The GOP's Phony Fear Factor

The GOP always has to have someone or something to blame for the state of society or the state of economy. In respect to the state of society, it's gays, blacks, immigrants (both legal and illegal), non-Christians, etc. who always bear responsibility in the GOP/Christianist warped world view. In economic matters, it's almost always taxes and/or government regulation. The fact that none of these supposed culprits and causes is not true never matters in the GOP/Christianist fantasy land. Many business owners would increase hiring if the business demand was present - I would do so personally if anyone in Washington would make the effort to stabilize the housing market and get real estate sales flourishing once again. Unfortunately, in that realm, there's too little regulation to require banks and mortgage lenders to restructure loans and stop pushing loans to foreclosure where they know they will be bailed out by FHA, HUD, mortgage insurers, etc. - leaving taxpayers to bear the expense and generating legions of evicted families and further depressed housing prices as the end product. In the New York Times Paul Krugman looks at the GOP phony mantra that government regulation is blocking economic recovery

The good news: After spending a year and a half talking about deficits, deficits, deficits when we should have been talking about jobs, job, jobs we’re finally back to discussing the right issue.

The bad news: Republicans, aided and abetted by many conservative policy intellectuals, are fixated on a view about what’s blocking job creation that fits their prejudices and serves the interests of their wealthy backers, but bears no relationship to reality. . . . . The answer, repeated again and again, is that businesses are afraid to expand and create jobs because they fear costly regulations and higher taxes.

The first thing you need to know, then, is that there’s no evidence supporting this claim and a lot of evidence showing that it’s false.

[I]sn’t there something odd about the fact that [big] businesses are making large profits and sitting on a lot of cash but aren’t spending that cash to expand capacity and employment? No.

After all, why should businesses expand when they’re not using the capacity they already have? The bursting of the housing bubble and the overhang of household debt have left consumer spending depressed and many businesses with more capacity than they need and no reason to add more.

Republican assertions about what ails the economy are pure fantasy, at odds with all the evidence. Should we be surprised? At one level, of course not. Politicians who always cater to wealthy business interests say that economic recovery requires catering to wealthy business interests. Who could have imagined it?

Yet it seems to me that there is something different about the current state of economic discussion. Political parties have often coalesced around dubious economic ideas . . . . but I can’t think of a time when a party’s economic doctrine has been so completely divorced from reality. And I’m also struck by the extent to which Republican-leaning economists — who have to know better — have been willing to lend their credibility to the party’s official delusions.

[T]his reflects the party’s broader slide into its own insular intellectual universe. Large segments of the G.O.P. reject climate science and even the theory of evolution, so why expect evidence to matter for the party’s economic views?

The truth is that we’re in this mess because we had too little regulation, not too much. And now one of our two major parties is determined to double down on the mistakes that caused the disaster.