J. Brad Hicks (bradhicks) wrote,
J. Brad Hicks

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Remember Reagan (conclusion): Reaganomics

(Yes, I know that this is way too long. But I'm not going to cut it down any further, or hide it behind LJ-Cut. If you care about me, or have ever been interested in anything I wrote, please this one time read a whole article this long, because this is just that emotionally important to me.)

OK, so we've established that I think that the massacre at People's Park, his sucking up to HUAC, his corrupt political appointees, and Iran/Contra were all bad things, but not worth being angry about all of these years later. Still, I've been gloating over Reagan's ill health for years now, and I'm glad the evil bastard's body has finally died, and thank the gods they're interring his rotting meat at his own Presidential Library instead of stinking up the sacred soil of Arlington National Cemetery with it. Because the second greatest evil that Reagan ever did, second only to Iran/Contra but (unlike Iran/Contra) still with us to this day, was his economic policies. Those policies killed thousands, and destroyed the hopes and lives of millions. And as subsequent years proved, all that suffering was for nothing. But because Those In Charge will never admit that they did all that damage and that none of it was necessary, they are still repeating the same evil mistake.

Reagan inherited a crippled American economy. During the Ford and Carter administrations, the US economy got just absolutely hammered by three things. Any one of those trends could possibly have been shrugged off, but together they wiped us out. First of all, the Johnson administration's insistence that we could fight a major land war in Asia without asking for any economic sacrifices from the American people (hmm, boy, does that suddenly sound familiar, where have I heard that more recently?), known as "Guns and Butter," had bankrupted the US Treasury. Secondly, the US lost its world-wide monopoly on manufactured goods, as the former (and future) industrial nations finished rebuilding the factories that had been bombed into oblivion in World War II. Maybe we should have seen this coming, but at the time nobody did. Finally, Egypt and Saudi Arabia imposed economic sanctions on the US for our assistance to Israel.

The result was something so awful and so new that economists had previously believed it impossible. Previously everybody knew that rapid growth was what caused inflation, so everybody knew that you couldn't have economic stagnation and inflation at the same time. But we did. It came to be known as stagflation. Ford knew he didn't have a mandate, let alone a plan, so he did nothing. Carter shot his mouth off and made it worse. Well, OK, Carter did achieve one thing: he negotiated our surrender to Saudi Arabia and Egypt, whereby we're still paying them insane amounts of "foreign aid" (danegeld) so that we can continue to support Israel without facing economic sanctions. But any lift we would have gotten from that was overwhelmed by the fact that he kept scaring the crap out of employers and investors by saying stupid things about the economy. So by the end of Carter's first term we had rising unemployment and inflation rates that briefly spiked up to 18%. And it was because they trusted Reagan to fix this problem that the American public elected him with such a huge mandate in the first place.

The Reagan administration believed that the reason for stagflation was that the middle class in America had it too good. They were demanding too much money, which was making it impossible for employers to afford them. They were then taking that too-much-money and using it to spend too much for things, causing inflation. The solution he proposed was to destroy the American people's ability to negotiate for wages by breaking the unions and by raising unemployment until people were desperate enough to take a job at any poverty-level wage. So Reagan appointed officials to the Department of Labor with specific instructions not to enforce the law, and to hammer the point home, he dissolved a major government employee union, the air traffic controllers' union, PATCO. He then persuaded Federal Reserve chairman Paul Volcker to make it impossible for regular businesses to borrow money to expand their operations. Instead, during the Reagan administration loans (in the form of junk bonds) were only available to well-connected "corporate raiders" who were loaned the money to take over companies, on the specific condition that they lay off as many workers as possible.

It's long been understood that businesses' ability to pay wages is directly related to workers' productivity, so the Reagan campaign started a major campaign to raise productivity. But the only ways they knew to raise productivity were to make workplaces less safe, and to set workers against each other in vicious competition. The vicious competition aspect was, of course, helped by enthusiastic layoffs. When you know that next month somebody else in your department is getting fired, you have a pretty serious incentive to look better than they do, don't you? This was incredibly stupid, and still is. There are a few jobs where individual employees are best motivated by putting them in competition with each other: solo commission sales is the only one that comes immediately to mind. For the rest of us, what it created was a powerful incentive to screw the other guy. Starting in the early 1980s, I have seen such an increase in conscious and unconscious sabotage and vicious office politics. It didn't used to be like this. Reagan taught us to hate our co-workers. And we show no signs of being ready to unlearn that lesson, no matter how much it costs us, no matter how many countries where workers aren't pitted against each other do as well as we do or better.

