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Who is Jude Wanniski? 



How The Republican Party Has Conned America for Thirty Years
by Thom Hartmann

Odds are you've never heard of Jude, but without him Reagan never would have become a "successful" president, Republicans never would have taken control of the House or Senate, Bill Clinton never would have been impeached, and neither George Bush would have been president.

Dwight D. Eisenhower, had been quite happy with a top income tax rate on millionaires of 91 percent. As he wrote to his brother Edgar Eisenhower in a personal letter on November 8, 1954:

"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt [you possibly know his background], a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid."

Goldwater, however, rejected the "liberalism" of Eisenhower, Rockefeller, and other "moderates" within his own party. Extremism in defense of liberty was no vice, he famously told the 1964 nominating convention, and moderation was no virtue. And it doomed him and his party.

And so after Goldwater's defeat, the Republicans were again lost in the wilderness just as after Hoover's disastrous presidency. Even four years later when Richard Nixon beat LBJ in 1968, Nixon wasn't willing to embrace the economic conservatism of Goldwater and the economic true believers in the Republican Party. And Jerry Ford wasn't, in their opinions, much better. If Nixon and Ford believed in economic conservatism, they were afraid to practice it for fear of dooming their party to another forty years in the electoral wilderness.

By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections.

Everybody understood at the time that economies are driven by demand. People with good jobs have money in their pockets, and want to use it to buy things. The job of the business community is to either determine or drive that demand to their particular goods, and when they're successful at meeting the demand then factories get built, more people become employed to make more products, and those newly-employed people have a paycheck that further increases demand.

Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.

At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!

Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness. In 1976, he rolled out to the hard-right insiders in the Republican Party his "Two Santa Clauses" theory, which would enable the Republicans to take power in America for the next thirty years.

Democrats, he said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too – spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.

There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

When Reagan rolled out Supply Side Economics in the early 80s, dramatically cutting taxes while exploding (mostly military) spending, there was a moment when it seemed to Wanniski and Laffer that all was lost. The budget deficit exploded and the country fell into a deep recession – the worst since the Great Depression – and Republicans nationwide held their collective breath. But David Stockman came up with a great new theory about what was going on – they were "starving the beast" of government by running up such huge deficits that Democrats would never, ever in the future be able to talk again about national health care or improving Social Security – and this so pleased Alan Greenspan, the Fed Chairman, that he opened the spigots of the Fed, dropping interest rates and buying government bonds, producing a nice, healthy goose to the economy. 

Greenspan further counseled Reagan to dramatically increase taxes on people earning under $37,800 a year by increasing the Social Security (FICA/payroll) tax, and then let the government borrow those newfound hundreds of billions of dollars off-the-books to make the deficit look better than it was.

Reagan, Greenspan, Winniski, and Laffer took the federal budget deficit from under a trillion dollars in 1980 to almost three trillion by 1988, and back then a dollar could buy far more than it buys today. They and George HW Bush ran up more debt in eight years than every president in history, from George Washington to Jimmy Carter, combined. Surely this would both starve the beast and force the Democrats to make the politically suicidal move of becoming deficit hawks.

And that's just how it turned out. Bill Clinton, who had run on an FDR-like platform of a "new covenant" with the American people that would strengthen the institutions of the New Deal, strengthen labor, and institute a national health care system, found himself in a box. A few weeks before his inauguration, Alan Greenspan and Robert Rubin sat him down and told him the facts of life: he was going to have to raise taxes and cut the size of government. Clinton took their advice to heart, raised taxes, balanced the budget, and cut numerous programs, declaring an "end to welfare as we know it" and, in his second inaugural address, an "end to the era of big government." He was the anti-Santa Claus, and the result was an explosion of Republican wins across the country as Republican politicians campaigned on a platform of supply-side tax cuts and pork-rich spending increases.

Looking at the wreckage of the Democratic Party all around Clinton by 1999, Winniski 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..."

In reality, his tax cuts did what they have always done over the past 100 years – they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people.


The Republicans got what they wanted from Wanniski's work. They held power for thirty years, made themselves trillions of dollars, cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 8 of the non-governmental workforce today, and left such a massive deficit that some misguided "conservative" Democrats are again clamoring to shoot Santa with working-class tax hikes and entitlement program cuts.

The Two Santa Claus theory isn't dead, as we can see from today's Republican rhetoric. Hopefully, though, reality will continue to sink in with the American people and the massive fraud perpetrated by Wanniski, Reagan, Laffer, Graham, Bush(s), and all their "conservative" enablers will be seen for what it was and is. 

http://www.commondreams.org/view/2009/01/26-0


 

http://blackwaterdog.wordpress.com/2011/05/17/

 

Original Post

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That graph is called lying with statistics.

