Reaganomics: Black Magic

I am going to keep this short and sweet as my thoughts here are a rehash.  Please read my post called “Reckless Reaganomics”  from 9/19/2008:

Make no bones about it: this financial crisis, mushrooming and rippling through supposed rock-solid institutions from banks to lenders to investment companies all the way up into what will be the ultimate test of the United States’ fiscal viability, had its beginnings under the Ronald Reagan administration.

Reagan’s legacy is draped in his trickle down economic policy. Sure —– he militarily outspent the USSR and brought that empire down. Sure —– he was an uplifting speaker who gave this country back its hope and vigor. But here is what else Reagan wrought.

Reagan was a big believer in total deregulation. He applied it to the airline industry and to financial institutions. Capitalism is a laissez-faire policy. Let the chips fall where they may. The rich will still be rich. However, the middle and lower classes will grow and the divide between the upper echelons and Joe America will increase drastically.

There are a number of events from the Reagan years that stick in my memory. During the 1980’s, I was a thirty-something mother who was raising two babies. However, even I had a thought or two about policy during that time. Reagan’s economic and political outlook had non-recuperative effects that translated into very bad social policy.

First, I remember during the 1980’s the Japanese were buying up American real estate faster than you could say “Sayonara.” Skyscrapers in major metropolitan areas were scooped up. What I deeply remember is that many heartland farmers could not maintain their land which, in many cases, had been in their families for generations. Reagan’s trickle down economic policy NEVER dripped down to help the farmers, the very people who fed our nation. Many farms were lost or sold to the Japanese.

Another vivid memory I have from that time is that many mental institutions were closed down and its residents released on the streets. This is the period when we had thousands of homeless people sleeping in our cities, parks, streets, anywhere and everywhere. Reagan did not believe that the government had any responsibility to pay to house and care for these mentally unstable, indigent people. Let the chips fall where they may. Capitalism working at its worst, and economic policy wreaking havoc with social policy.

Perhaps my most vivid memory is of Reagan saying that “all the Democrats do is tax and spend.” Reagan borrowed and borrowed from our own government so that he could spend and spend on arms to put the USSR out of business. So yes, the Berlin Wall fell, but man oh man, were we ever so deep in debt. My take on this is that the Republicans BORROW and spend. George W. Bush, over the last eight years, has taken up this borrowing tactic as well. Borrowing on end by printing up funny money from the Mint is not acceptable, even if the reason for it is military action. As we have seen, with our national deficit in record territory, there are financial consequences of dire proportions.

So now on top of the war debt, we are spending even more non-existent dollars on financial bailouts. I do not have the answer. All I know is that if we do not rescue many of these financial institutions, we will lose our personal shirts as the markets react to their tanking value. On the other hand, if we do bail out these institutions, we, the taxpayers, are going to have huge tax liabilities in order to pay back the government for these “saves.”

Two things I do know for sure: first, we should NEVER spend more than we have on tap and second, there should be a flat income tax rate of 15%.  That way there would be no loopholes, shelters or evasions that wealthy people and above all, corporations, could use to dodge their fair share of taxes.  Fifteen percent for EVERYONE;  No exceptions.

So as true as my name is Yo Mama, Ronald Reagan was the architect of what has befallen us today. Increasing a country’s morale is no excuse for taking from the poorer to line the pockets of the richer. This is NOT capitalism; this is rape. Plain and simple, it is economic and as a result, social suicide.

The part of this current predicament that we have not seen yet is social discontent and uprising. Do not be fooled: when absolutely NOTHING trickles down to the middle and lower classes, there will be frenzy afoot.

In the ensuing twenty years since Ronald Reagan reigned, as well as the eight years he was in office, I have been adamant in my opinion that he was NOT the great leader that everyone and their mother has him cracked up to be.  Far from it.

His deference to the financial elite at the expense of the working class was an economic holocaust in the making.  Plus, his practice (and thus the platform of the GOP since his tenure) of borrowing and spending (versus their criticism of the Democratic party that all they do is tax and spend) has created an economy on the brink of disaster.  His busting up and total eradication of the flight controller’s union helped to set the standard for keeping the working class’s upward financial mobility in check.  Sure: Reagan was probably a nice guy, knew how to delegate bureaucratic responsibility and always put his love of and pride in America at the top of his agenda.  But his “trickle down” economic policy was a sham.  What good is a positive national outlook if the mechanisms for financial equity strangle 95% of the citizens?  “Feel good” politics versus real benefits to society.

Today in the New York Times, Paul Krugman writes of the disastrous effect of Reaganomics.  Finally, some validation for my dim outlook on the Reagan administration.

And let us not forget who the star players were in the savings and loan crisis  of the 1980’s that nearly brought the United States to its knees:  George W. Bush and his idiotic do-nothing sons.  People have forgotten this chapter of our economic history.  Perhaps a short history is in order:

My hat is off to Paul Krugman for the very timely reminder he has afforded us this morning.  Optimism and semantics, such as the Reagan administration offered, will get us only so far.  The majority of the people will not make economic progress nor enjoy the rights allotted to the top 5% of the population.  However, Reagan’s legacy is that he made the 95% of the population FEEL GOOD about not getting their share.

Was that magic, or what?  I call it black magic.


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