Fifth Generation Reaganomics

First there was President Ronald Reagan's 1981 supply-side economic program . . . cut domestic spending, cut taxes on the rich, let them invest money in factories, and more people will join the workforce and contribute to the tax base.  In other words, tax work instead of wealth.  Reagan economics - called, henceforth, "Reaganomics" - worked, at least in the short term, but not the way Reagan, Arthur Laffer, Jude Wanninski, and other economic conservatives envisioned.  The rich people invested their tax cuts in themselves, and most of the jobs created in Reagan's eight years - which lowered the employment rate from 7.4 percent in February 1981 to 5.4 percent in January 1989, making Reagan the only Republican President since World War II to leave office with the unemployment rate lower than what it was when he entered office - were low-wage jobs that no one could reasonably expect to make a living from.

The tax cuts blew up the deficit and caused a recession, forcing tax increases in 1990 under the senior George Bush and another tax increase under Bill Clinton in 1993.  With the passage of a budget that year that increased domestic spending, then-House Speaker Tom Foley, a Democrat from Washington State, said we had come to the end of Ronald Reagan.

Ironically, he lost his House seat in the Gingrich revolution of 1994 that gave us a Republican Congress and Reaganomics Mark Two.  Only President Clinton's firm stand on deep spending cuts, plus a 1995 government shutdown that neutralized Speaker Newt Gingrich, prevented another deficit; in fact, with many tax hikes still in place and with measured spending cuts to boot, a budget surplus was generated.  Not to mention decent jobs.   

Then came the third iteration of Reaganomics with George Walker Bush and his 2001 and 2003 tax cuts, blowing the surplus and putting the country deeper in debt and leading to the loss of good jobs that, quite frankly were lost for good.  And military spending went way up thanks to not one but two wars in the Middle East.  And then came the 2008 financial crisis.

Barack Obama then came into office with a Democratic Congress in 2009, with many Americans thinking we'd seen the last of Reaganomics. Fourth generation!  The Tea Party came into power in Washington in 2011 and brought it back.  More jobs lost, more tax breaks for wealthy people.

Now Donald Trump is the White House with a Republican Congress, and his tax reform proposal is essentially Reaganomics Mark Five - Reaganomics on steroids.  I won't go into the details, because, quite frankly, neither has Trump.  The proposal - which would pretty much give corporations a huge tax break - only takes up one page of a ream of paper. 

We've seen this movie before.  And not only does it keep getting worse, the celluloid is wearing very thin.

No Job? Too Bad!

Twenty-five years and change ago, on his way to becoming the second Democratic presidential candidate to lose 49 states, Walter Mondale complained that the Republican attitude to unemployment was that if you were jobless, you were on your own. The unemployment rate was falling at the time of the 1984 presidential campaign - even though most of the jobs that were created paid less than $11,000 a year, a laughable annual salary even then - and so Mondale's gripe fell on deaf ears. That same complaint doesn't seem to be getting anyone anywhere these days either. Republicans have continuously blocked extending unemployment benefits in the Senate, and neither party has been in any rush to help people who have been out of work for 99 weeks - that's nearly two years, folks - out of fear of deficit spending. Ed Schultz, on his MSNBC show, has complained that the Senate isn't listening to the people.

Uh, they kind of are. It turns out that Ed Schultz's Minnesota populism is as popular as Mondale's was back in the eighties. Cathy Lewis, a public talk radio host from metropolitan southeastern Virginia (where Schultz is originally from, incidentally), says that the topic of unemployment benefits doesn't come up a lot on her radio show. "I think," Lewis told Gwen Ifill on the PBS NewsHour last night about the benefits issue, "you only find that level of discontent if you yourself are affected by it. That's my sense on the radio program that I do every day. I don't hear people talking as much about that. What I hear them talking about is the hiring and the jobs are not coming back as quickly as they had hoped that they would."

In other words, if the people aren't so concerned about it, the Senate won't act on it. And why should most Americans be concerned? There are currently four million Americans who are affected by unemployment benefits running out, but in a nation of three hundred million or so, that's not a number that's going to move any Republicans in the Senate. Nor does it move many other Americans. I think Cathy Lewis's remarks about her listeners in Virginia indicate a general attitude among Americans toward the unemployment benefits issue; if it's not their problem, why care about it?

Bear in mind also that, even in the worst of economic circumstances, unemployed Americans, including the discouraged jobless people or part-timers not officially counted in the unemployment rate, are always a minority of the population. The employed majority are usually more interested in keeping their own jobs in a recession than helping others find a job or hold on to a safety net. Indeed, Lewis noted that many people in her area are more interested in preserving the jobs they have than creating new ones with the federal stimulus money southeastern Virginia has received. And you can bet there are a lot of voters - especially independents - who worry about too much spending.

Democrats in Washington are trying to balance the budget on demand, trying to find cuts to offset emergency spending on jobless benefits so as to avoid deficit spending. Spending more money to put more people to work - building infrastructure, for example - seems to be out of the question. And the Democrats' efforts to accommodate deficit hawks may not be enough. Bottom line? What Walter Mondale said in 1984 is true today.