Let the GOP keep fawning, swooning and squirting all over this dark era of the American economy. I always remember my first home purchase in 1986 with 13.875% interest. The Reagan years were a nightmare for the non-wealthy and should be laid to rest once and for all.
Washington, it seems, is still ruled by Reaganism — by an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good.
Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming.
Let’s talk for a moment about why the age of Reagan should be over.
First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the “magic of the marketplace” were supposed to lead to dramatically better outcomes for everyone? Well, it didn’t happen.
To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years.
Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.
And then there’s the small matter of the worst recession since the 1930s.
There’s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis — and the crisis came.
“We have always known that heedless self-interest was bad morals,” said Franklin Delano Roosevelt in 1937. “We know now that it is bad economics.” And last year we learned that lesson all over again.Or did we? The astonishing thing about the current political scene is the extent to which nothing has changed.
As Krugman points out, the Reagan mindset of letting the marketplace take care of everything continues in the health care "discussion." Our brilliant lawmakers still seem to believe the outcome will be different.
Just stop it. Reaganism died while Reagan was president. Let it go.