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The Reagan Legacy

February 9th, 2011 · No Comments · Capitalism, Economics, Politics

The American scene has changed since 1980 and not for the better. What is our biggest problem today? That’s right: the national debt. Everything to do with the national debt goes back to Ronald Reagan. And it is much more complex and sinister than just the numbers, which themselves are staggering.

From the end of World War II, until 1980, every political administration in Washington, Democratic and Republican alike, except…for special circumstances…Gerald Ford, had reduced the national debt.

In 1980, Ronald Reagan won election to the Presidency. In 1981, he cut taxes from 74% at the top rate to 50% and later he cut the top rate to 28%. At the same time he quadrupled the military budget, despite the fact that every U.S. intelligence service knew and undoubtedly told him that the Russians were far behind in technology and rapidly going broke.

He did, of course, have no problem increasing taxes on those who make $100,000 or so…or less…when he and Tip O’Neill agreed to raise the Social Security and Medicare taxes on the average American working family. In addition, Reagan cut back on domestic programs by 54%, programs which mostly inure to the benefit of the middle and lower income groups, who depend more on government.

The Reagan pattern was established, and as he was unreasonably popular, even though things were going badly most of the time, averaging a 52% approval rating, Republicans decided to continue his policies and invoke his image every time they came up with some foolish new proposal. And it worked.

So much for the Republican claim of supporting those “hard working American families…” How many times have you heard that from some Right Wing corporate-pandering Congressman? The fact is that since 1979, real wages for the bottom 99% of Americans have not increased at all, while the top 1% have gone from 29% of the wealth in the country, about a third, to 59% about two-thirds…and it’s climbing faster right now than ever.

What does that mean? It means that the segment of the richest Americans who want power…the Right Wing Super-rich…have enough money to control media, politics and the entire jobs market. They can control what the ignorant read and watch. They can control which politicians are nominated and elected. And they can control where jobs go…whether in the North or the South and here in the U.S. or abroad.

And now it is clear that during the Bush Administration they packed the courts with Right Wing, Federalist Society, totally partial judges. We saw the effect in Alabama where a sitting governor was attacked, lies told about him, and when he lost his office, was immediately charged with trumped up offenses by U.S. Attorneys hired by Karl Rove.
The U.S. attorneys hid evidence, exaggerated other evidence, brought in evidence about things that were not even criminal and made them sound criminal…and, with an ignorant Southern jury, persuaded 12 jurors that this man who had a popularity rating of 57% was actually a criminal.

They took this well-respected governor away literally in minutes and slapped him immediately into solitary confinement “for his own protection” so that he was not able to speak to anyone for months. It was the kind of act, this miscarriage of justice, for which someone like Rove should go to jail, or worse. Rove is a scum bag of the worst kind and should be treated the way you would treat a wild animal.

This is the kind of thing that happens when the stakes become high. The state of Alabama is a key state for Republicans. They won’t win Ohio or Michigan or New York or California or any state with a large, well-educated population of Middle Class families. But they must have the South to win elections and they must win elections because that is where their money comes from. Their patrons are the large corporations. The only value the Republican Party has to them is the Reagan legacy…that they will support big business to the detriment of the rest of the population.

Remember, Reagan did more for the rich than merely give them tax cuts. As only one example, he changed the tax rules on real estate, so that not only could brand new buildings be taxed as though they were falling apart, but they could be written off over seven-and-one-half years. So there were virtually no taxes paid on them and at the same time tax losses were being written against them.

Reagan virtually decimated the regulatory structure, turning environmental regulation over to a bunch of non-regulatory anti-environmenalists from Utah. The outcome was that business went wild and polluted everything in sight. Naturally the large oil companies and chemical companies are unhappy with Democrats. They never had it so good as under the toxic policies set up by a damned fool by the name of Reagan.

He simply put America out of balance because of his lack of vision. Within two years of Reagan’s taking office, 1983, the United States was running structural deficits of 6% of GDP that would grow almost every year until the country was running national deficits of close to half-a trillion a year.

Tax cuts to prosperity? Ridiculous. If you look at the charts, GDP rose for a year or two after the very problematic 1980-1983 period of deep economic recession. After that, the GDP declined every year until 1991 when it went below zero before beginning to rebound. It should be noted that it rebounded when the first George Bush raised taxes.

It would take 15 years after Reagan’s tax cuts and a Democratic President before we would balance budgets again. Before the bleeding stopped Reagan and the first President Bush would run up over $4 trillion in national debt.

Before it could be stopped by President Clinton and the process reversed, the country would reach $5.16 trillion in debt. But at least the deficits had stopped. Government had increased taxes on a few people, but 22 million more people had jobs than had been employed when Clinton took office.

The Clinton years were the longest sustained period of economic growth in the history of the country. More people owned homes and more African-Americans climbed out of poverty into the middle class than at any time in our history. A rising tide was lifting all boats and U.S. ingenuity and economic energy was at an all-time high.