GWB was in office eight years, which included the 9-11 and Katrina disasters.

Obummer's had only been in office for a little over two years when that chart was made, and if, God forbid, he stays in for eight years, he will far surpass W.

Additionally, The Republican presidents vilified in the chart had been in office for 20 years, while, thankfully, the dems only a little over ten years. 

There are "lies, dam ned lies, and statistics"- Disraeli

 

 

1954 vs 2006 Individual Income Taxes as a Percentage of GDP

"Remarkably, despite having a much more progressive income tax rate structure with much higher income tax rates in 1954, the percentage share of GDP for both 1954 and 2006 is nearly identical, coming in at 7.8% and 7.9% respectively."

 

"We also provided the nominal (non-inflation adjusted) GDP figures for 1954 and 2006 in the chart above. Our next step was to adjust these figures for inflation and, as with the income levels previously, we adjusted these figures according to changes in the Consumer Price Index for Urban Consumers (CPI-U). Then we multiplied the results for each year by the percentage shares of GDP, which will provide the inflation adjusted revenue for each year in constant 2006 U.S. dollars. The following chart shows our final results:"

 

 

1954 vs 2006, Inflation Adjusted Income Tax Revenue [Constant 2006 USD)

"We find that revenue generated by the much flatter income tax rate structure of 2006 is nearly 4.7 times that produced by the much more progressive income tax rate structure of 1954, coming in at $1,044 billion compared to $223.1 billion respectively."

 

http://politicalcalculations.b...s-1954-vs-today.html

 

The Propagandist would choose ideology over revenue.  But, then he is the Propagandist.

 

I suggest this alternate site:

 

http://www.propagandistmag.com/our-propagandists

 

 

 

political propagandists writers columnists commentators pundits provocateurs

 

 

Interventor,

 the hole in your argument is the whole "adjusted for inflation" notion that allows your numbers to be inflated or deflated depending on the argument. In the 50's the women stayed home and the man went to work and made a fine living. Today, both working have a tough time making ends meet, and not at all, if they both work for minimum wage.

 Also missing from your corrupt propaganda is the division of wealth in America from the 50's verses today. That tells the real story.

Extra,

 

That wives did, or didn't work isn't relevant.  As waitresses and most teachers, clerical staff, sales staff and administrative staff were women, I doubt your premise.  As I was there, I know your premise is in error.

 

As only 5 percent of workers earn minimum wage or below, that statement is in error, as well.

 

In short, you're citing erroneous and irrelevant data to the argument at hand.

 

Beware the drones!

Propie,

 

From Ike's letter to his brother, on your post:

"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs..."

 

Of course, 1954 was quite different from 2011.  Social security needs reform, not abolishment.  The average life span and health of the population has increase considerably.  When social security was founded men worked until about 66.75 years.  Increasing the eligibility ages a little, using a slightly smaller inflation factor (0.25 percent less) and means testing are the most proposed changes.

 

Unemployment insurance -- now there's a plan that's expanded beyond all recognition.  From about 13 weeks to 99 weeks!  In Denmark, they are reducing the support time. 

 

Farm programs -- a program originally founded to help the family farmer, its now overwhelmingly supports agribusiness, forcing out the small farmer.  Agriculture Department need a total overhaul.  WIC and food stamp program should be moved to HHS.  This would dilute the influence of the K Street lobbyists working for agribusiness.  The farm support program should be phased out entirely over 3 to 4 years.  At least, then, the government wouldn't be supporting big farms to the detriment of small farms.  I would suggest Agriculture retain a small advisory activity for small farmers to include setting up of farmers' markets.

Originally Posted by interventor1212:

 

 

1954 vs 2006 Individual Income Taxes as a Percentage of GDP

"Remarkably, despite having a much more progressive income tax rate structure with much higher income tax rates in 1954, the percentage share of GDP for both 1954 and 2006 is nearly identical, coming in at 7.8% and 7.9% respectively."

 

"We also provided the nominal (non-inflation adjusted) GDP figures for 1954 and 2006 in the chart above. Our next step was to adjust these figures for inflation and, as with the income levels previously, we adjusted these figures according to changes in the Consumer Price Index for Urban Consumers (CPI-U). Then we multiplied the results for each year by the percentage shares of GDP, which will provide the inflation adjusted revenue for each year in constant 2006 U.S. dollars. The following chart shows our final results:"

 

 

1954 vs 2006, Inflation Adjusted Income Tax Revenue [Constant 2006 USD)

"We find that revenue generated by the much flatter income tax rate structure of 2006 is nearly 4.7 times that produced by the much more progressive income tax rate structure of 1954, coming in at $1,044 billion compared to $223.1 billion respectively."

 

http://politicalcalculations.b...s-1954-vs-today.html

 

The Propagandist would choose ideology over revenue.  But, then he is the Propagandist.

