Showing posts with label Ronald Reagan. Show all posts
Showing posts with label Ronald Reagan. Show all posts

Monday, February 21, 2011

Manifesto Joe's Great Moments In Conservative History, Chapter 11: Mr. Magoo Wins The Cold War

By Manifesto Joe

Revisionist history has it that Ronald Reagan "won the Cold War" by, in essence, outspending the Soviet Union on a military buildup. Those evil commies just couldn't compete, the myth has it, and they were suddenly forced to fold their empire all over the world.

What utter right-wing hogwash.

Let's look a bit more closely at the situation as it really was in those days. The U.S., typically, has spent perhaps as much as 6% of its GDP on the military. The old Soviet Union often spent as much as 25% of its GDP on military outlays, depriving its civilian population of many basic needs so that lonely, unhappy young men could sit around on military bases in the Soviet part of the world, getting sick on boiled carp and bad vodka.

I remember all the right-wing alarmist BS of the time. I read in the National Review in 1985 (that was when I could still read that rag without tossing my cookies and making the pages stick together) that the Red Army was arguably the most formidable fighting force that the world had seen up to that time.

We know now that, around 1985, the Soviet military was a large, but largely ineffective, fighting force, ill-equipped and with miserable morale. Hell, the Mujahideen in Afghanistan kicked 100,000 of their asses for years and years, finally forcing them out of the country. (And yet, nobody now seems to be arguing that U.S. Rep. Charlie Wilson, D-Texas, won the Cold War. The argument seems at least as plausible.)

After the Soviet Union collapsed, conservatives all of a sudden crowed about the superiority of American fighting forces over those hapless commies. The story kept changing whenever it was convenient. So, which was it, right-wingers? The most formidable fighting force the world had ever seen, or a bunch of homesick clowns who couldn't beat a ragtag guerrilla force in one of the world's poorest countries?

The Soviet economy was at the root of the empire's decline, and it had been in trouble for a very long time. Its centrally planned economy was stagnating by the mid-1970s, when Reagan was still sticking his foot in his mouth as governor of California. Here's a passage from answers.com that summarizes this pretty well:

The vigorous Soviet economy of the late-1960s and early 1970s quickly fell victim to the very factors that had contributed to its success, central planning and raw materials allocation. Brezhnev recognized that the Soviet economy was slowing, and attempted to patch problems rather than completely overhaul the system. His efforts failed. Even if Brezhnev had attempted to overhaul the Soviet economy, the highly entrenched special interests that made their living by manipulating the Soviet Union's centrally planned economy could have defeated Brezhnev's efforts.

Throughout the 1970s and into the mid-1980s, the Soviet Union's GNP and industrial output continued to increase, but at a lessening pace, eventually leading to economic stagnation. The Ninth Five Year Plan (1970–1975) saw a growth rate of approximately 3%. The period of 1975–1980 experienced a growth rate of between 1% and 1.9%, depending on whether revised Soviet numbers or the West's estimate is examined. Likewise, 1980–1985 saw a further decline in economic growth, between 0.6% and 1.8%. Declining economic growth rates were not confined to the Soviet Union. Eastern Europe, with its economies intertwined with the Soviet Union's, suffered a similar fate.

This declining growth rate in the 1970s and 1980s resulted in the Soviet Union receiving a diminishing rate of return on capital investment. This proved disastrous for the Soviet economy, because by 1980, the Soviet Union was spending nearly one-third of its GNP on capital investment, with most of the sum dedicated to the military. The military was consuming such a large portion of the Soviet economy for two reasons: the Soviet involvement in Afghanistan and the arms race with the United States. These two events would weigh heavily in the Soviet economic demise and lead to its inevitable fall. A weak economy prevented the Soviet Union from reacting appropriately to each experience.


Now, what Reagan admirers would have one believe from this is that the U.S. military buildup of the 1980s was what "won" the Cold War. The Cold War had been going on for about 35 years by the time Reagan even took his first oath of office. Did he hasten the Soviet collapse by a year or two? Perhaps -- but it's pretty clear from what we now know that the Soviet Union's economy was already, in essence, a dead man walking by 1980. Just a basic maintenance of the U.S. military for another 11 years was quite sufficient to see them run out of gas.

I've read that when one says something to Russian economists nowadays about Reagan winning the Cold War, they are unable to restrain their laughter. Everybody knew what the problems were in those days, they would say, and they were all right here.