Whether you maintain that Social Security funds are part of national revenues or in a trust fund…either way you account for it Clinton had budget surpluses. They are simply larger if you count Social Security trust funds. Remember, Clinton raised rates taxes on the top 1% to the “staggering, job-destroying” heights of 39% from 35%. All Republicans—every single one—voted against it. But he was right and obviously they were wrong.

In the Reagan years, the incomes that did go up were mainly among the wealthy. The top 1% of Americans saw their incomes rise twice as fast as the rest of society. But the poor and elderly and those who were one way or another disadvantaged saw the opposite.

Housing and education and social services where devastated, with some being cut as much as 80% and almost none less than half. But Reagan smiled and unless you were tripping over the homeless on your way into Grand Central Station or giving quarters to the homeless in cardboard boxes along Madison Avenue, you might never have known.

Another problem that began with President Reagan and was resumed with President Shrub Bush was the neglect of the regulatory functions of government and the potential fostering of white-collar crime, such as embezzlement of savings and loan funds. After the fact we learned that the Savings and Loan crisis under Reagan eventually cost approximately $150 billion to close or restructure S & Ls worth over $500 billion.

Over a thousand Savings and Loan executives went to prison.

Of course under Shrub Bush there was a huge crisis that caused the demise of at least one giant investment bank and the closing and or merging of many others to save the system. The investments of hundreds of millions of Americans were not saved, however, because the stock market crashed and half the equity in almost every person’s investments were lost.

Multi-millionaire Republican Congressmen, like Darrell Issa wanted to shut down the banking system and turn the country into another Somalia, but some intelligent minds prevailed and the government loaned $750 billion to Wall Street to bail them out.

Only one man, Bernie Madoff, went to jail even though his acts were repeated again and again in different ways by tens of thousands of salesmen on Wall Street, selling worthless pieces of paper. Not one Wall Street banker went to jail. The banks that caused the problem, thanks to Republican Senators and thanks to John Boehner and his close Republican allies in the House, have gone on to become bigger, more powerful and more corrupt than ever before.

The real legacy of Ronald Reagan, therefore, was not smaller government, nor tax cuts nor a strong economy through a pared-down public sector and a more efficient private sector.

The real legacy of Ronald Reagan was the upward shifting of the economy, favoring the General Electrics and the Bechtels of the world while cutting back on subsidized housing by 80% or reducing by 60% the retraining of those whose jobs had gone to Asia.

Reagan’s legacy was the military-industrial complex that he increased so that when the Cold War was over, there was no “Peace Dividend.” We went right into a war with Saddam Hussein and built tanks and planes and missiles and added hundreds of thousands of soldiers and contractors. Reagan begot Dick Cheney and Cheney begot Rumsfeld and they both started two trillion-dollar wars while making themselves rich.

Reagan set state-against-state, region against region, and white supremacists against integrationists. He aligned the Republican Party with the rich and with huge international corporations with no allegiance any longer to the U.S. worker. The Republicans encouraged moving plants and jobs overseas in return for campaign contributions.

The Southern Democrats, the ones who did not want to join with African-Americans switched to the Republican Party, even the ones who did not want to see the return of segregation. They allied themselves with gun owners and anti-abortion activists and Fundamentalist Christians intolerant of anyone who did not agree with their narrow view of morality.

Eventually their politics would lead them to support a war in Iraq based on a Republican President’s lie that would cost 4,500 American deaths, 30,000 American wounded and over 250,000 Iraqi civilians killed and five million displaced. It made Halliburton rich and Dick Cheney richer but it cost the American people a trillion dollars and is an endless, wasteful use of American taxpayer money.

The legacy of Reagan continues in the lies that the Republicans are locked into as tightly as if they were sewn into their clothes. In the early years of Bush the First, the Congressional Budget Office, which everyone now knows is an independent bureau, and if anything in those days, was Republican leaning, was asked to do a study. Remember that there had been a popular Republican president for 8 years and a current Republican President who appointed the head of CBO, a Republican economist.

The CBO was asked by all these Republicans to do a study to see how much economic impact, how much improvement in the country’s tax revenues was caused by tax cuts to stimulate the economy. To the surprise of Republicans, (or maybe not) CBO announced that tax cuts, far from improving tax revenues over time, actually did not even pay for the tax cuts themselves.

The CBO study showed that tax cuts of the kinds that Reagan (and later Shrub Bush) enacted paid only a range of between 1% and 22% of the actual loss in revenues from the tax cuts. So if the tax cuts cost $1 trillion, the most taxpayers can expect to see in revenues in the future is $220 billion.

But it could just as easily be a dollar back on a hundred, i.e., as little as $10 billion. Consequently, it is pretty clear that the current tax cut $700 billion tax cut for the rich means all taxpayers will end up paying China about $690 billion in repayment, with nothing to show for it but more money in the pockets of the already Super-rich.

Another part of the Reagan legacy is…never admit a mistake. So, even though the Republicans knew this in 1991 and 1992, they continued the big lie. It is clear by now that any prosperity that seemed to take place in the 1980s was financed by borrowing from the Middle Class to give to the rich and to corporations…in tax breaks. The shortfalls in funds were borrowed from the Chinese and Japanese and Saudi Arabians.

