Published: February 9, 2011
Here we are, 100 years after Ronald Reagan’s birth (on Feb. 5) and 30 years after his first birthday as president of the United States, and we really haven’t given proper due to the present he gave us. True, the custom normally is for the celebrant to receive the gift, but what Reagan gave us is still giving.
I’m not speaking of hypocrisy; heaven knows there isn’t a politician elected who doesn’t give a little of that. Reagan’s hypocrisy—railing against big government while growing it, lobbying for balanced budgets while never submitting one, decrying taxes while raising them several times—is a little more pronounced than most, but that wasn’t the real gift he bequeathed us. Even his hardline statement about not negotiating with terrorists fell by the wayside when he sold arms to Iran in violation of both federal law and an arms embargo, in order to get hostages released in Lebanon.
More than anything else, what Reagan gave us is an enduring, entitled class of individuals who believe that work should be taxed, but wealth should not. These were the people who were the prime beneficiaries of Reagan’s first and most important tax cut: the one that brought down the top rate.
Historically, we had seen this before, back in the Roaring ’20s. Tax cuts that lowered the top marginal rate from 73 percent down to 25 percent fueled rampant stock speculation and real estate bubbles before it all came crashing down in the Great Depression. Sound familiar?
The difference between then and now is that the class that benefited from both the tax cuts of the 1920s and Reagan’s and George W. Bush’s cuts is that the moneyed class behind them has firmly worked it into the public mind that raising any taxes whatsoever is anathema. In their mind, “voodoo economics” (as George H.W. Bush memorably put it when running against Reagan) is an article of faith—for them, cutting taxes solves all ills.
Think back to the days before Reagan rang up our first-ever trillion dollar deficit, as part of his plan to spend the Soviet Union into bankruptcy. Try to remember high school kids with paint buckets at major intersections begging for money for uniforms or band instruments. Try to remember a massive homeless problem, with the mentally ill roaming the street at all hours in nearly every population center. Try to remember the crumbling infrastructure, with cities pleading bankruptcy and states with recurring structural deficits.
You can’t, because they didn’t exist.
After the crash of the 1920s, from the 1930s to the 1980s, the top tax rates climbed back to the 70 percent range. In that time, we won a world war, built an interstate highway system, and sent men to the moon. We also created the giant middle class that was the engine of the nation, and we managed to make it a half century without a crash or major bank failure. And then came Reaganomics.
Under Reagan, federal tax policy in effect was the first great push for inequality. Princeton political scientist Larry M. Bartels summed it up thusly: “Under Republican administrations, real income growth for the lower- and middle-classes has consistently lagged well behind the income growth rate for the rich—and well behind the income growth rate for the lower and middle classes themselves under Democratic administrations.”
It took 30 years of “trickle down,” but we are no longer the “shining city on a hill.” We’re at this point because the wealthy refuse to pay their share to keep the granite walls from crumbling. Plus, they gave us a savings-and-loan crash after Reagan’s tax cuts, and a real estate bubble and crash after Bush, none of which was paid for primarily by the moneyed class.
And once a Democrat enters office, the cries go up to “do something about the deficit”—cries that are never heard when Republicans are in the White House. Dick Cheney famously put it to former Treasury Secretary Paul O’Neill: “Reagan proved that deficits don’t matter . . . this is our due.”
Cries against this course are drowned out by a custom-built noise machine. At every opportunity, the machine endlessly repeats, “Taxes are bad, taxes are bad.” Which is how we get to the point where we were this winter, where the elected officials servile to the moneyed class will set aside nearly any policy goal in order to make sure the Bush tax cuts for the rich are extended.
No other president has had a fully funded post-presidential legacy propaganda machine like Reagan has, to stroke and massage his memory to the point where what he actually did is no longer of consequence. It’s all about what they want him to stand for. Reagan is now the gilded idol of the moneyed class, the totem for systemic inequality, and the one-word clarion call for tax cuts in perpetuity for the freeloader caucus. It took 30 years, but he got what he wanted. Happy birthday, Mr. President.
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