Republicans Prepare to Attack America with Santa Claus
The headline over at Politico on Nov. 16 says it all: White House’s hopes for a lame-duck debt ceiling deal are fading fast.
It’s no accident or coincidence that this never once happened during the presidencies of Ronald Reagan, George Bush, George W. Bush, or Donald Trump. Or that it did happen during the presidencies of Bill Clinton and Barack Obama … and, now, Joe Biden.
You could even call it a conspiracy: there’s an amazing backstory — with a unique name — here.
Republicans, with this declaration, have formally rolled out Reagan’s “Two Santas” trick.
They’re now proclaiming step one: holding the U.S. economy hostage by refusing to raise the debt ceiling. But step two, using it to destroy the Democratic Party (and the nation, if they don’t get their way), is the most insidious part.
If they succeed, it could crash the entire U.S. economy and throw us (and perhaps much of the rest of the world) into something far worse than a recession.
And, sure enough, Mitch McConnell verified step one when he said there would be “zero” Republican votes to raise the debt ceiling.
Treasury Secretary Janet Yellen responded by telling the Wall Street Journal that if the Republicans force a shutdown of the U.S.
government like they did to Obama in 2011, “We would emerge from this crisis a permanently weaker nation.”
But the GOP is adamant: they have their strategy, worked out and fine-tuned by Ronald Reagan and followed by Republicans in Congress ever since, and they’re sticking to it.
This destruction of the U.S. economy during a Democratic presidency, they believe, will help their prospects heading into the presidential election of 2024.
This is part of an old GOP strategy — dating back to the Reagan Revolution — which worked well for them during both the Clinton and Obama presidencies. It even has a name: Two Santa Clauses.
To defeat it this time, Democrats must get ahead of it and publicly call it out (as they failed to do in the past).
Here’s how it works, laid out in simple summary:
To set up its foundation, the Two Santas strategy dictates, when Republicans control the White House they must spend money like a drunken Santa and cut taxes on the rich, all to intentionally run up the US debt as far and as fast as possible.
“The only thing wrong with the U.S. economy is the failure of the Republican Party to play Santa Claus.”
—Jude Wanniski, March 6, 1976
They started this during the Reagan presidency and tripled down on it during the presidencies of Bush and Trump.
Massive tax cuts and uncontrolled spending during Republican presidencies produced three results: they stimulated the economy with a sort of sugar high, making people think that the GOP can produce a good economy; they raised the national debt dramatically (it’s at $31 trillion today, 100% of which tracks back to Reagan’s, Bush Jr.’s, and Trump’s massive tax cuts and Bush’s two illegal off-thebooks wars); and they made people think that Republicans are the “tax-cut Santa Clauses.”
Then comes part two of the one-two punch: when a Democrat is in the White House, Republicans must scream about the national debt as loudly and frantically as possible, freaking out about how “our children will have to pay for it!” and “we have to cut spending to solve the crisis!”
The “debt crisis,” that is, that they themselves created with their massive tax cuts and wild spending.
Do whatever it takes: shut down the government, crash the stock market, and damage U.S. credibility around the world if necessary.
This will force the Democrats in power to cut their own social safety net programs and even the crown jewel of the New Deal, Social Security, thus shooting their welfare-of-the-American-people Santa Claus right in the face.
And, sure enough, here we are again with a Democrat in the White House.
Following the script, Republicans are again squealing about the national debt and saying they will refuse to raise the debt ceiling, possibly crashing the U.S. economy.
And, once again, the media is preparing to cover it as a “Debt Crisis!” rather than what it really is: a cynical political and media strategy devised by Republicans in the ‘70s, fine-tuned in the ‘80s and ‘90s, and since then rolled out every time a Democrat is in the White House.
Politically, it’s a brilliant strategy that was hatched by a fellow most people have never heard of: Jude Wanniski.
Republican strategist Wanniski first proposed his Two Santa Clauses strategy in the Wall Street Journal in 1974, after Richard Nixon resigned in disgrace and the future of the Republican Party was so dim that books and articles were widely suggesting the GOP was about to go the way of the Whigs.
There was genuine despair across the GOP, particularly when Jerry Ford couldn’t even beat an unknown peanut farmer from rural Georgia for the presidency.
Wanniski argued back then that Republicans weren’t losing so many elections just because of Nixon’s corruption, but mostly because the Democrats had been viewed since the New Deal of the 1930s as the “Santa Claus party.”
On the other hand, the GOP, he said, was widely seen as the “party of Scrooge” because they publicly opposed everything from Social Security and Medicare to unemployment insurance and food stamps.
The Democrats, he noted, had gotten to play Santa Claus for decades when they passed out Social Security and unemployment checks — both programs of Franklin Delano Roosevelts’ Democratic New Deal — as well as their “big government” projects like roads, bridges, schools, and highways that gave a healthy union paycheck to workers and made our country shine.
Even worse, Democrats kept raising taxes on businesses and rich people to pay for all that “free stuff” — and Democrats’ 91% top tax rates on the morbidly rich didn’t have any negative effect at all on working people (wages were steadily going up until the Reagan Revolution, in fact).
It all added, Wanniski theorized, to the public perception that the Democrats were the true party of Santa Claus, using taxes on the rich to fund programs for the poor and the working class.
Americans loved the Democrats back then. And every time Republicans railed against these programs, they lost elections.
Therefore, Wanniski concluded, the GOP had to become a Santa Claus party, too. But because Republicans hated the idea of helping out working people, they had to come up with a new way to convince average voters that the GOP, too, had the Santa spirit. But what?
“Tax cuts!” said Wanniski.
To make this work, the Republicans would first have to turn the classical world of economics — which had operated on a simple demanddriven equation for seven thousand years — on its head. (Everybody then understood that demand — “working-class wages” — drove economies because working people spent most of the money they earned in the marketplace, producing “demand” for factory-output goods and services.)
To lay the ground for Two Santa Clauses, in 1974 Wanniski invented a new phrase — “Supply-Side Economics” — and said the reason economies grew and became robust wasn’t because people had good union jobs and thus enough money to buy things but, instead, because business made things available for sale, thus tantalizing people to part with their money.
The more products (supply) there were in the stores, he said, the faster the economy would grow. And the more money we gave rich people and their corporations (via tax cuts) the more stuff (supply) they’d generously produce for us to think about buying.
At a glance, this 1981 move by the Reagan Republicans to cut taxes while increasing spending seems irrational, cynical and counterproductive. It certainly defies classic understandings of economics. But when you consider Jude Wanniski’s playbook, it makes complete sense. Thom Hartmann is a talk-show host and the
author of The Hidden History of Monopolies: How Big Business Destroyed the American Dream (2020);
The Hidden History of the Supreme Court and the Betrayal of America (2019); and more than 25 other books in print. This article was published in Common Dreams.