Reagan appointed Milton Friedman, the father of the idea "natural rate of unemployment," to his board of economic advisers, and when Paul Volcker stepped down, Reagan appointed a disciple of Ayn Rand to be Federal Reserve chairman, Alan Greenspan. To Greenspan, keeping unemployment high isn't a temporary exigency to reverse stagflation. According to Reaganomics, high unemployment is absolutely essential to capitalism. For the masses, Reagan himself talked about "Morning in America," but if you read the business pages and the economics press, the Reagan team was perfectly blunt. Yes, hundreds of thousands of middle class people were intentionally reduced to grinding poverty or worse. It was also tacitly understood that this policy was going to be devastating to African Americans in the working class; as the old saying goes, when the white economy gets a fever, the black economy dies of pneumonia. Last hired, first fired; that kind of thing. The Reagan team and their admirers have never openly confronted the implications in terms of public health, family stability, the effect their policies would have on children, or the thousands who've died over the years because of Reaganomics -- frozen to death under overpasses, murdered in over-crowded homeless shelters, or just the traditional way out for the obsoleted male, suicide. But even if they had, they would have justified the thousands of human sacrifices they've shoveled into the jaws of Moloch because those sacrifices prevented a bigger problem. If we hadn't killed those thousands of people, if we hadn't ruined the lives of millions of people over the years since then, then the US economy would never have recovered from stagflation. The resulting economic collapse would have ruined and killed many more. A few were sacrificed to save the many.

How were the American people persuaded to accept this? They were taught to hate the poor. They were taught that having a job is a precious privilege, and one that only the most special people deserve. The American people were carefully taught that the 6% of the adult population that have done nothing wrong but still can't find even part time or temporary work are unemployed because they just aren't good enough. It was their own fault. If only they'd been a little better at clawing their way to the top, it would have been somebody else, somebody less worthy than they, who'd be living in a refrigerator carton under a bridge on the waterfront. To a certain type of person, this was a very comforting message, because it absolved them from any feelings of guilt, and from any sense of obligation towards the needs of the down-trodden.

(I just finished reading an excellent book about young hobos of the 1930s called Riding the Rails: Teenagers on the Move During the Great Depression. The thing that kept hitting me right between the eyes is that during that recession, just as now, there were people who hated the poor, the kind of people who'd intentionally sic the cops on a guy who's just going door to door hoping to earn a meal by doing some chores, the kind of person who'd intentionally kill a guy who was just trying to hitch a free ride to a place where he could look for work. But in the 1930s except for a few places like central Texas, everybody who was unemployed at the time remembers that among ordinary people, the few people who hated the poor were terribly unpopular, even bigger social pariahs than the poor people themselves were. Compare that attitude with the world after Reaganomics. The change in our country literally brings tears to my usually painfully dry eyes.)

But then, in the Clinton years, something funny happened. Unemployment dropped to near zero. Wages rose, for the first time in decades. And stagflation didn't return. The Y2K bug created a national crisis. Almost every computer in America had to be replaced with a new one. Almost every line of software code in America had to be reviewed and fixed or rewritten from scratch. The high wages paid to those desperately needed people increased the amount of wages that were being paid into the economy, so other sectors of the economy suddenly found that once again Americans could afford to buy goods, so they were doing so, so those employers had to hire more people. The people they hired could suddenly afford things they'd needed all those long years of Reaganomics, so they bought stuff too, and the virtuous circle went on and on.

