Thom Hartmann looks back to the Ronald Reagan presidency to explain how Republicans seized the strategy of tax cuts and spending to counter the Democrats’ winning formula of social welfare spending. Now Republicans are threatening to force the federal government to default on the national debt, which would plunge the global economy into chaos, unless Democrats make deep cuts in social programs like Social Security and Medicare.
Hartmann writes:
The media refers to it as a debate around the debt ceiling, but it’s actually far simpler than that. And entirely political.
Back in November, a few weeks after House Republicans won the election and seized control of that body, I wrote to you warning that the House Republicans would try the same scam that Ronald Reagan first rolled out in the 1980s. I wrapped the article up with the “hope that Democratic politicians and our media will, finally, call the GOP out on Wanniski’s and Reagan’s Two Santa Clauses scam.”
So far, no soap. I haven’t heard a single mention of Two Santas in the mainstream media, and I’ll bet you haven’t, either. That’s the bad news.
The good news — perhaps — is that the scam has lost its sting after working so well for them for 42 years. President Biden and House Democrats are standing firm, saying they have no intention of negotiating around the debt ceiling with terrorists threatening to destroy our economy.
But even if it’s the last gasp of this scam, it appears House Republicans plan to go out with a bang. So let’s quickly review how Two Santas works.
Back in 1976 the Republican Party was a smoking ruin. Nixon had resigned after being busted for lying about his “secret plan to end the Vietnam War,” his involvement in the Watergate burglary, and his taking bribes from Jimmy Hoffa and the Milk Lobby. He only avoided prosecution because Gerald Ford pardoned him.
His first Vice President, Spiro Agnew, had also resigned to avoid prosecution for taking bribes.
Newspaper and television editorialists were openly speculating the GOP might implode. The Party hadn’t held the House of Representatives for more than two consecutive years since 1930(and wouldn’t until 1994), Jerry Ford had ended the War the year before in a national humiliation, the unemployment rate was over 7 percent, as was inflation after hovering around 11 percent the year before.
The Republican Party had little to offer the American people beyond anti-communism, their mainstay since the 1950s.
Americans knew it was Democrats who’d brought them Social Security, Medicare, Medicaid, unemployment insurance, subsidized college, the right to unionize, antipoverty programs, and sent men to the moon. And they knew Republicans had opposed the “big government spending” associated with every single one of them.
But one man — a Republican strategist and editorial writer for The Wall Street Journal named Jude Wanniski — thought he saw a way out. It was, he argued, a strategy that could eventually bring about a permanent Republican governing majority.
In a WSJ op-ed that year, Wanniski pointed outthat Americans thought of Democrats as the “Party of Santa” and Republicans as, essentially, Scrooge. Republicans, he noted, hadn’t even proposed a tax cut in 22 years!
The solution, Wanniski proposed, was for Republicans to start pushing tax cuts whenever the GOP held the White House. This would establish their Santa bona fides, particularly if Democrats objected. It would flip the script so Democrats would fill the role of Scrooge.
To make it even easier for Republicans to cut taxes, Wanniski invented and publicized a new economic theory called Supply-Side Economics. When taxes went down, he said, government revenue would magically go up!
Four years later, when Reagan came into the White House with the election of 1980, he picked up Wanniski’s strategy and doubled down on it. (In the primary of 1980, he’d even run on it: his primary opponent, George Herbert Walker Bush, derided it as “Voodoo Economics.”)
Reagan not only cut taxes on the rich: he also radically increased government spending, goosing the economy into a sugar high while throwing the nation deeply into debt.
Citing Supply-Side Economics, in eight short years Reagan ran up greater deficits than every president from George Washington to Jerry Ford combined, taking our national debt from around $800 billion all the way up to around $2.6 trillion when he left office.
By 1992, when Bill Clinton won the presidency, Reagan and Bush’s debt had climbed to over $4.2 trillion, giving Republicans a chance to double down on Two Santas. Bill Clinton would be their test case.
House Republicans loudly demanded that Clinton “do something!” about the national debt, waving the debt ceiling like a cudgel. Over the next eight years they repeatedly wielded the debt ceiling, shutting down the government twice. The battles lifted Newt Gingrich to the speakership.
Clinton caved, making massive cuts to the social safety net to get a balanced budget, a gut-shot to the Democratic Santa programs.
By the end of the Clinton presidency the formula was set. When Republicans held the White House, they’d spend like drunken Santas and cut taxes to the bone to drive up the national debt.
