Home > Economy, Politics, Trends > GOP Demi-god Doctrine of Liquidation

GOP Demi-god Doctrine of Liquidation

April 1, 2011


Spend Less, Owe Less, Grow the Economy.

– GOP Congressional report

We are all witnessing the radicalization of the Republican Party right before our very eyes. They are the party of “no”. No compromises as a part of governing. No jobs bill or jobs training bill. No social programs that lift up the poor, the elderly, the sick and the disenfranchised. No NPR, no NASA, no NOAA, no Department of Education, and no EPA. Just small government concentrated in the hands of the few…. and we know who they are.

The GOP believes that in an economy where 26 million people remain unemployed or underemployed, who have lost their jobs and homes, lost opportunities to attend college [see related below] PARING BACK BENEFITS at all levels of government is a worthy goal. Basically, it’s to hell with the American people in favor of what the GOP thinks. They are acting upon their self-annointed demi-god narcissistic status and implementing the doctrine of liquidation. These fools be damned.

Nobel winning economist lays it out nicely in his NY Times article, The Mellon Doctrine:

“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.” That, according to Herbert Hoover, was the advice he received from Andrew Mellon, the Treasury secretary, as America plunged into depression. To be fair, there’s some question about whether Mellon actually said that; all we have is Hoover’s version, written many years later.

Here is what the GOP is actually doing today:

Two weeks ago, Republican staff at the Congressional Joint Economic Committee released a report, “Spend Less, Owe Less, Grow the Economy,” that argued that slashing government spending and employment in the face of a deeply depressed economy would actually create jobs. In part, they invoked the aid of the confidence fairy; more on that in a minute. But the leading argument was pure Mellon.

Here’s the report’s explanation of how layoffs would create jobs: “A smaller government work force increases the available supply of educated, skilled workers for private firms, thus lowering labor costs.” Dropping the euphemisms, what this says is that by increasing unemployment, particularly of “educated, skilled workers” — in case you’re wondering, that mainly means schoolteachers — we can drive down wages, which would encourage hiring.

Their logic is ill-informed, the rationality beyond the pale. Krugman continues:

There’s a fallacy of composition here: since workers at any individual company may be able to save their jobs by accepting a pay cut, you might think that we can increase overall employment by cutting everyone’s wages. But pay cuts at, say, General Motors have helped save some workers’ jobs by making G.M. more competitive with other companies whose wage costs haven’t fallen. There’s no comparable benefit when you cut everyone’s wages at the same time.

In fact, across-the-board wage cuts would almost certainly reduce, not increase, employment. Why? Because while earnings would fall, debts would not, so a general fall in wages would worsen the debt problems that are, at this point, the principal obstacle to recovery.

And Krugman catches onto the kind of manipulation the GOP is pulling:

Now, liquidationism isn’t the only argument the G.O.P. report advances to support the claim that reducing employment actually creates jobs. It also invokes the confidence fairy; that is, it suggests that cuts in public spending will stimulate private spending by raising consumer and business confidence, leading to economic expansion.

Or maybe “suggests” isn’t the right word; “insinuates” may be closer to the mark. For a funny thing has happened lately to the doctrine of “expansionary austerity,” the notion that cutting government spending, even in a slump, leads to faster economic growth.

What have I written about time and again is, insinuation. Insinuation is a form of manipulation. It is commonly used in propaganda. It is an indirect or covert suggestion or hint, especially of a derogatory nature. Meaning, something underhanded is going on. And there is no doubt about it, the GOP is operating in very underhanded ways these days as evidenced in 16 states with Republican governors who are stripping union workers of their collective bargaining rights, putting public land up for sale, and worse — in the case of Ohio, Governor Kasich’s bill just signed into law yesterday will allow DRILLING ON PUBLIC LANDS INCLUDING PUBLIC PARKLAND!

Read the entire Paul Krugman article, click here

Related on Education Opportunities:
The GOP along with the Tea Party, want to eliminate the Department of Education. Here in California, community colleges are slashing enrollment for many colleges due to budget cuts. SDSU will cut enrollment by 10,000. IF the California Republicans would allow the tax vote to occur, Californians could decide their own future by voting to extend various temporary taxes which would help rectify a portion of our budget. No voting opportunity, or a ‘NO’ vote, will dramatically impact education across the board. But again, the GOP says Californians should not even have that opportunity.

  1. Alpha
    June 20, 2011 at 9:38 pm


    I Pledge Allegiance I Promise to be faithful and true (Promise my loyalty)
    to the flag to the emblem that stands for and represents
    of the United States all 50 states, each of them individual, and individually represented on the flag
    of America yet formed into a UNION of one Nation.
    and to the Republic And I also pledge my loyalty to the Government that is itself a Republic, a form of government where the PEOPLE are sovereign,

    for which it stands, this government also being represented by the Flag to which I promise loyalty.
    ONE Nation under God, These 50 individual states are united as a single Republic under the Divine providence of God, “our most powerful resource” (according to the words of President Eisenhower)

    INDIVISIBLE and can not be separated. (This part of the original version of the pledge was written just 30 years after the beginning of the Civil War and demonstrates the unity sought in the years after that divisive period in our history)

    with Liberty The people of this Nation being afforded the freedom to pursue “life, liberty, and happiness”,
    and Justice And each person entitled to be treated justly, fairly, and according to proper law and principle,

    for All. And these principles afforded to EVERY AMERICAN, regardless of race, religion, color, creed, or any other criteria. Just as the flag represents 50 individual states that can not be divided or separated, this Nation represents millions of people who can not be separated or divided

    “Always Giving GOD the Glory & Praise”

    I Love you all… with no conditions

    ‘BIG HUG’

    Bottom line… Do the right thing because it is the right thing to do.


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