The Reagan Revolution Goes Splat Against A Pandemic
Beware, conservatives aren’t really interested in personal self-sufficiency.
I remember when Ronald Reagan won his first election as president. I remember the excitement. I remember how excited my parents were, too. There were going to be tax cuts, the economy would go boom, and Reagan identified the government as the problem, not the solution. For a time, it seemed that widespread prosperity was at hand.
Here we are, 40 years later. We are still on Reagan’s road. We are still giving tax cuts to the rich, even after they have rigged the economy for themselves. The entire country is awash in debt. Everyone is in debt. We are deep into a pandemic with near-zero leadership at the national level. Rent and mortgage deferments abound. There is really no coordination going on. Except for that part about how the election was rigged to give us Joe Biden. And that part about how if Trump had won, there would be no GOP claims of a rigged election.
It gets better. A recent study has shown that more than half of the young adults in America are still living with their parents. If the economy was booming before the pandemic, it’s hard to tell judging by the number of young adults still living with their parents. It’s worse with the pandemic, but the trend was already there, even after a few years of Trump. The Reagan Revolution got us here, to a place where the kids can’t manage on their own, well into adulthood.
Then another study came out from the Rand Corporation. According to Business Insider, “The wealthiest 1% has taken $50 trillion from working Americans and redistributed it”, to themselves over the last 45 years. And some genius thought we wouldn't notice.
I can see Mr. Burns at work. “Let me see now, if we carry the ones and add a few zeros, we can redistribute the earnings from hard-working Americans to us. Over time, we will arrive at a point where people stop having so many kids, they stop buying stuff they want and everything they really need, they’ll use credit cards to buy. Then they’ll be paying off their debts to us for the rest of their lives. Gravy train…”
The economy has been rigged to the tune of at least $50 trillion over the last 45 years. The blind spot that liberals have is that they think they can just tax it after the income is received. Little do they know that the law is so convoluted that it’s easy to find a lawyer and an account that will help divert that money to some tax-deductible purpose.
The goal then is not to tax the money after the rich get it. The goal is to rewrite the rules so that the economy actually delivers the fruits of our labor back to the people who expended the effort to make the economy work in the first place. It’s kind of like this: if the rules of the economy can be used to put everyone in debt (except the rich), then the rules of the economy can be written to make everyone fairly self-sufficient.
To see the wealthy squirrel away $50 trillion for themselves while leaving everyone else practically destitute, well, that’s abuse. And all abuse does is breed dependence. You might think I’m exaggerating when I say destitute. The minimum wage is still at $7.25 an hour. Do you know anyone who can live on $7.25 an hour and still care for their family? I sure don’t.
According to the Bureau of Labor Statistics, the median income in America is $33,000. That means that half of the working people in the United States earn less than $33,000 a year, a statistic that any capitalist can be proud of. In a metropolitan area, that means, renting a room or sharing an apartment. That means not having much left over after the basics are covered. That could also mean a pile of debt. Or, that could mean living with your parents until you can make more money.
But at least we can say we have billionaires living here. Billionaires are good for us, too. They show us that someday, one of us can become a billionaire, with big, teary eyes. They show us what is possible when the rules are written correctly by people who are expecting a quid pro quo.
So let’s put this in some perspective. To earn a billion dollars, a person earning $33,000 a year, would have to work for 30,303 years. That suggests that a billionaire would have to be 30,000 times smarter, more efficient, or more effective than someone who works on the front lines at Walmart. Even if we doubled that, we’re still looking at 15,000 years to get to one $1 billion. There is no reason to believe that one human being is 30,000 times smarter than any one of the rest of us. The odds that a human at the top of God’s MLM called “capitalism” is even 15,000 times smarter than the rest of us, is, to be generous, extremely remote.
Billionaires are made by giant corporations. The only way you can have a giant corporation is if you have a giant government. So no matter what a Republican says about the big bad government when he gets his big fat tax-deductible campaign contribution from an anonymous donor, and he votes for something in favor of redistributing income upwards, he is tacitly endorsing a big fat government.
Don’t worry my dear conservative readers. So-called liberals have this problem, too. They cry and complain that we aren’t taxing the rich enough, but they don’t see how they’ve been led down the road to subsidizing the rich. They don’t see that by the time the rich get their money, it’s too late to tax it. They don’t see that the same big government that they crave has been subverted to do the work of the rich instead of the people. The incentives are just too high, too tempting, too incredible.
An economist that has noticed the blind spots of the left and the right, Dean Baker, has written extensively about those blind spots. He rightly points out that we shouldn’t be paying biotech companies buku bucks for medical research and then handing them patents on top of that. He rightly points out that if American auto workers can be made to compete with foreign autoworkers that earn a fraction of what Americans earn, then we can put American doctors in competition with foreign doctors by allowing them to immigrate here to work for a fraction of what American doctors earn. He also points out that longer and stronger patent and copyright laws make it easier for big tech companies to ship our manufacturing jobs to China, Thailand and Vietnam.
