Essay by Martha Quillen
Culture & Politics – November 1996 – Colorado Central Magazine
When it comes to candidates, it’s hard to tell whether they’re outright lying to us, or merely spouting banal rubbish without thinking twice about it. Then again, maybe they’re really deluded.
The Republicans, for example, actually seem to believe that they are fiscal conservatives. But the Republican Party’s devotion to Calvin Coolidge’s strategy — of lowering taxes while limiting government interference in the affairs of business and industry — is not conservative.
When Ronald Reagan was elected he promised to reduce our four-hundred-million-dollar deficit, by “jump-starting” our economy with innovative lending laws and bank deregulation. By the time Reagan left office, the United States had a three-trillion-dollar deficit.
Through two terms, Reagan gambled on a dynamic course. Strict governmental standards regulating investments, banks, and collateral were relaxed, so that business and industry could expand. As Reagan saw it, wealthy industries would eventually mean more jobs, more opportunity, and more money for everyone.
The President also inflated his budgets, believing the Democratic congress would have to make some unpopular cuts and take responsibility for them. The Democrats, however, merely made snips here and there. Still, the prevailing wisdom was that “it takes money to make money,” so the President persisted. Reagan knew, of course, that the debt was mounting, but in Republican theory, that wasn’t entirely bad. A huge debt would eventually call for big cutbacks, and the Republicans believed in less government.
During the ’80s, stocks and currencies could be transferred instantly, and the concept of a world-wide economy was born. Opportunity abounded, but no one knew how to control so much cash when it was moving through electronic space. The phenomenal possibilities of the situation, however, captured the banking community’s imagination, and they eagerly hazarded all the money Reagan made available.
A touch of madness seized our nation. Monetary speculation flourished, and Americans made heroes out of bankers — while the press lauded the rising careers of people like Mike Millken and Ivan Boesky. Besides, new technology was rapidly changing established financial wisdom.
In retrospect, it’s easy to see how Reagan’s ideas inspired both Republicans and Democrats — and Reagan’s ideas did inspire both parties. Thus, Democrats can’t get too uppity about “Reaganomics” — since we couldn’t have gotten into our current financial mess if a Democratic congress hadn’t sanctioned the risks.
Although similar economic incentives once led us into a depression, many economists in 1980 thought “supply-side” economics could work. In theory, the depression happened because the stock market crashed, a few banks failed, and people panicked. Desperate to get their money out of uninsured accounts, Americans made runs on the banks, and banks all over the country folded. Hence, a lot of people lost everything.
During Reagan’s presidency, the banks were insured, so the president’s advisors thought there would be no panic about a few financial glitches here and there. Therefore, there would be no frenzied runs on the banks, and no mass bank failures.
As it turned out, Reagan’s “supply-siders” were partially right. In the 1980s when the banks failed, people lined up patiently to get their money from the Feds.
Since “supply-side” ideas have now led America into a depression under Coolidge, and a four-trillion-dollar deficit due to “Reaganomics,” it stands to reason that real conservatives would be more skeptical by now.
Yet, for a time during the ’80s, money was plentiful, and countless fortunes were made. Interests rates shot up, but that didn’t bother those with money to invest, and high interest actually helped many senior citizens, since they often relied upon interest payments from retirement investments.
According to Reagan, the American dream was to make a million dollars, and in the ’80’s economy it was easy — for those who already had quite a bit of money, and the right connections.
Unfortunately, however, most of that money never found its way to American workers. Most of Reagan’s trillions were spent on things perceived to invigorate the economy like “corporate welfare,” and lavish defense contracts including Star Wars.
Because the U.S. government insured the money in American banks, the Feds also had to assume $5,000,000,000 in debt when those banks failed. Today, our tax money pays the interest on that debt, too. But that money didn’t just disappear into the government ozone. Our government didn’t spend that money — citizens did.
Even though banks failed all across the nation, California, Texas and Colorado consumed the majority of that recklessly supervised cash — and it shows, in new homes, sprawling subdivisions, and renovated buildings, in Denver’s skyscrapers, Vail’s abundance, and Colorado Spring’s rampant development. In Chaffee County alone, three banks failed.
For Central Colorado, however, the ’80’s were devastating. Many mines faltered as high mineral prices brought new competition. But the price of gold and silver dropped (because investors quit purchasing precious metals to hedge inflation).
Yet Reaganomics may also have spurred our current recovery because, after the bank failures, investors came to Colorado eager to take advantage of all that overbuilt, underpriced real estate left empty by the crash. And eventually, as prices on the Front Range escalated, those investors shopped around, spreading visible growth throughout our state. (Which may be seen as good or bad, depending on whether you’re looking at our financial gains or the subdivisions on the hill.)
The Reagan-Bush financial plan, however, should not be viewed as commendable no matter how hard Republicans want to obscure the voters’ perceptions. Yes, Republicans claim that capital in circulation stimulates prosperity for all, but it’s obvious that Reagan entrusted America’s bankers and businessmen with more money than they could handle.
But on the other hand, at least Ronald Reagan believed in America and Americans.
In 1996, far too many politicians engage in bigotry, stereo-typing, name-calling, and malice in order to win elections. Personally, I’m sick of Republicans who blame tax-and-spend liberals for our budget problems. How soon they forget the little matter of four trillion dollars of additional debt directly attributable to Republican policies.
Even more telling, for more than two decades both Republicans and Democrats have promised us a balanced budget, and failed to deliver one. In the meantime, both parties have blamed the other, when in truth, the current U.S. budget would actually be balanced today — if the U.S. didn’t have to pay interest on the trillions of dollars of debt we incurred during the Reagan years.
