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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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purificadoras de aguacompare resume servicesPharmerJoshuaNateExhaustedMD Recent comment authors
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ExhaustedMD
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ExhaustedMD

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… Read more »

Margalit Gur-Arie
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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… Read more »

Nate
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Nate

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… Read more »

Peter
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Peter

“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?

Margalit Gur-Arie
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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… Read more »

Nate
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Nate

“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.… Read more »

Margalit Gur-Arie
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“”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… Read more »

Nate
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Nate

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… Read more »

Peter
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Peter

“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… Read more »

Nate
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Nate

” 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… Read more »

Wendell Murray
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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… Read more »

Peter
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Peter

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… Read more »

PharmerJoshua
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PharmerJoshua

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… Read more »