Now that John McCain has doubled down on his insistence that the “fundamentals of the economy are strong,” and Sarah Palin has announced to Charlie Rose that all that is needed is for the government to get out of the way of the private sector, it’s time to remember that this is exactly the ideology of the Republican party in the 20’s and the theme of Herbert Hoover’s 1932 campaign.
Now to be sure, McCain is trying to explain away his previous remarks by saying that he was talking about the strengths of American workers, implying nonsensically that Obama and the Democrats somehow were blaming the victims. Let’s stipulate that the fundamentals of the economy were not strong in 1937. Was that the fault of the American worker? Obviously not. So McCain’s formulation is nonsense–on a par with the rest of his understanding of economics.
McCain is now promising a few marginal reforms around the edges, turning our economic problems into a minor moral crusade–more symbolism than substance. He promises to hit CEO bonuses and Wall Street speculation in unspecified ways– despite never having supported any such reform in the past. But you can be sure he will do nothing that will cause his rapacious capitalist de-regulator friend and quasi-disgraced national campaign Co-Chair Phil Gramm any discomfort, and that he will continue to be against increases in the minimum wage and any structural change in the economy or tighter regulation of business by government.
We need to go back to a government that is for all the people, and not just the rich. In the end, the rich (as opposed to a few beneficiaries of corruption and speculation) will do better under Democrats than Republicans, along with the economy as a whole. Trickle-up works, while trickle-down doesn’t These are the plain economic facts of the past eighty years.
It’s worth remembering what Roosevelt said while campaigning in 1932:
Do what we may to inject life into our failing economic order, we cannot make it endure for long unless we bring about a wiser, more equitable distribution of national income … the reward for a day’s work will have to be greater, on average, than it has been, and the reward to capital, especially capital that is speculative, will have to be less.
We know much more about how to manage an economy than Roosevelt did then, but his insight fits our times too. Universal Health Insurance, which frees American businesses and individuals to compete more effectively as well as helping to provide a floor of well-being, is a good place to start on this agenda.