The Age of Reagan,
1980-2008


1 Kings [4:25] And Judah and Israel dwelt safely, every man under his vine and under his fig tree, from Dan even to Beersheba, all the days of Solomon.

Psalms [2:1] Why do the heathen rage, and the people imagine a vain thing?

Exodus [1:8] Now there arose up a new king over Egypt, which knew not Joseph.

Popular opinion polls generally show that Americans, by large majorities, desire smaller government, lower taxes, and fewer laws, that they reject the ideas of income "redistribution" and preferential policies based on sex, race, etc., and that approval ratings for Congress, controlled by the Democrats from 2007 to 2011, are even lower than approval ratings for George W. Bush. If this is the case, one must then wonder what many Americans thought they were doing in November 2008, not only electing a liberal Democrat President -- the first Northern Democrat since John Kennedy -- but returning large Democrat majorities in both houses of Congress. The Democratic Party, quite openly, is consistently in favor of larger government, higher taxes, many more laws, income "redistribution," and preferential policies -- and from the evidence of "speech codes" on college campuses, it not clear how much Democrats even believe in fundamentals like free speech (advocating things they don't like is "hate speech"). And, in general, they are the ones beginning to use campaign finance laws to suppress their political opposition and harass attempts at grass roots democracy. The situation looks less peculiar when we notice other opinion polls that show [until very recently, August 2009] Americans believing that Democrats do better with the economy than Republicans. But this is also perplexing when one of the principal recent complaints about Republicans during the Bush Administration is that they have been spending like Democrats. Since the Democrats would be worse, one wonders what people expect by voting for them. If people want the Democrats to, at least, be "different" from the Republicans, this looks like a case of what is often said about second marriages:  the triumph of hope over experience.

In fact, the Democrats only had one economic strategy:  Spending. As "stimulus" spending, this could be given a Keynesian economic gloss, but in practice all it really meant was funneling money to Democrat political allies, especially public employee unions. It was a political money laundering operation. That the spending didn't much help the larger economy simply meant that not enough was spent. On 8 June 2012 President Obama made the bizarre statement that, "The private sector is doing fine" (despite 8.2% unemployment); but he still meant that more spending was indeed necessary, just that the money must be directed to State and local governments, i.e. to expand government more and pay for bureaucrats and their unions. If he really thought that the Republicans would fall for this, even the blockheads, he demonstrated less political insight than anyone ever would have expected.

A generation has now passed since Ronald Reagan was elected in 1980, and many voters do not remember Jimmy Carter and what the economy became in the 1970's, with double digit inflation and unemployment, high taxes, gas lines, and poor growth. Nor have many noticed that in the years of exile from power, the Democrats have moved more and more to the Left, to the point where the Democrat victory not only spells the defeat of Republicans and probably of Reaganism but may well mean the defeat in the United States of most of the principles that characterized the Western cause in the Cold War. The "tenured radicals" at American universities, who often were open allies of the Communists in Vietnam and of the Soviet Union throughout the Sixties, Seventies, and Eighties, now have achieved their goal of all but dominating American education, the media, and the intelligentsia, and of setting the "progressive" agenda for the Democratic Party. The thesis of Francis Fukuyama's The End of History and the Last Man (1992), that liberal democracy and capitalism have been vindicated by the Fall of Communism and are without rival, is now exposed as absurd. That should have been evident at the time, as various radicals and reactionaries would labor tirelessly to undermine the post-communist consensus, but it is now demonstated beyond mistake by events.

All these years, we have been living off the capital of Ronald Reagan's Presidency, and now it is forgotten what Reagan's accomplishments even were. The Age of Reagan has probably ended with the defeat of John McCain for President. Yet McCain, despite his protestations of being a Reagan Republican, embodied much of what had gone wrong with the Republican successors of Reagan. Bill Clinton, governing with a Republican Congress (1995-2001), for all the farcial, disgraceful, and dangerous aspects of his Presidency, may have proved more faithful to Reagan than people like George W. Bush and John McCain. Which is not to say that any of them, including George H.W. Bush, were anything like worthy successors of Ronald Reagan. Indeed, more than once McCain needed to assert his Reaganism because much of his behavior bespoke the opposite, and his career in the U.S. Senate often looked like one long insult to the Republican Party and its core constituents.

