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TechnoratiThe Great Reagan Pyramid Scheme Comes Crashing Down
The Republican Party that Nixon invented melded the moneyed classes of the Northeast with the white evangelicals of the South. This odd couple went on to simultaneously steal from and oppress the rest of us. The moneyed classes were happy to let the New Puritans impose their stringent morality, since they could always just buy any licentiousness they wanted, regardless of the law. And the New Puritans were so consumed with cultural issues such as homosexuality, abortion, school prayer and (yes) fighting school desegregation that they were happy to let the northeastern Money Men waltz off with a lion's share of the country's resources, consigning most Americans to stagnant wages and increasing debt. The Reagan revolution consolidated this alliance and brought some conservative Catholic workers into it.
These domestic policies at home were complemented by wars and belligerence abroad, which further took the eye of the public off the epochal bank robbery being conducted by the American neo-Medicis, and which were a useful way of throwing billions in government tax revenue to the military-industrial complex, which in turn funded the think tanks and reelection campaigns of the right wing politicians. The Reagan fascination with private armies and funding anti-communist death squads contributed mightily to the creation of al-Qaeda, blowback from which fuelled even bigger Pentagon budgets, spiralling upward and feeding on itself. Terrorism is much better than Communism as a bogey man, since you can just intimate that there are a handful of dangerous people out there somewhere, and force the public to pay over $1 trillion to combat them. In fact, of course, less US interventionism abroad would create less blowback, and genuine threats are better addressed through good police work by multilingual FBI agents than by a $700 billion Pentagon budget.
As a result of the Second Gilded Age and its serf-like subservience to big capital, most corporations in the US don't pay any income taxes, despite doing $2.5 trillion annually in business.
The Reagan Revolution included the stupid idea that you can cut taxes, starve government, abolish regulation of securities, banks, & etc., and still grow the economy. The irony is that capitalist markets need to be regulated to avoid periodically becoming chaotic (as in 'chaos theory,') but the people who most benefit from regulation are most zealous in attempting to abolish or blunt it.
What those policies did was create the preconditions for a long-term bubble or set of bubbles that benefited (for a while) the wealthiest 3 million Americans and harmed everyone else.
The average wage of the average worker is lower now than in 1973 and has been lower or flat for the past 35 years. That's the condition of the 300 million or so Americans.
In the meantime, the top 1 percent has multiplied its wealth many times over and now takes home 20% of the national income, owning some 45 percent of the privately held wealth in the US.
The Right keeps promising us growth, but it turns out that "growth" is mainly for them, i.e. for the 3 million (and indeed mainly for about 100,000 within the 3 million).
Those 3 million are a new aristocracy, lords of the economy, who reward each other with tens of millions in bonuses for ceremonial reasons that have nothing to do with the jobs they actually perform. Bush has been trying to make them a hereditary aristocracy by getting rid of the estate tax.
That is why banks are refusing the government bailout if it restricts the salaries of the top officers-- you don't mess with the feudal lord's prerogatives.
The enormous wealth of a thin sliver or people at the top of US society allows them to buy members of congress and to write the legislation that regulates their industries.
Congress capitulates to this 'regulatory capture' because its members have to buy hugely expensive television ads to remain competitive in elections. So they fundraise from the rich, and the rich have expectations (as Keating did of McCain).
These problems could be fixed with a graduated income tax and a closing of tax loopholes ( after we get out of the recession or crash or whatever this is); by legislation criminalizing regulatory capture; by requiring mass media to run political ads for free as a public service (the public owns the airwaves); and by much shortening the election season (please).
A lot of America's fiscal and educational problems were caused by congressionally mandated fixed sentences imposed on judges with regard to marijuana possession, as a sop to the New Puritans that make up 1/3 of the Republican Party. You have a lot of people serving 5 years in jail for having small amounts of pot. The states had to build new prisons to hold them all. They took the money out of the budget for higher education, abolishing the whole idea of state universities and causing tuitions to rise.
