Every four years we go through the ritual of having primaries and caucuses to select our presidential candidates. Then we endure an exhausting campaign that mercifully ends on Election Day. While virtually all Republican candidates support the policies of Herbert Hoover and George W. Bush, they don’t mention their names. The name Hoover is synonymous with Great Depression as Bush is to Great Recession. Instead, they invoke the mythological memory of Ronald Reagan, who most voters have forgotten presided over the biggest stock market crash in between those two bigger ones. Republicans are hoping that voters are unaware that the economic policies of Reagan, Hoover, and Bush are virtually the same.
One evening in 1980, I heard President Jimmy Carter give a surprisingly commendable campaign speech in Jackson Square in New Orleans, where I was living. With his own economic problems – stemming from OPEC’s high oil prices – he still separated himself from his rival Ronald Reagan. He pointed out there were significant differences between the economic policies of his and FDR’s Democratic Party and that of Reagan and Herbert Hoover’s Republican Party. I looked around the mostly young and middle-aged crowd and wondered just how many of them understood what he was talking about.
The Republican Party was about to benefit from two fundamental changes in American society. First, voters who personally experienced the Great Depression of the 1930’s were becoming a much smaller part of the electorate. Second, in all probability, there were more voters than ever before who knew little to nothing about American history. Ever since the Soviets launched Sputnik into space in 1957, our public schools had de-emphasized the teaching of history and good citizenship in favor of math and science. If you combine that with the longtime and continuing practice of many school systems using their coaching staffs as history teachers, you can see the problem.
The result was that we had begun to live in what Gore Vidal accurately described as “the United States of Amnesiacs.” If you have amnesia, you don’t remember anything about yourself before the present. Unless you know where you came from, you don’t know where you are, and you can’t wisely plan for the future. As George Santayana warned, “He who does not learn from history is condemned to repeat it.”
Ronald Reagan promised “a return to normalcy.” He borrowed that expression from Warren G. Harding, the Republican winner of the Election of 1920. What Harding wanted to return to was the “Gilded Age” (1869-1900) – the time before the Progressive Era (1901-1920). Harding and Reagan wanted to return the country to control by the Plutocracy, the few who were rich. They each wanted to return to a time when there was no income tax, no regulation of business practices, and no protection for labor, the consumer, the unemployed, the elderly, or the environment.
Throughout the 1920s three Republican presidents (Harding, Calvin Coolidge, and Herbert Hoover) practiced trickle-down economics: help the rich instead of the common people. If the rich get richer, their investments supposedly will lead businesses to expand, and some of that money will trickle down to the people in the form of jobs and salaries. In October 1929, seven months after Hoover took office, the stock market crashed. The Great Depression that followed lasted over ten years. Surprisingly, Hoover has been defended by some because he was not solely responsible for the massive unemployment, hunger, foreclosures, and homelessness. Any president who followed the irresponsible and incompetent Harding and Coolidge had to walk into a national disaster.
However, Mr. Hoover should receive the full credit he deserves. Coolidge allegedly complained that even though Hoover was Secretary of Commerce, he thought he was undersecretary of everything else. But that was the deal. Hoover agreed to be Harding and Coolidge’s commerce secretary only if everything involving the economy went through him! Hoover was the architect of trickle-down economics and deserves to be held fully accountable for the tragic results.
Even though by 1980 most voters knew nothing of Hoover or the Great Depression, Mr. Reagan knew better than to refer to his own economic policy by its old name. Instead, it was called “supply-side economics.” When David Stockman, Reagan’s budget director, was asked about the difference between “supply-side” and “trickle-down,” he admitted they were identical. Stockman even warned Reagan and his advisors that cutting taxes on the very wealthy while drastically increasing spending on the military would lead to huge deficits and social insecurity. Nobody cared. Within four years, Reagan had tripled the federal debt that had been accumulated by all 39 previous presidents combined!
The real rationale behind “trickle-down Reaganomics” was that even if helping the rich get richer probably wouldn’t benefit the rest of society, it would increase the federal debt. That would make it impossible for the government to spend money regulating Big Business and providing services to the people. Less money would go to highway infrastructure, national parks, and safety-net programs like food stamps, unemployment compensation, Medicaid, and Medicare. Sadly, decreasing revenues and shifting money from domestic programs to the military created one of the largest spending programs in the government – paying the interest on borrowed money! Reagan exchanged pay-as-you-go (which he dubbed “tax-and-spend”) for borrow-and-spend.
Not surprisingly, there was an “epidemic” of homelessness, and much of the country was in a serious recession throughout the eighties. My father J. C. Offutt, an electrical contractor in El Dorado, AR, said he was too old to wait for another president, closed his Electric Service Co., and retired. Amazingly, the Reagan stock market crash of October 1987 – the worst since ’29 – didn’t come until his second term. Ironically, what saved us were those Republican-hated safety-net programs set up by Democratic presidents and/or Democratic Congresses between 1933 and 1980.
I remember thinking that every president for the next fifty years would have to deal with the issues (some real, some imagined) of Ronald Reagan’s huge debt. I was wrong. In 1993, Bill Clinton initiated a sufficient tax increase on those in the upper 1½% income bracket, the wealthiest among us. He immediately got control over our fiscal policies. The economy boomed, and Clinton had a budget surplus in each of his last four years. Even though Clinton moved the Democratic Party closer to Wall Street, allowed the wealthy to get wealthier, and irresponsibly signed the repeal of Glass-Steagall allowing the banks to gamble recklessly, he was still resented by the Republican Party. Clinton’s tax policy (combined with his actions on the environment and conservation) was probably the primary reason for the Republican Party’s obsession to find a way to impeach him.
George W. Bush’s first priority (invading Iraq was his second) was to reinstate “Reaganomics,” or – as Bush’s father called it in 1980 – “voodoo economics.” He wanted to cut the taxes on the “haves and have mores,” and even Alan Greenspan endorsed the disastrous plan. Incredibly, the guru of the Federal Reserve said that he was afraid that if Clinton’s policies were continued, the entire federal debt might be paid off within six years! Not surprisingly, the Reagan debt and the interest paid on it were needed to prevent universal health care for all Americans.
Now, future presidents will be saddled with the results of Bush’s expensive wars in Iraq and Afghanistan, and all the issues connected to his exorbitant debt – which doubled that of all 42 previous presidents combined – and the long-lasting effects of the Great Recession, which President Barack Obama inherited.
The 2016 Republican candidates are all supporters of a plutocratic government (rule by the few who are extremely wealthy) and thereby support the same economic policies of the Gilded Age, Herbert Hoover, Ronald Reagan, and George W. Bush. The only one of those they will endorse, though, will be Reagan – hoping the voters don’t realize there is no difference among them. Fortunately for today’s Fox-Republican-TEA Party, voters don’t always vote in their own best economic interests. However, they did in 1992 – and maybe in 1996. They did in 2008 – and maybe in 2012. With the recent awareness of income inequality, maybe they’ll do it again in 2016. We can only hope.
by David Offutt
This is a slightly updated version of an essay that was published November 8, 2007, in the El Dorado News-Times as a letter to the editor.