Today, the US Congress prepares to hopefully present a stimulus package for President Obama’s signature. Economists agree that this is necessary, both in purpose and scope, to prevent further caving in of both American and world economies. The package now making the rounds of Capitol hallways is more balanced than either of the proposals to emerge from the separate houses of Congress. The GOP complains still, despite enormous Democratic concessions, that the bill is partisan and wasteful. But, in their arguments, the Republicans largely prove themselves ignorant or misleading about history, particularly the New Deal and successful economic stimulus. This stimulus package, though not quite representing the best hopes of the White House, does show more promise than the separate packages proposed by either the House of Representatives or the Senate.
The final stimulus has come out, and it looks like an improvement over either version previously negotiated by the House of Representatives and the Senate. In light of Republican intransigence during the earlier separate negotiations, large corporations have lost some of their tax cuts, while small businesses, the true drivers of employment in the US, have been favored with new cuts. On this balance, Congress has struck a note for equity in the American business milieu. The large corporations that have been generally responsible, through crass mismanagement and unbridled greed, for our current economic crisis, gone to the government for assistance, and historically paid less in taxes than middle class America, have lost out to those who have been responsible, self-reliant, and productive. The corporate favor-seeking GOP has been largely denied in its misguided attempts to secure greater concessions for the wealthy, whose interests are the only ones they truly represent. People, any country’s most important commodity, have been generally placed ahead of institutions. Most of the special ear-mark funding presented by Democrats in the original House package has been trimmed, while education and unemployment have been bolstered from the cuts made in the Senate.
Talk about gracious winners and sore losers. Though the White House and Congressional Democrats offered the GOP nearly 80% of their demands in tax cuts, the Republicans continue to lambast the package as inappropriate, partisan and wasteful. Most economists’ analyses show that the only ones proposing genuinely inappropriate, partisan, and wasteful modifications to the stimulus are the Republicans. The continuing cry for the now mantric tax cuts for the wealthy show that the GOP cannot or will not learn from the past. It is evident that, in the future, the Democrats should offer the Republicans nothing at the start of any legislative negotiations and thereby prevent wholesale concessions which, in the end, reduce the overall effectiveness of inspired and better reasoned attempts to address GOP-wrought American economic woes.
The GOP argues constantly that FDR’s New Deal didn’t pull us out of the Great Depression, and they are correct. What happened, though, is not exactly the truth that Rush Limbaugh and the GOP attempt to describe. In 1933, at the start of the New Deal, unemployment was at 25%; by 1938, unemployment had shrunk to 10%, an obvious sign of success. From 1933 until 1937, when the New Deal was firmly in place, the American economy grew by 13% annually. In concessions to Republicans and “Blue Dog” Democrats (economically conservative), FDR scaled back government spending, and the recovery stagnated, until 1941, when World War II forced an unprecedented amount of government spending, which broke the stagnation imposed by fiscal conservatives. After the conservative spending restrictions of 1937-38, economic growth slowed to 10% annually while unemployment again rose, but only to about 15%, until the start of World War II. So, the New Deal, in all likelihood, would have broken the Great Depression by 1940, if fiscal conservatives had not been appeased. This re-contraction points only to the success of the New Deal usurped by fiscal conservatism. One telling failure of the modern Republican/Rush/conservative argument to explain all of this is illustrated by the consistent electoral return of FDR to the White House. Apparently, if the conservative argument is accepted, New Deal policies were so out of favor that the people of the US wanted to see the same man in charge. Like most GOP arguments, the logic doesn’t follow.
Although assigning responsibility for our current economic mess may seem like playing the “blame game”, it is actually fundamentally necessary to foment understanding of the problem and its underpinnings. Only by addressing the who, what, where, when, how, and why of the financial crisis can the solutions for the present and preventions for the future be found. This issue goes beyond party and required a bi-partisan approach. In the end, the party and its supporters who, in encouraging the meltdown, proved its philosophies wrong had nothing new to offer.
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