GOP'S Economic Spin Machine

by John M. Curtis
(310) 204-8700

Copyright October 4, 2010
All Rights Reserved.                                

            When President Barack Obama was sworn in Jan. 20, 2009, the GOP propaganda machine was already tying the U.S. economic collapse under President George W. Bush to young president.  Conservative radio talk shows hadn’t missed a beat linking the recession to Barack’s socialist ways.  Over a year had passed since Bush and Treasury Secretary Hank Paulson’s $687 billion Economic Recovery and Stabilization Act Oct. 3, 2008, providing emergency funding to financial institutions that had run out of cash.  Bush’s so-called “stimulus” program was designed with Depression-era expert Fed Chairman Ben S. Bernanke to prevent another Great Depression.  When Barack took the reins from Bush the economy was in a death spiral, forcing the new president implement his own $787 billion bail out plan Feb. 17, 2009 called the American Recovery and Reinvestment Act.

            Heading into the midterm elections, only Obama’s plan was a heinous socialist act that has crippled the U.S. economy.  Only Obama and his socialist policies has caused today’s sluggish growth rate of 1.8%, about half that projected in 2010-20111 for the European Union.  Congressional Republicans are running a on an austerity program, hoping to cut $100 billion out of the federal budget.  They insist Obama must take the blame for today’s anemic growth, making no reference to Bush’s TARP bailout program or to his Medicare Part D prescription drug plan that has put Medicare and the federal budget billions in the red.  Since Obama took office, the GOP has sought to erase Bush’s economic mess, laying the blame squarely on Obama.  Facing the midterm elections, more educated voters must now ask themselves whether they buy the GOP’s version of history or reality.

            House Minority Leader John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) unveiled the “Republican Pledge” Sept. 22, essentially blaming today’s economic problems on Obama and the Democrats.  They promised to repeal the president’s health care reform bill passed by the House and Senate and signed into law March 23, 2010.  Reinventing former House Speaker Newt Gingrich (R-GA) 1994 “Contract with America” that won the GOP new majorities in the Senate and House.  Boehner and McConnell’s “Pledge” hopes to do the same on Election Day.  Like so many other PR stunts, the GOP has tried feverishly to sell voters on the inevitability of a GOP takeover Nov. 2.  Today’s nearly 10% jobless rate gave rise to the Tea Party movement, enlisting the GOP’s most conservative voters into a kind of rebellion against minorities taking American jobs.

            Given the massive budget deficits and weakened economy, it’s reasonable to question the advisability of pushing a $1 trillion health care reform plan.  National polls showed that most voters were more concerned about jobs than health care, putting Democrats out of touch with the street.  “The mood of the country isn’t anti-incumbent—it’s anti-taxes, anti-spending and anti-Obama,” said Boehner, hoping to create the incentive for GOP voters to make him House Speaker Nov. 2.  Boehner hopes to convince voters that Obama and the Democrats caused today’s economic woes.  He wants voters to forget what happened under Bush.  Capitalizing on today’s economic mess gives the GOP the best shot at picking up seats in the House and Senate.  Whether the GOP can hang the whole mess on Obama to independent and crossover voters is anyone’s guess.

            No one blames the GOP from profiting from today’s recession.  Before voters throw the baby out with the bathwater, Republican’s “Pledge” offers no answers to an economy still reeling from irresponsible derivative trading by the nation’s biggest financial institutions.  When the president passed his Wall Street reform bill July 11, it didn’t go far enough in restoring needed protections of the Depression-era Glass Steagall Act, including preventing banks from trading in risky securities.   Fed Chairman Bernanke and Treasury Secretary Tim Geither have more work to do regulating hedge and private equity funds.  Short-selling by these funds prevent overall markets from providing needed liquidity to publicly traded companies to expand payrolls and help reduce the unemployment rate.  More GOP-sponsored tax or spending cuts have little to do with fixing the economy.

            GOP strategists have done a good job of tapping into voter frustration stemming from today’s high unemployment rate.  Neither party addresses the systemic problems with currently unregulated hedge and private equity funds, allowing short-sellers to accelerate the downward direction of stock markets.  Blaming today’s economic mess on Obama is good GOP propaganda but doesn’t address systemic problems requiring long-term fixes.  More tax and spending cuts won’t stop hedge and private equity funds from playing both sides of the market, especially short-selling that prevents market from rising over the long haul.  “The financial regulation bill did fix some of the stuff that needed to be fixed but it failed to fix a lot that should have been fixed and tried to fix what wasn’t broken,” said Standard & Poors’ chief economist David Wyss, hoping Bernanke and Geither would get back to work.

About the Author  

John M. Curtis writes politically neutral commentary analyzing spin in national and global news. He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.