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Bad Economic Policy and the Destruction of the American Economy Since the Days of President Nixon

By Andis Kaulins

Paul B. Farrell at Market Watch in his article Reagan insider: GOP destroyed economy reports on Four Deformations of the Apocalypse, a recent July 31, 2010 NY Times op-ed by David Stockman, a director of the Office of Management and Budget under President Ronald Reagan, where Stockman claims that Republican policies starting with former President Nixon bankrupted America and the Republican Party, who have abandoned sound, traditional values for bad economic policy. As Stockman writes:

"But the new catechism, as practiced by Republican policymakers for decades now, has amounted to little more than money printing and deficit finance ? vulgar Keynesianism robed in the ideological vestments of the prosperous classes.
This approach has not simply made a mockery of traditional party ideals. It has also led to the serial financial bubbles and Wall Street depredations that have crippled our economy. More specifically, the new policy doctrines have caused four great deformations of the national economy, and modern Republicans have turned a blind eye to each one."

The four deformations are summarized by Farrell as:

Stage 1. Nixon irresponsible, dumps gold, U.S starts spending binge
Stage 2. Crushing debts from domestic excesses, war mongering
Stage 3. Wall Street's deadly 'vast, unproductive expansion'
Stage 4. New American Revolution class-warfare coming soon

as he concludes:

"As the apocalypse draws near, Stockman sees a class-rebellion, a new revolution, a war against greed and the wealthy. Soon. The trigger will be the growing gap between economic classes: No wonder "that during the last bubble (from 2002 to 2006) the top 1% of Americans -- paid mainly from the Wall Street casino -- received two-thirds of the gain in national income, while the bottom 90% -- mainly dependent on Main Street's shrinking economy -- got only 12%. This growing wealth gap is not the market's fault. It's the decaying fruit of bad economic policy."

Full post as published by LawPundit on August 13, 2010 (boomark / email).