What Reagan Did & What the Democratic Party Should Have Done

On January 11, I circulated my last commentary. I concluded with, “Next: What Reagan did and what the Democratic Party should have done.

In discussing what Reagan did, I could focus on the outrageous things he did such as creating a huge tax cut focused mostly on the rich, and creating a huge deficit which so shocked his budget director, David Stockman, that he resigned and wrote, “The Triumph of Politics” pointing out the irresponsibility of these policies. (Even at this late date the book is worth reading.) 

What Stockman, however, failed to understand was that there was method to this madness. For years, the right, which before Reagan was not the uniform face of the Republican Party (The Republican Party in days of yore contained such liberals as Fiorello LaGuardia, Jack Javits and John Lindsey in New York, Senator Case in New Jersey and Senator Morse of Oregon to mention a few.) was intend on destroying the gains made during the Administration of Teddy Roosevelt, Woodrow Wilson, Franklin Roosevelt, Harry Truman and Lyndon Johnson all of whom had put a check on the unbridled power of wealth, and created for 90% of the rest of the people a new empowerment through anti-trust laws, regulations of health, safety and the environment, working conditions, minimum wage, unemployment insurance, Social Security, Medicare and Medicaid to mention a few. 

For years, repeated attempts had been made to eviscerate these programs but the public would have none of it. Now for the first time a new strategy was unfolding. Until then the cry was if we cut or abolish these programs we will be able to cut taxes. Now the motto was cut taxes, which is always popular even if the bulk of the cuts benefit few, and then faced with a crisis of debt make the cutting of programs a matter of fiscal necessity. (Democrats opposed these initiatives but they had no positive program in response. They feared the label, “The tax and spend party.)

These irresponsible tax-cutting measures were a clever plan but the country had not yet been sold on either, that large deficits could be sustained, or that cutting taxes would generate more revenue for the government. The famous Laffer curve turned out to be laughable and Bush’s pére’s claim during the previous primary that supply side economics was voodoo economics, seemed well founded. Reagan succumbed to the pressure and in 1982 an increase in taxes which repealed 1/3 of the previous reduction was signed by Reagan resulting in a boom and his overwhelming re-election vis a vis McGovern.

As the deficits grew Republican spinmeisters supported by the popular press continued to foster the misconception that Democrats were an irresponsible spendthrift party and that the deficit was not caused by Reagan tax cutting. A check of the facts reveals that The Democratic Congress during Reagan years authorized spending very close to what was called for in the Reagan budgets but with different priorities. It is also to be noted that during the Carter years spending as authorized by Congress was substantially below the period of the Reagan years. But Democrats, neither then nor now, seem inept at getting the truth out. Whether this is because of a press that has no interest in the truth, or because of Democratic ineptness is hard to determine. When the 1982 recession hit, Reagan blamed Carter and the popular press fostered this myth. To this day the myth of a highly successful Reagan administration is maintained and rarely challenged.

But the cleverness of Reagan and the ineptness of Democrats can best be found in two items that Reagan initiated. One was indexing, of tax rates. Democrats had always been the champions of a graduated income tax but inflation was pushing more and more middle class people into ever higher tax brackets thus undermining the principle of a graduated tax. Democrats never focused on this problem. Reagan who had no attachment to this principle, pushed through a clause in the tax code indexing tax brackets to inflation, and thereby became, in the eyes of the middle class, the man who protected them against creeping tax increases. This should have been a Democratic initiative but this like many others was too much to expect from a party that was suffering from arterial sclerosis and had run out of ideas.

During the Reagan years it became apparent that Social Security would face a crisis within a matter of decades unless fresh income injected into the system but it was on Reagan’s initiative that the cap on SS payroll taxes was raised, and taxes were increased on a portion of Social Security payments to people in the higher brackets, which was to be plowed back into the Social Security Trust fund, thus postponing the crisis date by decades. It should have been Democrats who were pushing for this but as I have said, Democrats have run out of ideas and initiatives. UNTIL DEMOCRATS STOP BEING THE PARTY OF CONSERVATISM AND AGAIN BECOME THE PARTY WITH SOLUTIONS, THE ASCENDANCY OF THE RADICAL RIGHT WILL CONTINUE AND ACCELERATE.

At the same time the Right has fostered a propaganda campaign that has gone on for decades that nothing can save Social Security and that the young are paying into a system from which they will never see a penny. A survey some years ago found that more young people believe in UFOs than believe they will ever see a penny from Social Security. In this kind of atmosphere it is no wonder that Bush, Jr. can work toward the abolition of Social Security and anybody who thinks that the present plan for private accounts is anything less than the first step toward that end is naïve.