If you want to learn about the blindspots of the liberals and the conservatives in greater detail, you can find all of that in books by Dean Baker like “Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer”, and “The End of Loser Liberalism: Making Markets Progressive”. I got started with Baker’s book, “The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer”. All of those books are free to download as PDFs or eBooks for your Kindle.
For at least 40 years, maybe more, we’ve been told that inequality is just the way the free market works. Do we have a free market? Not if the rich are buying off our legislatures to write laws that suppress our unions, wages, and workers' rights. Not if the wealthy can buy longer and stronger patents and copyrights when they already have the money to defend them. Not if the well-heeled can create artificial scarcity to limit competition in their respective trades like health care, dentistry, and law, to name a few.
To put this in a biological perspective, no other animal on the planet leaves their kids with less than they need for independence. Lions don’t eat all the deer, nor do they put them in cages to keep the next generation from eating. But in a very real sense, that is what the Reagan Revolution was about. I was there, I saw it start. Now I’m seeing the results.
I saw how Reagan went after the unions. I saw how Don Regan told him to “speed it up” at a speech on Wall Street. I saw how the Reagan Revolution was really about “I, Me, Mine”. I saw how Reagan demonized the government without ever acknowledging that in order for great wealth to accumulate, you must have a great government to protect it. And I saw how the rules could be made to effect greater inequality at the behest of the few at the expense of the many.
In an interview on the topic of that study by the Rand Corporation, Nick Hanauer, an early Amazon investor made billionaire, noted one very interesting statistic:
Yeah. This is a very exciting day for us, or moment for us, because finally someone with the math and economics chops to get to the bottom of exactly how much money has been redistributed from the bottom to the top, has done it. The RAND Corporation, which is one of the most credible nonpartisan think tanks, maybe in the world, has done this amazing analysis of what has happened basically to incomes since 1975. The results are simply shocking. In fact, bigger than we thought.
In 2018 dollars, $2.5 trillion per year has been redistributed upward from the bottom 90% of Americans to the top 1% of Americans. What’s particularly shocking is the people in the 90th to 99th percentile they basically just held their own.
That study is evidence of abuse that leads to dependence on the government. Look, I’m not a liberal for the free stuff. I used to be a conservative. I voted for Reagan once. Now I know the fraud of Reagan and his cronies. That fraud now costs the rest of us about $2.5 trillion per year, all going to the top one percent. If this is capitalism, then capitalism is socialism for the rich.
Abuse doesn’t teach anyone any skills. Abuse can only breed dependence. Now, look at how dependent we are upon the state. In a pandemic, most people do not have the savings they need to hunker down and let the pandemic pass. Most people can’t go a year without getting paid, nor do they have any breathing room to find some other way to earn money. I can’t help but wonder if those in the top 1% think the rest of us deserve what we got.
So when I see Trump campaigning, I see him campaigning in favor of this stink we know of as The Reagan Revolution, and the resulting inequality. I certainly don’t see him talking about it. Do you? I see him as a man who profited handsomely from the system built for the billionaires. I see him as someone who is a billionaire himself who has zero sharing the eggs laid by the golden goose that the rest of paid for. I see a man harboring a fervent hope that he can just enslave the rest of us long enough to pass his legacy onto his kids. His kids are incredibly wealthy, too. They have no need to disturb the way things are. They’re not anxious to talk about this problem, either. They’d rather have us believe that we have billionaires because that's how markets work, not how the markets work.
I see Joe Biden in this, too. He’s wealthy. His family is wealthy. He’s probably a nice guy, but I don’t see him talking about that Rand study, either. He made his money in politics. He’s been at the game for a long, long time, just as long as Trump, but Trump likes to act like “politics” is business. Joe Biden will distract us with the idea that we can tax the rich, without telling us that he had a hand in writing laws that made the wealthy, well, wealthy.
The only people that are talking about that Rand study are Bernie Sanders and The Squad. Some people call them “socialist”. Some people are just noticing that the rules have been rigged, and we’re all paying for it. The rules are not sustainable in their present form. For if the economy depends on us spending money, or buying things on credit, without a concurrent increase in wages to support that spending, at the end of the day, the 99% will look at the 1% and wonder how they got there if the market is so free.
If we want to have a substantive conversation about inequality, we need to look at the root cause. Nobody is smart enough to “earn” a billion dollars. But we are smart enough to make the rules do what we want them to do, even if most people don’t understand the rules. We can start by acknowledging one simple fact. If we can write rules into our economy to give rise to billionaires, then we can write better rules that make everyone more or less self-sufficient.
Notice that none of the conservative politicians that purport to lead this nation are talking about self-sufficiency. None of them really want to address the vast sea of personal debts we all swim in. Even fewer ask us to imagine a country filled with people who have saved one year of expenses.
With one year of expenses saved, the average person could handle most contingencies. With one year of expenses saved, the average person could choose where and when he wants to work. With one year of expenses, the average person would have the confidence to participate in civics. And none of that is contemplated by the Reagan Revolution, nay, the Reagan Revolution abhors personal responsibility at the level I suggest here.