The Bushes both began by indicating a fundamental difference with the Reagan agenda. Thus, in his inaugural address, George H.W. Bush called for a "kinder, gentler nation." Nancy Reagan immediately asked, "Kinder than what? Us?" The implication was that Bush wanted to be kinder and gentler than Ronald Reagan -- with the implication than Reagan had not been very kind or gentle. This played right into the hands of the Democrats, who then played Bush for a fool. His only substantive campaign promise, not to raise taxes, was traded in for mere promises, never realized, of spending reductions. A mild recession then set up H.W., who had been very popular over the liberation of Kuwait, for defeat by Bill ("It's the economy, stupid!") Clinton. H.W. had raised the marginal tax rate from Reagan's 28% to 31%. Clinton raised it further to 39.6% -- though this was still far smaller than the 70% rate under Jimmy Carter.

George W. Bush, in launching his campaign for the Presidency in 2000, characterized his political philosophy as "compassionate conservatism." Again, this contains the implication that previous conservativism, like, oh, that of Reagan, had not been "compassionate." Just as with his father, this looked like an attempt to curry favor with Democrats by conceding all their worst characterizations of the Reagan Presidency. It was a clumsy and ineffective pitch, although, to be sure, good enough to beat Al Gore (despite losing the popular vote). Bush did cut the marginal tax rate, temporarily, back to 35% -- not even as low as taxes were under his father -- but then nearly every other domestic policy of his Administration was "Democrat light." His "No Child Left Behind" education bill, written in collaboration with his "good friend" Ted Kennedy, simply perpetuated the Democrat lie that the Federal Government has a Constitutional role in education, or that such a thing does any good. It won him no credit from the Democrats, not even from Kennedy, just because they wanted more money (as they always do) and less accountability in the bill. Similarly, Bush introducing a brand new entitlement, a drug benefit in Medicare, won him no credit either, even while creating vast new unfunded liabilities for the Federal Government. Cautious attempts to introduce some small privatization into Social Security were screamed down by the Democrats and their socialist allies.

Although Bush won the 2004 election with majorities in Congress, and said that he was going to use his "political capital" to accomplish something, he ended up, again, accomplishing nothing of value. Meanwhile, the Republicans were simply spending like Democrats on worthless pork barrel projects (now called "earmarks" for some reason). Bribery and sex scandals removed anything else that might have distinguished Republicans from Democrats. Democrats then won Congress in 2006. The identity of Republican and Democrat attitudes, however, was demonstrated in the recent (2008) trial of Republican Senator from Alaska Ted Stevens, the father of the infamous "Bridge to Nowhere." Stevens was convicted despite the character testimony of Dan Inouye, Democrat Senator from Hawaii. Stevens and Inouye, as it happens, have been the worst offenders in the Senate for "earmarks" and pork barrel spending. Naturally, after 2006, the Democrats did nothing to restrain spending and only altered the practice of "earmarks" in a way intended to conceal their origin and existence. For this betrayal and dishonesty, they have now, with bitter irony, been rewarded in the 2008 general election.

As it happens, Ronald Reagan and his influence may have just provided a brief and partial respite from a continuing process. This began in the 19th century, but a certain threshold in its progress can be identified. According to the theory of government of the Declaration of Independence, which reflected the political philosophy of John Locke, the Government of the United States of America ceased to be a legitimate government in 1938. This is because of a decision by the Supreme Court, United States v. Carolene Products Co. There, the Court ruled that economic regulations, in other words those laws that limit the use of private property or otherwise restrict economic freedoms, such as the right to take a job or start a business, all of which constitute "takings" of some of the rights traditionally associated with private property and personal liberty, will simply not be reviewed or overturned by the Court so long as they have a "rational basis." The infamous "footnote four" of Carolene Products, written by Chief Justice Harlan Fiske Stone, divided rights in half, allowing "strict" review for rights such as "the first ten Amendments," but only a "relaxed review" for any other rights, such as those of property. How "relaxed" is the review going to be? Well, if a law need merely have a "rational basis," there really is going to be no law about property or economic matters that will merit being struck down as violating anyone's rights. The Court simply abdicates enforcing any such rights.

As it happens, this violates one of "the first ten Amendments," since the Ninth Amendment explicity asserts that "The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people" [boldface added]. This internal incoherence of Stone's holding (had he read the 9th Amendment?), and even the fact that his distinction was made up out of whole cloth, without legal or judicial precedent, pales besides its larger meaning. Jefferson wrote, "To secure these Rights, Governments are instituted among Men....that whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or to abolish it..." Since the United States Government, through the Supreme Court, determined in 1938 not to enforce basic rights of property and economic liberties, it will be then be the case that, in the words of John Locke, its "trust must necessarily be forfeited." It is no longer a legitimate government. It is an active system of tyranny. John Adams would agree:

The moment the idea is admitted into society that property is not as sacred as the laws of God, and there is not a force of law and public justice to protect it, anarchy and tyranny commence. [The Works of John Adams, Little, Brown, 1851, Vol.6 p.9]

