The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics

I have just one minor criticism of this book: the subtitle, "The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics." Strange to say this somewhat misrepresents the content of the book. The real con was played on the American public not just Washington, and it was more of a political con than an economic one. It is true that the Reagan and especially the George W. Bush administrations systematically stole money from the middle class and gave it to the rich, but that is only part of the story. The real con, as Jonathan Chait makes clear, is in their attempted destruction of the checks and balances of our democratic/republican form of government as established by the founding fathers. The Republicans have simply made Congress irrelevant in many respects. Chait shows how the Bush administration was able to stifle opposing views by intimidating a cowardly press, and with a near dictatorial level of executive privilege in the White House and a storm trooper like control of committees and procedures in the Congress, was able to empty the treasury and fatten the pockets of cronies in big corporations. In their zeal to make government smaller, the voodoo economists, the neocons, and their clueless allies, the evangelical social conservatives, have eviscerated the machinery of government to the point that all the appointed posts are filled with Bush buddies, party hacks and corporate henchmen, many of whom are incompetent and loyal not to the American people but to the very institutions and corporations that they are supposed to oversee and regulate. Furthermore Bush has greatly weakened America abroad with his wasteful and immoral war in Iraq while at the same time has strengthened both Al Qaeda and the theocracy in Iran. Additionally, Bush's personal incompetence and immorality in international affairs has made the US not just the butt of jokes but has brought shame upon the US, once arguably the moral leader of the world. As Chait chronicles it, this thievery and desecration of America was tried before during the reign of the robber barons and continued until the power structure realized that if they kept stealing from the masses they might invite the specter that was haunting Europe into the heartland of American--that specter being communism. Now with communism nearly dead, the new robber barons are again emboldened. The thievery began again in earnest during the Reagan administration with the laughable economics of the Laffer Curve. The idea is that--miracle of miracles!--you can increase government revenues by lowering taxes. Yes! If governments tax at too high a rate people will lose the initiative to work or invest because of diminishing returns from their labor and capital. But if you lower taxes allowing people to keep a higher percentage of what they have earned, low and behold they work harder and invest more and this stimulates the economy! This idea, as Chait acknowledges, contains a germ of trut

In this brilliantly-written book, Jonathan Chait, senior editor at the New Republic, shows simply and lucidly how a tightly knit group of politically and economically motivated men have taken over the US state. Right-wing economic extremists and business lobbyists now control the terms of the debate and determine the political climate. He shows how this tiny coterie has turned the Republican Party into a machine for protecting and expanding the wealth of the very rich. It has been a coup on behalf of the plutocracy, resulting in a massive looting of the Treasury, huge corporate subsidies, vastly increased inequality and growing poverty. Since the 1970s, the top 0.1% of Americans has tripled its share of the national income; the top 0.01% has quadrupled its share of national income to 3%. The chosen policy is single and simple - cut taxes on the rich. This is supposed to increase incentives, making the economy grow. Tax cuts supposedly increase tax revenues - less is more, greed is good. How differently we run things here in Britain! The policy does not reflect what most Americans want. They want a more active government, providing more services, taxing the rich more through a more progressive tax system. The government does not even reflect what most Republican Party members or voters want, but only what its funders want. Because the government does not reflect public opinion, it has to lie about its policies. The media, owned by the very rich, fail to analyse or challenge these policies. Instead, they focus on the presumed strengths or weaknesses of politicians' characters. To pursue its unpopular economic agenda, the American government has had to break down the American political system, corrupt American politics and defeat democracy. The separation of powers is no more, and there is no rule of law.

I am reluctant to give 5 stars to any review, but I succumbed to the temptation in this case simply because for what it does this book is just about as good as it gets. It reminds me somewhat of Paul Krugman's scarily prescient book "Fuzzy Math" that predicted all of the fiscal calamities that followed the enactment of the Bush tax cuts. Chait's book is similar to Fuzzy Math on two counts: first, it offers a sustained, cogent criticism of Bush economic policy; and second, it is extremely well-written. Chait has an admirable ability to make fairly technical subject matter completely clear to a lay audience. He increases readability even more by sprinkling his prose with a healthy dose of humor. I couldn't put the book down, devouring it in a weekend. However, The Big Con has a considerably more ambitious scope than Fuzzy Math, which was essentially limited to an analysis of Bush's 2001 tax cuts. The Big Con focuses upon the entire history of supply-side economics, the philosophy that has, as Chait aptly demonstrates, completely captured the Republican party despite the fact that it has virtually no support among professional economists. If you want to learn something about economic policy while enjoying a thumping good read, I can't recommend a better choice.

Let me state up front that I do not subscribe to all of Jonathan Chait's tenets. I do not believe, for example, that a graduated (what he would call progressive) income tax rate is fundamentally just. Hence I do not consider it immoral for the government to cut taxes on the wealthy, since the wealthy already pay a higher percentage of their income in taxes. It is, however, grossly irresponsible to cut taxes and go on a credit spending spree. Deficit-financed budgeting compromises not only our economy but our national security, and subverts the traditional Republican ethos of self-reliance. Critics who dismiss Jon's arguments because they do not share his ideological underpinnings only illustrate his complaint about the lack of consensus in Washington. Increasingly America is becoming a place where we cannot agree even to disagree. Yet this is not ultimately a treatise on the merits of conservatism or liberalism, but "a book about the disappearance of the center and the triumph of the extreme," as he notes in the introduction. Republicans may not want to listen to Jon Chait, but if they continue to wallow in economic junk science, then they may find themselves with a lot more time to consider what he has to say.

It's a pretty good book. Those who think that conservative economic policies are well-supported by some kind of professional consensus among economists will be shocked, shocked to learn that on at least one of the key elements of Republican Party economic policy thinking -- their obsession with cutting taxes -- the ideas being put forward to justify it by the Bush administration, The Wall Street Journal, and all the rest are crackpot economic notions that are being mainstreamed only by virtue of (what else?) relentless message discipline. These same crackpots (and presumably liars) would have you believe that returning to Clinton-era levels of taxation would wreck the economy, that retirement security can best be provided to all by expanding tax breaks for rich people, that health care can best be improved by expanding tax breaks for rich people, that sound education policy requires expended tax breaks for rich people, and so on. Um, wrong on the facts, wrong according to the ACTUAL consensus.