[ Hopefully this time Democratic politicians and our media will,
finally, call the GOP out on Wanniski’s and Reagan’s Two Santa
Clauses scam and put an end to it once and for all…]
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THE SHUTDOWN IS THE TWO SANTA CLAUSES SCAM REARING ITS UGLY HEAD
AGAIN  
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Thom Hartmann
September 20, 2023
The Hartmann Report
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_ Hopefully this time Democratic politicians and our media will,
finally, call the GOP out on Wanniski’s and Reagan’s Two Santa
Clauses scam and put an end to it once and for all… _

Image by schubinger from Pixabay,

 

As the United States barrels toward a GOP-caused fiscal disaster and
government shutdown, House Republicans have laid out their vision for
the future of America.

In a budget document they released yesterday, the
legislators proposed dramatic $9 trillion cuts
[[link removed]] to Social
Security
[[link removed]], food
stamps, aid to women and children, Medicare and Medicaid, along a new
round of tax cuts for America’s billionaires. Their argument is that
we need to “balance the budget now!”

This is the classic Two Santas strategy that the GOP has been running
ever since 1981. In addition to showing the hypocrisy and depravity of
these politicians who are happy to live on the largesse of rightwing
billionaires but see no benefit in feeding hungry children, it also
shows that Jude Wanniski’s grand plan, adopted by Reagan in 1981, is
alive and well.

IT’S NO ACCIDENT OR COINCIDENCE THAT THE THREAT OF A FAILURE TO PAY
THE NATION’S BILLS OR FUND AN UPCOMING YEAR _NEVER ONCE
HAPPENED _DURING THE PRESIDENCIES OF REAGAN, BUSH, BUSH, OR TRUMP. OR
THAT IT _DID_ HAPPEN _EVERY SINGLE TIME_ DURING THE PRESIDENCIES
OF CLINTON, OBAMA…AND, NOW, BIDEN.

You could even call it a conspiracy: there’s an amazing backstory
— with a unique name — here. And it all started with a guy named
Jude Wanniski, who literally transformed American politics with a plan
that the American mainstream media, astonishingly, continues to
ignore.

HERE’S HOW IT WORKS, LAID IT OUT IN SIMPLE SUMMARY:

TO SET UP ITS FOUNDATION, WANNISKI’S “TWO SANTAS” STRATEGY
DICTATES, WHEN _REPUBLICANS_ CONTROL THE WHITE HOUSE THEY MUST SPEND
MONEY LIKE A DRUNKEN SANTA AND CUT TAXES ON THE RICH, ALL TO
INTENTIONALLY RUN UP THE US DEBT AS FAR AND AS FAST AS POSSIBLE. 

THEY STARTED THIS DURING THE REAGAN PRESIDENCY AND TRIPLED DOWN ON IT
DURING THE PRESIDENCIES OF BUSH AND TRUMP WITH MASSIVE TAX CUTS FOR
BILLIONAIRES AND INCREASES IN SPENDING ACROSS-THE-BOARD.

Those massive tax cuts and that uncontrolled spending during four
Republican presidencies produced three results:

*
They _stimulated the economy_ with a sort of sugar high, making
people think that the GOP can produce a good economy;

*
They _raised the national debt_ dramatically (it’s at $33 trillion
today, almost all of which tracks back to Reagan’s, Bush Jr.’s,
and Trump’s massive tax cuts and Bush’s two illegal off-the-books
wars);

*
And they made people think that _Republicans are the “tax-cut Santa
Clauses.”_ 

THEN COMES PART TWO OF THE ONE-TWO PUNCH: WHEN A _DEMOCRAT_ IS IN
THE WHITE HOUSE, REPUBLICANS MUST SCREAM ABOUT THE NATIONAL DEBT AS
LOUDLY AND FRANTICALLY AS POSSIBLE, FREAKING OUT ABOUT HOW “OUR
CHILDREN WILL HAVE TO PAY FOR IT!” AND “YOU MUST CUT SPENDING TO
SOLVE THE CRISIS!”

The “debt crisis,” that is, that they themselves created with
their massive tax cuts and wild spending.

Do whatever it takes, the “Two Santas” strategy goes. Tie up
legislation, deny a quorum, filibuster, shut down the government,
whatever.

WHICH IS WHY, FOLLOWING WANNISKI’S SCRIPT, REPUBLICANS ARE AGAIN
SQUEALING ABOUT THE NATIONAL DEBT AND SAYING THEY WILL REFUSE TO FUND
THE GOVERNMENT, POSSIBLY CRASHING THE US ECONOMY. 