Does this demonstrate the superiority of capitalism? Well, yes and no. Many of those who led the U.S. through the Cold War were Democrats, who advocated a mixed economy and were regarded by capitalism's right-wing ideologues as heretics. The Democrats weren't fans of the Soviet command economy, either, or of its police state. But they recognized a need for a reformist approach to capitalism, which one would be at a loss to explain to the typical Tea Party activist of 2011.

Now, less than 20 years after the final collapse of the Soviet Union, it looks like it is capitalism that is in trouble all over the world, and that seems largely for similar reasons -- its apparent inability to reform itself. For over 30 years in the U.S., wealthy individuals and giant corporations have insisted on gaming the political system to evade taxes, and on demagoguing much of the public into believing that any sort of tax increase will ultimately be a tax increase on them.

We now have the vantage point of seeing, from the second term of the Clinton administration, that it is quite possible for the federal government to raise enough revenue to run comfortably in the black without damaging the economy. But one wouldn't know that, if one listens to rich people and Corporate America, and takes their swill seriously.

Back to the Cold War -- it came to an end because of a general collapse of the Soviet economy, and that was something that was many years in the making. A military empire has to be paid for, and the Soviet empire had their system overextended long before Reagan became president. Less than 20 years later, it looks increasingly like something similar is happening here.

Years ago, there was a saying that the U.S. didn't win the Cold War -- Japan won it. Now I'd say it's looking more and more as though China was the real winner. The U.S. is so deeply indebted to them, and largely because of war expenses, that we aren't likely to get out of that debt within any living American's lifetime.

Now, as for Reagan and Mr. Magoo

Ronald Reagan was apparently an inspirational leader for many people. In contrast, what I generally saw for 8 years was a "Teflon" presidency and the amusing rightness of his critics' comparison to the cartoon character Mr. Magoo.

For those perhaps too young to remember, Mr. Magoo was a cartoon character whose life span was from about 1949 to 1965. The late character actor Jim Backus was his voice. Mr. Magoo doesn't get a lot of retro TV airplay nowadays, because I think he's regarded as far too politically incorrect, sort of like comedian Bill Dana's character Jose Jimenez or advertising's The Frito Bandito. I'll explain.

Mr. Magoo was a rich old dude who had poor eyesight and was hard of hearing, yet he insisted on continuing to drive his outdated flivver and to stroll through life as though there were nothing wrong. He would instigate catastrophes everywhere he went, but would himself walk away unscathed and oblivious about anything that had happened. People who had impaired eyesight and hearing were eventually offended by the character, so despite great popularity in his day, Magoo had a pretty short shelf life on the rerun circuit.

Compare this to a president who cut and ran after hundreds of Marines got blown up in Lebanon, yet today few call him a coward. (If it had been Bill Clinton or Barack Obama, there would have been all kinds of editorial comments about how yellow is not a color that goes with the decor of the Oval Office.)

Compare this to a president who was basically giving his blessings to a tradeoff with terrorists of arms for hostages -- and yet now few seem to remember this.

Compare this to a president whose policies led to the most expensive failure of U.S. financial institutions since the Great Depression. Not many seem to remember that, either.

Compare this to a president who created record deficits by cutting taxes broadly on wealthy Americans and big corporations, so much that now you can't reason with the average shithead on the street about how these people are looting the store and pushing the burden onto him or her.

This is a litany that could go on a long time -- but finally, compare this to a president who just happened to be sitting there, on the edge of dementia, at the time that Mikhail Gorbachev decided that the Soviet system was no longer workable. And now, right-wing revisionist historians are strutting about, posturing as though this were a feat that Reagan pulled off all by himself. Few seem to recall the reality of the situation -- they just remember glittering speeches about the myth of some "shining city on a hill."

Mr. Magoo, I sez. The senile old fool walked away from multiple disasters unmarked. And he's still doing it posthumously.

"Magoo, you've done it again!"

Manifesto Joe Is An Underground Writer Living In Texas.

Monday, February 7, 2011

Manifesto Joe's Great Moments In Conservative History, Chapter 10: Reagan Is Still 100

By Manifesto Joe

OK, plus one day. Cut me some slack -- I had to work on Super Bowl Sunday.

Ronald Reagan's presidency seems to have become bogus nostalgia for some people. I suppose that for some, it's appropriate. If you hate labor unions and love union-busting, you'd love Reagan. If you hate poor people and think they ought to be punished for being poor, Ronnie was your man. If you think keeping a country in a state of perpetual war is good for it, then Reagan would happily oblige you.

Let's look at some of the real Reagan legacy.

