The genius of Allen West

By Richard K. Barry

Rep. Allen West (R-Fla.) is peddling a unique spin on how the GOP should talk about Obama's economic recovery (and, by the way, if Republicans want to call the economic downturn "Obama's recession" or terms like it, we need to start talking about "Obama's economic recovery").

Anyway, West was on Fox News with Neil Cavuto and had this to say about the improving economy and how Republicans should frame it:

WEST: Well, I would think maybe the markets are maybe looking five to six months down the road, when we have a change in leadership in this country – 

CAVUTO: Wait a minute, you think that this is built on a Republican either capturing the White House or Republicans capturing the Senate? … You think that the markets are getting bubbly in anticipation of a Republican taking the White House?

WEST: Oh, absolutely.

I liked Steve Benen's take at The Maddow Blog:

Let me get this straight. In the Republican congressman's mind, investors are overlooking improved job numbers, improved consumer spending, and improved economic confidence, and are instead investing based on expectations that a new, unnamed president might take office 10 months from now?

Well, maybe they will try to go with something like this because, let's face it, if the economy does continue to improve, they'll have nothing else. It's still awfully silly.

(Cross-posted at Lippmann's Ghost.)

How Ronald Reagan unwittingly laid the groundwork for the death of capitalism

Guest post by Marc McDonald 

(Ed. note: This is Marc's second guest post at The Reaction. His first, on how Steve Jobs represented much of what's wrong with the U.S. economy today, can be found here. For more of his writing, check out his great blog, Beggars Can be Choosers. -- MJWS)

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Marc McDonald is a Texas journalist who runs the progressive political blog Beggars Can Be Choosers. 

Thanks to tireless efforts by historical revisionists over the past two decades, Ronald Reagan has gotten a lot of credit for achievements that he had nothing to do with. "Winning" the Cold War is a good example.

In reality, Reagan's policies had little or nothing to do with the collapse of the Soviet Union. In fact, the last thing the Military Industrial Complex ever wanted was to see the Cold War's end (and with it the trillion-dollar gravy train of "defense" contractor funding). 

On the other hand, Reagan should get credit for something that he actually did achieve: laying the groundwork for the death of capitalism as we know it. 

Capitalism had its first near-death experience during the Great Depression. Ironically, it was saved by the most progressive president that the U.S. ever had: Franklin D. Roosevelt. Although attacked by the business community at the time, FDR's New Deal in fact resurrected capitalism and gave it new life. The New Deal created the Great American Middle Class: tens of millions of well-paid workers that actually had the money to buy the products that the system produced. 

It was a wonderful arrangement that made America a superpower and the most envied nation on the planet for decades to come. 

However, America's wealthy never got over their hatred of FDR and the New Deal -- despite the fact the latter saved capitalism from itself. The Rich & Powerful constantly plotted to abolish the New Deal. And in 1980, with Reagan's election, the wealthy class finally saw its chance to begin the attack on the New Deal -- a process that continues to this day. 

Under Reagan, middle-class entitlements were slashed, as were programs to assist the poor. And sweeping changes in tax policy began to favor the very wealthy, at the expense of the middle class and the poor. Also, labor unions and labor laws were gutted. Lastly, under Reagan's disastrous "free trade" policies, America started shipping all its good-paying manufacturing jobs overseas. 

The result of all this was that, under Reagan, the Great American Middle Class began to shrink -- a process that continues to this day. And with a much-weakened middle class, U.S. capitalism has hit a major crisis in that fewer and fewer consumers are able to buy the products that the system produces. 

The latter is a crucial component of capitalism that has long been curiously overlooked by the "free market" Chicago School zealots who've long championed a completely deregulated economy. I find it interesting how these zealots are always so concerned about the plight of the "over-taxed, over-regulated" rich (who they claim are the only necessary ingredient for successful capitalism). 

Of course, what these ivory tower zealots overlook is that capitalism as we know it simply can't function unless there is a strong, prosperous middle class around to buy the products created by the system. 

Although Reagan's policies gutted the U.S. middle class, the resulting devastation to capitalism didn't become readily apparent until much later on. This was because the whole crisis was masked by America's increasing embrace of credit-fueled consumption, which created the mirage of prosperity. 

