Reaganomics Fallout
Stan Newton

The corporate crashes of Enron, Worldcom and others did not start in the year 2002. They had ended there. It all got started much earlier, in 1980 when President Reagan came to power. Some critics may say that it’s a shame to pick on a seriously ill, old gentleman. Relax, my dear critics. I am not picking on President Reagan personally. It would have been utterly unfair to blame one man for the disastrous economical shenanigans of the entire Republican establishment. Mr. Reagan was just a front man for the Republican politicians, lobbyists and the special interest groups of the richest Americans and Corporations. Well-paid Republican advisers and “experts” came up with the idea of so-called “trickle down economy”. Mr. Reagan was just a deliveryman, and he did deliver those rotten ideas to us with the charm and panache of a B-rated actor. And it worked! We did support the “Reaganomics”. We, the voters, had kept Mr. Reagan in power for eight years and elected Mr. Bush Sr. for four more years of Reaganomics. The Republican idea was that “if you give all the money to the rich, then may be someday, somewhere, somehow some of it would eventually “trickle down” to the poor”. In real life under Reagan/Bush Sr. the money had only been trickling up into the pockets of 5% of the wealthiest Americans. Nothing had ever trickled down from them to the poor folks, for the “well to do” don’t share anything with anybody.

Now then, let’s set aside all that pompous yet empty republican hoopla about the “great” Reagan/Bush Sr. years. Let us examine the real facts and statistics of those years.

Here are the top ten facts, which the Republicans would love to hide:

#1. Before Mr. Reagan came to power our National debt was in the billions of dollars. After he left, it was in trillions of dollars. In the eighties the Republicans were boasting about Reagan’s "longest economical expansion". In reality that was the longest period of borrowing and the highest national debt accumulation in the history of our Nation! The Reagan’s “expansion” ended in 1987 with the record numbers of bankruptcies, foreclosures and unemployment. Some expansion! Where did the trillions go? The answer is - to the same 5% of wealthiest Americans, whom the Republicans have always been working for. Under Reagan, they all tripled and quadrupled their fortunes, while the rest of our Country got deeper in debt and recession.

#2. In the seventies, before Mr. Reagan came to power, our cities had rather limited number of homeless here and there. Yet, by 1988 the homelessness had turned into a wide spread National disaster! Why? Because of the Republican “deregulations” of the Real Estate taxation. Under the pressure from Real Estate moguls the Republicans had introduced a hush-hush perk to the landlords. Here how it worked: Let’s say a landlord owns a building with fifty units and only thirty units are rented out. The twenty empty units were “loosing money” until they were rented. That’s where the Reaganomics kicked in. A bill was passed under the table, allowing the landlords a tax deduction of the rent amount from all vacant units as a “business loss”. As a result the landlords lost any incentive to rent their apartments for they were getting paid anyway. If a unit is rented, the tenant would pay the rent. If not, our Uncle Sam would pay it, out of the taxpayer’s pocket, of course. Secondly, the rent prices went up through the roof, for the landlords were no longer interested in attracting tenants with a low rent. The final consequence of that Real Estate perk was mass “warehousing” of empty apartments and millions of homeless, who could no longer afford the sky high rent. In the mid-eighties I used to live in a four buildings complex, where 75% of apartments were empty. The management had paid me $3,500 to move out. They were converting the buildings into condos, which only a few could afford. That’s where the homelessness came from, straight from the Reaganomics.

#3. Before Mr. Reagan came to power, the Middle Class America was still strong. After twelve years of Reaganomics the Middle Class was in ruins. Reagan's way of "Union busting" and generous Corporate perks had led to the total domination of Corporate bosses over the “salary caps” for the workers, over the job cuts and moving the jobs abroad. And so, the Middle Class had fallen closer to the poverty line and the Poor had turned into homeless. When the Middle Class goes down, so does the consumer spending. With low consumer spending our Economy hit the skids. That’s how the Reaganomics had thrown entire Country into a deep recession, while some excessive fortunes had “trickled up” into the pockets of the richest Americans with Republican blessings.

#4. Before Mr. Reagan came to power, small businesses, small shopkeepers and small farmers were doing alright. But Republican deregulations had given unfair advantages and tax breaks to the big businesses and to the large farms at the expense of the small ones. That's why by 1987 the small businesses’ and farms' bankruptcies and the unemployment hit the record levels.