When Democrats come into the presidency, Republicans would use the debt ceiling to force them to cut their own social programs and shoot the Democratic Santa.
As I noted last November, when Clinton shot Santa Claus the result was an explosion of Republican wins across the country as GOP politicians campaigned on a “Republican Santa” platform of supply-side tax cuts and pork-rich spending increases.
Democrats had controlled the House of Representatives in almost every single year since the Republican Great Depression of the 1930s, but with Newt Gingrich rigorously enforcing Wanniski’s Two Santa Claus strategy, they used the debt ceiling as a weapon.
State after state turned red and the Republican Party rose to take over, in less than a decade, every single lever of power in the federal government from the Supreme Court to the White House.
Looking at the wreckage of the Democratic Party all around Clinton in 1999, Wanniski wrote a gloating memo that said, in part:
“We of course should be indebted to Art Laffer for all time for his Curve… But as the primary political theoretician of the supply-side camp, I began arguing for the ‘Two Santa Claus Theory’ in 1974. If the Democrats are going to play Santa Claus by promoting more spending, the Republicans can never beat them by promoting less spending. They have to promise tax cuts…”
Ed Crane, then-president of the Koch-funded Libertarian CATO Institute, noted in a memo that year:
“When Jack Kemp, Newt Gingrich, Vin Weber, Connie Mack and the rest discovered Jude Wanniski and Art Laffer, they thought they’d died and gone to heaven. In supply-side economics they found a philosophy that gave them a free pass out of the debate over the proper role of government. … That’s why you rarely, if ever, heard Kemp or Gingrich call for spending cuts, much less the elimination of programs and departments.”
Two Santa Clauses had fully seized the GOP mainstream.
Never again would Republicans worry about the debt or deficit when they were in office, and they knew well how to scream hysterically about it and hook in the economically naïve media as soon as Democrats again took power….
Please open the link and read the rest of the article.
Ah
So it’s all about DeSantis?
A Tale of Two Santa’s
It’s all about the Santas
Of GOP and Dem
And all about DeSantis
Who perpetrates the scam
“Freedom” that will lead to utter chaos…
“He (Nixon) only avoided prosecution because Gerald Ford pardoned him.”
I wonder if Traitor Trump is smart enough to realize that his best chance to beat all of the federal crimes he has committed is for the US to vote in a Republican president in 2024, probably another thug like him, that might pardon him, too.
All the Traitor has to do is avoid a serious guilty federal court verdict for about two more years. If DeSantis or another Big Lie supporting Republican runs for president, if they show up at one of the Traitor’s golf courses for a game of cheating at golf with the Traitor, the transaction made on the links may be a deal where Trump urges his voters to vote during the GOP primaries for that candidate if that candidate when elected pardons the Traitor.
The Traitor’s support might not count as much for the general election but it counts a lot for the primaries, and if you don’t win the primaries, you don’t run in the general election.
Trump will still be guilty for state crimes. A Rethuglican president cannot pardon him for those.
I have wondered lately if he is preparing a mobster in the bathroom defense. Too cuckoo to stand trial.
Yes, and sadly the main antidotes for this bait-and-switch scam are information and good public education. But Reagan–followed by Clinton–used the bait and switch to perfection when technology gave us cable and multiple channels. This allowed them and the broadcasters to say we don’t need the “Fairness Doctrine” anymore–there will be so many channels that every viewpoint will be covered. Not so. All the channels are commercial–mostly owned and operated by rich, white men–who are pluralistic on social and racial matters (good for their advertisers), but progressives like Bernie Sanders can rarely get a foot in the door, and a loudmouth like Trump can get 24-7 coverage. I don’t need to comment on what’s happened and happening to PUBLIC education, except to say teaching kids to think doesn’t seem to fit the curriculum of the multiple-test mentality that has come to dominate our schools. And even if we had the will to reverse course in education, tax cuts have decimated state budgets so that public colleges and k-12 schools are woefully underfunded. Notice, too, that a high proportion of our leaders in both parties went to private schools and colleges. I hope it’s not too late to turn this Titanic around.
It is also unfortunate that the economic policy of corporate Democrats supports much of the same ideas as the GOP. They are no friend to labor and the working class despite their claims that they are. When the chips are down, they generally cave to the demands of the GOP so that the middle class has been losing economic ground for the past forty years with ever widening income disparities.