In other words, the CBO study proved that Reagan simply borrowed the money from the People to make it appear that the economy was growing. It was the ultimate “big lie.” And as with any lie, it distorts the point of view. The liar becomes accomplice. The lie gets bigger. Then no one can disavow it or everyone loses credibility.

The notion that tax cuts lead to greater revenues is now so obviously wrong that even a CBO study is not necessary. But it has become another part of the Reagan legacy. Tell a lie and simply keep pretending that it is somehow true. It becomes so irrational that Senator McConnell can stand with a straight face and say that it is necessary to give billionaires a tax cut on Monday and cut Social Security and health care for First Responders to 9/11 on Tuesday.

What happens to a political party is not much different from what happens to criminals. Once a gang has a successful robbery, they are emboldened to try something bigger, then something bigger than that. The Reagan successors, McConnell, the lobbyist panderer, and Boehner, the tobacco industry pol have taken up the big lie.

They no longer even try to hide their motives which are to build the fortunes of the already super-rich by creating worker-slaves. Reagan at least worked hard to solidify support for Social Security. Those like Grover Norquist, the tax-cut-for-billionaires lobbyist and the slightly off-kilter Rep. Paul Ryan of Wisconsin want to destroy both Social Security and Medicare.

When Reagan took office, the wealthy were still paying their fair share of the debt that this country had incurred to keep them free, to protect their property and their lives and those of their children and grandchildren. Now, they are demanding that the middle class and the poor..and their children…should pay for the country while they live like Senator John McCain, jetting around, from one of his 9 houses to another.

The latest Faux-Reaganites, the “Tea Party” members have been funded by two specific groups, Americans for Prosperity and FreedomWorks. These two groups have absolutely nothing to do with freedom or the prosperity of the average man and woman.

Both groups were founded and supported by two Right Wing oil men whose father founded the John Birch Society, a group that saw Communism in every one who wasn’t a bigot or who did not believe Jesus would return on a cloud. These brothers have worked for Right Wing causes, founding things like the arch-conservative Cato Institute, the Manhattan Institute and the Hudson Institute, all groups designed to do research to justify Right Wing causes, like killing the minimum wage and Medicare.

Now they have new recruits, the Tea Party group, people with no political philosophy or knowledge at all. They are Neocon camp followers, ignorant and opinionated. They want to cut government, rein in spending. But they don’t want to raise taxes. So they want to do the bidding of the very billionaires who sponsor them and whom they foolishly ask us to believe don’t’ matter to them.

Let’s see how this works. They just gave $700 billion in tax cuts to these billionaires and yet we are supposed to believe that they aren’t sponsored by them. We are supposed to believe that these idiots believe that all our economic problems are caused by those of us who have paid our Social Security faithfully for the last 50 years and therefore should now have it reduced from the meager amounts we receive.

The Tea Party would have us believe that they do not support the billionaires who started and funded and paid for their organizations and meetings and elections. They would have us think that they sincerely believe that men and women who work for state governments for a pittance compared to the private sector (when it existed) should now have their pensions reduced. They should have their pensions cut despite the fact that they have paid about 80% of their pensions out of their own pockets! So, give billions to billionaires and cut back on those who have worked for us faithfully for 50 years so that they themselves can perhaps go on relief. This is the stupidity of the Tea Party…or the guile…which is probably closer to the truth. They are simply shills for billionaires.

Apparently Cheney believed at least one thing that he said….”deficits don’t matter.” Cheney is easy to picture, exhibiting the smarmy, curving little snicker he made when talking obliquely about how stupid and easy to fool the American people are. Cheney knows that he and the Republicans own the media, so his propagandists can filter the truth. Big corporations owe him and he owes them. It’s an incestuous relationship. When people like Keith Olbermann tell too much of the truth, they are asked to step away from the microphone.

The Reagan legacy is woven into the fabric of American society. We no longer question the fact that big pharmaceutical companies treat us like dirt. They charge us five times what they charge other people. They own the government so that the government lets them charge whatever they want to Medicare and the government…all of us…pays the bill. But money goes up. The pharmaceuticals get more of our money. We pay more in drugs. We pay more, as the middle class or the poor, as a percentage of our income, in taxes and we now face government cuts in the very things we pay for.

The Reagan Legacy….up the rich and down the middle class and the poor. Reagan never liked free lunch for children of the poor, institutions where we house the mentally ill, vegetables for welfare children that cost more than catsup and places for the old or the ill to rest their heads safely at night.

That legacy of incivility, of impersonality is the key characteristic of the Neocon Republican Party today. They believe in many of the things that we proved in the last century were unjust, unfair and uncharitable….and inhumane. But the power of enormous wealth when used by those who are intolerant and impersonal has proved daunting. The Reagan Legacy has put America on the edge of becoming no more than a once-prosperous, Latin American plutocracy.

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