Under Reagan, America simply stopped paying its bills. The government started borrowing hundreds of billions of dollars from the likes of Japan. And consumers increasingly started pulling out their credit cards to pay for purchases, rather than using cash. 

Finally, a series of bubbles came along to further create the illusion that the American economy was much more prosperous that it really was. These included the Dot Com bubble and the more recent housing bubble. 

Of course, the whole Ponzi scheme all came crashing down in 2008. Since then, the U.S. economy has remained on life support. The nation continues to plunge further into debt, even as the U.S. dollar continues to hit new all-time lows. The middle class is all but extinct these days, as are the good-paying jobs that once help make the American economy the mightiest on earth. 

Virtually all of this is a legacy of Reagan's policies. And unlike capitalism's first near-death experience, in the 1930s, it's extremely unlikely that we'll see another FDR ever come along to give the whole system a new lease on life. In our Citizens United era, that's simply not ever going to happen. 

Reagan (or more specifically, his wealthy backers) originally aimed to crush the New Deal and return the U.S. to an unregulated 19th century dog-eat-dog form of capitalism. They hoped that this would propel capitalism to new heights. But by ignoring the key role of middle class consumption in their calculations, they unwittingly severely damaged capitalism itself and turned America into a second-rate power. 

We continue to see the corrosive effects of the Reagan legacy to this day. The serious problems that began to emerge during his presidency (out-of-control fiscal and trade deficits, a shrinking middle class, the loss of good manufacturing jobs, and a plummeting dollar) continue to this day. 

Of course, the wealthy class to this day continues to live in denial that the whole capitalist party is now over. They continue to cling to the hope that the crisis caused by the 2008 economic collapse will eventually be fixed and the capitalism will somehow continue. 

The problem is that the good-paying manufacturing jobs are gone for good. And the much-hyped service economy jobs that were supposed to replace the latter have in fact been poor substitutes, offering vastly lower pay and benefits, for the most part. In fact, to this day, America continues to bleed what few good manufacturing jobs it has left, thanks to the utter absence of any kind of intelligence trade policy. 

What's more, given the ever-weakening dollar and the ever-growing trade and fiscal deficits it faces, America has less and less clout on the world stage. For the entire post-World War II era, America could simply print more dollars to bail itself out of fiscal crises, given that the dollar was the world's international reserve currency. That era, clearly, is near an end. 

With the demise of the dollar, America will be a much weaker and less wealthy nation. For the entire post-World War II era, America has been the standard-bearer for capitalism. With the latter now discredited, it's clear that the rest of the world is increasingly rejecting the U.S. model of economics and is instead turning to the regulated, technocrat-led economies of China and Singapore as the new role model. 

Not only did Reagan's era doom capitalism, but his toxic legacy ensured that America will find it extremely difficult to remedy the crises that resulted from his administration. These range from the deterioration of public education that resulted from Reagan's budget cuts to America's crumbling infrastructure. These two factors alone will make it increasingly difficult for America to compete globally in the years to come. 

But perhaps the most toxic legacy of all was Reagan's abolition of the Fairness Doctrine. This ensured that America's mainstream media would increasingly do little more than parrot the official corporate line. Americans today are hopelessly misinformed on the issues these days. And a nation that is misinformed is going to find it difficult to ever take the necessary steps needed to fix the crises unleashed by Reagan's policies.

"We can do this": Not really live-blogging SOTU 2012

By Michael J.W. Stickings

And so it begins...

I have no intention of really live-blogging President Obama's address night. I'm just going to sit here, drink my Traquair Jacobite Ale from Innerleithen, Scotland (a strong beer flavored with coriander), and comment at random on a variety of things, some of them having to do with the SOTU.

No Americans fighting in Iraq in nine years. And Osama bin Laden is "not a threat to this country." True on the first point, not so much on the second. Osama is still powerful, even (or especially) in death. But I get the point. Obama has ended an unpopular war but is anything but a pacifist. He's a militarist, too, and he got the baddest of the bad guys. Trump that, Mitt! -- or... Newt?!

What theater, though. How fitting that the SOTU is on the same day as the Oscar nominations. (I know, the Tonys are theater. But you get the point.)