#5. Before Mr. Reagan came to power, the disparity between the poor and the very wealthy Americans was still at a reasonable level. In the seventies the 5% of superrich Americans were in control of about 40% of our national wealth. After the twelve years of Reaganomics the disparity had gone up drastically. The same 5% of richest individuals were already controlling about 70% of our National wealth. Now this situation is getting even worse under the current Administration, thank to the disproportional tax cuts for the rich. Should our disparity between haves and have-nots reach South American levels of 90-95%, we shall find ourselves in total collapse, Argentina way.

#6. Before Mr. Reagan came to power, the Wall Street had been strictly regulated and watched over. After the Republican deregulations, the crooks like Ivan Boskey, Mike Milken and others were given a free hand to swindle and to pillage. Millions of small investors had lost billions of dollars in the "Junk Bonds" frauds and insider trading, while a few over-night billionaires were born at the expense of many ruined American families.

#7. Before Mr. Reagan came to power we had no "Savings and Loans" problems. "Savings and Loans" was a Republican idea. After years of appalling mismanagement all S&L Banks had gone chapter eleven. Speaking of S&L scandal, Neil Bush, a son of then President Bush Sr. was directly involved in the S&L crash. Using his father, the President, as collateral, Neil Bush got to manage one S&L Bank. Or shall we say, he got to mismanage it into chapter eleven like the rest of the S&Ls. For that he was “severely” slapped on the wrist – he had to pay $50,000 fine after having squandered $1.5 billion of taxpayers’ money. Where did all those S&L billions of dollars go? The Republicans had never investigated the losses and never went after those who had “lost” the money. They had just said that the money was gone. Period. Such a colossal collapse had left Republican Administration short of funds. That’s why “read my lips, no more new taxes” President Bush Sr. had raised our taxes and we, the taxpayers, had to pay for the Republican mismanagement.

#8. Back in the eighties some unscrupulous members of Reagan advisers’ team had secretly diverted large sums of oil money to the Nicaraguan rebels called “Contras”. As result of this covert operation some Americans lost their lives in that skirmish. The “Irangate” investigation had been initiated, but it got nowhere. The Reagan’s team didn’t seem to remember anything. President Reagan stated that he did not “recollect” any of the Irangate activities. After endless interrogations and a search for the “smoking gun”, and after $300 million of our tax money had been wasted on that investigation, the investigators had come to a conclusive decision that there was not enough hard evidence to come to any decisive conclusion. Some investigation!

#9. Back in 1978 President Carter got a bum wrap from the Republican PR manipulators for the double-digit inflation, though the real reason for the inflation was the oil price hike. When the oil prices go up, all the prices go up along with it. That’s life. The Arabs had doubled the price of oil, which had brought the double-digit inflation upon us. President Carter had nothing to do with our Economic hardship. Yet, the Republicans used the Arab created inflation to come to power by bashing President Carter. Then during Reagan/Bush Sr. years oil prices came down substantially. Yet, despite of the low oil prices the Republicans had still managed to get us into a deep recession.

