Saturday, June 9, 2012

Hey Einstein, go figure.

When you say Albert Einstein, the first thing you’ll often hear is E=MC2, theories of relativity, patent clerk, quantum physics, and opposition to atomic weapons.  No doubt the man was a brilliant innovative scientist and there are hundreds of quotes attributed to him regarding science and humanity.  I have taken the liberty to reference two such quotes to frame the Republican party and all those that support what was once grand, but is now just old.

Since the end of World War II, administration after administration, Democrat and Republican alike,  worked hard to keep deficit spending under control while fiscal policy addressing spending and taxation were adjusted based on economic conditions.  That all went out the window when the uber Keynesian Ronald Reagan took office and eight years later, the ‘staunch conservative’ had tripled the national debt.  Along with this reckless spending and tax giveaways, the free market maven started the nation down a path of excessive deregulation that G H.W. Bush and Clinton eagerly continued. 

 Insanity: doing the same thing over and over again and expecting different results.
We cannot solve our problems with the same thinking we used when we created them.

All of that still paled in comparison to the work of the economic genius George W. Bush and his free market fanatical spend and borrow, and cheap money administration.  While the Clinton administration was able to actually create a balanced budget and debt to GDP dropped significantly, all of that was blown away when Bush-Cheney-Rumsfeld and the rest of the Nixon-Ford-Reagan refurbished retreads came back to town.  Dick ‘deficits don’t matter’ Cheney made sure that like Reagan defense spending skyrocketed, tax cuts unapologetically benefiting the richest were enacted, two unfunded wars were waged, and a post-9/11 security fueled government spending binge resulted in another doubling of the debt from $5Trillion to $10Trillion.

Insanity: doing the same thing over and over again and expecting different results.
We cannot solve our problems with the same thinking we used when we created them.
Since 1980 we have experienced 20 years of Republican White House, 11 years of a Democratic White House.  The Democrats have controlled the Senate for 14 years versus 17 for the Republicans, while in the House the Democrats had control for 20 and The Republicans 11.  And both parties have controlled both the executive and legislative branches for six year periods.  It is safe to say that since 1980 when spending exploded both parties have had a hand in it, the difference being one party, the Republicans, claim to be economic and financial conservatives.  While the Democrats where vilified with the phrase tax and spend, the Republicans were borrow and spend; and boy did they ever.  In fact they were so good at it, they actually produced the New American Exceptionalism.  Yes, an entire national cultural identity of spending beyond one’s means took off; the only exceptionalism were the Americans who lived within their means as a result of intelligence and a proper upbringing.

Our unfettered fiscal policy was matched by a unencumbered monetary policy within a wild west unconstrained attack on regulation.  The same regulations that had protected the economy and the taxpayer since the Great Depression had become an inconvenient truth for both Democrat and Republican alike.  Rubin, Clinton, Summers, Geithner, Bernanke, Paulson, Greenspan, O’Neill, Baker, Regan, etc. all went about dismantling banking regulations while blocking the calls for new regulations to monitor the emergence of newer more complex financial weapons of mass destruction such as CDO’s CDS, and some asset backed securities.   It was off to the races.

 Insanity: doing the same thing over and over again and expecting different results.
We cannot solve our problems with the same thinking we used when we created them.

And what happened? We suffered through a series of banking crises in the 1980’s, followed by the collapse of Long Term Capital Management.  In the non-financial sector corporate malfeasance at Enron, WorldCom, Adelphi, Tyco, Arthur Andersen, and others led to the failure of companies, the wiping out of savings, and the destruction of shareholder value.  All of which were mere nuisances  compared to the Great Recession of 2008 that nearly brought the global economy to its knees.  Bear Stearns, Lehman Brothers, Wachovia, Merrill Lynch, and thousands of banks and businesses went out of business.  Yes the very controls and common sense that had guided this country from the Great Depression to the 1980’s had been  swept aside.  Risk management had been replaced with leverage, common sense replaced with gambling, saving replaced debt, intelligence replaced by exuberance,  and all the while our fiscal and monetary policies fed the beast.

Insanity: doing the same thing over and over again and expecting different results.
We cannot solve our problems with the same thinking we used when we created them.

So now we have Mitt Romney and his economic plan representing the Republican Party in 2012.  And who does he surround himself with?  Glenn Hubbard,  dean of Columbia Business School and the former chairman of the President George Bush’s Council of Economic Advisors, Vin Weber, former Gingrich protégé, Kevin Hassett, former economic advisor to both George W. Bush and John McCain, and Gregory Mankiw, current Harvard professor and ALSO former chairman of George W. Bush’s council of economic advisors.  And what is Romney’s economic plan entail?

Further tax cuts for the rich, increased military spending, corporate tax cuts, and ultimately increased income disparity in America.  The man has picked the same team that ran this country into the 21st century dustbowl.  Oh what does Romney say he will do on Day One?  Revoke Dodd-Frank and Sarbanes-Oxley.  The two laws created to return some level of oversight, control and regulation to corporations.  These laws are far from perfect and contain too many loopholes for bad business practices and I would love to see them replaced with more streamlined effective and efficient laws.  Unfortunately, Romney isn’t offering replacement, just revocation.

Insanity: doing the same thing over and over again and expecting different results.
We cannot solve our problems with the same thinking we used when we created them.

I guess you don’t need to be a quantum physicist to realize that Republican policies are bad for America.  What’s astonishing is the not-so-Grand  Old Party of greying whites continues to trot out the same failed fiscal flops and Americans think it will work.  I guess a sucker is born every minute.
Insanity: doing the same thing over and over again and expecting different results.
We cannot solve our problems with the same thinking we used when we created them.


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