"What's at stake are not Democratic values or Republican values, but American values. We must reclaim them." Ah, Obama the non-partisan. But a good case to make in a speech that, let's face it, is more or less the opening salvo of Campaign 2012 for Obama. You'll have to find the partisanship between the lines, it seems.

The president is making the case for recovery: businesses are hiring, jobs are coming back, new rules are in place to prevent shit from happening. Fantastic. "I will not return to the policies that brought about this crisis in the first place." Something like that. I just wish I had full confidence in his sincerity. He's done too much for Wall Street for me to believe that he means it -- or, rather, that he'll back up what he means with action, and lasting change.

Well, we heard this before the speech... Osama is dead, GM is alive and kicking. He just made the second point. "The American automotive industry is back." (The quotes may be slightly off, by the way. I'm doing the best I can.)

Message to Americans: Your manufacturing base is not coming back. Sorry. It may get better, and there's certainly an opportunity for innovation to improve domestic manufacturing, but the world has changed -- and it's not changing back. Just ask Apple. Billions and billions of dollars in earnings and cash, but where does it make its iconic "American" products? But, sure, go ahead and try to deal with outsourcing and stop companies from avoiding taxes.

Ah, corporate tax cuts. Of course. What else is new?

Oooh, Eric Cantor looks pissed. Is it because Obama didn't show up with a hammer and sickle?

Don't get me wrong. Policy-wise, I'm for most of this. It's fine. And certainly preferable to what the GOP has to offer. But it's all quite delusional nonetheless. Because, of course, if you tell the truth in American politics, you're doomed. Just ask Jimmy Carter.

"Americans will always win." If there are fair trading practices. Like I said: delusional.

Education... something something something... teachers... something something something... Seriously, it's all good. Though Boner -- sorry, Boehner -- looks unimpressed. I guess he doesn't think kids should stay in school.

Okay, there's no point following this. It's all about speaking points, issue after issue. It's about how the speech will be reported in the media: President Obama said a, b, c, d, etc. I just say, though, there's not a lot that's terribly compelling in this speech so far. He's moving from issue to issue, avoiding partisanship, offering some delusional/aspirational goals, along with a few concrete policy proposals, but that's about it. "We should be working on comprehensive immigration reform now." Okay, but how? And do you really think Congress will be sending you any sort of meaningful reform package anytime soon? Of course not. It's just about hitting the right notes. Like... equal pay for women! Well, fine. Who's against that... other than the Republicans? "Expand tax relief to small businesses." Great. And?

Sorry, I don't mean to be so negative. I know he's doing what he has to do. It's all part of the theater of the SOTU. And I know that leadership requires the communication of such aspirational goals. But I'm not sure what the unifying theme of this speech is. What philosophy, if you will, is driving the president? Or if not philosophy, what vision? Maybe it's coming when/if he ties it all up.

Forget the laundry list of policy proposals for a moment. What is this speech about? Honestly, I'm not sure.

Sullivan, who's live-blogging tonight, of course:

And now a Santorum-style focus on manufacturing -- and the same old abuse of the tax code to influence the economy. This is industrial policy, based on populism. It isn't unleashing the free market through tax reform. It's a throwback to paleo-liberalism. Tax breaks and subsidies to keep jobs at home. It's spitting in the wind of the global economy -- and it fails to grasp government's proper role. Workers here will never be cost-competitive with the Chinese. This is fantasy -- and cheap populism.

I have a different view of "government's proper role" than Andrew does -- I think it should have an activist role to try to rectify capitalism's injustices -- but I tend to agree with this. What we're hearing tonight is populist nationalism. Maybe that's the theme, the vision, the "philosophy." 

And, yes, it's all quite "vapid" (while making the tax code more and more complicated).

More Sullivan:

This speech is beginning to make Bill Clintons' look like clear and visionary. But people loved Clinton's long laundry list of micro-policies. I think this is the worst SOTU Obama has given. But maybe it will work. It sure seems like it has been put through a software program to pander to various industries.

I agree it's the worst, trying to think back to the others (through the haze of this ale). It just seems overly processed, as if lines were approved by focus groups and then glued together.