And, once again, the media is preparing to cover it as a “Debt
Crisis!” rather than what it really is: a cynical political and
media strategy devised by Republicans in the 1970s, fine-tuned in the
1980s, and since then rolled out every time a Democrat is in the White
House. 

POLITICALLY, IT’S A BRILLIANT STRATEGY THAT WAS HATCHED BY A FELLOW
MOST PEOPLE HAVE NEVER HEARD OF: JUDE WANNISKI.

Republican strategist WANNISKI FIRST PROPOSED HIS TWO SANTA CLAUSES
STRATEGY IN 
[[link removed]]_THE
WALL STREET JOURNAL 
[[link removed]]_IN
1974
[[link removed]],
after Richard Nixon resigned in disgrace and the future of the
Republican Party was so dim that books and articles were widely
suggesting the GOP was about to go the way of the Whigs. 

There was genuine despair across the GOP, particularly when Jerry Ford
couldn’t even beat an unknown peanut farmer from rural Georgia for
the presidency. 

WANNISKI ARGUED BACK THEN THAT REPUBLICANS WEREN’T LOSING SO MANY
ELECTIONS JUST BECAUSE OF NIXON’S CORRUPTION, BUT MOSTLY BECAUSE
THE DEMOCRATS HAD BEEN VIEWED SINCE THE NEW DEAL OF THE 1930S AS THE
“SANTA CLAUS PARTY.”

ON THE OTHER HAND, THE GOP, HE SAID, WAS WIDELY SEEN AS THE “PARTY
OF SCROOGE” BECAUSE EVER SINCE THE 1930S THEY’D PUBLICLY
OPPOSED _EVERYTHING_ FROM SOCIAL SECURITY AND MEDICARE TO
UNEMPLOYMENT INSURANCE AND FOOD STAMPS. 

The Democrats, he noted, had gotten to play Santa Claus for decades
when they passed out Social Security and unemployment checks — both
programs of FDR’s Democratic New Deal — as well as their “big
government” projects like roads, bridges, schools, and highways that
gave a healthy union paycheck to workers and made our country shine. 

Even worse, Democrats kept raising taxes on businesses and rich people
to pay for all that “free stuff” — and Democrats’ 91% top tax
rates on the morbidly rich didn’t have any negative effect at all on
working people (wages were steadily going up until the Reagan
Revolution, in fact).

It all added, Wanniski theorized, to the public perception that the
Democrats were the _true_ party of Santa Claus, using taxes on the
morbidly rich to fund programs for the poor and the working class.

AMERICANS LOVED THE DEMOCRATS BACK THEN. AND EVERY TIME REPUBLICANS
RAILED AGAINST THESE PROGRAMS, THEY LOST ELECTIONS.

Therefore, Wanniski concluded, THE GOP HAD TO BECOME A SANTA CLAUS
PARTY, TOO. 

But because Republicans hated the idea of helping working people, they
had to come up with a new way to convince average voters that the GOP,
too, had the Santa spirit.  But what? 

“TAX CUTS!” SAID WANNISKI. 

To make this work, the Republicans would first have to turn the
classical world of economics — which had operated on a simple
demand-driven equation for seven thousand years — on its head.
(Everybody then understood that demand — “working-class wages”
— drove economies because working people spent most of the money
they earn in the marketplace, producing “demand” for
factory-output goods and services.)

TO LAY THE GROUND FOR TWO SANTA CLAUSES, IN 1974 WANNISKI INVENTED A
NEW PHRASE — “SUPPLY-SIDE ECONOMICS” — AND CLAIMED THE REASON
ECONOMIES GREW AND BECAME ROBUST WASN’T BECAUSE PEOPLE HAD GOOD
UNION JOBS AND THUS ENOUGH MONEY TO BUY THINGS (“DEMAND”) BUT,
INSTEAD, BECAUSE BUSINESS MADE THINGS (“SUPPLY”) AVAILABLE FOR
SALE, THUS TANTALIZING PEOPLE TO PART WITH THEIR MONEY. 

The more products (supply) there were in the stores, he said, the
faster the economy would grow. And the more money we gave rich people
and their corporations (via tax cuts) the more stuff (supply) they’d
generously produce for us to think about buying.

AT A GLANCE, THIS 1981 MOVE BY THE REAGAN REPUBLICANS TO CUT TAXES
WHILE INCREASING SPENDING SEEMS IRRATIONAL, CYNICAL, AND
COUNTERPRODUCTIVE. IT CERTAINLY DEFIES CLASSIC UNDERSTANDINGS OF
ECONOMICS.  BUT WHEN YOU CONSIDER JUDE WANNISKI’S PLAYBOOK, IT
MAKES COMPLETE SENSE.

