An Earthquake Hits Massachusetts!...

In 2008 America’s Independents slammed the Republicans for being too Keynesian, in 2009 those same Independents are slamming the Democrats for their hyper-Keynesianism.

THAT is “THE message” of those two electoral seasons.

While the Bush administration did two very positive things, (1) first it engaged the scourge of our day, global jihadist terrorism, AND (2) greatly INCREASED tax revenues via those across-the-board tax rate cuts, the overwhelming bulk of its agenda was recklessly Keynesian.

How successful those tax rate cuts were was proven when the Capital Gains tax was cut from 30% to 20% and Capital Gains revenues subsequently soared, as investments skyrocketed. The SAME THING happened when the income tax rates were lowered across-the-board - income tax revenues soared and the Deficit was halved by 2006.

Opponents lamely argue that “Had those incomes and investments been taxed at their original (higher rates) we’d have reaped a LOT more in tax revenues.”

That’s not merely naïve it’s absolutely UNTRUE.

When the Capital Gains rate is lowered, investments rise and so do Cap Gains tax revenues. When the Capital Gains rate is raised, investments fall and the Cap Gains revenues fall...it really is just as simple as that.

The same goes for the income tax – escalating income tax rates incentivize SAVING (deferring income tax deferred) and result in lower income tax revenues, while lower rates, incentivize spending (taking more of one’s income upfront) and that results in higher income tax revenues.

But aside from those two things, the Bush administration was as Keynesian as LBJ’s, Nixon’s or Carter’s. In fact, not only did the Bush administration spend MORE in social spending (adjusted for inflation) than LBJ did, it also delivered over 1,000 pages of REGULATION per year, including the most expensive and far-reaching piece of financial regulation in decades, in Sarbannes-Oxley, which single-handedly resulted in the “jobless recovery” in that administration’s first term.

The "de-regulation" liberals often complain about, the repeal of the Glass–Steagall Act, occurred in 1999 and was signed into law by Bill Clinton on November 12^th, 1999.

So the Bush administration’s legacy is primarily a Keynesian one. In fact, it was at least as Keynesian as Nixon’s and close to that of Carter’s and LBJ’s.

THAT’S what America’s Independents responded to in 2008 in delivering these Keynesian Republicans a serious warning and political body-blow.

Pundits from across the political spectrum speculated that “perhaps the American electorate had veered Left,” or “embraced big government.”

Not even close.

Since 2007, the number of self-proclaimed Conservatives has increased (from 37% to 41%...and growing) every year, as the number of self-proclaimed liberals actually decreased a little - a fact hardly indicative of a nation “veering Left.”

And this year, those same Independents have made it all too clear where they stand and that’s solidly AGAINST big government and excessive government spending.

So far in 2009, the Dems have suffered three major losses, the first in “bluing” Virginia, which saw its first Republican sweep of the top 3 spots (Governor, Lt. Governor and Attorney General) in over 25 years! New Jersey saw a heavy-set, charisma-challenged Republican (Doug Christie) beat a well-funded, incumbent Democrat (Jon Corzine)...and last night, we saw the most shocking of upsets – a little known Republican State Senator beat out another well-funded, politically connected and “Democrat’s ANNOINTED candidate” (Martha Coakley), by more than 5% (over 100,000 votes) in perhaps the BLUEST of blue states!

The fact that President Obama campaigned for all three Democratic losers is telling...even the “popular” Obama couldn’t save them.

Still, last night’s upset, which saw a seat occupied by Ted Kennedy since 1962 taken by an under-funded and unknown Republican upstart was the clearest message America’s Independents have sent! In that special election, 71% of the Independents in Massachusetts (a state where 51% of the electorate is Independent) voted for a Conservative Republican!

As Scott Brown so presciently said, “When there’s trouble in Massachusetts, there’s trouble everywhere.”

Massachusetts was clearly a referendum on the current healthcare abomination, the ineptly carried out non-stimulating stimulus packages, the huge and wasteful bailouts, Cap & Trade and the reckless and irresponsible exploding national debt, which the current administration just added a whopping $1.6 TRILLION to in ONE year!

I am still concerned that the Rockefeller-wing of the GOP may not be ready to listen to the people any more than liberal Democrats are.

Starting in 2006 and in the route of 2008, the American people rejected the Keynesian overspending GOP.

So far in 2009, the American people have rejected the Keynesian overspending of the liberal Democrats in 3 major races (VA, NJ and last night, in MA)...BUT the Keynesians (who inanely believe that, “Every problem has a scientific solution, best implemented by a beneficent government”) in BOTH major Parties have proven to be stubbornly tone deaf.

But it’s clear for anyone with eyes to see, the American people have spoken loud and clear over the last four years (2006 thru 2009) in rejecting that Keynesianism overspending outright.