The pressing issue: how did it come to this? A new republican governor provokes a red-herring crisis, plunges with disturbing mania into a scheme to bust the state employees' unions, and refuses to listen to anyone but his handlers. Psychologists ponder his mental stability and fitness to serve in office.
What mindset drives republican governors and legislators to systematically disenfranchise the middle class? (In a future post we'll dissect how their tacticians and strategists managed to persuade so many voters to vote against their own best interests.)
The sire of today's conservatives is Ronald Reagan, elected in 1981, though his handlers might also need to submit DNA. Too many of his policies were double-edged swords, doing some small good but far more harm. His tax cuts benefited the wealthy far more than the rest of the tax base (Conservatives are curiously silent about this.), but the supply-side defense of this move was to argue that all taxpayers would have more incentive to work, output would rise, and inflation would subside. Business taxes were chopped, and a twenty three percent cut in personal income taxes was phased in during 1981 and continued for three years. This government-sponsored “gifting” of revenue to the already wealthy, which the democratic republic was supposed to use to provide services, fund regulatory agencies and research, provide for the common defense and redistribute wealth, would prove a poison pill for the nation.
Many conservatives these days float a muddled notion that the U.S. has, or should have, a capitalist economy. It doesn't, and it shouldn't. The U.S. has a mixed economy, with private and public sectors. Federal, state and local governments are charged with collecting taxes and yes, (Here's what makes the laissez-faire capitalists and Robber Barons' blood boil.), they redistribute some of it, sometimes in the form of money but also in the form of services, to those who cannot participate fully in the economy and marketplace. The old, the poor, and the disabled are citizens too, as are those ordinary people who were inoculated against money-madness. All citizens are entitled to protection from threats external AND internal.
The government accepts that certain tasks and services belong to the public sector, in part because the private sector has no conception of the challenges they present (being able to comprehend only the tangibles associated with chasing after profit in a market as free as it can be without being labeled anarchy), in part because the private sector has no will to perform any act which cannot be commoditized and exploited for profit, in part because the private sector has no talent, experience or resources it is willing to devote to the task, and largely because the government, the administrator of the legal system, guardian of national security and protector of citizens, is compelled in the interest of its own preservation, and hopefully by ideals expressed in constitutional documents, to provide a minimum level of equity for those citizens.
But the deregulated market environment that Dr. Reaganstein re-animated and that now, after decades, passes for normal, now allows corporations to raid public sector and quasi-public sector spheres for profits. The growth of for-profit colleges is one sad example. CEOs at these “institutions” take salaries in the millions but can't be reached for comment when students find their class credits don't transfer to legitimate colleges. Nor will these “innovators” own up that profit is paramount, rather than the goal of enriching students with marketable skills. When graduates fail to find employment, despite the “I'll-say-anything-to-get-you-in-here” claims made by recruiters at these for-profit colleges, which CEO steps to the reporter's microphone? “Graduates” are handed a worthless degree and promptly saddled with student loans they cannot repay, because they can't find work in their field of study. Nor will bankruptcy lift the burden of these loans. The Business Media hails this as innovation. Let's be more accurate and call in predation.
With deregulation, entrepreneurs, investors, hedge fund managers, financiers and the like saw that it was easier, and now legal, to steal than to innovate. Long-term thinking and long-term investment vanished from the corporate mindset. The labor force is now viewed as more disposable than it had been in nearly a century.
Thanks to the Reagan Doctrine, government became a republican farmer, who actually led the foxes into the hen house. Wealth redistribution, once a functional part of our mixed economy, was turned on its head and made a tool of the money-mad. The money and benefits, the latter taking many forms, is now funneled in the wrong direction, to those least in need of it.
Indeed, since the 1980s, there has been a remarkable and dangerous divergence in income levels. Princeton economist Paul Krugman even calls it The Great Divergence. Conservatives grow curiously angry at the mention of this phenomenon, and furiously evade, avoid and distract attention away from any discussion of it. This widening income disparity, sad to say, and predation by the affluent upon the middle class have become an internal threat to our national security. And as in the time of Dickens, conservatives see the poor as lazy, responsible for their plight, best left to Malthusian ends. Conservatives create a class of have-nots, then turn around and blame the poor for clearly having the wrong values.
But didn't Reagan's policies help the country? The economy? In light of the current economic blight, the answer is no. Or maybe yes. A monied elite did benefit. But Reagan's successful push to deregulate the private sector and concurrently cripple government oversight has proven as dangerous to our nation, if not more so, than his victory in the battle for corporate welfare and tax cuts for the wealthy. Arguably, deregulation had a role in spurring, but not causing, the ten-year-long economic expansion in the 1990s (Computerization was a larger factor.), but that sword slashed both ways: Deregulation also fostered the housing and credit bubbles, the related mortgage meltdown, and the (I love this phrase.) “financial innovations” that took Wall Street and the Financial District by storm, helping to create a “shadow banking system” which also collapsed.
Anyone hear echoes of 1929 bouncing off those buildings in the Financial District? But these are only more recent and thus immediately recognizable examples. Here's an older one.
Fill in the blank: The Savings and Loan ____________.
Actually several answers are correct. They include Scandal, Crisis, Debacle, Meltdown....
The Savings and Loan Crisis of the 1980s blossomed into a financial scandal because Reagan's advisors worshiped a simplistic belief that problems limiting the growth and profitability (never mind the accountability and stability) of this industry could be addressed by merely deregulating it. This action epitomizes the “Government is the problem” mantra Reagan liked to intone. Real solutions required greater intelligence, a more comprehensive and complete understanding of the problem than Reagan's advisors could stomach, ideologically and temperamentally, the sustained political will to apply long-term thinking to a long-term solution, and the ethical will to stop the problem from being co-opted for political and financial gain. The administration failed on all fronts.
Through it all Reagan doddered, an active non-listener who smiled and waved, acting the role of a lifetime, one that always evaded him during his Hollywood apprenticeship: the concerned, affable patriarch, assuring a confused, worried electorate that he and his advisors were solving every new crisis (Think: Iran-Contra), all the while enacting policies that buried a time bomb in the U.S. economy. That bomb recently detonated, leaving a Great Recession in its place.
The economic crisis we find ourselves in, then, had its origins in a set of elitist, pro-corporate policies enacted over thirty years ago by a Straw-Man much like the one now in the Governor's office in Wisconsin. The ideology that enslaved Reagan's intellect and blinded his reason was crafted by wealthy, powerful interests eager to work from the shadows. Now replace the name Reagan with the name Walker in that last sentence.
In the next post, we'll shine a light into the corners and closets of Walker's office and flush out those ventriloquists.
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