Transcript: Thom Hartmann: The Big Picture: Right-washing history. 20 May '11
As I was heading into my radio studio this morning - something caught my ear on MSNBC before I left the house
In an interview on Morning Joe - I heard Illinois Senator Mark Kirk say this:
I think we should be optimist about the United States. We had a tremendous deficit like this right after World War Two. And because we had fiscally conservative leaders, we paid off those huge World War Two deficits and unlocked the economy that became the superpower called the United States of America.
My mouth practically dropped to the floor.
I don’t know if Kirk just wasn’t paying attention in history class - or if this is the latest effort by Republicans to "right-wash" history - but either way - nothing could be farther from the truth than what Senator Kirk just said.
This is our nation’s debt as a percentage of GDP - all the way from just before World War 2 - up until today.
And yes - our debt was enormous after World War 2 - as it should be - it cost a lot of money to kick the Nazi's butt.
And yes - all it took was two presidents after Roosevelt to bring our debt back down to reasonable levels.
So how’d they do it - how did Truman and Eisenhower reign in our debt? Was it thanks to the conservative fiscal policies that Ron Kirk is touting?
No - we didn’t cut our way to fiscal prosperity like Republicans today want you to believe - we GREW and SPENT our way to prosperity
Coming out of the Great Depression - Franklin Roosevelt tore down a decade of co-called "Conservative policies" that unleashed the "Roaring 20's" bubble economy - and then led to the Stock Market crash in 1929.
Roosevelt immediately jacked up the top income tax rate to keep rich people from gambling with their excess money - and to pay for a "New Deal" to put working class Americans back to work. Under his watch - the top income tax rate went from 25% in 1931 all the way up to 94% by the end of World War 2.
And through the Truman and Eisenhower Administrations - that top tax rate stayed at around 91%.
So yeah - if Mark Kirk wants to take a lesson from the 1950's on how we paid off our debt so fast - then he should consider raising taxes on the rich. What he shouldn't be learning from is what Reagan did with his so-called Conservative policies that exploded our debt in the 1980's.
Under Reagan's watch the top income tax rate plummeted from 70% in 1980 to 28% in 1989 - and by the end of his term more than 3 trillion dollars of debt was on our nation's balance sheets. Corporate taxes also played a key role in paying off our debt.
Roosevelt jacked those up too - from 12% to 40%. And Republican Dwight Eisenhower raised them again - up to 52% in the 1950's.
Corporate taxes accounted for about a third of all government revenue during the 1950's and 1960's.
Today - thanks to a much lower 35% tax rate and corporate lobbyists - corporate taxes make up less than 7% of all government revenue and most large corporations pay little or no income taxes...no wonder we're going bankrupt.
And then there's labor policies. While America was paying off its World War 2 debt - Truman and Eisenhower continued Roosevelt's pro-labor agenda.
Take a look at what Harry Truman had to say back in 1948 - about the Democrats pro-labor policies:
The reason is that the people know that the Democratic Party is the people's party, and the Republican Party is the Party of special interest, and it always has been and always will be....
Workers have benefited by the progress which has been made in carrying out the programs and principles set forth in the 1952 Republican platform. All workers have gained and unions have grown in strength and responsibility, and have increased their membership by 2 millions. Furthermore, the process of free collective bargaining has been strengthened by the insistence of this Administration that labor and management settle their differences at the bargaining table. This policy has brought to our country an unprecedented period of labor-management peace and understanding." ...
Wages and salaries in this country have increased from 29 billion dollars in 1933 to more than 128 billion dollars in 1947. That's labor, and labor never had but one friend in politics, and that was the Democratic Party and Franklin D. Roosevelt....
The total national income has increased from less than 40 billion dollars in 1933 to 203 billion dollars in 1947, the greatest in all the history of the world. These benefits have been spread to all the people, because it's the business of the Democratic Party to see that the people get a fair share of these things.
Scott Walker in Wisconsin just flipped out, right?
And in 1956 - this is what the Republican Party's platform under the leadership of Dwight Eisenhower was regarding labor:
Workers have benefited by the progress which has been made in carrying out the programs and principles set forth in the 1952 Republican platform. All workers have gained and unions have grown in strength and responsibility, and have increased their membership by 2 millions.
Furthermore, the process of free collective bargaining has been strengthened by the insistence of this Administration that labor and management settle their differences at the bargaining table without the intervention of the Government. This policy has brought to our country an unprecedented period of labor-management peace and understanding.
From the Republican Party's official platform in the 1956 election!
Under the Truman and Eisenhower's administrations - nearly a third of all private sector workers in America belonged to unions. And because of that - as Truman and Eisenhower just point out - workers were bringing in healthy wages, which meant they were paying more in taxes - and the government was collecting more revenue to pay off its debt.
Thanks to unions - the pay ratio between a CEO and a worker on the factory floor was about 30 to 1 back then...today it's more like 600 to 1. Workers are now getting screwed with low wages and, thus, many don't even make enough to pay federal income taxes.
So yeah...if we REALLY want to pay off our debt - how about instead of busting up unions - we start promoting unions - promoting workers having more money in their pockets - to stimulate our economy AND raise everyone's wages.
And finally there's government spending. Over and over again - you hear Republicans say we need to cut spending - but that's not what Truman and Eisenhower did to pay off our debt - they INCREASED spending.
Truman and Eisenhower oversaw the GI Bill, which sent ten million returning soldiers to college for free - my dad was one of them - and helped millions more buy a home with low-interest loans - my dad was one of them, too. Plus those vets got free healthcare, and low-interest loans to begin small businesses.
Eisenhower went gangbusters building highways - schools - bridges - dams - wiring our rural areas for electricity - he made massive government investments in our infrastructure. As a result - more and more people got jobs - collected paychecks - and paid taxes.
Plus - with a more efficient infrastructure - businesses made more profits and paid their fair share back to the government to reduce our debt.
The idea of cutting government investments to reduce our debt never even crossed the minds of these presidents - they knew that the quickest way to get out of debt was to grow an economy - not shrink an economy. And often growing an economy requires government spending.
Today - if we really want to get our debt under control - then we need to invest in America - renovate our infrastructure so that everyone makes more money.
Roosevelt - Truman - and Eisenhower followed a really simple recipe to pay off our debt in less than two decades: High taxes for the rich - increased union membership - and government spending on infrastructure...and it all worked.
We've already seen what Conservative fiscal policies of cutting taxes - busting up unions - and shrinking government investments does to our economy...it's right here (points to the chart). When Reagan took power - and when George W. Bush put Reaganomics on steroids in the 2000's.
For too long - Republicans have right-washed the history of Ronald Reagan - hiding the fact that he added more debt to our nation than every single other president in history combined - from George Washington to Jimmy Carter.
Hiding that he actually raised taxes 11 times - mostly on working class Americans - claiming the dishonorable distinction of being the first president in history to cut taxes for the rich and raise taxes for the poor at the same time.
And hiding the reality that our nation's infrastructure is crumbling today because of Reagan's "starve the Beat" economic philosophy.
The Republicans got away with the re-write - exalting Reagan to the heights of American sainthood - but I'm not going to let them get away with re-writing the presidencies of Harry Truman and Dwight Eisenhower - men who employed truly progressive fiscal policies to grow the middle-class in America and to pay off our debt at the same time.
The solutions to today's problems are clear - we've used them before and they worked.
We need Democrats like Harry Truman and Republicans like Dwight Eisenhower - not corporate shills like Mark Kirk, John Boehner, and Eric Cantor - if we're going to get America back on the right track.
That's The Big Picture.