#10. Before Mr. Reagan came to power the "corporate deregulations" were not around. Old corporate rules were protecting against possible abuses of power and the CEO’s salaries were modestly high, based upon the profitability of a Corporation. Then the Republicans declared their “hands off” of Corporations policies. Encouraged by those deregulations the CEOs, the COOs and such started paying themselves multi-million dollar salaries and huge bonuses while downsizing and cutting jobs. Thanks to Reagan/Bush deregulations millions of well-paid jobs had been lost permanently, or moved abroad. But the worse was yet to come. Because of the Republican catering to the corporate bosses, the entire corporate mentality had changed dramatically. The top corporate management realized that the Government was no longer watching them. The sky was the limit. That’s where the Enrons and the Worldcoms and all other crashes came from. They did not happen over night. The problem with outrageous salaries and obscene bonuses for the top corporate brass had been brewing ever since the Republican deregulations of the eighties. Let’s do some accounting. Take Enron, for example. For a number of years some twenty Enron’s top executives were paying themselves multi-million dollar salaries and excessive bonuses. Mr. Anderson, for one, was getting $27,000,000 a year. It was discovered that each member of Enron’s top management owned several mansions with a price range between $10,000,000 and $30,000,000 a piece. If we ad up all those millions of dollars embezzled by the top brass from Enron over the years it will amount to several billions of dollars. Such a waste is absolutely unsustainable. No matter how profitable a corporation is the squandered billions of dollars will always lead to its collapse. Enron did not collapse because of the “books cooking”, as many are saying nowadays in order to hide the truth. Enron had collapsed because of the waste of money by the top bosses. The books were “cooked” just to cover up the pillaging. All this was going on under then Governor G.W. Bush, who “kindly” allowed his “good buddies” of Enron to pay zero taxes, while closing his eyes on their money squandering pirouettes. Can you imagine that he, the Governor of Texas, did not know what was going on, while having BBQ parties with the Enron Bosses? Well, Gov’nor, we hardly knew ya. It would have been easy to restore the pensions and 401Ks to the employees of Enron, if the stolen money had been confiscated from the crooked CEOs and reinvested back into the pension fund for the workers. But the Republican Administration is not going to really punish their wealthy “bed pals”. For the PR smoke screen they will parade the culprits in handcuffs and do a lot of well-publicized wrist slapping. But at the end of the day all the wealthy criminals are going to keep their ill-gotten gains. And the hard working Americans will suck rocks, Republican style.

These are the top ten facts of Republican mismanagement, which are somehow kept under wraps by News Media, as if someone is censoring out everything detrimental to the Republican Party.

By the way, have you noticed, folks, that each time we have a Republican President there is always a crash or a collapse of some sort? In 1987 the Wall Street crashed. At the end of Mr. Bush Sr. term the S&L Banks collapsed. And now, under new G.W. Bush, there is a whole bunch of them “Enrontten” apples, collapsing right and left. Is this a mere coincidence? I don’t think so. This is the inevitable result of the old Republican irresponsible and bankrupt fiscal policies of catering to the wealthy. “Catering to the rich” idea had proved to be totally disastrous all over the world. Take South America, Africa or Southeast Asia where all the Governments are just a bunch of corrupted wealthy elite who share the wealth of their Countries among them, while keeping 95% of their population on a starvation diet. What do all those Countries have in common? Bankruptcies, mass poverty, violence, economic instabilities, kidnapping for ransom, rebellious insurgents, diseases – all this is a predictable and inevitable result of catering to the wealthy few. Do we want to be lead down this road by the Republicans?

On the other hand in the Countries like Norway, Denmark, Holland, Austria, Switzerland the economic picture is dramatically different. They all have strong middle class, good social services, pension plans and Medicare for everybody, not just for the rich. And all of them live in stable and prosperous societies. Why? Because the Governments there are catering to the middle class and use progressive taxation, where the rich pay higher taxes thus providing enough money to keep up the good life for everybody. This way the wealth is distributed more evenly among the entire population.

Looking back one can say that the twelve years of Reaganomics had been appalling years for our Economy. Yet, there is much more to it. Along with economic hardships and disparity, the Reaganomics had also destroyed the emotional fabric of our Society at large. The “grab as much as you can and as fast as you can at the expense of the others” mentality had spread its ugly wings nationwide. The human feelings of brotherhood, camaraderie, goodhearted warmth to each other and caring for one another, which were so prevalent during and after the World War II, all but disappeared. The greed, cruelty, violence and indifference had raised its brutal face over our Nation.

Yet, the 5% of the richest Americans would emphatically insist that the Reaganomics years were the best years of their lives - they had amassed huge fortunes. Money means power. When the wealthy and the Corporations got so much money from the Republican tax breaks and other perks, they had acquired unprecedented powers over our political and economic life. Nowadays the Corporations practically own and control our Government, our Press and our Broadcasting Media. That’s why we are hearing only positive opinions about the Republican Presidents, no matter how much damage they inflict to our Economy. Since 1980 we have been losing our Democracy to the big business and to the special corporate interests. Gradually our Country is turning into a Corporate Dictatorship.

And here we go again - we are getting Bush-whacked for the second time around. Just like old times of President Bush Sr. our debt and unemployment are growing, the Wall Street is in free fall and we got recession again. And a war is looming on our horizon. Like father, like son, I guess.

