This week, Trump appointed Treasury Secretary, Steve Mnuchin, held a lecture and brief Q&A discussion at UCLA. Among other aspects were his position as regards the Mnuchin-Trump/GOP Congress economic agenda.
Mnuchin defends the Trump/GOP rich giveaway agenda debated an obvious disagreeing audience. In uncharacteristic of NPR style, the commentator, Ryssdal even engaged Mnuchin directly, in bantering the ideas thrown by the Secretary.
Unfortunately for Mnuchin, there is a significant historical bias of evidence against the Trump-GOP tax and economic plan; also the Secretary’s plan. The facts of history refute the claims being made by Secretary Mnuchin. These arguments against the GOP current plan can be roughly defined as:
- Ronald Reagan 1981
- GW Bush 2001
- GW Bush 2003
Each of these years marked a common action – major trickle-down tax cuts! And how did these three GOP fickle-trickle tax bills go? The results in all three attempts, to use the GOP fickle, unbridled trickle, first year the rich saw YUGE tax savings and incentives; We the rest of us saw a trickle. The years after, gave the rich a continued gorging of tax savings while We the rest saw – increased taxes! And the last natural consequence of the unbridled, fickle-trickle?
A DOWNWARD SPIRALING, FAILING ECONOMY!
This same result occurred all three times the fickle-trickle has been tried, starting in the second year. The first trickle-attempt by Reagan, a meltdown was averted. How did RR spare himself a GW Bush finish? Between 1982 and 1984, President Reagan got Congress to pass TAX INCREASES!
These new Reagan era tax increases were the LARGEST PEACETIME TAX INCREASES IN HISTORY! Reagan did this to offset his own dysfunctional fickle-trickle mistake of 1981; effectively canceling most of his tax-cut provisions within two-years. He did; however, stave off an economic meltdown and saved – his legacy! Reagan also started up another what has become common element, that the GOP use, every time the GOP are in power – WAR! In other words, BIG MILITARY SPENDING! In Reagan’s case it was “Star Wars“. In GW Bush case it was “The War on Terror” and specifically the purpose-intentional war against and upon IRAQ, declared and ensuing U.S. invasion in 2003.
GW Bush tried the fickle-trickle tax-cuts twice during his 8-years! First, in 2001 and again in 2003. Why did he try twice? Because the ’01 tax-giveaway to the rich did not have the long-term impact that GW and his GOP ?experts? promised; quite the opposite in fact. By the second year, the GW economy was tanking so – he doubled down and tried the same thing – again in ’03; that is the GW legacy. I think we know how that second attempt ended.
There is another catastrophic element that plays significant role as culprit in our recent economic meltdown woes. It (the culprit) was infused into policy in 1999, passed by GOP Congress, signed by a belligerent President Bill Clinton. It is this repeal which severely impacts the US economy, like an amplifier, every time some financial hiccup occurs.
In 1999 GOP Congress/Clinton repealed a legislative package called Glass-Steagall. Glass-Steagall was created in – 1933! Think about that timing? The repeal of Glass-Steagall cleared the way for banks to once again, first time in almost 100-years, to act like securities traders (just like back in the roaring 20s). After 2000, banks merged normal banking/lending/savings – with investment securities trading and they did this trading with unregulated incredibly high leverage (up to 99% borrowed funds). This high-leverage was at incredible risk, should repayment ever be required!(and life moves on)
Then came the mortgage crisis, which started as early as 2005; the visible downward spiral in 2007. This “subprime mortgage crisis“, was the trigger (domino), which culminated in a major financial meltdown, “The Great Recession of 2008“! The Great Recession as it is termed, was not caused by the subprime mortgage crisis (the domino); rather, by a greedy, reckless Wall Street
Financial Industry doing high-risk (on steroids) “CDS” and “CDO” securities trading without the reserves to pay up if things went south! We know the rest of this very painful story, which ECONOMY RESTORED over the next 8-years is – the Obama Legacy!
Back then Secretary Mnuchin was one of those reckless high-risk hedge-fund manager/traders; he lost his companies because when the piper called in the Wall Street bets, Mnuchin, like most of the greedy, corrupt securities traders and their companies, were so over-extended that they failed! So should have, the big banks!! But then we would have had the greater depression instead of the “Great Recession”; that choice by Congress in late 2008 can be argued but the course (2009 to present) – a part of our history and again, Obama’s Legacy.
Now Mnuchin and the GOP are trying it all again – same as, same as, last decade.
Why do the GOP think this time will somehow be a different outcome?
Back to present, in 2017 (at Mnuchin’s direction) Trump and GOP Congress did another great big Reagan-GW Bush style tax cut. As we know this legislation (just like the three before), uses the fickle-trickle. It moves massive tax savings to the top 1% wealthy, paid for – with a massive $1.5-Trillion dollar increase of our national debt!
Mnuchin says an increased GDP will pay for the $1.5-Trillion? Wait! The GW Bush Administration said that too about their $1.5-Trillion tax-cut deficit spending. So did the Reagan Administration promise that the soon to be improved economy would pay for his 1981 tax-cut bill, year-over-year deficit. BUT NO, not once, has that happened. Every time the GOP has made that promise, the debt does rise to or above the projection and We the Common People end up with the debt to be repaid. Always have, always will. — and the GOP economic promise FAILED!!
Now, Mnuchin, Trump, and GOP Congress want to repeal Dodd-Frank, the banking regulation passed in July 2010, that just barely restored limited regulation back into the banking sector, protecting We the People to a small degree, from another greedy, reckless banking industry bailout!
“A key component of Dodd-Frank, the Volcker Rule (Title VI of the Act), restricts the ways banks can invest, limiting speculative trading and eliminating proprietary trading. Effectively separating the investment and commercial functions of a bank, the Volcker Rule strongly curtails an institution’s ability to employ risk-on trading techniques and strategies when also servicing clients as a depository.” — Investopedia
Mnuchin and GOP Congress want to repeal this? They want to go back to open season, AGAIN! He wants to restore the banks and securities traders, his almamater industry, back to their full power, high-risk, no accountability, greed before brains practices. In other words the GOP, Trump, and Mnuchin want to LIVE-DIE-REPEAT. That is just ludicrous!
The next meltdown will require some drastic tools that will not solve; rather, justify some very horrible but required choices by our Government and our “central banker”.
(see HYPER-INFLATION and DEBT JUBILEE)
Why? Because the U.S. at every level (We, our companies, and our government) are so under-water with DEBT, that the Fed will not be able to inject us with enough remedy next time the bank gambling gets called in to pay up! And what will be the next trigger? Unknown at present but whatever it is, retail meltdown, another real estate correction, US is no longer the world currency, or maybe just too much debt! Whatever becomes that trigger – the dominoes will topple again because banks are high-risk trading (CDS and the more recent “ABS” securities), like never before, more now than they were before 2008!
In other words Mnuchin’s old industry, the one he helped blow up in 2008 – are primed again and this, Trump’s appointed Treasury Secretary wants to LIVE-DIE-REPEAT. Only this time there my be no repeat – rather a reset!
Mnuchin and the wealth machine get richer and we – ??