The betrayal of the Declaration of Independence and of the most fundamental principles of the Constitution is a shocking truth; yet there has been no acknowledgement in mainstream American opinion and public discourse, including that of Ronald Reagan, that this is the case. The government has betrayed its trust, yet people seem not even to notice. Under Reagan, indeed, modest steps were taken on a slow road to recovering the truth. A landmark was the book Takings: Private Property and the Power of Eminent Domain [1985] by Chicago law professor Richard Epstein. Yet the process is slow and uncertain, with many setbacks -- such as the 2005 Kelo v. City of New London decision, which allowed the government to take private property and simply give it to other, politically favored, private parties. The Supreme Court cannot be trusted to correct the evil it has allowed, and mainstream politics, especially the Democratic Party, is dead set against restoring what Adam Smith called "natural liberty." This is the "original sin" of what I called the "New Republic" in American history, i.e. our regime since 1933.

The stated reasons for much economic regulation, such as consumer protection, are given the lie by the Carolene Products decision itself. This involved nothing more than a piece of special interest legislation designed to remove competition that was disliked by the dairy industry. The Carolene Products Company sold "filled milk," which was evaporated milk mixed with vegetable oil, usually coconut oil. This was cheaper than whole milk, but looked and tasted like it and kept better (in the days before everyone had a refrigerator). There was nothing wrong with it, but the dairy industry didn't like the competition. The holding of the Court was that the quality, honesty, or legitimacy of the product was irrelevant. The law could prohibit such a thing, regardless of the merits of the case or the actual purpose of the law, simply if a "rational basis" for such a law was even conceivable. Since the "rational basis" of the law was actually to enforce collusion by the dairy industry (whose monopolistic practices are still protected by State and Federal law) and suppress competition, the case would never stand on its own merits. According to Carolene Products, no taking of property or economic rights need ever be reviewed on its merits.

Why would the Court contradict the Declaration of Independence and destroy liberty and the Constitution in 1938? It is part of la trahison des clercs, "the treason of the clerics" (clerc, "clergyman, scholar, learned person"), the abandonment by intellectuals of the principles of the Enlightenment in favor of collectivism, statism, socialism, and other attacks on individual liberty and property. It is of a piece with the general attack by intellectuals in the 20th century on capitalism, the free market, private property, and individuality. As such, it is vicious politics and stupidly ignorant economics. Unfortunately, we see this sort of thing in a statement by the winner of the 2008 election for President:

Now, we also have to recognize that failed economic policies promoted by George Bush, supported by Senator McCain, a theory that basically says that we can shred regulations and consumer protections and give more and more to the most, and somehow prosperity will trickle down. [Barack Obama, 1st Presidential Debate]

The keys phrases in this are that, supposedly in the absence of "regulations and consumer protections" (where the Bush Administation actually did almost nothing -- Jimmy Carter may have been responsible for more deregulation), we end up giving "more and more to the most, and somehow prosperity will trickle down." This betrays a fundamental misunderstanding or misrepresentation of free market economics. Behind it is a rejection of the very meaning and role of capital, a viewpoint perfectly characteristic of Marxism but never stated openly in those terms in American politics. The picture we get is that more is "given" to the rich, from whom some of it will "trickle down." It is not clear what the Democrats think the mechanism for this would be, perhaps that businesses grant pay raises just out of the goodness of their hearts. The bitter irony of the canard of "trickle down" economics is that the alternative apparently contemplated, i.e. money being taken by the government and handed out to the needy, is what truly and perfectly fits the metaphor of the "trickle down" -- wealth is seized from the productive and then is allowed to "trickle down" from Washington, where meanwhile politicans, bureaucrats,
We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises.... I say after eight years of this Administration we have just as much unemployment as when we started.... And an enormous debt to boot!

Henry Morgenthau, Jr., Secretary of the Treasury, testimony to the House Ways and Means Committee, May 9, 1939 (17.2% unemployment)

and activists have taken their own generous cut of what has been looted from those who created and earned the wealth in the first place. This was exactly the idea in mind during the public spending of the Great Depression, yet that completely failed to relieve unemployment or end the Depression.

The Left has never learned the obvious lessons from that experience. It is capital that creates jobs, capital investment that increases productivity, human capital that increases wages, and free investors who move capital to investments with a chance of producing things that the public wants. The investors are not always "the Rich," but rich people are more likely to possess and worry about investment capital than are poor people. But one wonders if Democrats are really this ignorant. It may be that Democrats who disparage "consumerism" do not believe in an economy that produces things that people want (these are, in Plato's words, "unnecessary desires"). They want the good and the wise(!) of government (like Al Gore) to decide what is worthy of investment and production. Thus, even if they know how capital and investment work, they want the government to be doing it anyway.

