Curious Coincidences

 As our economy limps along every single Republican running for political office offers a prescription of tax cuts, regulatory cuts and cuts in the size of Government to bring our economy back to health.  Their unanimity is impressive, and their policy beliefs are easy to produce as wonderful sound bites.  Democrats have no such unanimity in economic policy, and certainly no specific policy so easily shaped into an appealing slogan.

A little bit a research reveals that this prescription has been the Republican position for the last 100 years.   From party platforms in the 1920’s through the Republican Presidential debates of this current electoral season, Republicans are the epitome of policy constancy over the last 100 years.

The research also reveals some curious coincidences.

 Imagine this scenario - Republican's promising to cut taxes, cut regulations and reduce the size of government win a sweeping electoral victory and take over both houses of Congress.  They restructure the tax law to make selling real estate or other assets more rewarding.  They begin chipping away at regulatory law to free up financial markets.  House prices begin to rise as do prices of stocks and other assets.   With Republican hands at the Congressional wheel the country goes through the better part of a decade with rising asset prices. Sounds wonderful, no?

 But if we continue with what actually happened we find income inequality rises as the rich get richer through complex financial dealings but working people make little gain.  Overall economic growth is pretty ordinary.  Then financial markets implode plunging the economy into a catastrophic collapse.  Millions of Americans lose their homes to foreclosure, stock prices collapse, banks collapse and the country limps along with a crippled economy for years.

You might think I am talking about recent history.  I could be.  But here is the first curious coincidence.  I could also be talking about the 1920's.

Coincidence #1:

In 1919 Republicans took over both houses of Congress, and in 1923 they also won the Presidency so they controlled all three branches of government for the next 10 years, until 1933.  Remarkably similar to recent history.  Republicans took over both houses of Congress in 1995 and added the Presidency in 2001, for a complete monopoly on public policy up until 2007.

Coincidence #2:

Between 1919 and 1933 the Republican Congress followed their belief that tax cuts, cutting regulations and cutting the size of government would lead to a strong economy.  In 1921 they cut income taxes on the wealthy.  They also created the first lower tax rate for Capital Gains, so for the first time selling an asset (such as your house) produced income that got better tax treatment than working at a job. 

In a like manner between 1995 and 2007 the Republicans followed their belief that tax cuts, cutting regulations and cutting the size of government would lead to a strong America.  They cut the marginal tax rates, particularly on the wealthy, cut the Capital Gains tax rate, cut regulations on the financial markets and changed the tax code to make selling Real Estate incredibly lucrative. 

Coincidence #3:

During both periods of long term Republican control the Republican era began with balanced Federal budgets, both era’s saw the budget dip into the red after the tax cuts and within a few years the Federal Government began spiraling into massive debt when the economy collapsed.

Coincidence #4 – the consequences:

Both periods of Republican control resulted in millions of home foreclosures as the housing market collapsed.  Both periods resulted in banks collapsing all over the country.  Both periods were marked by extraordinarily high unemployment that stayed at those high levels for longer than any other time in modern history.  Both periods saw millions of people lose all or most of their life savings.

Coincidence #5 - the most curious coincidence of all: 

1919 to 1933 and 1995 to 2007 were the only times in the last 100 years Republicans controlled both houses of Congress for more than one two-year session.  During he same 100 years Democrats controlled both houses of Congress for 14 years from 1933 to 1947, then for 24 years from 1955 to 1981, and another 8 years from 1987 to 1995.  Yet the two biggest economic collapses in modern history both followed the only two lengthy periods of Republican control of the Federal Government.

Just coincidence?