To help, Arthur Laffer took that equation a step further with the
famous “Laffer Curve” napkin scribble he shared
[[link removed]] with Dick Cheney and
Don Rumsfeld over lunch. Not only was supply-side a rational concept,
Laffer suggested, but as taxes went down, revenue to the government
would magically go up! 

Neither concept made any sense — and time and our $33 trillion
national debt have proven both to be colossal idiocies — but if
Americans would buy into it all, they offered the Republican Party a
way out of the wilderness.

RONALD REAGAN WAS THE FIRST NATIONAL REPUBLICAN POLITICIAN TO FULLY
EMBRACE THE TWO SANTA CLAUSES STRATEGY. 

He told the American people straight-out that if he could cut taxes on
rich people and businesses, those “job creators” (then a
newly-invented Republican phrase) would use their extra money to
“build new factories” so all that new stuff “supplying” the
economy would produce faster economic growth. 

George HW Bush — like most Republicans in 1980 who hadn’t read
Wanniski’s piece in The Wall Street Journal — was initially
horrified. Ronald Reagan was proposing “Voodoo Economics
[[link removed]],” said Bush in the
primary campaign, and Wanniski's supply-side and Laffer’s tax-cut
theories would throw the nation into debt while producing nothing to
benefit average Americans.

But Wanniski had done his homework, selling “Voodoo” supply-side
economics to the wealthy elders and influencers of the Republican
Party. 

DEMOCRATS, WANNISKI TOLD THE GOP, HAD BEEN “SANTA CLAUSES” SINCE
1933 BY GIVING PEOPLE THINGS. FROM UNION JOBS TO FOOD STAMPS, NEW
SCHOOLS TO SOCIAL SECURITY, THE AMERICAN PEOPLE LOVED THE “TOYS”
AND “FREE STUFF” THE DEMOCRATIC SANTAS BROUGHT EVERY YEAR, AS WELL
AS THE GROWING ECONOMY THE INCREASING UNION WAGES AND SOCIAL PROGRAMS
PRODUCED IN MIDDLE CLASS HANDS.

But Republicans could stimulate the economy by throwing trillions at
defense contractors, oil companies, and other fat-cat donor
industries, Jude’s theory went: spending could
actually _increase_ without negative repercussions because that
money would “trickle down” to workers from the billionaires and
corporate CEOs buying new yachts and building new mansions.

PLUS, REPUBLICANS COULD BE _DOUBLE_ SANTA CLAUSES BY CUTTING
PEOPLE’S TAXES! 

For working people, the tax cuts would only be a small token — a few
hundred dollars a year at the most — but Republicans would heavily
market them to the media and in political advertising. And the tax
cuts for the rich, which weren’t to be discussed in public, would
amount to trillions of dollars, part of which they knew would be
recycled back to the GOP as campaign contributions from the morbidly
rich beneficiaries of those tax cuts. 

THERE WAS NO WAY, WANNISKI SAID, THAT THE DEMOCRATS COULD EVER WIN
AGAIN.

Every time a Democrat was in the White House, they’d be forced into
the role of Santa-killers if they acted responsibly by raising taxes;
or, even better, they’d be machine-gunning Santa by cutting spending
on their own social programs.

EITHER ONE WOULD LOSE THEM ELECTIONS, AND IF REPUBLICANS EXECUTED THE
STRATEGY RIGHT, THEY COULD FORCE DEMOCRATS TO DO BOTH!

Reagan took the federal budget deficit from _under_ a trillion
dollars when he was elected in 1980 to almost three trillion by 1988,
and back then a dollar could buy far more than it buys today.

Republicans embraced Wanniski’s theory with such gusto that
Presidents Reagan and George HW Bush ran up more debt in twelve years
than every president in history up until that time — from George
Washington to Jimmy Carter — _combined_. 

SURELY THIS WOULD BOTH “STARVE THE BEAST” OF THE AMERICAN
GOVERNMENT _AND_ FORCE THE DEMOCRATS TO MAKE THE POLITICALLY
SUICIDAL MOVE OF BECOMING DEFICIT HAWKS. 

Bill Clinton, the first Democrat they blindsided with Two Santas, had
run on an FDR-like platform of a “New Covenant
[[link removed]]”
with the American people that would strengthen the institutions of the
New Deal, re-empower labor, and institute a national single-payer
health care system. 