Supply-side economics

It's not hard to see that the timing for supply-side theory was right. The America of the late 1970s and early '80s was suffering from demand-pull inflation -- too many dollars chasing too few goods. A correction was needed.

What we got was an overcorrection. The misery index of, at one point, 13% inflation and 21% interest rates gave Reagan what he needed to sell a large dose of snake oil to the public. Economist Arthur Laffer's supply-side theory was that cutting taxes would actually increase federal revenue, because (1) with lower rates, more of the wealthy and big corporations would be willing to pay rather than seek tax shelters or be scofflaws, and (2) the resulting economic growth would in itself create revenue.

Well, in 1981, taxes were cut broadly, with the rich and corporate America as the main beneficiaries. So, we sat back and waited. And waited. Almost 30 years later, I'm still waiting for my trickle-down from the first time. It generally felt more like "tinkle-down."

What this did in reality was create a structural deficit, with too many government obligations (including Reagan's defense buildup that amounted to a 40% increase in military spending) versus too little federal revenue. Deficits ballooned to record numbers.

The second year, 1982, Reagan and members of Congress led by Sen. Bob Dole of Kansas overhauled Social Security, raising taxes on it and thereby mitigating some of the revenue-anorexic effects of the tax cuts of the previous year. At least Social Security would be sound enough for another generation or so. But the effect was to raise taxes on less affluent people, and in a way that most of them had no clue thereof. The Social Security tax, you see, is regressive, ceasing after a certain level of income. Rich people don't pay it past a certain income figure. Apparently this was once gauged as a way of getting them on board with the program. But de facto, when Social Security taxes are raised, it's the working class that pays most of it.

Anyway, we kept waiting, and the deficits just got bigger. All that extra revenue that was supposed to come in -- well, it didn't. Supply-side just turned out to be a massive fraud that greatly enriched the wealthy while the incomes of ordinary people stagnated. The mantra we kept hearing from Reagan was simply that "Congress spends too much."

Looking back, there was method in this madness. If you're a laissez-faire economic conservative, you want, as Grover Norquist said, government to be shrunk down to the size that it can be "drowned in the bathtub." That's one good way of accomplishing that.

Self-fulfilling prophesies

Despite the Democratic House of Representives' insistence that much of the social safety net be preserved, big cuts did ensue. The financial deregulation that began during the Carter presidency accelerated under Reagan. Government subsidies for housing and the like were slashed -- the HUD budget ended up something like 40% of what it had been, in real dollars. And regulation of any kind was curtailed as too expensive. What that did was essentially tell all the foxes that the henhouse was theirs for the taking.

Thus, the bromides about government being so inept, being so unable to function efficiently, etc., gain credibility of sorts. Naturally, when you put inept and inefficient political appointees in charge of diminished government regulation, you're going to get inept and inefficient "regulation." With such an approach, government indeed becomes the problem, not the solution, as Reagan famously said.

Rampant corruption

Reagan appointees became notorious, producing a federal government that had more officials either indicted or under investigation than any in recent memory. I believe that the count was over 100 at one point. With the foxes in charge of all the henhouses, how could we have expected anything different?

But obviously, many Americans don't remember any of that now. What they remember, with hazy nostalgia, is a telegenic actor-president who spoke to them about "a shining city on a hill." Some of us -- unfortunately, not enough -- remember that this hill had a curious odor of dung about it.

The savings-and-loan scandal

I'll lift a bit of material from Wikipedia to cover this:

The deregulation of S&Ls gave them many of the capabilities of banks, without the same regulations as banks. Savings and loan associations could choose to be under either a state or a federal charter. Immediately after deregulation of the federally chartered thrifts, state-chartered thrifts rushed to become federally chartered, because of the advantages associated with a federal charter. In response, states such as California and Texas changed their regulations so to be similar to federal regulations.[citation needed]

More important, however, was the moral hazard of insuring already troubled institutions with public dollars. In the view of a savings and loan president or manager, the trend line was fatal over the long haul, thus to get liquid, the institution had to take on riskier assets, particularly land. When the real estate market crashed, the S&Ls went with it. By insuring the risk, the government guaranteed that desperate S&L owners and managers would engage in ever more risky investments, knowing that if they were successful, the institution would be saved, and if unsuccessful, their depositors would still be bailed out.


The S&Ls went on to do a lot of imprudent real estate lending (sound familiar?), among other things that led to the failure of 747 of them. The Resolution Trust Corp. was created to clean up the mess. We have a family friend who worked for the RTC, taking possession of failing S&Ls on behalf of the government. She told us that at one site, she went to the second floor and found a well-stocked wet bar with cut-glass nudes and such decorating the place. Things like this had been apparently done with depositors' money.