If Democrats want to win, they need to work on a strategy that includes protecting Social Security, Medicare, public education and other public institutions, supporting common sense gun control, climate change, a single payer health care option and getting the money out of politics. The left needs to defend its real base, working families, instead of protecting the interests of corporations over the needs people.
retired teacher
Its not the Left. Democrats have caved to the GOP because the GOP wins elections. Somebody voted for them !!!!!!! NOT ME .
In spite of all the hype the GOP won the House this Year.
The party of Q and Oligarchs should not have be able to win Dog Catcher a position of dog catcher
Edit : should not have been able to win a position as dog catcher.
All variations of crap like “taxes are theft.”
yes
And underlying that GOP Santa strategy is the reactionary xtian fundamentalist mentality that the GOP has tapped into to the tune of 70M votes. I’d say that most of those votes were social issue voters and not economic issue voters.
I’d say that’s a pretty safe bet since the vast majority of these voters are hurt by the economic policies of the Republican party.
And the worse they are hurt, the more militant they become about voting Republican based purely on social issues.
It’s a downward spiral from which there is no escape.
Religion is probably the strongest form of self-denial that humans are capable of. It even counteracts the self preservation instinct.
On Faith and Fate
When humans got religion
They really sealed their fate
The world is unforgiving
When all you have is faith
Duane, see my response to you down under general comments to gain more margin space for my ridiculously long response…
https://www.tiktok.com/@texas.trey/video/7188662115106884910
Responding to Duane @ 1/22 7pm… It may or may not be true that most of them were social-issue rather than economic-issue voters. I tend to doubt it, since economy was in trashcan by Nov 2020 & more on Trumpistas’ “minds” at that point. But die-hard Trump cultists were covid-deniers, blaming shutdowns on Dem states &/or Fauci, convinced Trump would pull us out [in a way you could call that a social issue 😉]. What I question is how much influence the “Christian Nationalist” crowd had on the 2020 election—i.e., what % of the Trump cult do they comprise? Excuse me while I go data-hunting to try to figure it out.
Per Pew, 71% of 2020 Trump voters were white non-Hispanics who attend church monthly or more often. [Context: 59% of all Trump voters attended church monthly or more often (typical of Republican vote generally), while only 10% of black non-Hispanics in that category voted for Trump, and only 5% attending church less or not at all.]
The question is, how many of the 71% were either evangelists or conservative Catholics?
We know that 85% of frequently-attending white evangelicals and 81% who attended church less often voted Trump in 2020. Ditto, 63% of frequently-attending white Catholics. The white non-evangelical Protestants are different: while they generally favor Republicans, the margin was higher for Trump among the infrequent worshippers [59% Trump-40% Biden]. Regularly-attending white mainstream Prot voters are nearly split: 51% Trump-48% Biden.
For me, the question is very hard to reduce to a mathematical formula, because Pew as well as PRRI have been showing vast changes in religious affiliation between mid-2000’s to 2020 [https://www.washingtonpost.com/politics/2021/07/08/rapid-decline-white-evangelical-america/ ]. Both white evangelical Protestant and white Catholic Republican voters have lost clout—the former decreased from 37% to 29%, the latter from 20% to 15% (while white mainstream Rep voters stayed at 22%) during those 15 yrs. Meanwhile the # of unaffiliated has become a contender among Reps @ 13% (& the largest voting group among Dems at 23%) – and all that is age-driven.
Maybe you or some math maven here can figure it out. But looks to me like Christian Nationalists are not driving the equation, just providing a once-comfy, but decreasing, aging-out margin to get Reps over the hump of very close elections… Which explains why they increasingly amp up gerrymandering et al voter-suppression of the still-loyal black vote.
Terrific article, Diane, thans for posting this. Put it in my saved faves– espeially to have that Jolley quote preserved.
Food for thought related to the Faux “Crisis” around the debt ceiling:
https://truthout.org/articles/warren-debt-ceiling-crisis-wouldnt-even-exist-without-trump-tax-overhaul/
Moreover, it’s pretty clear that the “debt ceiling” not only conflicts with established law but conflicts with both Article 1, Section 8 of the Constitution and Amendment 14, section 4. It came into being as a way to control the cost of WW1, and has long-outlasted it’s purpose.
And yet, the Democrats continue to be held hostage over it by the Republicans. I hope that when the Democrats get full control, they will repeal it, along with codifying the vote, health, women’s autonomy and eliminating the filibuster among other things.
But they wont. They WILL continue to send me pleading emails to send them money. If they’re so hard up for cash, perhaps they should talk the the rich who pay no taxes, let alone even their fare share.