A few weeks before his inauguration, however, Wanniski-insiders Alan
Greenspan, Larry Sommers, and Goldman Sachs co-chairman Robert
Rubin famously
[[link removed]] sat
Clinton down and told him the facts of life: REAGAN AND BUSH HAD RUN
UP SUCH A HUGE DEFICIT THAT HE WAS GOING TO HAVE TO BOTH RAISE
TAXES _AND_ CUT THE SIZE OF GOVERNMENT PROGRAMS FOR THE WORKING
CLASS AND POOR.

Clinton buckled under the threat of a government shutdown: he raised
taxes, balanced the budget, and cut numerous social programs. He
declared an “end to welfare as we know it” and, in his second
inaugural address, an “end to the era of big government.”

CLINTON SHOT SANTA CLAUS, AND THE RESULT WAS AN EXPLOSION OF
REPUBLICAN WINS ACROSS THE COUNTRY AS GOP POLITICIANS CAMPAIGNED ON A
“REPUBLICAN SANTA” PLATFORM OF SUPPLY-SIDE TAX CUTS AND PORK-RICH
SPENDING INCREASES.

Democrats had controlled the House of Representatives in almost every
single year since the Republican Great Depression of the 1930s, but
with Newt Gingrich rigorously enforcing Wanniski’s Two Santa Clauses
strategy with brutal threats to shut down the government, they finally
took it over in the middle of Clinton’s presidency.

State after state turned red, and the Republican Party rose to take
over, in less than a decade, every single lever of power in the
federal government, from the Supreme Court to Congress to the White
House.

NEWT HAD DONE
[[link removed]] HIS
JOB IN THE HOUSE OF REPRESENTATIVES. LOOKING AT THE WRECKAGE OF THE
DEMOCRATIC PARTY ALL AROUND CLINTON IN 1999, WANNISKI WROTE A
GLOATING MEMO
[[link removed]] THAT
SAID, IN PART:

“We of course should be indebted to Art Laffer for all time for his
Curve... But as the primary political theoretician of the supply-side
camp, I began arguing for the ‘Two Santa Claus Theory’ in 1974. If
the Democrats are going to play Santa Claus by promoting more
spending, the Republicans can never beat them by promoting less
spending. They have to promise tax cuts...”

Ed Crane, then-president of the Koch-funded Libertarian CATO
Institute, noted in a memo that year
[[link removed]]:

“When Jack Kemp, Newt Gingrich, Vin Weber, Connie Mack and the rest
discovered Jude Wanniski and Art Laffer, they thought they’d died
and gone to heaven. In supply-side economics they found a philosophy
that gave them a free pass out of the debate over the proper role of
government. ... That’s why you rarely, if ever, heard Kemp or
Gingrich call for spending cuts, much less the elimination of programs
and departments.”

TWO SANTA CLAUSES HAD FULLY SEIZED THE GOP MAINSTREAM.

Never again would Republicans worry about the debt or deficit when
they were in office; but they knew well how to scream hysterically
about it and hook in the economically naïve media as soon as
Democrats again took power.

When Jude Wanniski died, George Gilder celebrated the Reagan/Bush
adoption of his Two Santas “Voodoo Economics” scheme — then
still considered irrational by mainstream economists — in a Wall
Street Journal eulogy
[[link removed]]:

“Unbound by zero-sum economics, Jude forged the golden gift of a
profound and passionate argument that the establishments of the mold
must finally give way to the powers of the mind. ... He audaciously
defied all the Buffetteers of the trade gap, the moldy figs of the
Phillips Curve, the chic traders in money and principle, even the
stultifying pillows of the Nobel Prize.”

REPUBLICANS GOT WHAT THEY WANTED FROM WANNISKI’S WORK. USING THE
“FISCAL RESPONSIBILITY” ARGUMENT — ESSENTIALLY TWO SANTAS IN
DRAG — REPUBLICANS HAVE FORCED TWO DEMOCRATIC PRESIDENTS, AND ARE
ABOUT TO TRY TO FORCE A THIRD, TO GUT-SHOOT THE DEMOCRATIC SANTA
ESTABLISHED BY FDR.

Using this strategy, Republicans held power for forty
years, transferred
[[link removed]] over
$50 trillion from working class families into the money bins of the
top one percent, and cut organized labor's representation in the
workplace from around a third of workers when Reagan came into office
to around 8 percent of the non-governmental workforce today.

Think back to Ronald Reagan, who more than tripled the US debt from a
mere $800 billion to $2.6 trillion in his 8 years. That spending
produced a MASSIVE STIMULUS to the economy, and the biggest
non-wartime increase in America’s national debt in all of our
history until Trump.