Not all of this occurred on Reagan's watch. But for eight years, he championed the sort of deregulation that led to such gross abuses.

More from Wikipedia:

The ultimate cost of the crisis is estimated to have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government via a financial bailout under the leadership of George H.W. Bush. The remainder of the bailout was paid for by charges on savings and loan accounts —- which contributed to the large budget deficits of the early 1990s.

Bogus nostalgia for "Doctor Feelgood"

People like to be told bright, glittering things by politicians, and Reagan was undoubtedly a master of that. My wife and I never quite understood the appeal. She hated him as an actor in his Hollywood days, and always commented on that turkey neck. I saw him similarly to Gore Vidal, who bemusedly called Reagan "grandmotherly."

Sadly, the man was almost all shine and very little substance. I understand that President Obama would like to pick up some of that shine, so as to rally faltering support for his programs. But Obama has the misfortune of being an intellectual, so despite also being a fine speechmaker, he usually ends up telling people a lot of grim truths that they don't want to hear. Reagan, about as far from an intellectual as it gets, never had that problem, and that was a major reason for his political success.

Coming soon: Reagan is still 100, third chapter.

Manifesto Joe Is An Underground Writer Living In Texas.

Sunday, February 6, 2011

Manifesto Joe's Great Moments In Conservative History, Chapter 9: Reagan Turns 100

By Manifesto Joe

I remember the time well. It was the 1980s, the prime of my young adulthood. He was supposed to be rebuilding America, and millions of jobs went overseas or to Mexico. Suddenly there were all these homeless people on the streets, hitting on you for spare change -- in 1980 they had either been living in Section 8 housing or were in mental asylums. You could see Reaganvilles beneath the bridges and underpasses in every city, with tents pitched and fires burning in garbage cans. He was supposed to be a fiscal conservative, but the deficit ballooned to record numbers. Yet, I noticed that I was suddenly paying more tax for Social Security than I was before.

He was supposed to be this badass patriot, yet hundreds of Marines were blown up in a defenseless position in Lebanon, and then we tucked tail and ran out of there. Arms appeared to be traded to terrorists for hostages. The example of Cold War conquest was overrunning some little halfass country called Grenada, where they found a cache of commie weapons that were, like, World War I vintage.

This is the guy we're supposed to be honoring on what would have been his 100th birthday?

Not the sharpest pencil in the box

We've certainly discovered that it isn't necessary for a U.S. president to be an intellectual of any sort. But Ronald Reagan lowered the bar a lot, and paved the way for the likes of Il Doofus, and now Klondike Hottie, to parade about on the national stage. Here is what some notables (and Reagan himself) said about Uncle Ronnie, courtesy of the website, "The Reagan Years":

"I never knew anything above Cs."
--President Reagan, in a moment of truthfulness, describes his academic record to Barbara Walters, November 27, 1981

"They told stories about how inattentive and inept the President was.... They said he wouldn't come to work--all he wanted to do was to watch movies and television at the residence."
--Jim Cannon (an aide to Howard Baker) reporting what Reagan's underlings told him, Landslide: The Unmaking of the President: 1984-88

"Reagan's only contribution [to the subject of the MX missile] throughout the entire hour and a half was to interrupt somewhere at midpoint to tell us he'd watched a movie the night before, and he gave us the plot from WarGames, the movie. That was his only contribution."
--Lee Hamilton (Representative from Indiana) interviewed by Haynes Johnson, Sleepwalking Through History: America in the Reagan Years

"This President is treated by both the press and foreign leaders as if he were a child.... It is major news when he honors a political or economic discussion with a germane remark and not an anecdote about his Hollywood days."
--Columnist Richard Cohen

"What planet is he living on?"
--President Mitterand of France poses this question about Reagan to Canadian Prime Minister Trudeau.

