Feb 11, 2011

February 12, 2011: Reagan As Reactionary, Perils of Pure Ideology, A Burden On the System

To say that Reagan was a reactionary is not to dismiss the impact of his political career on western civilization. Indeed the impact was quite extraordinary, for he had picked up where Goldwater began giving impetus to a movement that in it’s most recent manifestations has become more virulent and destructive than ever. As Wilentz (1) points out, the warping of the conservative movement in the wake of Reagan has served to further politicize the judiciary and the justice department; further undermine constitutional safeguards against intrusive government; has further developed the bastard idea–hatched at the Yale Law School–of the “unitary executive” arrogating powers unto the presidency heretofore unheard of; it has further crippled governance through a war on federal regulations, spending cuts on regulatory agencies, and general incompetence; and, perhaps most importantly, it has further eroded the foundations of the republic itself by waging war on the middle class.

It is a war now in its fifth decade. Today incomes remain stagnant or are declining. Official unemployment now hovers around 10%, with estimates of real unemployment ranging from 15-18%. Home foreclosures, down 17% from last year at this time, were lower only because of the paper jamb in the foreclosure mills due to some irregularities in the banking industry. There are some further troubling signs: it was announced briefly on NPR yesterday that the New York Stock Exchange is to be merged with some German outfit foreshadowing the movement of the center of the financial world elsewhere. It was also announced that papers released through Wikileaks reveal that Saudi oil production may have peaked or is about to. Further, also decades before it was about to happen, Social Security outlays will exceed the contributions to the Social Security Trust Fund in this fiscal year.

All of this can be laid at the foot of Reagan and his Republican cohorts. Failure to reign in on the housing market as the real estate bubble began developing in the early part of the last decade is a singular example. Here confronted with the fact that from 2003-2007 the economy was annually building 25% more housing units than for which there existed a market, the administration–always finding regulations and controls abhorrent–failed to act. Greenspan, at the Federal Reserve, acting as the acolyte of Ayn Rand that he is, had full faith that the “markets would correct themselves”. The result, given western man’s long history with such bubbles was wholly predictable. Nevertheless the ideological imperative–always measured against the Reagan “legacy” of pure ideology–won out.
So we had another crash.

Today, nearly 4 years into it, the end of mass foreclosures are nowhere in sight.

Then there is the example Reagan set by removing the solar panels from the White House roof, and beginning the movement to undo Carter’s efforts to cut our use of foreign oil. Carter had cut our imports of oil by 50% in 4 years, a trend that was speedily reversed under Reagan as thermostats were reset, speed limits were raised, CAFÉ guidelines for the auto industry were relaxed and abandoned, and subsidies for alternative energy were cut.

Similarly the lingering unemployment rate. In my youth unemployment as a so-called “lagging indicator” would follow the movement of the economy by about six months. Today we are well into the first year of recovery and no end of high unemployment in sight. Why? Because, among other things, capital is now sitting on an estimated 2 trillion dollars and refusing to hire anyone. What expansion is occurring is taking place overseas.

The reason that we have this skewing of the economic balloon is that at the beginning of this administration a robust jobs bill was sacrificed to the conservative “mantra” of cutting taxes. Almost two thirds of the nearly trillion dollar outlay went to tax cuts with business getting the lions share. Cuts for median incomes would amount to about a pizza a week. Instead of building things...like roads, rails, and internet we parceled it out in such a way as to have minimum impact on employment. The result is that we are further behind technologically and, for all that TARP money, we have nothing to show for it except the return of fat-cat bonuses on Wall Street.

By failing to take the money and put it into construction, we failed to increase demands for building products and labor necessary to rebuild America. The result has been an extraordinarily high unemployment rate for an extraordinarily long period of time. This serves to reduce revenues while increasing demand for services creating huge deficits. It also means less money going into Social Security and the wholesale retirement of aging “boomers” who–much against their proclivity and far too soon–are leaving the workforce and becoming a burden on the system.

And, of course, lets not forget that it was ‘Ol’ Two-Cows Bush who, following the Gipper’s example, famously raided the Social Security Lock Box and drained the accounts of every last dollar leaving only a stack of IOU’s reaching nearly to the moon. Oh how much different it would have been had not the Supreme Court elected that fool from Texas back in 2000. Social Security would have been rock solid and the entire federal debt would have been erased from the books.


Footnotes:

Wilentz, Sean. “The Age of Reagan, A History, 1974-2008" Harper Collins, New
York, 2008. 564 pages.

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