As expected, posting the cover for my book on the Ronald Reagan myth -- "Tear Down This Myth," which will be published by the Simon & Schuster imprint Free Press on Feb. 3 -- drew a lot of response. Several commenters wondered why publish such a book in the wake of Obama's election victory -- I believe the answer is quite clear, that a distorted view of the 40th president, who he really was and what he accomplished, still guides too many of our policy makers, even after the landmark events of 11/4/08.
Just check out the itinerary of Treasury Secretary Henry Paulson, a man who has a 24-hour-a-day job if there ever was one: Saving the global economy from any more damage than that which has already been wreaked upon it. And so Paulson has turned down numerous speaking gigs and canceled appearances so he could stay on top of things. But the former Wall Street honcho couldn't turn down the unofficial state cathedral of Reaganism, a long six-hour flight from the nation's capital:
Managing the biggest financial crisis since the Great Depression has left Treasury Secretary Henry Paulson little time to sleep, let alone fly around the country to speak at fundraisers.
But that's just what he did Thursday, delivering a speech at the Ronald Reagan Library in Simi Valley, Calif., that organizers said would help "promote the legacy of Ronald Reagan."
Critics said the trip was ill-timed given the financial crisis and economic slowdown that are roiling global markets. They also pointed out that Paulson's recent actions - nationalizing the banking system and beginning to overhaul financial regulation - are out of step with Reagan's legacy of small government and deregulation.
"Anybody who has engaged in the actions of Henry Paulson and then said he's promoting the legacy of Ronald Reagan I think is historically illiterate," said Craig Shirley, author of two books about Reagan's campaigns.
Well, you surely could make the case that Paulson has better things to do with his time than to make the long schlepp to Simi Valley (and it is a long schlepp from the East Coast, having visited there myself in August). But this story -- like so much that we talk about when we talk about Ronald Reagan -- misses the main point altogether. The American people should not be worried that the Paulson-engineered bailout is betraying the legacy of Ronald Reagan. The real problem is that the legacy of Ronald Reagan -- of deregulating the world of risky finance and leaving a giant mess for all of us to clean up -- is betraying the American people, again.
In a way, Reagan was the grandfather of the financial bailout in America. Because it was Reagan who pushed to deregulate the savings-and-loan industry, back when credit default swaps were still a gleam in the eye of the Lehman Brothers.
''All in all, I think we hit the jackpot,” Reagan said on Oct. 15, 1982, when he signed into law a bill that lifted many restrictions on the savings-and-loan industry, giving thrifts the power to make larger real-estate loans and compete with money market funds. Some jackpot. It turned out that the deregulation of the S&L's unleashed a corrupt rush into risky and often corrupt real-estate dealings, often involving insiders, and the nation's thrift industry teetered on the edge of collapse just months after the Gipper left the Oval Office in January 1989. Within months, Reagan's hand-picked GOP successor, George H.W. Bush, was forced to push through a bailout package with a value of $160 billion - which would be a lot of money now but was a huge amount of money 19 years ago. This is what Craig Shirley calls "Reagan's legacy of small government and deregulation."
The reality is that Reagan's "legacy of small government" took America from a creditor nation to the world's biggest debtor nation during his eight red-ink-ridden years in the White House. You can very easy straight line from the era of Reagan in the 1980s, from "greed is good" insider trading on Wall Street and his steep tax cuts for millionaires and billionaires -- to our 2008 of sub-prime mortgages, credit default swaps and CEOs with their runaway pay and their golden parachutes and their bailout-seeking jaunts on corporate jets.
And so what is the lesson that our chief fiscal steward, Henry Paulson, has gleamed from that?
In his speech, Paulson struck a Reagan-esque theme, warning of the risks of imposing too-strict regulations as a knee-jerk response to the near-term financial crisis.
Proceeds from the annual Reagan Lecture, which about 900 people paid $75 to attend, will be plowed back into the Ronald Reagan Presidential Foundation & Library's programs, which promote education about Reagan's history and ideas, Giller said.
If backwards history like Paulson's speech is the "education about Reagan's history and ideas" that Americans are getting -- and it is -- then we're all in big trouble. It was willy-nilly deregulation that spurred on the global fiscal crisis, and even now, more than a trillion dollars in the hole, our Treasury Secretary and bailout czar is still clutching his Reagan rosary.
Believe me, for America's sake, I wish there wasn't a need to puncture the myth of Ronald Reagan. But clearly there is.
Comment removed.
Will, NOW you've done it. The GOP wingnuts will try to burn you at the stake for this "heresy" no matter how true it may be.— AHiredGun- The worlds biggest con man "the economy is fundamentally sound" Subprime is contained Hank Paulson.— Tageman
- Truth and a mediocre writer for a mediocre paper. Doubtless Reagan's legacy is distorted (though I doubt Will is much concerned with the distortions of FDR's legacy." The US finally became a creditor nation in 1916, a debtor again in what, 1983? Should we give credit to creditor status to Wilson and debtor status to Reagan? It would seem this is a simple article written bu a simpleton looking to manipulate minds.— dreinterests
- How about also attacking the myth of his tax cuts? Sure he cut the rates but it was the largest tax increase by getting rid of most of the interest deductions only leaving mortgages. That's why all the calls for tax cuts now that cite Reagan's and the growth of tax receipts really are dishonest.— Jets
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Will, these days I'd rather read about jukeboxes.
That's nice, but you have to believe that it was de-regulation that caused the financial crisis and not a social engineering program that mandated lenders give loans to people who obviously couldn't afford them. I believe the latter. This is the "build the economy from the bottom up" thinking that Obama shares. Also Will, don't give me that line you wish there wasn't a need to take down RR, libs have to rewrite history to solidify their power. Your just being a team player.— jmc- Comment removed.
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Will Bunch, a senior writer at the Philadelphia Daily News, blogs about his obsessions, including national and local politics and world affairs, the media, pop music, the Philadelphia Phillies, soccer and other sports, not necessarily in that order.
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