"During Mr. Reagan's trip to Europe...members of the traveling press corps watched him doze off so many times--during speeches by French President Francois Mitterrand and Italian President Alessandro Pertini, as well as during a one-on-one audience with the Pope--that they privately christened the trip 'The Big Sleep.'"
--Mark Hertsgaard, On Bended Knee: The Press and the Reagan Presidency

"He demonstrated for all to see how far you can go in this life with a smile, a shoeshine and the nerve to put your own spin on the facts."
--David Nyhan, Boston Globe columnist

"an amiable dunce"
--Clark Clifford (former Defense Secretary)

"Poor dear, there's nothing between his ears."
--British Prime Minister Margaret Thatcher

"...like reinventing the wheel."
--Larry Speakes (Reagan's former press secretary) describing what it was like preparing the President for a press conference, Speaking Out: The Reagan Presidency from Inside the White House

"The task of watering the arid desert between Reagan's ears is a challenging one for his aides."
--Columnist David Broder

"He has the ability to make statements that are so far outside the parameters of logic that they leave you speechless"
--Patti Davis (formerly Patricia Ann Reagan) talking about her father, The Way I See It

"This loathing for government, this eagerness to prove that any program to aid the disadvantaged is nothing but a boondoggle and a money gobbler, leads him to contrive statistics and stories with unmatched vigor."
--Mark Green, Reagan's Reign of Error

"President Reagan doesn't always check the facts before he makes statements, and the press accepts this as kind of amusing."
--former president Jimmy Carter, March 6, 1984

"Ronald Reagan is the first modern President whose contempt for the facts is treated as a charming idiosyncrasy."
--James David Barber, presidential scholar, On Bended Knee: The Press and the Reagan Presidency, Mark Hertsgaard

"His errors glide past unchallenged. At one point...he alleged that almost half the population gets a free meal from the government each day. No one told him he was crazy. The general message of the American press is that, yes, while it is perfectly true that the emperor has no clothes, nudity is actually very acceptable this year."
--Simon Hoggart, in The Observer (London), 1986


Sage words from the Gipper himself

These quotes are from the same source:

"All the waste in a year from a nuclear power plant can be stored under a desk."
--Ronald Reagan (Republican candidate for president), cited in the Burlington (Vermont) Free Press, February 15, 1980. (In reality, the average nuclear reactor generates 30 tons of radioactive waste per year.)

"Growing and decaying vegetation in this land are responsible for 93 percent of the oxides of nitrogen."
--Ronald Reagan, cited in the Los Angeles Times, October 9, 1980. (According to Dr. Michael Oppenheimer of the Environmental Defense Fund, industrial sources are responsible for at least 65 percent and possibly as much as 90 percent of the oxides of nitrogen in the U.S.)

"Fascism was really the basis for the New Deal."
--Ronald Reagan, cited in Time, May 17, 1976

"I know all the bad things that happened in that war. I was in uniform four years myself."
--President Reagan, in an interview with foreign journalists, April 19, 1985. ("In costume" is more like it. Reagan spent World War II making Army training films at Hal Roach Studios in Hollywood.)

"...a faceless mass, waiting for handouts."
--Ronald Reagan, 1965. (Description of Medicaid recipients.)

"History shows that when the taxes of a nation approach about 20 percent of the people's income, there begins to be a lack of respect for government.... When it reaches 25 percent, there comes an increase in lawlessness."
--Ronald Reagan, in Time, April 14, 1980. (History shows no such thing. Income tax rates in Europe have traditionally been far higher than U.S. rates, while European crime rates have been much lower.)


Well, that's enough to digest for one day. But wait awhile -- there's more.

Manifesto Joe Is An Underground Writer Living In Texas.

Tuesday, July 15, 2008

Dude, Where's My Plane? FAA Recruiting High Schoolers To Be Air-Traffic Controllers

By Manifesto Joe

Full disclosure of motive: I couldn't pass up yet another opportunity to bash America's all-time most overrated president, Ronald Reagan, when I ran across this item. In 1981, The Great Prevaricator mass-fired over 11,000 members of PATCO, the air-traffic controllers union, for staging an illegal strike. He also ordered a lifelong ban on rehiring, eased 12 years later by President Clinton.

Reagan seemed mainly concerned with how tough he looked, rather than with the safety of U.S. air travelers. Now, 27 years later, the system hasn't fully recovered -- there are still fewer controllers despite the increase in air traffic -- and the scabs hired to replace the strikers are reaching retirement age. As they leave, the Federal Aviation Administration is desperate for warm bodies, even trolling high schools to recruit fresh grads into training programs.

Hold the phone. Readers, do you remember yourselves fresh out of high school? Hell, I graduated fifth in my high school class, but I was a mess during my freshman year in college. I had little self-discipline and was only beginning to develop a sense of responsibility. I would sleep in and cut some of those "101" classes, read the textbook and show up for the tests, and wonder why I got a B instead of an A. I dressed like a bum and then wondered why many people seemed to think I was one. I chain-smoked in public places. I missed deadlines for the student newspaper. It's amazing my G.P.A. never fell below 2.95. (I started making the dean's list when I was a junior and had grown up a bit.)

