WTF is Wrong with the GOP --- Part II

Recently after reading an article by a leading conservative blaming the GOP’s recent collapse on mean words pixel-ated on Liberal Blogs, I started pondering just what the real reasons for the collapse were.  I know that there was gross incompetence, an unshakeable faith in the ideology of deregulation and unrestrained markets, corruption, avarice and George Bush.  This is all true.  But the real question is how did this toxic combination come together and place the GOP in the box it finds itself in today. 

In Part I of “What the Fuck is Wrong with the GOP,” I took a look at the origins of today’s Modern GOP finding that starting with the initially successful “Southern Strategy” as a way of realigning the South away from Democratic control to loyal Republican control, which in effect resulted in writing off the Black Vote and a reliance on White Super Majorities on election day.  We also looked at a reliance on Racial polarization and its declining returns over time, leading to the Gingrich, Bush and Rove Strategy of Getting Funky with the Fundamentalists to maintain the GOP’s percentage of the white vote.

With demographics a challenge, maybe the Party of Ideas can bring enough people back to the party or bring enough new voters to the GOP to make a difference at the ballot box.  In today’s episode of WTF is wrong with the GOP, let’s look at the core ideas of the GOP. 

True believers in Party doctrine hold a messianic belief in the power of free markets that not even Adam Smith would share.  Another tenet of this ideology (referred to as “The Old Time Religion”) centers around tax cuts.  The Old Time Religion teaches followers that cutting taxes always brings prosperity by (1) raising tax revenue (2) placing capital in the hands of privileged elites which will use their superior position and knowledge to wisely invest the capital in the market and/or (3) increase consumption.  All these three factors together along with the benefits of Deregulation unleash the Magic of the Marketplace where a rising tide lifts all boats (but beware of tsunamis, i.e., The Bush Bust). Another tenet of Party Doctrine holds that Government Institutions are inefficient and burden Markets from working at desired levels.

Now I am not an economist.  That being said, I’ll note that finer points of economic theory are a step above my pay grade but at the same time offer some inherent contradictions within current party ideology. 

First the idea that cutting taxes always raises revenue and makes it easier to balance the budget has been disproved by history.  If cutting taxes always raises revenue and helps to balance the budget, why not eliminate Taxes all Together?  Surely revenue would then go through the roof and the budget would balance itself.  The assertion that cutting taxes raises revenue is nothing more than a ruse designed to avoid discussion of the proper role of government and how to fund it.  Debate exists whether the GOP Tenet of tax cuts and the ginormous debt so spawned is a feature or a bug. Some say drown the Government a bath tub.  Others say starve the Beast.  I don’t know the answer but this inherent contradiction between burdensome debt and tax cuts is an obvious problem for the GOP that can’t be easily reconciled.

Next, if the Market is a panacea to all problems, wouldn’t an unregulated market present an inherent danger to the Old Time Religion?  An unregulated or under regulated market raise the possibility for some to game the system and in order to realize short term economic benefits while externalizing long term risks for you and me to bear.  In this instance the reckless receive all the rewards while you and I receive all the risk and end up burdened with the costs. Thus burdened with the costs, people will demand that the system be fixed and remedial regulations enacted.  

Therefore if one believes in markets as the driver of innovation and prosperity, it is axiomatic that the markets must function efficiently and fairly.  To do this there must be rule of law to prevent abuse of the system and enforcement of regulations to promote accountability.  This helps out on multiple levels. One, the rule of law is establish and two, the results are more likely to appear fair and thus gain the confidence of consumers and investors.  So in order for markets to work fairly and efficiently, there must be not only fairness but the appearance of fairness as well.  

But by all accounts in recent years enforcement was lax or non-existent and as rule sets such as Glass-Steagall, crafted in the 1930s and 40s were torn down, they were not replaced with 21^st century rule sets to address the new ways the capital moves in this century.  Instead what was left behind was a blind faith in the virtue of market participants to act with honor and integrity before self interest thus imperiling popular support for the Old Time Religion should the inevitable scandal occur.

It would seem that as the GOP has invested so much in the free market, it would do everything in its power to prevent Enron style collapses and current calamities such as the Bush Bust from occurring.  Such disasters only give impetus to change and more regulation.  Enron brought on Sarbanes-Oxley.  Who knows just what regulations the Bush Bust will lead to.  But the GOP did little to prevent the Bush Bust probably due to its blind faith in the tenets of the Old Time Religion that teaches its adherents that Government Institutions only burden the Market instead of providing a useful check and a balance against bad behavior and excess.  I suspect this is a bug within the ideology rather than a feature but it presents significant challenge for the GOP as the full consequences of Bush Style and GOP style economics provide a daily reminder of this inherent problem of unregulated capitalism to the nation for years to come. 

In Part III of WTF is wrong with the GOP will turn to torture.