 

I suggest this alternate site:

 

http://www.propagandistmag.com/our-propagandists

 

 

 

political propagandists writers columnists commentators pundits provocateurs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Do your figures take into account population growth?

 

http://www.economicpopulist.or...s-working-age-adults

 

Do your figures take into account the explosion number of super-rich?

 

http://www.leftbusinessobserver.com/****Mess.html

 

 Even a flatter, lower tax schedule applied to more tax payers and more enormously increased incomes would yield the results. This many more people paying taxes and making so much more money are going to raise revenue, unless it's reduced to a very, very, very low rate.

 

 

http://acivilamericandebate.wo...f-income-inequality/

Last edited by The Propagandist

Propie asked if the income tax increases from 1954 to 2006 considered population increase. No, the figures were non-inflation corrected, as stated.  However, as the population double during that time period and income tax collected went up 4.7 times as much, I'd say that proves the point.  Wouldn't you!

 

To reiterate:

"We find that revenue generated by the much flatter income tax rate structure of 2006 is nearly 4.7 times that produced by the much more progressive income tax rate structure of 1954, coming in at $1,044 billion compared to $223.1 billion respectively."

 

 

Originally Posted by interventor1212:

Propie asked if the income tax increases from 1954 to 2006 considered population increase. No, the figures were non-inflation corrected, as stated.  However, as the population double during that time period and income tax collected went up 4.7 times as much, I'd say that proves the point.  Wouldn't you!

 

To reiterate:

"We find that revenue generated by the much flatter income tax rate structure of 2006 is nearly 4.7 times that produced by the much more progressive income tax rate structure of 1954, coming in at $1,044 billion compared to $223.1 billion respectively."

 

 

 

 

Then that leaves the super-rich making oh so much more money and (supposed to be) paying oh so much more in taxes. Except -- I'm sure most of their income comes capital gains (10 or 15%).

 

Oh, I forgot. Since those figures were non-inflation corrected, and inflation went up over 8 times since 1951, I'd say revenue increase of 4.7 times is pretty anemic.

 

 

The preceding chart shows the non-seasonally adjusted consumer price index since around 1950. St. Louis Fed: Series: CPIAUCNS, Consumer Price Index for All Urban Consumers: All Items I was born in 1951 and it would take $8.39 in 2010 to have the same buying power as $1 in 1951. CPI Inflation Calculator 

http://tennesseeindependent.bl...-prediction-for.html

 

Originally Posted by The Propagandist:

Thanks for The Propagandist website. Should I worry about trademark violation?

 

The artwork is a little hokey, but otherwise interesting.

 

And why didn't they give the woman in the poster a machine gun, too. Sexist fascist pigs!!!


The poster is from the WWII UK.  The second man's a miner with his drill. The woman is a Landgirl farmer.  They were fighting fascists, Propie.  Pigs were rationed.

Last edited by interventor1212
Originally Posted by The Propagandist:
Originally Posted by interventor1212:

Propie asked if the income tax increases from 1954 to 2006 considered population increase. No, the figures were non-inflation corrected, as stated.  However, as the population double during that time period and income tax collected went up 4.7 times as much, I'd say that proves the point.  Wouldn't you!

 

To reiterate:

"We find that revenue generated by the much flatter income tax rate structure of 2006 is nearly 4.7 times that produced by the much more progressive income tax rate structure of 1954, coming in at $1,044 billion compared to $223.1 billion respectively."

 

 

 

 

Then that leaves the super-rich making oh so much more money and (supposed to be) paying oh so much more in taxes. Except -- I'm sure most of their income comes capital gains (10 or 15%).

 

Oh, I forgot. Since those figures were non-inflation corrected, and inflation went up over 8 times since 1951, I'd say revenue increase of 4.7 times is pretty anemic.

 

 

The preceding chart shows the non-seasonally adjusted consumer price index since around 1950. St. Louis Fed: Series: CPIAUCNS, Consumer Price Index for All Urban Consumers: All Items I was born in 1951 and it would take $8.39 in 2010 to have the same buying power as $1 in 1951. CPI Inflation Calculator 

http://tennesseeindependent.bl...-prediction-for.html

 

If inflation were included, the taxes collected graph would show the greater increase. As you couldn't recognize the UK WWII posterr, I must assume you're neither a student of history, or math.  Just a Google cut'n paster propagandist.

Originally Posted by The Propagandist:
Originally Posted by marksw59:

Prop, I'm guessing you are either an academic, employed a a position that requires little or no real responsibility, or retired.

 

 

How'd you guess?

Those are the three foremost categories where one would have enough disposable time on your hands to spend on the internet as you obviously do. Too bad you can't put that to some good productive use.

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