Saturday, April 11, 2009

Democrats Can Bury the GOP

I am going to play "Democratic Strategist" today... I believe that there is an argument that could literally end the GOP, if the Dems pushed it hard enough and long enough. The argument goes like this: (1) the current recession was caused by the rampant speculation and unregulated transactions of bankers, Wall Street, and corporations; (2) the bankers, Wall Street, and corporations were permitted to make these actions because of the recent obsession with deregulation; (3) the GOP is responsible for the deregulation; and thus (4) the GOP caused the current economic crisis.

Here are the details...

Eighty percent of the American public blames banks, financial institutions, and large corporations for the economic crisis, says a Washington Post-ABC News poll. If this outrage can be redirected toward the GOP, the Dems would profit a great deal. To redirect this outrage toward the GOP, Dems should -- and can -- make the case that the GOP allowed these banks, financial institutions, and large corporations to wreck the economy. The key is concentrating on the GOP's obsession with deregulation.

During the years leading up the the Great Depression, Wall Street was rampant with wild speculation. Men (it was only men) were getting very, very rich by placing bets on the stock market. Because the government failed to regulate these acts, the market became artificially inflated. When the bubble popped, the Great Depression resulted. Thus, a lack of oversight permitted banks and Wall Street to get greedy and destroy the economy.

During Roosevelt's presidency, tight regulations over the economy were implemented, and they remained on the books for approx fifty years (until President Reagan). During this fifty year period of regulation, speculation and other shady economy tricks were kept to a minimum. As a result, this fifty year period of regulation saw robust financial success and the creation of a middle-class; true, there were a few recessions, but they were short-lived and relatively minor.

Then came Reagan. President Reagan and his conservative compatriots failed to learn the lessons of history, and thus they deregulated the economy to its pre-Depression condition. As a result, wild speculation resumed, and the financial sector grew and grew and grew. Soon, a huge bubble formed in the 1980s, resulting in the savings and loan crisis, the biggest economy crisis since the Depression.

Yet, the GOP continued to push deregulation, and thus bankers and Wall Street continued to speculate. Wall Street invented credit-default swaps and other totally unregulated multi-billion dollar transactions. Corporations and banks bundled together loans into huge packages and sold them off, even though no one knew how much they were worth (these transactions were subject to little or no regulation). The failure to properly regulate and oversee the housing market permitted housing prices to inflate. All of these unregulated economy entities soon became far overpriced, and when the bubble burst, the current recession resulted.

This was all precipitated by banks, corporations, and Wall Street. Further, banks, corporations, and Wall Street were allowed to make these transactions only because of the GOP's obsession with deregulation.

Thus, the GOP caused the current recession.

If this argument is made as convincingly and agressively and consistently as the Dems' anti-Bush arguments, it would bring the GOP to its knees.

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