Yet few candidates in 1996 admit that America’s financial woes are the result of grievous malfeasance on the part of congress. For the American working class, Reaganomics was a disaster. The rich got richer, while American workers tread water. Yet Republicans still support the hopelessly naive idea that wealthy industries will translate into wealthy American workers.
In reality, thriving industries have been adept at moving jobs overseas, mechanizing assembly lines, and downsizing labor forces. Yet even so, politicians seem rather nostalgic for those high-flying Reagan years. Republicans, especially, can’t face the fact that prosperity during the 80’s was a delusion — that we’re still paying for.
— Although fall-out from Reagan’s economic policies was even then pushing our deficit toward the four-trillion mark, in 1988 George Bush vowed to carry on Reagan’s tarnished economic policies.
— And now Dole offers us a tax cut, even though Republicans claim that the budget must be balanced ASAP — and that it might take some very unpleasant cuts to do so. Bob Dole also claims that he’d like to return to a simpler, more moral age like the 1950s.
Well, maybe that is possible. But in order to do so, it might be necessary to embrace the economic policies of that bygone era.
From 1954 to 1963, Americans making over $200,000 per year were taxed at 85 – 91 percent. Thus, it’s obvious that if Dole really wants to bring back the idyllic splendor of the pre-baby boom era, he’ll have to more than double taxes for the wealthy.
Instead, Dole peddles an income tax cut to the financially beleaguered — even though the poorest of America’s working families don’t pay much in income taxes. The working poor pay social security taxes, sales taxes, gasoline taxes, cigarette and alcohol taxes, but they don’t pay extravagant income taxes.
Even families who make seventy-five thousand dollars a year won’t see appreciable returns under Dole’s plan — compared to those who make a million or more — because Dole is offering a blanket cut that serves those making millions far better than it serves the middle class.
Bob Dole rants about character, but he belongs to the most deceitful class of spoilers in America — candidates who blame everything that’s ever gone wrong on someone else. Such candidates terrorize Americans with a vision of moral degeneracy that’s destroying our way of life and costing us plenty — when in actuality, Dole’s former Senate buddies have cost us more.
Personally, I’m sick of hearing that baby boomers are an immoral, self-indulgent, promiscuous generation of lousy parents and cowardly draft-dodgers. I’m sick of politicians who blame homosexuals, illegal immigrants, immoral youngsters, deadbeat Dads, unwed mothers, alienated youth, Hollywood filmmakers, and people who don’t speak English for all of the ills of our society.
I’m sick of candidates who blame welfare families for our financial woes — since even with inflation taken into account, it would literally take several centuries for our current annual welfare budget to add up to four trillion dollars.
Besides, who’s running this country anyway? The welfare mothers?
In 1996, far too many candidates encourage fear, greed, and vengeance. They promise us more police, more prisons, more drug convictions, stiffer sentences, harsher penalties for crime, budget cuts on other people’s so-called entitlements, and a host of other legislation aimed at punishing Americans for our government’s incompetence.
But our candidates don’t seem to have any ideas about how they can curb the factors that make crime, poverty and mayhem inevitable.
Our schools are floundering. Far too many of our children are illiterate. Working parents can’t afford decent health care. Our mentally ill wander the streets without adequate treatment, and those who desperately want help, can’t get into drug treatment programs.
Children dependent upon government agencies get tossed from foster home to foster home, losing all semblance of family and continuity. Our courts are slow, sometimes taking years to decide a youngster’s future. Our legal system favors the wealthy, and allows people to use our courts and our police to harass, defame and bedevil those they dislike.
A trend toward mandatory sentencing without regard to individual circumstances or common sense infests not only our courtrooms, but also our schools. Thus, a six-year-old boy was suspended for kissing a girl, and a teenager was kicked out of school for carrying the drug Midol.
Our politicians revile people who come to the United States looking for work because their opportunities in their native countries are nil and their children are hungry. Yet at the same time, the U.S. offers lucrative agreements and favored trade status to nations like China and Mexico that continue to spawn waves of beleaguered refugees.
In regard to health statistics, the United States doesn’t rank in the top ten (with twelve countries surpassing us on all three considerations, higher life expectancy, lower infant mortality, and universal access to medical care). But the U.S. ranks number one in health care expenditures per person.
By international standards, and even many of our own, American physicians rely too heavily on surgery and potentially dangerous drugs. In addition, American doctors are criticized by the international community for their overuse of antibiotics, a practice which has led to a rise in the incidence of difficult-to-treat infections caused by antibiotic-resistant bacteria.
Yet many politicians rank us number one in health care — because America has more health-care equipment than any other nation.
Whenever such problems have come up in this year’s election, it’s been to blame the other Party for causing them. The Republicans and Democrats work against each other — and all of us. Last year, while attempting to balance the budget, they shut down the government instead — which, of course, had to be restarted at enormous expense.
Instead of resolving our problems, many of which are government-induced, Congress pits us one against the other. Should we cut Social Security or farm subsidies? Should we cut Medicare or the defense budget?
Or should we spend our whole budget building prisons, while our candidates promote hangings?
As bereft of ideas as most politicians seem to be, it’s time they tackled some of the causes of crime and poverty, (causes they actually promulgate instead).
Or do we really want to live in a society where handguns, security systems, police patrols, car alarms, drug agents, canine squads, prisons, and the death penalty are the best things we have to offer?