But who can object to "a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans." Republicans, of course! Once more, I hope he's serious and actually follows through on this. It might help if his presidency weren't sponsored by Goldman Sachs.

Uh-oh, now he's going after millionaires. Class warfare! That's what we'll hear from Romney et al. What we're hearing is that the Republican response will be all about how "divisive" this speech was. As if it's divisive to say that millionaires should pay their fair share of taxes. But that's how Republicans think -- they have no interest in requiring the rich, and especially the super-rich, to sacrifice anything at all, even for the common good.

On foreign policy, especially with respect to the Middle East... again, it's not that I disagree with what he's saying, it's that there's no unifying theme to what he's saying. No argument. No unifying vision. He'll stand up for human dignity... but he'll do everything he can to stop Iran from building nuclear weapons? He may not mean it, but... what... he's still got military action on the table? Military cooperation with Israel -- that got a standing ovation -- hoo-wah! Again, what exactly is Obama's thinking on foreign policy, on America's place and role in the world? Or is it all ad hoc, while sucking up to popularity?

"America is back!" Sure, back from where it was under Bush, but what does that mean? "America is the one indispensable nation..." On behalf of every other country in the world: Screw you, America. Seriously, do we need this sort of jingoism, cloaked as it may be in Obama's liberalism?

Would the world be a significantly worse place without America? Think about it.

And now: the military. De rigueur, of course. (And I'm generally fine with it. Not every U.S. serviceman urinates on corpses. Most of them are honorable men and women. What I object to is Obama's militarism, and, make no mistake, he's a militarist. Maybe not as reckless a militarist as his predecessor, but still one nonetheless. He'd do a lot better if he thought less that the military was the solution and considered other alternatives to the establishment of peace.)

Maybe now we'll get some genuine passion: the mission to get Osama. Oh, please. America is like that Navy Seals unit? That unit is a microcosm of America? "There is no challenge too great, there is no mission too hard..." Uplifting rhetoric, I suppose, but a bit forced, no?

"The state of our union will always be strong." Wait, did he say at any point that it is strong? I mean, I wasn't going to watch because of course we all know the state of the union is awesome. What else was there to say? But I wonder.

Anyway, now I have to stop watching. However mediocre the speech, it's the post-speech punditry that is truly horrendous, and it will be no different tonight.

Here's a final word from Sullivan:

This notion that a country, a democracy, should have the same attitude as troops fighting a war is preposterous and slightly creepy. Yes, we should put aside our differences to get important things done, put aside ideology to focus on solving problems. But we are not a military and the president is not our commander. He is our president. We have every right to argue with one another and to distrust one another at times. The whole idea of getting each others' backs in a boisterous democracy is deeply undemocratic. I do not want to be a citizen trained like a member of the Navy SEALs. Nor should anyone. This isn't Sparta. It's America. And to use the raid on bin Laden as the model of our future cooperation struck me as too easy and trite an analogy.

Yup.

Look, who knows, this speech might have been fine. Gergen just called it "politically shrewd." And that's pretty much as CW as it gets. But it wasn't a powerful speech at all, despite what super-partisan Begala is saying, and while he may have done a lot tonight to reach out to independents, he'll have to do a lot more on the campaign trail to energize those of us who consider ourselves members of his, and his party's base.

Have a good night, everyone.

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Okay, just a couple of comments on Mitch Daniels's GOP response:

Not much red meat for the base, but it's got its share of ridiculous partisan points: For example, Obama's "constant disparagement" of business? Really? In what world is this true? How is it anti-business to save Wall Street and the auto industry?

And he praises Steve Jobs as a job creator? What, for creating low-paying jobs in China? Please. I realize this guy is more reasonable than most in his party, but his absolute faith in the private sector (and claim that Obama and Democrats are anti-market and don't trust/believe in the American people) is far more delusional by far than anything Obama said tonight about populist nationalism. In fact, much of what he's saying is just blatantly dishonest.

Ah, there it is: Obama the divider. Please. What a bunch of fucking bullshit. Credit Daniels for saying the rich shouldn't have tax advantages, but otherwise this is just your typical old-school Republican nonsense. Just less crazy, and less crazily put, than what we normally hear from Republicans, Mitt and Newt included.

And now... good night.