How We Got Here
As I begin, I feel it necessary to make two prefatory remarks; first, I don’t want this to turn into a protracted debate on Saint Ronald Reagan. I realize that he is very popular and that very popularity has made any criticism of him verboten. And yet that is exactly what I’m preparing to do. Put your hands over your ears and say “La,la, la, I’m not listening,” if you must (like Pee Wee Herman).
Second, I’m running a low-grade fever and am varying between woozy and sleepy. Usually I’m pretty funny in this state, but we shall see.
We are still living in 1981.
A choice was made to continue on a path built from the end of WW2 until 1980 or to embark on the Reagan Revolution, a bold break from Keynesian economics to supply side, the Laffer curve, and laissez-faire business policy. The genius of Reagan was to not torch the social programs Keynes necessitated instead settling for the mule of supply-side and large domestic programs that led to the ballooning deficits of Bush I, the Clinton fix and the delusional Bush II tax cuts. Genius in that it has left the memory of the Reagan years as hallowed, ignoring the ruin it eventually has led us to.
The reason I’m writing this is I still, to this day, hear people suggesting that tax-cuts are the way to make America stronger. No, No, No. It didn’t work for Reagan and it still doesn’t work. When the meal’s over the bill always comes, but the supply-side answer is “I’m already full, why would I want to pay for it?”
Someone always pays and we’re paying now with 30 years of interest.
Patco was the beginning of the era we are still in. I don’t have a chart of wages during the past 30 years in front of me but I know, intuitively, that, adjusted for inflation, they have fallen. How do I know that? The proof is all around you. The current talk is that sub-prime mortgages led us to this sorry state but what necessitated sub-prime lending? Sub-standard wages, cooking the books to make it look like the American Dream was still out there just waiting for real Americans to get their piece.
Once the weight of the American government was fully thrown behind big business, the balance went out of the system. The steady plodding progress of Keynes was traded in on the thoroughbred of laissez-faire and the country raced ahead, right? Did I forget to mention that the race lasts forever across the desert? Oops, my bad.
Bet you wish you had that donkey, now (or a camel might even be better. I’ve noticed people get very attached to camels. Is it the calm, steady gait? I’m not sure what that equates to in this now broken metaphor, maybe Canadian-style governance? I’m just saying Canadians seem to be very attached to their government. Did I mention the fever?)
The two sides of the laissez-faire sword are the suppression of wages AND the re-entrenchment of the status-quo. Is there any wonder America has begun to lag the world in education, technology and most importantly social issues? I say most importantly social issues because there is a palpable fear of the governed by the government because both are aware of the inequity of the system. I’m just telling you the truth. It’s what I do.
At some point, someone has to stand up and say supply-side never worked, should have never happened and the result is the world that teeters back and forth between boom and bust but doesn’t make any real progress.
It’s the Voodoo curse the evangelists are always going on about.