I am frequently amused by the often repeated litany of praises to Ronald Reagan that culminate in his deification as the “ father of modern conservatism.” Bill Kristol and Fred Barnes are the most prominent and active advocates with Charles Krauthammer and the rest of the Fox Fiction talking heads not far behind. Now, lest one be pilloried for daring to vilify the deceased, let me make clear that I once voted for Reagan and now, nearly a quarter-century later realize that it is the one presidential vote I wish I could take back. Reagan was indeed a real charmer, a master salesman and in many ways a real tough guy when dealing with some of the thugs in the world. So, he had many positive attributes. But his economic goods were a disaster from which we are still trying to dig our way out. The fact that it has taken so long to come unglued is indeed part of the genius of the whole charade.
Indeed Reagan is “the father of modern conservatism.” It was his sale of the trickle down economic theory to a gullible public that has us in the fiscal kettle of fish we now find ourselves. Though one must acknowledge that there have now also been nine years of Democratic administrations since the onset of Reaganomics, it is important to keep in mind that there have been 16 years of Republican rule in the last 25 years as well. Neither party did anything to reverse the policy. It has been a bipartisan gullibility.
But back to the Reagan charm offensive camouflaged as domestic economic policy.
The trickle down theory was indeed a simple sales pitch. It consolidated complicated economic theory into an understandable and palatable potion of snake oil that provided him eight years of being able to talk out of both sides of his mouth while Wall Street raped and pillaged the American economy. Trickle down suggested very simply that if you let very rich people shake the money tree indiscriminately they will allow some of it to “trickle down” to the population’s underlings. Since it was a very simple pitch, even Reagan was able to explain it so the underlings could understand it. And he did, over and over and over for eight long and charming years, repeating the lines like the actor he was until at some point he may have actually believed it himself. For those eight years we waited and waited and waited like the Israelites in the desert for the trickle to trickle down.
We now know what very rich people do when they are allowed unimpeded to harvest money like the biblical manna from heaven.
The assumption was, that as the select few were rewarded, they would build plants, create jobs, rejuvenate the American middle class, exercise civic responsibility and we would all live happily ever after. Camelot Reagan style!
What in fact happened was quite the opposite.
As the investing class, or as trickle down assumed, the job providers, accrued tax favors and other economic perks they invested in hedge funds, derivatives, mortgage backed securities and other shady and creative investment charades that promised huge upside potential with the risk being borne by the taxpayer . They produced nothing of social value, least of all jobs. In fact they shut down plants and shipped jobs offshore, first to Mexico and then to Asia where labor costs were even cheaper. At the same time they were being dealt a plush hand of house money, the government coincidentally deregulated the world. It became possible to engage openly in the increasingly speculative ventures that created a house of cards that a year and half ago came tumbling down. And they were able to do all this while regulators and referees simply looked the other way. Reagan “Enron-ized” the world.
But it’s been 21 years since Reagan rode off into the California sunset… long enough for a gullible and forgiving electorate to have completely forgotten him. But the Reagan legacy is coming home to roost. Finally there are the attempts at financial reform to clean up the mess he left behind. His mantra that “government is not the solution but the problem” is only half wrong, but it is indeed half wrong. It assumes you can have your cake and eat it too. Or it might be more appropriately summarized in McConnel / Boehner rhetoric, “Let them eat cake,” washed down with a tea party.
John Kliebenstein is circulation and operations manager of the Brownwood Bulletin. His column appears on Wednesdays. E-mail him at john.kliebenstein@brownwood