I was in Lexington, Kentucky at one point during those years, and Maier's was opening a big-box store in town. Many people were happy, because in many towns Maier's provides a welcome competitor to Wal-Mart, a less evil deep-discount big-box retailer with even more selection. But employers in Lexington were panicking ... because Lexington was already running negative unemployment. During the Reagan years, to keep the country from convulsing in open revolution, the Bureau of Labor Statistics made a whole bunch of "technical" corrections to the definition of "unemployed," in order to make unemployment look lower than it actually was. Need a full time job to pay the bills but you can only find part time work? Haven't looked for work in the last three months because you know there are no jobs out there? Qualified to work in a good job but flipping burgers because that's the only work you can find? On the rolls at a temp agency that hasn't sent you out on a contract all year? Not working because you're in prison? Can't find any work because you've done prison time in the past? Can't find work because you've got a physical disability that employers would rather risk a lawsuit over than hire you? Since Reagan, if any of those terms apply to you, you're not "unemployed," so you don't count in the unemployment rate. Well, in Lexington about five years ago, employers got so desperate that they were hiring those people, training them, and putting them to work. That's something the economy could have done at any time, but didn't, because of the cross-party consensus, based on the illusionary successes of Reaganomics, that unemployment had to stay at 6%, even among people who don't have any of the other "not unemployment" problems I listed above.

Was the result runaway inflation? No, even though wages went up. Companies simply learned to put employees to more productive use and to waste less money. And oddly enough, in the 1990s that didn't so much involve pitting them against each other in destructive contests. Instead, it involved getting them to communicate more, to share secrets of productivity more, to recognize that their economic health depended on the company's, to work together as teams. It involved management learning to streamline purchasing decisions and to waste less raw materials. You may want to credit these things to the Internet Age. But don't tell that to your grandmother or great grandmother who worked in the factories of World War II, because these are all lessons that America had learned before. If that previous generation hadn't learned these things, Hitler would have won World War II. Clintonomics was not a radical new theory. It was a return to what the economy looked like before the economic shocks of the 1970s.

And that means that all of the people who have died for Reaganomics died in vain. All of the children eating lead paint because of Reaganomics were crippled for nothing. All of the families that broke up because the husband lost his job to junk-bond fueled "downsizing" were destroyed for nothing. All of those people whose hopes were destroyed were crushed for no good reason at all. All the extra workers crippled or killed in less-safe workplaces were hurt out of pointless spite. And worst of all, we learned to hate the poor people that Reaganomics reduced to poverty when it wasn't their fault, after all.

And that's why I'm glad that Reagan is dead. If his God was merciful to him, he lost his ability to remember or understand what was going on around him before he found these things out. In the mean time, I have no idea how Alan Greenspan, Milton Freedman, and all of their evil disciples can look themselves in the mirror, know that they were wrong about what they did to us, and not commit suicide out of shame, horror, and guilt. And the worst of it is, our current administration still worships at the temple of Reaganomics. Do you think it's an accident that we have high unemployment now? Do you think that it's an accident that practically the very first thing that Bush the Younger did was panic companies into laying people off en masse? Do you think that it's an accident that the airlines are being denied the temporary bridge loans they need to recover lost revenue from the panic after the 9-11 attacks, and that neither they, nor the airports, nor the first responders are being allowed to hire enough people to implement critical security upgrades?

On January 18th 2001, for Bush's inauguration, The Onion ran a satire piece entitled, "Bush: 'Our Long National Nightmare of Peace and Prosperity Is Finally Over.'" You have to be a premium subscriber to find it in the archives, but back in January Dan Chak got their permission to reprint and annotate it for his web log. You can find his version of it right here, and it is an absolute must-read. Go get yourself a copy while you can, because now that he's graduated the site's going down in a couple of weeks.

Seen from the perspective of three years later, it turned out not to be satire. It turned out to be an entirely prescient look at what Bush's version of Reaganomics was going to do to our country. I said in my other columns on Reagan that I can get over the other evils that he did, because they were all long since over, vanishing into the past. But before I can get over Reaganomics, it would have to stop. But no. We have a president who's desperately trying to raise unemployment. We have companies doing everything they can to rob the middle class of purchasing power, then wondering why nobody's buying their stuff. We've gotten over that brief fad of working together in our workplaces, and are being pitted against each other in desperate vicious fights to be the last person on the layoff list. And once again, we're being taught to hate the poor. And that's why I still hate Ronald Reagan.
Tags: current events, economy, history, politics

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