Just how bad is people's ignorance of economics and of history I realized when I saw Marc Lamont Hill of Temple University, who often appears on Fox News, saying to Bill O'Reilly, "Capitalism is bad for poor people." (In a later show, he tells O'Reilly, "The people have a right to the fruit of your labor" -- as good a definition of a slave state as we are likely to hear anywhere.) It is not clear to me what planet Dr. Hill has come from. Poor people flee to the United States from places where socialistic experiments have perpetuated poverty. If it were not for Haiti, the poorest country in the Western Hemisphere would be Cuba, yet idiots like Michael Moore and Ted Turner still celebrate Cuba as some sort of paradise compared to the United States -- while people die trying to escape. When Communism fell, it was obvious to nearly all that socialist economies were a failure. It was not as obvious that "mixed" economies, like Euro-Socialism, had failed also; but the riots in France in 2005, after years of 9% or 10% unempolyment, should have reminded people of what was already conspicuous:  places like France and Germany have persistent unemployment, poor growth, high taxes, and high costs of living. In other words, Jimmy Carter's economy. When I was in London in 1970, the basic subway fare was 6 pence (6d = 2.5p). By 2006, it was up to 3 pounds (£3 = 300p). Yet, when I was stuck waiting at the California Department of Motor Vehicles not long ago (yes, it is Hell, as in Reaper), there was some fellow ranting about how much better everything was in Europe than in the United States. Perhaps that is better than if he had been yearning for the Soviet Union, but it is characteristic of the persistent attraction of socialism. When American education openly praises and promotes socialism, the magnitude of the problem that faces the country becomes clearer. Ignorance of economics and history is institutionalized, usually among people who are well educated and think of themselves as well informed and rather clever. But it is all elaborate folly -- and the institutionalization is the work of rent seeking clercs who do not (immediately) need to pay the costs of their bad ideas.

Democrats flatter themselves by thinking of all Republicans as stupid -- the inarticulate Bushes have helped with this greatly. Recently, Conservatives in general have been pouring gasoline on the stereotype by deciding that they needed to take on Charles Darwin (as in Ben Stein's anti-Evolution movie Expelled). This represents a high order of folly. Despite large percentages of Americans who do not believe in Evolution (according to polls), this almost never translates into any political victories and it always persuades anyone with a proper education in science that Conservatives are intent on recreating a Dark Age of Mediaeval ignorance and bigotry. Reagan himself, shortly after his election, made one embarrassing statement about Evolution but then wisely remained silent the rest of his Administration. Apart from that misstep, indeed, it is Reagan who gives the lie to the Democrat stereotype. It now appears that Ronald Reagan was the most productive writer of any American President. Not many people were aware that he had written all of his own syndicated radio commentaries during the Seventies. When the original holographic texts of the addresses were discovered, Reagan was revealed, not just as a great speaker, but as a great writer. Again, Democrats flattered themselves that Reagan was simply the public relations tool of a shadowy conspiracy that provided him with something to say. Yet even as President, when he employed speech writers, Reagan often extensively rewrote their submissions. The speech writers didn't like Reagan's "Mr. Gorbachev, tear down this wall!" but Reagan kept reinserting it into his speech. Today, the Republicans have no one of comparable understanding, focus, or eloquence. The Democrats, on the other hand, have no lack of demagogues who have grounded their entire careers on nothing but rhetoric. The American people, obviously, are still vulnerable, or perhaps more vulnerable than they were ten or twenty years ago. And the Republicans, with no one more successful to offer than George Bush or John McCain, have only themselves to blame.

The application of the Biblical quotes above might not need explanation, but I'll provide it just in case. 1 Kings [4:25], "And Judah and Israel dwelt safely, every man under his vine and under his fig tree, from Dan even to Beersheba, all the days of Solomon." Such a statement of the security of private property is most appropriate for the Reagan Administration, or any following its principles. Since to the Democrats, private property is simply on loan from the government, with ownership and control rights stripped away for whatever stupid purposes the government thinks suitable (regulatory "takings"), no such security is possible. Psalms [2:1], "Why do the heathen rage, and the people imagine a vain thing?" The "heathen," obviously are Democrats, and the "vain thing" is when people believe the socialist follies that are promoted by the Democrats. Exodus [1:8], "Now there arose up a new king over Egypt, which knew not Joseph." The Pharaoh "which knew not Joseph" is now President Obama.

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