Again, I'm an example of someone who graduated from high school with honors. What about that student who made a C-plus in metal shop? You want this person controlling air traffic?

Here's the full article from that bastion of American newspaper journalism, the New York Post. I get the impression the Post has been trolling the high schools for cheap recruits as well. The difference is, you don't end up in a body bag after reading tabloid journalism. It's a much slower death, and only from the neck up.

Anyway, here's an excerpt from the Post exclusive:

The FAA has offered an unprecedented $100,000 bonus to air-traffic controllers throughout the country to lure them to the New York area's five understaffed radar centers - and has even begun trolling local high schools to recruit for the jobs.

The FAA began its recruitment efforts in high schools and through online ads on MySpace and Craigslist because of a severe staffing shortage and lack of experience among workers at its air-control towers.

One recent hire is a 20-year-old who is now reading the scopes for the Terminal Radar Approach Control (TRACON) center in Westbury, LI, officials said.

By 2011, 59 percent of all controllers will have less than five years on the job.

The recently hired 20-year-old man has a bachelor's degree in air-traffic control, but other new hires can come straight out of 12th grade. They go through three months of training before becoming "controllers in training" and eventually full-fledged staffers.


Let us once more ponder the Reagan legacy: Richer rich and poorer poor, deregulation of everything including lending banks, environmental horrors, and now frighteningly close calls at airports across the nation.

Here's a suggestion for President (I hope) Obama: Find every surviving member of the PATCO strike Class of '81 and offer them their jobs back, with big bonuses and raises. Then have the FAA let the high schoolers grow up some before putting countless lives in their hands.

Manifesto Joe Is An Underground Writer Living In Texas.

Monday, July 14, 2008

The Great Prevaricator Remembered II: With Reagan Policies, Seldom Has So Much Harm Been Done To So Many By So Few (Plus Swipes At Phil Gramm)

By Manifesto Joe

With news of a Bush/Treasury/Federal Reserve bailout of mortgage giants Fannie Mae and Freddy Mac, I'd say it's unofficially official: Reaganomics, and the 30-year era of helter-skelter deregulation that came with it, is at long last dying for good.

No, it's not dead yet. I think terminal brain cancer is a certain diagnosis. Yet Reaganomics lingers, having been reanimated repeatedly from the dead. But I don't think another long-term resurrection is possible.

And as the details of a massive bailout emerge, the person who comes to my mind is that turkey-necked geezer who presided over the first "great" round of deregulation during the '80s -- The Great Prevaricator himself, Ronald Reagan.

Reagan survives largely just in right-wing mythology. But some of his soldiers, who helped him construct this sturdy economic Trojan horse, are still with us. Despite a rebuke over a recent gaffe, former GOP Sen. Phil Gramm of Texas, deregulator extraordinaire, is still John McCain's economic adviser.

Gramm, a Texas Aggie economist (Know how to spoil an Aggie party? Flush the punchbowl), earned his bars in the "conservative" movement as one of The Fibber's hardiest point men. He started in the House as a major architect of the 1981 tax cuts that, first, handed a bonanza to the wealthiest Americans. Then, those cuts plunged the federal budget so deeply into the red that piecemeal tax increases had to be sneaked past the public for many years thereafter to slow the hemorrhaging.

He was also a player in the '80s deregulation of savings and loans, which ultimately opened them up to full-scale looting. It took years, and many, many billions from the taxpayers, to clean up that mess. (Sound familiar now? To paraphrase the poet Santayana, our leaders did not remember the past, and we are ALL condemned to repeat it.)

Near the end of his venal "service" in the Senate, Gramm was a towering figure in the second "great" wave of deregulation. This from Wikipedia:

Later in his Senate career, Gramm spearheaded efforts to pass banking reform laws, including the landmark Gramm-Leach-Bliley Act in 1999, which modernized Depression-era laws separating banking, insurance and brokerage activities. Between 1995 and 2000 Gramm, who was the chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, received $1,000,914 in campaign contributions from the Securities & Investment industry.

Here, "modernize" means that the bill Gramm co-sponsored repealed certain New Deal-era regulations of the Glass-Steagall Act of 1933, which had helped keep those pillars of high finance separate, and hence relatively honest and solvent, since the '30s.