So you've got more ignorant people (because people can't afford even "state" college), and fewer high-tech firms are founded; and you're feeding and housing large numbers of harmless potheads with your tax dollars instead. The US maintains a vast gulag of nearly 2 million prisoners, putting us in the same league as Putin's Russia. No country in Western Europe incarcerates a similar proportion of its population.
Mexico's president wants to decriminalize the possession of small amounts of drugs such as marijuana, cocaine and heroin for personal use, though an arrest on possession charges would require entry into a program to kick addiction.
Decriminalizing possession of small amounts of drugs; decriminalizing marijuana altogether (and taxing the resulting industry); removing mandatory federal sentencing requirements; and letting states go back to educating their children instead of putting millions in jail; would solve another big batch of America's problems.
So there you have it. Abolish puritanism in government policy; go back to using the government to regulate industries and finance and provide services; and fight terrorism with better public diplomacy and better police work instead of with militarization-- and you might get out of this thing intact.
45 Comments so far
Show AllFree the weed, free the people, and knock down that stupid fence.
"You never change things by fighting the existing reality. To change something, build a new model which makes the existing model obsolete"
-R. Buckminster Fuller
Yeah, 'tis true. Juan Cole is plugging for the Democrats and covering up for their part in the Meltdown.
This is a good article, but it is true, as someone else has already observed, that Cole is too protective of the Democrats. For example: regarding Cole's observation that "The Reagan fascination with private armies and funding anti-communist death squads contributed mightily to the creation of al-Qaeda": yes, but we must never forget that it was CARTER who deliberately provoked the Soviet invasion of Afghanistan by funding the Mujahedin, as Brzezinski has explained in a famous interview. http://www.counterpunch.org/brzezinski.html
It was also Carter who launched the US participation in the barbaric wars against the people of Central America. Reagan intensified it, but Carter started it.
Mark Marshall
Toronto
Sam Abrams
mas.smarba@gmail.com
See James Galbraith's new book The Predator State...for a full rap-sheet on the new predator/ceo class
Hey America- http://www.youtube.com/watch?v=quY5d_XdoWU
welcome to Argentina PArt II
http://www.youtube.com/watch?v=khjnU8tVQdM
http://www.youtube.com/watch?v=ykMUflzaaAE
http://www.youtube.com/watch?v=whVSw5X2pVU
"you can cut taxes, starve government, abolish regulation of securities, banks, & etc., and still grow the economy."
Also, you can cut taxes, increase military spending infinitely and still balance the budget. Furthermore you can have $60 billion a month trade deficits for an infinite amount of time.
What do you mean the house of cards has already collapsed? It's still sort of standing, sort of like the second twin tower.
Nietzsche
Lately I have noticed people on TV telling me what a good living I could make serving as a crew member on a yacht. Translation: the rich are so rich that the only way we can make a good living is by being their toadies.
If we go to school to learn how to really please massa maybe he will scratch our heads and kick our butts.
Get this Daddy Warbucks: FUCK YOU.
The class war is over. The rich won. But I would rather eat potatoes and beans than the caviar you left on your plate while I am cleaning up after you.
Juan Cole has turned into a partisan hack.
Nowhere in his analysis do you find the word "Democrat".
It's all the Republican's fault. How simple!
Is he so ignorant that he would leave out simple truths like Clinton signing the deregulation of the Glass-Steagall Act? Or that he attributed our funding against the Russians in Afghanistan (anti-communist death squads) solely to Reagan with no mention of Carter?
No, he knows better, he's not an idiot. We're just too close to an election to mention anything bad about the Democrats. Anyone reading his site for the past couple of months can plainly see he's become little more than a cheerleader for Obama.
What I don't understand is why the Left abandoned Hitchens for supporting the Iraq and Afghanistan Wars, while Cole who also supported them, wasn't abandoned as well.
