“The disparity in wealth began around 1980" ... “We began to experience these problems in the early 1980s"... “Regulations were eased in the 1980s”...
I noticed a constant in recent stories about our economic, domestic and foreign woes. The year 1980 is used vaguely as a bench mark. There is an actual, specific date when those woes began. The date was January 20, 1981, when the worst president of the Twentieth Century—Ronald Reagan—was sworn into office.
Barely two months in office he was shot by a movie fan. His minions already had set into motion policies that have led to long-term disaster for the United States.
I want, first, to dispel a couple of myths about Ronald Reagan.
First, Reagan, ironically an economics major at Dixon College in Illinois, had little to do with the economic boom of the 1980s. Many economists credit that boom to two factors: (1) President Carter cut the supply of money from the Federal Reserve as a way to stop stagflation, but, short-ter, caused a recession and did little to help Carter’s re-election hopes; (2)War between Iran and Iraq, two major oil producers, led to a precipitous drop in the price of crude oil and, our economy oil-driven as it is, our economy was benefitted. Reagan was not in office when President Carter chose the former policy.
As to the latter policy, the war between Iraq and Iran already had begun by 1/20/81. To some degree, Reagan’s people “helped” both sides. The United States gave military intelligence and arms to Iraq and military hardware, via Israel, to Iran. The war had the short-term effect of a boost to the American economy. The long-term effect was the United States was viewed in a negative light.
There also is the matter of Reagan’s role in the “fall” of the Soviet Union. For decades, the Soviet Union invested too much of its money in military equipment. That crippled the Soviet economy. Some point to “Star Wars,” the space missile-defense system, as part of the cause of Soviet investment in military. This misses Aldrich Ames, a “mole” the USSR had placed in the CIA who reported to his bosses all the failures in the “Star Wars” program. The Soviet Union complained about “Stars Wars,” but only to goad the United States into greater foolish expenditures on a defense program of no value. Simultaneously with the Soviet Union’s economy devolving, nationalistic sentiments of the various republics of the USSR, always vibrant, swelled in the late 1980s. Reagan’s line “Mr. Gorbachev, tear down this wall” in Berlin is a nice sound bite, but little more.
Let’s now turn to long-term disasters of the Regan years.
Perhaps the policy that has most crippled the United States has been “trickle-down” or “supply-side” economics. This is the notion that a tax cut to the most affluent will result in benefits to others as those affluent people spend the money they save from taxes. As Senator Warren said two weeks ago to an audience at the Harvard Book Store, trickle-down economics never has worked. The most wealthy people take that money and invest it, in many instances overseas. Also, they try to hide money in offshore tax havens.
If “supply-side” economic policies worked, then the George W. Bush years would have resulted in an outright BOOM for the American economy, instead of the bust that ended his presidency.
Our economy is best served by policies that put money into the hands of those who seek to escape poverty. People in low socioeconomic brackets, when given dollars, spend those dollars on food, clothes, housing, and transportation.
If we want to help our economy, we should do several things: (1) return to the tax policies of the Eisenhower—there’s a real left-winger for you—years; (2) prevent off-shore investment and, like many other countries, penalize those who seek to hide assets overseas; and (3) invest in our infrastructure.
Reagan, former head of the Actors’ Guild, also sought to “bust” unions. This wqas a huge mistake. Unions tend to protect the rights of their members. This week fast-food workers around the World walked off their jobs in protest of working conditions and low wages. A CEO of a fast-food corporation, on average, makes 1,000 times more money than the average worker in (usually) his corporation. That number, according to an article in The New Yorker in—here is a coincidence—1980 was 42 times the wage of the average worker.
Finally, Reagan put on steroids—this is too precious a metaphor to pass up—Nixon’s “war on drugs.” This has been a failed policy from its outset.
Ronald Reagan, through his minions, also helped to stall the release of the United States embassy personnel taken hostage in Iran. This was conduct that falls in the category of “treason.” For this Regan should have been charged and, if found guilty, sentenced.
Many of our woes today can be traced to January 20, 1981. There were others who played the role of President of the United States, and much more capably. In “Fail Safe,” Henry Fonda was a wise but troubled President who grappled with a crisis of nuclear war. Harrison Ford jumped out of an airplane. James Garner and Jack Lemmon played former presidents with more charisma and style. Ronald Reagan’s was not a fictional portrayal, unfortunately, although Reagan himself probably made few of the decisions. The people around him simply did as they wanted.
The disparity in wealth between the wealthiest and poorest is the greatest it has been since 1929. That was the year the stock market crashed and the Great Depression is considered officially to have begun. The disparity we face now must be resolved. Otherwise, another aspect of Ronald Regan’s presidency, will be another depression on a scale similar to our greater than that of 1929.