The GOP’s Great Betrayal—Rise Of The UniParty Since 2006

For all practical purposes 2006 can be identified as the year in which the baleful reign of the UniParty became deeply embedded on the banks of the Potomac. At the fateful juncture the Washing GOP establishment saw fit to make two of the worst appointments to high Federal office in the entire history of the United States. That is, the appointment of Ben Bernanke, an out-and-out Keynesian statist, to the Fed chairmanship and Hank Paulson, a liberal activist and Goldman Sachs plenipotentiary, as Secretary of the Treasury.

To be sure, sound money, fiscal rectitude and free markets were already in their death throes during Bush the Younger’s second term, but these vile appointment sealed the coffin. Thereafter, in fact, the GOP became the second party of government—-launching Bailout Nation during the Wall Street meltdown of 2008 and cheering on the subsequent money-printing spree under the Bernanke/Yellen/Powell cheap money trifecta, two authors of which were GOP appointments. And then piling into Warfare State spending and the resulting public debt explosion with such enthusiasm as to make traditional “borrow and spend” Democrats blush with envy.

Thus, shortly after 2006 the spending faction within the GOP took control of the policy con, nominating a pro-war maniac, Senator John McCain, for president in 2008, and followed up with another neocon warmonger, Mitt Romney, in 2012. And then, of course, came the all-time king of government spending and public debt, Donald Trump, in 2016.

It goes without saying that the explosion of public debt and fiat credit since 2006 has left middle class America high and dry. But for want of doubt, the purple line below shows the purchasing power of a dollar saved or earned in January 2006. It’s now worth just 63 cents.

Not surprisingly, that was the fruit of the Fed’s madcap money-printing over the past 18 years. As shown by the black line, the Fed’s balance sheet is still up by nearly 800% from its 2006 level notwithstanding the tepid reduction due to QT during the last two years.

In hard dollars and cents, the Fed has printed $6.5 trillion of fiat credits since January 2006, which represents spending power plucked out of thin digital air. That this confirms the GOP’s final and complete capitulation to printing press statism is evident simply by asking: What would Uncle Milton Friedman’s slow and steady money growth rule (3% per annum) have generated over the same period?

We don’t think money-printing even at Friedman’s 3% rule is called for, yet the answer is there would be a Fed balance sheet today of just $1.4 trillion. That is to say, the Fed has printed upwards of $6 trillion of excess fiat credits over the past 18 years, thereby transforming the nation’s central bank into the milk-cow of speculative windfalls on Wall Street and endless Forever Wars and borrow and spend  bacchanalias on the banks of the Potomac.

Purchasing Power Of The Worker’s Dollar Versus The Fed’s Balance Sheet, 2006 to 2024

Needless to say, when it comes to the impact on main street wage and salary workers, not so much. Since 2006, total inflation-adjusted wage and salary payments (2024$) have risen from $9.4 trillion per annum to $12.1 trillion. That $2.7 trillion gain amounts to $20,600 per US household in constant dollars.

By contrast, the constant dollar net worth of the top 1% of US households have grown from $27.3 trillion to $44.6 trillion as of Q4 2023. That $17.2 trillion gain amounts to $13.2 million each for the 1.3 million richest US households.