You can't blame one party without blaming the other. I'm glad I'm voting for Ralph Nader. At this point, it is irrelevant to blame either Clinton or Raygun for the damage done to the country. What happened happened. Let's move on and work towards bringing in a new party outside these two so that this country can be truly represented and can be counted on to undo the damage.
VOTENADER.ORG !
Yeah, that'll fix everything.
It won't fix everything.
If elected, they would be opposed by the entire political establishment.
But when you are digging yourself into a hole, what should you do?
Stop d...? Starts with a "D". Stop...? Hmmm...
Obama and McCain are ready to dig deeper than the Kola borehole.
Good points.
If "the Republican party that Nixon created melded the moneyed classes of the northeast with the white evangelicals of the South", then why are the northeast states blue on my electoral map this election cycle, and most of the Great Plains and mountain state west are scalding red?
Wall Street and other big business elites have been a mainstay of the GOP base ever since the 1870's. It is also true that Nixon's law-and-order cultural values and southern strategy co-opted formerly "solid" white Dixie Democrats into the Republican camp. And yes, Reagan added some conservative working class Catholics into the GOP base mix.
But what I think is a bit understated here is how that $700 billion annual Pentagon budget geographically gets distributed to lock in additional regions and their Congressional and Electoral College votes for the GOP. That's why with a few scattered "swing state" exceptions, the conventional wisdom now holds that the Democrats have a lock on the Pacific coast and New England, the GOP has the South and the Great Plains/mountain states, and the industrial Midwest is what holds the balance.
Thank you, Professor Cole, for the reminder that "the Reagan fascination with private armies and funding anticommunist death squads contibuted mightily to the creation of Al Qaeda, blowback from which fueled even larger Pentagon budgets, spiraling upward and feeding on itself. Terrorism is much better than Communism as a boogey man....." That brings us up to date through the reign of George the Lesser in this thumbnail sketch of how the Grand Old Party has evolved from Tricky Dick to McCain/Palin.
Time to take the toys away from the boys.
The tough nut to crack as I see it is how you can articulate to ordinary, middle American voters the notion that 9/11 was blowback. I mean, look what happened to Reverend Wright when he made even a single offhand comment to that effect.....
Bill from Saginaw
"The Right organizes for power; the Left organizes for self-expression."
If that's true, then no wonder we had Reagan and everything since.
My question is: why do we STILL rehash this, now some 28 years later? It has all been said. Instead, we SHOULD be deciding what we're going to do to keep it from happening again, or minimizing it as much as possible, and then getting off our asses and DOING it. Plan our work, then work our plan.
In other words - organizing for power, not bloviating ad nauseum and endless hand-wringing.
They say organizing leftists is like herding cats. But this is only true when leftists are connected via umbilical cord to the elitist establishment. First, leftists, disconnect yourselves from the elitist establishment. Then you can express your uniqueness via your economic/political independence. You will then find organizing very easy, because you will recognize that peer inter-dependence is far superior to oppressive dependence on the elitist establishment.
Wow, did we ever get suckered with Raygun. Barely 19, I remember voting for Reagan's first term. Minimum wage, I believe was $3.35 an hour but, as a young man, I could actually afford to live on it. Everyone thought the tax rebate was the best thing since cotton candy, but I felt somehow cheated seeing only a few extra bucks in my paycheck. I didn't vote for Reagan's second term, when deregulation brought about the junk bond and Savings and Loan scandel. Jeeze, didn't we learn ANYTHING from that?
Most notable, though, was that minimum wage didn't go up the least little bit, even though the cost of living did. Employers had to pay more than that to get anyone to work for them. Also, during Reagan, the poor were made a punching bag and blamed for all the ills of the day. No one apparently saw the cruel and mean side of Reagan and reaganomics, which the republicans took up as their banner and marched us right up to where we are today. Truth always trumps spin, though sometimes later than we want it to.
I remember my Dad saying in the 80s "This is getting to be a mean, mean country"
Oh, yeah, some people saw Reagan for what he was!
