicans in control. At least for the first 4 years of Bush they had complete control (“political capital to spend”) yet didn’t improve the country, which the voters seemed to notice. If you look at polls neither party enjoys a good public opinion and voting Democrat or Republican is a desperation vote, not a support vote, because there are no real alternatives. Voters though expect their problems to be solved with no pain and other peoples taxes in about 6 months.

  14. Without dancing around the issue, this is simply a matter of lying on the part of Mr. Reich. President Hoover didn’t listen to the advice of his Treasury secretary. How do I know this? Because he INCREASED spending dramatically by essentially doubling it, not cutting it, which is what small government proponents aim to do. He artificially fixed prices and wages in multiple markets. In short, he was FDR before FDR was FDR. He was in favor of increased government control, also reflected in his support from TR and the Progressives.
    Mr. Reich, you must either be willfully ignorant of American history or too dogmatic to understand what the lack of evidence does to an unsupported argument. FDR did not reverse course from what Hoover was doing; he CONTINUED the same Progressive and collectivist course at a much faster and stronger pace.
    Extending unemployment benefits does not help workers. Study after study constantly shows that workers start seriously looking for jobs once they know their unemployment benefits are going to end. Take a look outside the United States at Denmark over the past 20 years to get an even clearer picture of government dependency on steroids.
    Screaming “They will cut Medicare and Social Security!” only decreases the probability of meaningful reform and innovative solutions. I know the government is used to putting aside any remnants of innovative solutions to problems. Medicare already established the US healthcare system as socialist, not capitalist or free market. Voucherizing Medicare, along with public education and eliminating unnecessary government licensing of healthcare professions, would go a long way toward solving healthcare problems. But it will never happen with people such as yourself that demonize and reject new ideas. Government and progressive proponents have become the conservatives. Whether it be poverty or healthcare or education, the Democratic Party on the whole has stood for reducing both economic and thus political and civil rights. Good intentions, horrible outcomes. Progressives better hope we don’t start applying evidence-based medicine principles to government policy. They might be out of a job.

  15. Robert is use to playing to the NPR crowd where no one is able to think for themselves. Mindless radio for mindless listeners stuck in liberal traffic jams. He can play these projection games and they eat it up.
    “Under Bush Republicans how did middle/lower income earners fair? Were they better off after his presidency?”
    Peter you seemed confused about how America works, Congress writes and passes laws then sends them to the president for final approval. A more accurate question is how did the middle class fair under a Republican congress compared to how they faired under the Dems since 2006….you don’t like that question nearly as much do you?

  16. IDIOTIC LIBERALS
    W, you post that others are “idiotic.”
    Please stop reporting what you and OWEbama see in the mirror. Thank you, and have another miserable-liberal day.

    ” .. That along with virtual every index of thought and policy, as Prof. Reich points out, represents the ever-present attempts of Republican rightist politicians to remove any and all socially-beneficial and productive legislation passed in the last 100 years in the USA ..”

  17. Alright, if this blog is going to allow such flagrant partisan bs to be printed at a health care site that should hopefully focus first on health care, let’s call it equally here, by a decades long independent voter, who, quite frankly, find both majority parties to really just be one: Republocrats
    Democrats show their history of just wanting to ensure dependency by minority groups by superficially alleging support of such causes, and then really doing nothing of substance to change the status quo in the end. Welfare reform? Never an idea from the Democrats, only reluctantly accepted by Clinton after he saw the writing on the wall. Real immigration reform measures to address the illegal immigration by central american people? I wish the Democrats would slit their throats before insincerely yet doubtfully offering considerable legislative measures.
    And this is not letting the Republicans off the hook either. Let’s be honest, the Tea Party is just “Republican purists” who have the balls to say what the general tone of the party is about! They had both the legislative and executive branches for 6 years this decade and did nothing of real substance to help this country internally. It is incumbency that is the problem here, folks, on both sides of this putrid aisle called Congress, and the sooner we vote all these entrenched incompetents out, the sooner real change for a possible better could be realized.
    People in Ohio, make a real statement to these idiots in Congress and do not reelect Boehner so his alleged intent to ascend will be humiliated!!! Think that will get the attention for the better in DC?
    To coin a terrible source for this reply: You betcha!!!

