By Joe Campbell
March 19th, 2009
So let me re-tell the story briefly.
Ronald Reagan in 1980 was a man who met his moment. The nation was reacting to the excesses of the New Deal and Great Society liberalism and the 1960s revolutions – and they wanted a return to an older time. The country was in a reactionary mood, but still looking for optimism after the glum and depressing honesty of Jimmy Carter. Reagan blended the two in his own distinctive way. At the same time, the conservative movement that had been launched with Senator Barry Goldwater’s 1964 campaign was finally reaching maturity. The infrastructure of think tanks, foundations, magazines, and other organizations that the Scaife family and the Coors family and the Koch family and later the Walton family and others had started to build in 1964 was generating new and innovative right-leaning ideas. The neoliberal philosophy that Reagan was sympathetic to still only had a small number of adherents, but thanks to the conservative infrastructure it had reach and with marketing savvy was sold. At the same time, wealth was already becoming more heavily concentrated in the hands of fewer and fewer people, giving the rich benefactors of the conservative movement more power.
In this moment, Reagan became president – with liberalism tired and worn out, with a reaction against it’s excesses and the excesses of the revolutions of the 1960s reaching a boiling point, and a conservative movement heavily influenced at the top levels by neoliberalism finally maturing. Thus was launched the Reagan Revolution.
This revolution wasn’t really about Reagan – but he was the figurehead at the top. A lot of the revolutionary changes had to do with society’s changing mores that allowed, “Greed is good” to became a positive mantra echoing the neoliberal Ayn Rand’s talk of the “virtue of selfishness.” Some of it had to do with the growing influence of the extremely wealthy. Some of it was a reaction against the silliness of the anti-materialism of the hippie generation. But like the 1960s revolutions, which were enabled though not created by the government, likewise for the 1980s revolutions. Reagan’s constant stimulus spending supercharged the economy; his trimming back the social safety net, his tax cuts for the wealthy, and his spending increases accelerated the concentration of wealth and power in the hands of fewer and fewer. His acquiescence to the informal Bretton Woods II arrangement created an economy that “favored finance over domestic manufacturing.” His trimming back of regulations also accelerated this trend. To some degree, these changes had positive effects – as the market was freer, as the economy grew, as corporations thrived, as the overall wealth of America grew.
But they spelled trouble down the road. The stimulus spending and tax cutting, the informal Bretton Woods II agreement, and concentration of wealth created an unstable system. Internally, the society was imbalanced as extremes of wealth and power were accumulated by a small minority. This eventually undermined the very free market and democratic discourse that is essential to the American tradition. A course correction later might have saved the Reagan vision – and for a time it seemed as if Bill Clinton’s moderate presidency had, as middle class wages finally began to grow again – but Bush doubled down on Reaganism when he should have pared back, and we are left with this mess.
Is this collapse Reagan’s fault? I wouldn’t say so. But he set the initial course towards this iceberg, even if the iceberg was out of sight at the time he set the course. He – and the 1980s revolutions in finance, economics, and government that his administration supported and enabled – are the true authors of this economic collapse, even if they cannot be blamed for not forseeing it.