Monday, April 16, 2012

Two Grinches

Politics is all about keeping your base supporters energized and ready to go to the polls for your party. You use the media to get out easy to digest messages, you have pundits who articulate these messages in various ways so they appeal to as many people as possible and then there are the think tanks that spend billions learning how to further manipulate people to achieve an end. Part of what you do is spend time pushing the positives of your team and part of the time its pushing the negatives of the other team. Its a back and forth and both parties in our system have enjoyed periods of rather sustained success due to their ideas being adapted at just the right time in history.

Democrats enjoyed success for most of my early life and it mostly started with Roosevelt and WWII. Our responses to the depression, a period of great pain for many that was seen as the end result of high finance run amok, were the cornerstone of democratic policies for decades. Protecting people by insuring their deposits (FDIC), making housing affordable via 30 yr mortgages (Fannie) and guaranteeing an income in old age (SS), were just a few of the important ways that average Americans were spared destitution if economic times turned real bad.

Republicans have enjoyed success from my college days onward. Mostly because they had the presidency when we fought off the inflation of the 70's and it was their policies which have been given credit. One of the strategies they have successfully used since that time centers around an idea by Jude Wanniski, a journalist/economist/author of that day, called the Two Santa Claus' theory.
It is described this way in Wikipedia;

"The Two Santa Claus Theory

The Two Santa Claus Theory is a political theory and strategy published by Wanniski in 1976, which he promoted within the United States Republican Party.
According to Wanniski, the theory is simple. In 1976, he wrote that the Two-Santa Claus Theory suggests that "the Republicans should concentrate on tax-rate reduction. As they succeed in expanding incentives to produce, they will move the economy back to full employment and thereby reduce social pressures for public spending. Just as an increase in Government spending inevitably means taxes must be raised, a cut in tax rates—by expanding the private sector—will diminish the relative size of the public sector". Wanniski suggested this position, as Thom Hartmann has clarified, so that the Democrats would "have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections"
The theory states that, in democratic elections, if one party appeals to voters by proposing more spending, then a competing party cannot gain broader appeal by proposing less spending. The first "Santa Claus" of the theory title refers to the political party that promises spending. Instead, "Two Santa Claus Theory" recommends that the competing party must assume the role of a second Santa Claus by not arguing to cut spending but rather offering the more appealing and publicly sellable option of cutting taxes.
This theory is a response to the belief of monetarists, and especially Milton Friedman[citation needed], that the government must be starved of revenue in order to control the growth of spending (since, in the view of the monetarists, spending cannot be reduced by elected bodies as the political pressure to spend is too great)[citation needed]. See also Starve the beast.
The "Two Santa Claus Theory" does not argue against this belief but holds that such arguments cannot be espoused to try to win democratic elections. In Wanniski's view, the Laffer curve and supply-side economics provide an attractive alternative rationale for revenue reduction: that under reduced taxation the economy will grow, not merely that the beast of the government will be starved of revenue, and that that growth is an attractive option to present to the voters. Wanniski argued that Republicans must become the tax-cutting Santa Claus to the Democrats' spending Santa Claus."

Interesting stuff. It seems to me that this strategy is blowing up for both parties. Now they are locked in a race to take away the least from their electorate. Both agree that something must be taken away but the what and the amounts differ. Now instead of being the "Two Santa Claus'" they are becoming the "Two Grinches". Whos brand of cutting will be most effective and appealing?

One of the things that may favor democrats is that they are more sincere in their beliefs that we must cut stuff. I disagree vehemently with austerity measures, knowing they are wrongheaded and based on a completely flawed paradigm of how govt financing works, but the democrats are more likely to be seen as sincere in their efforts to make things better. Republicans have shown that they are just about slashing and burning everyone elses stuff and keeping their stuff safe from harm. Unfortunately our politicians keep reenforcing the idea the populace has that the only choice we have is the least bad one.


  1. Two Grinches. Nice analysis!

    "It seems to me that this strategy is blowing up for both parties. Now they are locked in a race to take away the least from their electorate."

    This stands as evidence that their solution was wrong from the start. But then I guess Wanniski didn't really offer a solution. He only offered a strategy for winning elections.

  2. Art,

    At least I have an audience of one! : )

    I thought of this post while answering a gallup pole on Sunday. The pollster was asking mostly questions surrounding my preferences for Romney, Santorum and Obama.

    When I was asked whether I liked Romney or Santorum and asked to give a scale of dislikeability from 1 to 10 I quickly answered 8.5 for Santorum and about 8 for Romney. When asked about Obama I paused and had to answer honestly that I mostly dislike Obama. I gave him a solid 6. Not a just over 5 like 5.2 or something but a solid 6. So I asked myself why. And its because he is agreeing with the idiot boys in substance, that the rest of us just have it too well. We need to be more miserable.

    Seniors need to stop expecting to be able to fly every so often to see their granchildren, hell not long ago no one flew, who the hell are we to think we should fly so much.......

    Workers need to be willing to sacrifice more of their incomes for their bosses. This sticky wages shit has got to go. If your boss is having trouble with his credit line you need to take a 25% paycut and be happy your boss doesnt send you packing!!

    For Gods sakes we absolutely cannot make the bankers mad. Without them we would have no money! They invented the stuff, if we push them they will take it all to Costa Rica and retire. Dont ask for new terms on your loans. (Dont even think about walking away or we'll sick Holder on your ass)

    These guys are all getting joy out of seeing "Who-ville suffer"