"... to let the northeastern Money Men waltz off with a lion's share of the country's resources ..."
I wonder whether the author knew how correct this is. For those who don't know, and the way it is most commonly used, the expression "the lion's share" suggests, perhaps, a big helping or more than his share. In the original story the lion took the whole lot -- that is the real meaning.
when we allow our government to treat us as children (drugs, guns, morality legislation, ect.) i expect only serfdom looms on the horizon..my definition of a serf is living a life where choice is removed..
ken
Sioux Rose
WELSH TERRIER 2: I applaud your plan, if only we could see such fair minded intelligence legislated in the "home of the free."
Nietzsche
I don't think anybody ever really believed it would work. We who were cheated had no political power to prevent the rich from stealing us blind.
bligh4
I am always wary of Professors giving economic advise, as they rarely have any real world experience. Triple that for Professor of Middle Eastern Studies.
So John MacCain wants to give tax breaks to corporations that don't pay taxes anyway. Does that mean we have to give them money? .......... Doh!
Excellent article Juan.
"These problems could be fixed with a graduated income tax and a closing of tax loopholes ( after we get out of the recession or crash or whatever this is); by legislation criminalizing regulatory capture; by requiring mass media to run political ads for free as a public service (the public owns the airwaves); and by much shortening the election season (please)."
Yes, but don't forget the Golden Rule,
"Them with the gold makes the rules".
Direct democracy, NOW!
Professor Cole refuses to give the US enough credit. He states that Western European countries do not have incarceration rates equivalent to ours. From figures I have seen, no nation on earth has an incarceration rate equal to ours. We are number one, baby! Number one in incarcerations, number one in defense (offense) spending, number one in arms sales, number one in budget deficits, number one in trade deficits, recently lost the number one position in CO2 emissions goshdarnit, number one in oil use, and number one in supporting coups against and otherwise overthrowing governments that stubbornly try to serve their own people's interests instead of corporate interests.
Pretty sure we're also number one in obesity rates.
Ditto infant mortality among first world nations.
Oh, and I believe we're also number one in illiteracy among first world nations.
USA! USA!
Excellent piece by Prof. Cole, as usual. Regarding drugs, while the decriminalization of cannabis would be a big step in the right direction, Cole's proposal does not go far enough. All drugs should be legalized and sold in liquor stores to people over 18. And taxed, of course. Not only would that empty the prisons of non-violent drug offenders, it would drastically reduce urban violent crime by eliminating the underground drug trade. Adults in a free society should be free do indulge in unhealthy habits as long as they do not violate the rights of others in the process. People should be allowed to be addicted to heroin just as they are allowed to be addicted to alcohol. And in any case, those who want heroin, crack, cocaine, etc. will get it anyway, whether we as a society "allow" it or not.
People should not be encouraged to use drugs. They should not be advertised, just as alcohol, tobacco and gambling should not be advertised. But they should be legally available.
Mark Marshall
Toronto
er... dooesn't drug addicton have considerable costs to the rest of society in the form of healthcare and accidents?
Alchohol can and is predominantly used in moderation. Opiates and the strong forms of cocaine cannot be used in moderation. They always lead to addiction, inability to function in society, leading to loss of job, resulting in crime to obtain the money for a fix, and finally severe health problems and death. All these have costs to society. No one is an island. I saw it every day in my old neighborhood.
But legal use of pot seems fine in legal pot bars like the Netherlands have. It would be nice for the US to lower drinking age to 18. Here in pennsylvania, a parent can be (and in one case was) arrested for serving wine at home, to their 18 year old son.
To USAn: thank you for the feedback. You say that "[o]piates and the strong forms of cocaine cannot be used in moderation." Is that really true? Are you really sure that's true? I honestly don't know. For all I know, you're right about that. But I am skeptical. I think many people hold beliefs about illegal drugs that are more based on media-fed conventional wisdom than by facts. At any rate, whether or not they can be used in moderation, there will always be users, and there will always be addicts, just as there will always be alcoholics. No point criminalizing them. And if we criminalize the dealers, we force them to arm themselves which leads to gun violence. Legalization eliminates the criminal dealers and reduces the guns on the streets. As for "crime to obtain the money for a fix", that problem can be solved by keeping the price reasonable.