THERE WAS NARY A PEEP FROM REPUBLICANS ABOUT THAT 218% INCREASE IN OUR
DEBT; THEY WERE JUST FINE WITH IT AND TO THIS DAY CLAIM REAGAN
PRESIDED OVER A “GREAT” ECONOMY.

When five rightwingers on the Supreme Court gave the White House
to GEORGE W. BUSH IN 2000, HE IMMEDIATELY REVERTED TO WANNISKI’S
“TWO SANTA” STRATEGY and again nearly _doubled_ the national
debt, adding several trillion in borrowed money to pay for his two tax
cuts for billionaires, and tossing in two unfunded wars for good
measure, which also added at least (long term) another $8 trillion.  

THERE WAS NOT A WHISPER ABOUT THAT DEBT FROM ANY HIGH-PROFILE
IN-THE-KNOW REPUBLICANS; IN FACT, DICK CHENEY — WHO KNEW WANNISKI
PERSONALLY — FAMOUSLY SAID
[[link removed]],
AMPLIFYING WANNISKI’S STRATEGY:

“Reagan proved deficits don’t matter. We won the midterms. This is
our due.”

Bush and Cheney’s tax cuts for the rich raised the debt by 86% to
over $10 trillion (and additional trillions in war debt that wasn’t
be put on the books until Obama entered office, so it looked like it
was his).

THEN CAME DEMOCRATIC PRESIDENT BARACK OBAMA, AND SUDDENLY THE GOP WAS
HYSTERICAL ABOUT THE DEBT AGAIN. 

So much so that they convinced a sitting Democratic president to
propose a cut to Social Security (the “chained CPI
[[link removed]]”).
Obama nearly shot the Democrats’ biggest Santa Claus, just like
Wanniski predicted, until outrage from the Democratic base stopped
him. And then we got the “sequester” out of it: a freeze on
Democratic spending and political power along with automatic cuts to
social programs if certain terms weren’t adhered to. It was a
successful hostage-taking exercise that is still largely in place.

NEXT, DONALD TRUMP RAISED OUR NATIONAL DEBT BY OVER $8 TRILLION
[[link removed]], AND THE GOP FUNDED
THE GOVERNMENT WITHOUT A PEEP every year for the first three years of
his administration, and then suspended the debt ceiling altogether for
2020 (so, if Biden won, _he’d_ have to justify raising the debt
ceiling for _2 years’ worth of deficits_, making it even more
politically painful).

AND NOW REPUBLICANS ARE USING THE RENEWAL OF GOVERNMENT FUNDING FOR
FISCAL YEAR 2024 TO DROP THEIR TWO SANTAS BOMB RIGHT ONTO PRESIDENT
JOE BIDEN’S HEAD. AFTER ALL, IT WORKED AGAINST CLINTON AND OBAMA AND
THE MEDIA NEVER CAUGHT ON. WHY WOULDN’T THEY USE IT AGAIN?

This time they’re planning on adding the Newt Gingrich twist of
shutting the government down and damaging the economy just as the
Democratic president heads toward an election.

And if the GOP’s failure to fund the government crashes the economy,
all the better. Republicans can just blame Biden: it’ll increase the
chances of Republican victories in 2024!

AMERICANS DESERVE TO KNOW HOW WE’VE BEEN MANIPULATED, AND BY
WHOM. SADLY, ALTHOUGH I AND OTHERS (IT’S EVEN DETAILED
[[link removed]] ON
WIKIPEDIA!) HAVE BEEN CALLING OUT WANNISKI’S SCHEME FOR DECADES,
NONE OF THE NATIONAL MEDIA HAVE EVER SERIOUSLY EXAMINED THIS 40+ YEAR
GOP STRATEGY.

As House Budget Chairman Jodey C. Arrington told reporters Tuesday
[[link removed]],
Republicans are anxious to get back to Reagan’s phony “fiscal
responsibility” scam, _aka _Two Santas:

“Our muscle as Republicans for fiscal responsibility has atrophied
over the years, and we’re trying to rebuild that. And so it’s like
going back into the weight room when you haven’t been there in a
long time.”

Hopefully this time Democratic politicians and our media will,
finally, call the GOP out on Wanniski’s and Reagan’s Two Santa
Clauses scam and put an end to it once and for all.

_Thom Hartmann is the NY Times bestselling author 34 books in 17
languages & nation's #1 progressive radio host. Psychotherapist,
international relief worker. Politics, history, spirituality,
psychology, science, anthropology, pre-history, culture, and the
natural world._

* Government Shutdown
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* House GOP
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* budget cuts
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* Republican Tax Cuts
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