Not content with leaving only this much damage imminent, Gramm helped pull off a major deregulatory coup the following year. More from Wikipedia:

Gramm was one of five co-sponsors of the Commodity Futures Modernization Act of 2000, which critics blame for permitting the Enron scandal to occur. At the time, Gramm's wife was on Enron's board of directors.

A big part of the CFMA was what became known as the "Enron Loophole." Again, Wikipedia:

The CFMA has received criticism for the so-called "Enron Loophole," 7 U.S.C. §2(h)(3) and (g), which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by Enron Lobbyists working with senator Phil Gramm seeking a deregulated atmosphere for their new experiment, "Enron On-line." ...

The legislation was passed by the Republican controlled Congress and signed by President Bill Clinton [ouch --MJ] in December 2000 to allow for the creation, for U.S. exchanges, of a new kind of derivative security, the single-stock future. An attempt to reverse this policy was vetoed by President Bush in 2008. Several Democratic Legislators introduced legislation to close the loophole from 2000-2006, but were unsuccessful due to Republican control of the House and Senate.

So, in the ensuing years, Phil acquired a succession of nicknames, including "Enron Phil" for the CFMA, and recently "Foreclosure Phil" for his banking "modernization."

For more on the extent of the profound injuries that then-Sen. Phil Gramm personally inflicted on America, click here for a Joe Conason article in Salon.

But enough with beating up on a now-obvious sleazebag operative like Gramm. Let's go back a generation, and longer, to that moth-eaten spirit ultimately behind the Enron accounting scandal, and behind what is becoming known as the Panic of 2008. It's that mythical right-wing figure, the man Gore Vidal once perceptively described as "grandmotherly": Reagan.

The Sixties spawned a unique cast of characters who lingered and did their dance macabre across our collective unconscious, on their way to oblivion. The same seems to be happening with the malefactors of the Eighties, the Armani-clad hooligans of the Reagan era.

They seem determined not to go away completely, at least not right away. But I foresee a day when they will be like withered cranks at small-town school board meetings, voted out of office but showing up in enfeebled bids to harass those who replaced them. An effectively permanent death seems at hand.

Going back to the Fannie Mae/Freddy Mac bailout -- and perhaps forward toward many more -- here are a couple of especially significant quotes from The New York Times on this story:

The companies, known as government-sponsored enterprises, or G.S.E.’s, touch nearly half of the nation’s mortgages by either owning or guaranteeing them, and the debt securities they issue to finance their operations are widely owned by foreign governments, pension funds, mutual funds, big companies and other large institutional investors.

“G.S.E. debt is held by financial institutions around the world,” Mr. (Treasury Secretary Henry) Paulson said in his statement. “Its continued strength is important to maintaining confidence and stability in our financial system and our financial markets. Therefore we must take steps to address the current situation as we move to a stronger regulatory structure.”


"... a stronger regulatory structure"? This from a Bush Cabinet member?

R.I.P., Ronnie Reagan. (And Phil Gramm?)

Manifesto Joe Is An Underground Writer Living In Texas.

Monday, June 16, 2008

Reagan: The Great Prevaricator Remembered, Four Years A.R., Part I

By Manifesto Joe

"A White House official who has had to bring large doses of bad news to the president about coming budget deficits recently observed: 'Reagan doesn't understand numbers. Every time the figures point to trouble, Reagan rebuts them with a personal anecdote'" -- Joseph Kraft, The Washington Post, Dec. 29, 1983

This month marked the fourth anniversary of The Great Prevaricator's death -- this morning in right-wing America, this is early in The Year 5 A.R. (After Reagan). In a presidential election year, his memory still surfaces now and then as some kind of standard by which all presidential aspirants are measured.

In a comments thread on a different blog, one commentator referred to Ronald Reagan as, though far from perfect, the last "presentable" president the U.S. has had. I agree to the extent that he was presentable as a sort of mannequin, which is common among Republican politicians. Reagan was the prototype GOP politician, America's First Mannequin. And he governed that way most of the time.

Assessing Reagan as a president, I would give him credit on a few points. Reagan was a turkey-necked chairman of the board who often slept through parts of Cabinet meetings, so he could never be as destructively proactive as George W. Bush. The latter governs like a reverse King Midas (everything he touches turns to feces) who is firmly convinced he can do no wrong. Reagan was afflicted with that same delusional self-assurance, but fortunately, he was so doddering and detached that he didn't do as much damage.

Reagan governed just a shade more from the "center" than Bush, and he didn't get us directly mixed up in foreign adventures for very long. There were Nicaraguas, Grenadas and Lebanons, but thankfully no Iraqs or Vietnams.