At any rate, I think the social harm caused by drug use (not to be confused with the violence caused by the settlings of accounts between rival gangs of underground dealers) has been grossly exaggerated. Almost every day I hear about traffic fatalities caused by alcohol. In my 48 years in this world I have never heard about a traffic fatality caused by any illegal drug. Not once. I am not saying that it has never happened, but the fact that I have never heard of it happening is highly instructive. The media are overwhelmingly Republican. They have no interest in covering up any social harm caused by illegal drug use. If there were a lot of people getting killed because of stoned drivers, it would be reported very prominently in the newspapers and electronic media.
Moreover, in my 48 years in this world I have heard countless accounts of violence fuelled by alcohol consumption. I have never heard of violence fuelled by the consumption of any illegal drug. Never. Not once, for example, have I read a newspaper account of a man who beat up his wife while under the influence of cannabis, heroin, cocaine or anything other than alcohol. Not once have I read or heard an account of a fight in a bar or club between patrons who were under the influence of cocaine or heroin or crack or meth or anything except alcohol. But fights between drunken patrons or party guests? More times than I could count.
I actually think that to legalize drugs other than alcohol might actually reduce violence, because it would give people more opportunities to use drugs other than alcohol, which we KNOW causes violence. (I do not mean by that to suggest that alcohol should be banned. For all its evil, banning it would be a greater evil - and would not do much to reduce consumption in any case)
As for the laws banning alcohol consumption by people under 19 or 21, they are beyond offensive. They are obscene, in view of the fact that 18-year-olds can legally be sent to their deaths in Iraq and Afghanistan.
Mark Marshall
Toronto
I wish that these kinds of ideas and opinions would receive wider circulation in the American media. We have free speech, don't we?
Free speech is an illusion in this country.
Let's tease apart potential opportunities for cognitive dissonance here.
The US is broadly viewed as a consumer-based economy, so it stands to reason that money in the hands of consumers is ultimately the driving force of the economy -- people might be able to borrow for awhile, go into debt up to their eyeballs, but it can't be sustained. Individual/ordinary people aren't like corporations or government agencies in the sense that they can play only very limited shell-games. So eventually personal spending will peak out, it cannot grow indefinitely.
But it's unclear whether the Reagan revolution really WANTED to preserve the consumer economy, whether it cared about economic sustainability, etc. or whether it it was simply rooted in sheer plunder -- willing to eventually take us back to full-fledged serfdom, and continue capitalizing on poverty as monarchs and oligarchs had done for centuries.
Reagan, Bush I, Bush II and the enabler Democrats certainly continued the tradition. They made real estate too expensive, reduced most people to degrees of real equity lower than any point since the last Great Depression, rushed to bailout the banks, etc. It really looks like they're hoping to dial back to the middle-ages. And it was a bloody transition for us to leave them. I really don't think we want to go through all of that again.
I agree and have held that opinion since the mid 1980s. The corporate elites know full well that the policies they support are not utilitarian (the greatest good for the greatest number, which most Americans equate with maximizing consumer spending) in the short-term or the long-term. But they recognize the policies must be cloaked in language acceptable to the masses so as to reduce resistance.
It seems their pact is based on ever-increasing debt-bondage, the underlying assumption is that you can't leech from people who are financially- or resource-independent. You can only take advantage of someone who is wanting something -- housing, food, gas, a loan, etc. It all centers around real estate. If even a single generation of Americans were ever to "get on top" of real estate, they'd pay it off early, and maybe buy a second property. Imagine if we could all own, outright and without a mortgage, a number of properties equal to the median number of children born in this country.