  18. Tim and Frank both idiotic make statements as does Mr. Herrick.
    Prof. Reich’s assessment could not be any more accurate. Rep. Boehner is about as dim intellectually whether in terms of intelligence or in terms of broad-based, factual knowledge as can be. Although likely the rest of his Republican brethren in the House and Senate are roughly on the same intellectual plane.
    Rep. Ryan of Wisconsin, whose pitiful paper on changes to existing social legislation (Medicare/Medicaid and Social Security primarily) and federal tax policy is at most a rehashing of political right-wingism starting roughly 100 years ago when a federal income tax was first being enacted along with concomitant efforts at social legislation, is considered through that pitiful effort to be a serious Republican policy proposer.
    That along with virtual every index of thought and policy, as Prof. Reich points out, represents the ever-present attempts of Republican rightist politicians to remove any and all socially-beneficial and productive legislation passed in the last 100 years in the USA. No change.

  19. Tim, FDR didn’t save America from the depression, WWII did. What was WWII – massive amounts of government spending far in excess of FDR’s programs.

  20. INSANE
    As soon as Mr. Reich shows us where he and Ms. Pelosi have stored the bottomless pit of money for their crazy ideas — that’s when the public will listen to this fiscal insanity.

  21. Hoover wrecked the economy by shrinking the government but then FDR “reversed course” and saved the country? I can’t believe this silliness is still spoken out loud. This is not economics, it’s rhetoric in the service of socialism.
    How many years of the Depression would Hoover get the blame for, from the Left? Answer: all of them, as many it takes. When the economy gets better, it was because of whatever government spending program the Democrats last started; when the economy dives, it is because of whatever the Republicans did last and because the next spending is not started yet. FDR institutes massive deficit spending, the economy gets worse for years and years and years, but it is all Hoover’s fault.
    Dogma is equally friendly to all possible facts.

  22. It is one despicable thing to have Social Darwinism as the operational model for a hopefully enlightened State, but that is not quite the Republican idea, is it?
    It is quite another situation when the proposed government is of the wealthy, by the wealthy, for the wealthy.
    Should we reinstate assets ownership as a prerequisite to voting maybe? Make sure that the “rotten” rabble doesn’t vote for entitlements for itself, with total disregard for the generation of 2567….

  23. Social Security is fine with slight tweaks if both sides are forced to compromise. If anything, the SSI tax is the most regressive tax in the U.S. hands down because it isn’t even a flat tax and capped out at a relaitively low income level.
    ‘Privization’ is just an attempt by a desperate financial industry that doesn’t want the gravy train to end. They want to get their hands on the greatest and last bastion of wealth in the U.S. to play with. I am highly dubious that the federal gov’t would also just be willing to let private account holders take serious losses either without some kind of bailout.
    Medicare/Medicaid are the big problems and Reich is being a bit disingenous here about the costs/savings projected even by the GAO/CBO. There are a fair amount of taxes imposed by Obamacare on businesses and individuals and some of the proposed savings (such as dramatic provider Medicare rate cuts) are a dead end.
    Hell, even a Tea Party candidate like Noem in South Dakota who is running to the far right is advocating for ‘suffucient’ (e.g., increases) to Medicare rates to rural providers because she knows her aging constituents would vote against her in droves if he advocated a voucher program like Ryan does.
    The ‘Pledge for America’ is just as disingenous though because supposedly cuts to Social Security, Medicare/Medicaid, and anything vaguely defense-related are off the table while endless tax cuts rule the day.
    Neither side is serious about controlling spending and want to continue to spend, spend, spend but on their pet causes.

  24. “I don’t follow Reich’s logic that requiring the federal government to live within its means is going to somehow impoverish all families below the median income.”
    Devon, I guess you’ll have to define “living within its means” before we can have any meaningful discussion.
    aaron, I guess Republicans will have to give us specifics about what, where and how much they will cut before we can determine how unfair and mean they are. Under Bush Republicans how did middle/lower income earners fair? Were they better off after his presidency?

  25. I don’t follow Reich’s logic that requiring the federal government to live within its means is going to somehow impoverish all families below the median income. The unfunded liability for promises made for Social Security and Medicare is $107 trillion, when measured out to the infinite time horizon. Future generations of taxpayers will have to service that debt.
    Basically, Reich is concerned about the down-trodden of today but not terribly concerned about the effects inter-generational transfers will have on future generations. What will benefit the most people in the long run is streamlining the role of government and increasing the share of the economy that produces goods and services of value. The best form of social protection is a good job.

  26. I am not sure if Robert posted this here or not.
    I wish the far left could come up with better arguments than Republicans hate poor people, Republicans do not care about people, Republicans are mean, Republicans are cruel…. the list goes on and on.

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