The ineptness of the Democrats on this issue can best be seen by putting their emphasis on there being no immediate crisis. Well, it may not be immediate but it is looming and the sooner it is addressed the less painful it will be. 

Kerry epitomized this paralysis when during the campaign he recognized a potential problem but then ruled out all possible solutions. He then suggested a commission to come up with a plan after he is elected. It is obvious that if an increase in taxes and a reduction in benefits are ruled out there is not much for a commission to do. But Kerry was busy pandering to his audience as he did when he opposed Yucca mountain in Nevada for which he had voted. 

Bush is very good at identifying problems and then proposing solutions which would only exacerbate them, or abolish programs that need minor surgery. But Democrats and the American people will lose, until and unless, Democrats offer real alternatives and real solutions rather than only angry denunciations.

Next time: Reagan and the Air traffic controllers strike, Clinton and “the end of welfare as we know it”, and Bush initiatives and Democratic ineffective responses.  

Why This Is So! (continued III)

I concluded my last installment with, “Next time, how Reagan takes the Republican Party and the country to the right and makes this respectable, as Democrats have no answer and as the Union movement crumbles.

When the country elected Reagan I think few realized what a radical departure this constituted for the country. During all the years of Democratic ascendancy the Republican Party for the most part did not take serious issue with the direction the Democrats were taking the country. To be sure, there were many of wealth who looked upon both Roosevelts as traitors to their class and dreamed of undoing all that they stood for and all they had accomplished. But the Republican Party knew that such a position would be political suicide and so basically ran on platforms that only opposed Democratic reforms on the periphery. They argued that they wanted to do the same thing only they could do it better. They opposed some measures because ”they went too far”; they opposed others on the basis of defending states rights, they opposed others on the basis that they were too expensive and therefore fiscally irresponsible, but they never opposed the basic concept of the welfare state and that the government had a responsibility to provide a safety net, to protect the environment and to treat working people as something other than a component of industry to be treated no different than a widget. 

In other words they ran as Democrats light or as some dubbed it, “The Me Too Party. They did make some viscous attacks on Democrats, which in the short run did little damage but in the long took its toll. Beginning as early as 1947 they began a campaign to weaken the Labor movement when they passed the Taft-Hartley Act over Truman’s veto. They attacked Democrats as being, “soft on communism” and Joe McCarthy as the leader of the red baiting Republicans dubbed the Democratic Party as the Democrat Party, a label that has stuck to this day. They accused Democrats of having lost China to communism and being anti-defense.

At the same time they recognized that they had no intellectual base and while attacking intellectuals as eggheads, they systematically formed think tanks so that today right-wing think tanks outnumber liberal ones by a significant multiple. 

They vowed that newscasts would be more too their liking or they would buy them and in time all three major networks were bought by large corporations and they formed their own network and cable news channel, i.e. Fox. They took over radio as their propaganda organ.

But until Goldwater came along they didn’t represent a true alternative to the Democratic Party initiatives. Goldwater brought the party sharply to the right but in doing so he gave the Party an identity and a passion that it never had before. Goldwater was defeated in a landslide, but he gave the party passion and purpose, which Reagan inherited and exploited. This was not true of the McGovern candidacy, which only served to strengthen stereotypes of Democrats as being, in the words of Spiro Agnew, “effete.” 

At the same time the Union movement, which at one time had the almost universal support of the American people, was losing its image as the bulwark of all working people. At the height of the Union movement few people would cross a picket line. Unfortunately, the image of unions over the years, fairly or not, became of groups that supported featherbedding and had contempt for the public. This was exemplified by the by the strike waged by the Transport Workers Union in 1966, who went out on strike days before the new Mayor, John Lindsay, was sworn in and tied up public transportation for 12 days. Today unions are associated more with wealthy sports figures than with ordinary laboring people and union membership which reached its peak at about 35% of the total work force in 1945, declined to about 15% by 1995 and has held steady at that level for the past ten years. While the reasons for this decline are varied its effect on the Democratic Party and the progressive movement has been negative.

At least as important it appears that after Humphrey’s defeat by Nixon in 1969 The Democratic Party showed itself as a party that no longer had a real agenda. Whatever significant progress which was made thereafter was done by the Supreme Court (e.g. See Roe vs. Wade 1973) and the Democratic Party essentially became a conservative party fighting to keep the status quo, as a backlash against many of the achievements of the Great Society gathered steam.

Next: What Reagan did and what the Democratic Party should have done.