What would happen is that real equity, with the exception of new construction, etc. would pass from the banks to real humans -- who'd gift their property onto their children outright. These children would have no 30 year debt-servitude to the banks for a mortgage -- they'd be far better positioned to start their own business, or work only part-time, etc. as the case may be. So it also seems that our economy is based on deliberate manipulation to always keep the obtaining of real equity out of reach, permanently, from a critical mass of people.
It's as if an instigated depression now and then is "essential" to keep the rich rich, the landless landless. Particularly when the depression is based on the loss of wealth from the middle-tier, coupled with the propping up of wealth at the top.
You never really "own" your land in America. There are always property taxes. In Switzerland there are no property taxes.
As far as 21st century serfdom goes, remember that serfs were bound to the land.
What is Homeland Security, but binding people to where they are? You cannot travel without a government issued piece of identification now. Why do you need a driver's license to take a train? You're not driving.
Try to get on a plane, or a train, or into a government building without a piece of ID. And it's only going to get worse, with the Real ID Act. You won't be able to go to Yellowstone National Park without a Real ID.
And Americans can no longer travel to Mexico, or Canada, or the Carribean, without a passport, complete with microchip.
Welcome to oppression, peasants.
Bow down before the one you serve. You're going to get what you deserve.
FOR SALE:
One Ronald Reagan portrait w/ four pictures surrounding it in Presidential Cherry Wood Frame w/ Presidential Seal. This picture was bought at the Reagan Presidential Library and is their only a few like it of the 10,000 made becuase it has the date of his death on it June 5, 2004, and was discontinued a few weeks later.
PS: It keeps the cockroaches, and mice away.
Coffeelover,,,,,,,
. . . it has the date of his death on it June 5, 2004, and was discontinued a few weeks later.
You were conned; Ronald Wetboy Reagan didn't die. That MoFo is still very much alive and reducing the nation to a bunch of paupers.
AMEN Mordechai!
at least his and the puppet masters legacy is destroying everythng we have left....
Coffeelover,,,,,
SOLD!
Can I borrow the money from China then force some sucker to pay for it 30 years later?
I left the country the year that Reagan left office. I was forty years old at the time. If I stayed I would probably be suffering because of the economic disaster brought upon the middle class. But today I doing just fine. I work when I want and live like I want. I have no credit cards, no bank accounts, no stock, no social security, no medical insurance, and best of all, no debt. I control my life and how I spend my time and money. I left America to regain that control. I've never regretted my decision.
Hoa binh
Where are you living?
Saigon or officially Ho Chi Minh City. Where do you live?
Hoa binh
"These problems could be fixed with a graduated income tax and a closing of tax loopholes (after we get out of the recession or crash or whatever this is); by legislation criminalizing regulatory capture; by requiring mass media to run political ads for free as a public service (the public owns the airwaves); and by much shortening the election season (please)."
Good but not good enough !!!
While a steeply graduated income tax addresses future income, it does nothing to recover the ill-gotten gains stolen from the American people over the last few decades.
Put simply, we demand our money back!
It's time to understand that the "regulatory capture" that Professor Cole describes can only work when the massive disparities in wealth have been at least somewhat brought into balance. If we leave multi-billionaires in place, there is no regulatory process that will restrict their undue influence on the people's government.
We don't need total economic parity but the current inequities of wealth distribution must be addressed if we are to have any chance of a truly representative government.
And speaking of undue influence on the people's government, we also need to disenfranchise any corporation that is "too big to fail." Massive corporations that don't serve the public interest should be put out of business or nationalized. These corporations, the ones that export jobs and don't pay taxes and lobby for war and lobby for less worker protection and lobby for less consumer protection and lobby for less environmental protection, are destroying the US.
You're elected.
"and by much shortening the election season (please)." PLEASE!
"by requiring mass media to run political ads for free as a public service (the public owns the airwaves); and by much shortening the election season (please). "
EXCELLENT idea.