And -- he was actually willing to talk with our enemies, eventually to good effect. His friendly relations with Mikhail Gorbachev made his second term, arguably a disaster at home, look much better than it really was. People seemed to forget all about Iran-Contra, the S&L debacle, exploding deficits, burgeoning homelessness and the like.

But, enough of giving Reagan his due. Let's travel back in time, to that ugly era of mullets and old-time collars on hipster men, those "serious hair" sheepdog permanents and floppy ties on yuppie women, and remember Ronnie Reagan as he was: a meaner-spirited version of Elwood P. Dowd.

This man lived in a world of celluloid fantasies -- where facts didn't matter, and where a dude who took the "gut course" in economics at a fourth-rate Illinois college conjured up economic policy that is still ruinously with us now.

Distortions of Jimmy Carter's Record

This material is from Reagan's Reign of Error, by Mark Green and Gail MacColl (1983, rev. 1987), p.43:
"We then went back into negotiations on their [the Soviets'] terms, because Mr. Carter had cancelled the B-1 bomber, delayed the MX, delayed the Trident submarine, delayed the Cruise missile, shut down the ... Minute Man missile production line ..." (Presidential debate, 10/28/80)
The B-1 bomber had been delayed. As for the rest: the Cruise missile and MX were under full-scale development; the Minute Man missile's production line had been shut down because the production schedule had been met; and the first Trident submarine, the USS Ohio, had been launched on April 7, 1979.

(What was that quotation about how a lie can travel so much faster than the truth?)

Green and MacColl, p.65:
"Mr. Carter is acting as if he hasn't been in charge for the past three and a half years; as if someone else was responsible for the largest deficit in American history" (Nationally televised campaign speech, 10/24/80)
Federal deficits totaled $195 billion under Mr. Carter. The latest budget projections [this was 1987] suggest that during Mr. Reagan's six years the deficit will total nearly $1 trillion.

(After the fact, we now know that Reaganomics roughly tripled the total national debt, from about $1 trillion to around $3 trillion.)

Reagan on Nuclear War

Green and MacColl, p.46:
"Those [nuclear weapons] that are carried in ships of one kind or another, or submersibles, you are dealing there with a conventional type of weapon or instrument, and those instruments can be intercepted. They can be recalled." (5/13/82)
Submarine-launched missiles cannot be recalled. If the president thinks differently he may be surprised in a nuclear exchange.

Reagan Quotes Churchill

Green and MacColl, p.60:
"I would like to quote a few words by a very famous and celebrated orator, journalist, soldier, historian, and statesman. People have said he might have made a great actor if he tried that. Winston Churchill. He said, 'The idea that a nation can tax itself into prosperity is one of the crudest delusions which has ever befuddled the human mind.' Now I don't know how that quote happened to catch my eye." (3/9/82)
Neither does anyone else. Reagan's speechwriters "don't know where he got that one from." Nor does the British historian at the Library of Congress; there was no such passage in the Library's extensive collection of Churchill quotations. Ten other books of quotations also failed to provide a clue.

Reagan on Poverty

Green and MacColl, pp.88-89:
"In 20 years, the federal budget increased five-fold and the cost of welfare grew ten-fold. But that didn't help many local governments which lost effective control of their communities. It didn't help small businesses hit by the highest interest rates in a hundred years. It didn't help the working poor and pensioners flattened by double-digit inflation and taxation." (1/14/82)
It probably did. The standard of living has doubled since 1960. Accounting for inflation, per capita disposable income, the average income after taxes, rose, in 1972 dollars, from $2,709 in 1960 to $4,472 in 1980. In 1959, 22.4% of Americans lived below the poverty line. By 1981, that figure had been cut nearly in half.

Green and MacColl, p.92
"The decrease in poverty I referred to earlier started in the 1950s. By the time the full weight of the Great Society programs was felt, economic progress for America's poor had come to a tragic halt."
In 1967, the Field Foundation testified before Congress on hunger in America: "Wherever we went and wherever we looked, we saw children in significant numbers who were hungry and sick." A decade later, the Field team retraced its 1967 steps and found "far fewer grossly malnourished people in this country. ..." They concluded that food stamps and other federal nutrition programs, implemented or inspired by Great Society legislation, had made the difference.

That's all we have time for today. My gratitude to Green and MacColl -- I highly recommend "The Instant Nostalgia Edition" of that book, if it's available. See you next time for more summer Reagan-bashing.

Manifesto Joe Is An Underground Writer Living In Texas.