Read a Pacific Northwest, liberal perspective on world, national, and local politics. From majestic Redmond, Washington - the Northwest Progressive Institute Official Blog.

Friday, May 04, 2007

Voodoo history for GOP

Yeah, the Gipper was awesome, dudes!
When, in August 1981, Reagan signed his Recovery Act into law at Rancho del Cielo, his Santa Barbara ranch, he promised to find additional cuts to balance the budget, which had a projected deficit of $80 billion -- the largest, to that date, in U.S. history. That fall, the economy took a turn for the worse. To fight inflation, running at a rate of 14 percent per year, the Federal Reserve Board had increased interest rates. Recession was the inevitable result. Blue-collar workers who had largely supported Reagan were hard hit, as many lost their jobs.

The United States was experiencing its worst recession since the Depression, with conditions frighteningly reminiscent of those 50 years earlier. By November 1982, unemployment reached, nine million, the highest rate since the Depression; 17,000 businesses failed, the second highest number since 1933; farmers lost their land; and many sick, elderly, and poor became homeless.

The country lived through the recession for a full year before Reagan finally admitted publicly that the economy was in trouble. His budget cuts, which hurt the poor, and his tax cuts, which favored the rich, combined with the hardships of a recession, spawned the belief that Reagan was insensitive to his people's needs. (Although it was a 25% across-the-board tax cut, those people in the higher income brackets benefited the most.)
Obviously, the economy rebounded thanks to harsh Fed policies and cheap Middle East oil. (Who was it we were supporting at that time...oh yeah, that Saddam guy.) But somehow the rather disastrous first Reagan term is overlooked in media accounts, allowing Republicans to claim a greatness that simply did not exist.

The early '80's were just as difficult for ordinary Americans as the late 1970's, in economic terms. Once the cheap oil, junk bonds and cocaine started flowing, things picked up, but it didn't last all that long and the country faced severe economic challenges again during the late 1980's and early 1990's.

It wasn't until the long national nightmare of peace and prosperity under Clinton that the economy really took off. That's not an argument that Clinton was an economic genius, as there was once again the Fed, oil prices and a brand new technology sector helping things along, but if we're going to be all misty-eyed about something let's at least pick a good time period.

The '80's generally sucked, for a multitude of reasons, including but not limited to fashion, music, Wall Street, Republicans, the Republican War on Drugs, Strategic Defense Initiative, ketchup defined as a vegetable for kids, arms for hostages, ignoring AIDS, savings and loans, cocaine, Lee Atwater, Elliot Abrams, Alexander Haig, David Stockman, James Watt, Oliver North and John Negroponte. Some of these events and names should sound familiar.

So while the GOP candidates went to Simi Valley last night and paid homage to a myth, it's worth remembering what things were really like, and that it's unlikely we will ever see cheap Middle East oil again.

I wish we could have said the same for the rest of it.

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