Wednesday, November 26, 2014
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UPDATED: How Gipper's ghost haunts our economy

Reaganomics redux

UPDATED: How Gipper's ghost haunts our economy

UPDATE: Fans of Attytood can tell me what they think of this blog in person tonight, when I talk about "Tear Down This Myth" and sign copies (which will be sold there by Joseph Fox) at Philly's legendary Pen & Pencil Club, at 1522 Latimer Street, at 7:30. See you there...bring your rotten tomatoes.

Roughly this time a year ago, inspired by the insanity that was the 2008 presidential race, I started working on Tear Down This Myth: How the Reagan Legacy Has Distorted Our Politics and Haunts Our Future." With a target publication date right before the Gipper's 98th birthday (or Reagan Day as modern conservatives have declared it), I did have one nagging worry. What if a decisive election victory last November by Barack Obama and congressional Democrats appeared to slay the Reagan myth for once and for all -- ushering in an Age of Aquarius in which government took a rational view of science, adopted economy policies that would actually help the middle class, and promoted a foreign policy in which our deeds matched our lofty rhetoric.

Silly me! Just like the bell in the Polar Express, the Reagan myth still rings for at least 37 Republican senators and 188 GOP House members, as it does for all who truly believe in the right-wing blather of Rush Limbaugh and Sean Hannity. And it's echoed by a lazy inside-the-Beltway press corps that came of age during the halcyon days of the 1980s and remains falsely convinced that America is a center-right nation, despite a slew of polls and election results to the contrary.

The Reagan myth was sold so successfully to the party's base by the likes of lobbyist and GOP point man Grover Norquist -- who founded the Ronald Reagan Legacy Project in 1997, in the dog days of the booming Clinton-era economy -- that too many Republicans really do believe that a tax cut is the solution to every problem, whether the nation has a budget surplus or a deficit, in times of war or peace, when the economy is booming or when Great Depression II looms.

Before this year's debate, the most bizarre manifestation came in 2003 when the Bush administration pushed through a tax cut even though America was engaged in two wars. Iowa Republican Jim Nussle, who headed the House Budget Committee at that time, explained "the basic playbook" on taxes is the one authored by Reagan, "and that is the one that I follow today." Meanwhile, one study found that nearly three-quarters of the whopping rise of nearly $4 trillion in national debt during the presidency of George W. Bush was attributable to two things: the simultaneous wars in Iraq and Afghanistan and the size of his tax cuts.

When President Barack Obama, both as a 2008 candidate and now as commander-in-chief, declared it was high time to end the folly that tax cuts are the only solution to the nation's woes, this is how South Carolina Sen. Jim DeMint responded: "It's incredible that he said that. It's clear that whether it's John Kennedy or Ronald Reagan or when Bush did this in 2001 and 2003, the economy came out of recession." But the evidence for that argument just isn't there.

In the case of Reagan's massive 1981 tax cut, it did start the great divergence of wealth between the very affluent and the middle class in this country, but it didn't save the American economy, which actually slid into a deep recession the next 15 months. When the economy finally reversed in the mid-1980s, it was the predicted bounce-back in the business cycle (even Reagan's budget chief David Stockman said so), a steep drop in global oil prices, and the inflation-fighting tight-money policies of then-Fed chairman Paul Volcker, an appointee of Jimmy Carter who today is a top adviser to Barack Obama. And yet the Ronald Reagan myth and the hanging-by-a-thread 41 Senate Republicans have foisted a recovery program on America that is too weighed down by more tax cuts, and spends far too little on the nation's crumbling infrastructure, on mass transit, on green energy.

History matters. To set a new economic course for America, Democrats including the Obama administration won't just have to win the daily news-cycle wars of the present. They will need to dig deeper, and recapture the past as well.

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Will Bunch
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