GW Bush’s Administration is bragging about the tax cuts, while keeping quiet about the fine print of these cuts. Here is the tax cut in details: The poor and the middle class folks would get between 1.5% and 1.75% tax cut, while those who make over $300,000 will get 5% cut. For example: if you were a worker making $20,000 a year, you’d get back only about $350, which wouldn’t even pay your monthly rent. At the same time a CEO who makes some $5,000,000 a year will get back $250,000. And there is more. The very wealthy, who own an Estate valued over $2,000,000, (like G. Bush Sr.), will be exempt from the “Inheritance tax”. Apparently our President’s first priority is to keep his father’s money in the family, no matter how badly his tax cuts would affect the rest of the Country.

Publicly, GW Bush is very loud about “how much he cares for the American workers”. Those are just words. What about his deeds? Just the opposite, 80% of his multi-billion dollar tax cuts would go to the wealthy few, while the average folks would get back just peanuts. Bill Clinton’s surplus has already been redirected toward the richest individuals and Corporations. Because of that our Economy is hitting the skids for the second year in the row. And the Wall Street keeps sliding down, thanks to the Republican slippery slope of economic mismanagement.

Is the Republican tax cut good for our Country? No, Sir. This is an outrageous highway robbery of the majority of hard working Americans, and a fat kick back for the wealthy, who had bought the White House seat for President Bush Jr.

Is this the way to rebuild our Economy? No, Sir, this is one sure way to ruin it!

Do we not have some forty million Americans, who live at or below poverty line? Don’t they deserve a better living? Don’t they need money much more then the millionaires?

Do we not have schools, which could use extra money for major improvements?

Do we not have homeless? Don’t we need more money for affordable housing?

Do we not need extra money for Medical coverage for everybody, not just for the wealthy and the Politicians?

Do we not need extra money to fight crime and drug addiction?

That's where the Taxpayers money should go! Not into the pockets of the wealthiest men on earth, who already have more money then they can spend within their lifetime.

President Bush Jr. doesn’t seem to understand that it’s the millions of poor folks, who would have turned our Economy around. They would have increased consumer spending by buying millions of new cars and new houses, if they had been given a substantial tax cut. The wealthy don’t help to revive our Economy for they don’t buy new cars and new houses. They stash their money away in the offshore “Tax Heavens” thus taking the money out of circulation, which leads to the contraction of our Economy.

The most amazing in this dramatic two year decline of our Economy is “the silence of the lambs”. The Democratic lambs, that is. The Republican Administration is doing to our Country what the Enron’s bosses did to their Company, while the Democrats are quietly sitting on their hands. Have you ever wondered why?

Because of you, my fellow voters. It was you, the voters, who had delivered a devastating blow to the Democrats by voting Republican. The Democrats still cannot get over the shock of sudden voters’ turn around. After twelve disastrous years of Reaganomics and eight great years with President Clinton every Democrat assumed that the voters would want more of the same prudent Democratic policies. It was impossible for a Democrat to imagine that you, the voters, would vote Republican. But you did. Now the Democrats don’t know to whom do you, voters trust, to your common sense or to the Republican lip service?

If we look at the economical statistics for the past one hundred years, we can see that each time we had a Republican President our Economy was in shambles. Then the Democrats would come in and would fix our Economy. Then you, the voters forget to think before going to the polls and you would elect another Republican for another four disastrous years. The only way to stop the Republican demolition of our Economy is to vote Democratic this time, to give the Democrats large majority in both Houses so they could bring back the prudent fiscal policies of Bill Clinton.

As one German Chancellor, Mr. Bismark once said: “Each Country has a Government it deserves”. And now you, who voted Republican, deserve to loose your pensions and your 401Ks. You deserve to see Bill Clinton’s surplus go to the wealthy, to see our Economy failing, to see the Wall Street and your investments tumble and to loose your hard earned money to the corporate crooks, sponsored by the Republicans. Those, who voted Republican in the Elections 2000, not only deserved all this hardship, they earned it.

It is you, my fellow Americans, who carry the final responsibility for the welfare of your Country. It is up to you, voters!

Don’t blow it, like you did it in the Election 2000!