By Harold Meyerson
The New York Times
10 June 2004
Ronald Reagan changed America, and -- with all due deference to his dedication to principle, his indomitable spirit, his affability -- not for the better.
Historians will argue how much credit Reagan deserves for the ratcheting down of the Cold War and the collapse of the Soviet Union. By any measure he surely merits some, even if he spent the better part of his presidency ratcheting the Cold War up.
But however much Reagan helped wind down the Cold War abroad, he absolutely revived class war here at home. Slashing taxes on the rich, refusing to raise the minimum wage and declaring war on unions by firing air traffic controllers during their 1981 strike, Reagan took aim at the New Deal's proudest creation: a secure and decently paid working class. Broadly shared prosperity was out; plutocracy was dug up from the boneyard of bad ideas. The share of the nation's wealth held by the wealthiest 1 percent of Americans rose by 5 percent during Reagan's presidency, while virtually everyone else's declined.
You need look no further than the current recovery to see Reagan's lasting effect on our economy. Corporate profits have been rising handsomely for the past couple of years, at roughly a 30 percent annual rate. But over two years into the recovery, wages are limping along at roughly the rate of inflation, gaining 1 to 2 percent annually. With the percentage of American workers who belong to unions -- 12 percent overall and just 8 percent in the private sector -- having sunk to its lowest level since before FDR, is it any wonder that wages are stuck?
Roughly a quarter of American workers belonged to unions when Reagan took office. When he broke the PATCO strike, it was an unambiguous signal that employers need feel little or no obligation to their workers, and employers got that message loud and clear -- illegally firing workers who sought to unionize, replacing permanent employees who could collect benefits with temps who could not, shipping factories and jobs abroad. Reagan may have preached traditional values, but loyalty was not one of them.
In his efforts to return capitalism to its previously unlamented Hobbesian past, Reagan had plenty of company. His helpmeet Maggie Thatcher made similar changes on her side of the pond. Throughout the advanced capitalist nations, the power of workers weakened as the old industrial economies ceased to expand and global investment began to outrun the constraints of the state. But nowhere was the force of investment stronger and the force of labor weaker than in the United States. The explosion of the trade deficit, no less than the budget deficit, dates to Reagan's morning in America.
Reaganomics reflected the rise of Sunbelt capitalism -- of right-to-work-state businessmen who, unlike their Northern counterparts, had never cottoned at all to unions or regulations. From Reagan's dictum that government is the problem to Tom DeLay's equation of the Environmental Protection Agency with the Gestapo, the idea that there are higher purposes than private profit, or gainful pest extermination, has been banished from modern Republicanism. And though Reaganomics may have begun in the backwaters of American capitalism, it soon spread to Wall Street, which has rewarded our current Reaganaut, George W. Bush, with more money for his campaign than any other sector. Scrap the taxes on dividends, and that musty financial oversight, and watch finance become the political clone of the oil bidness.
By letting business be business in its pre-New Deal mold -- free to speculate and shed longtime employees -- Reagan and his acolytes not only transformed the classic Northeastern capitalists. They also drove from their ranks the Willkie-Eisenhower-Rockefeller-Nixon Republicans who were the traditional GOP's political tribunes. In this the Reaganites succeeded all too well.
Reagan didn't mean to destroy the moderate wing of Republicanism per se, or to root the party in Southern states exclusively. To be sure, his primary opponents in 1968, 1976 and 1980 -- Nelson Rockefeller, Richard Nixon, Gerald Ford, the senior Bush -- were moderates against whom he ran up big vote totals in the South. But each time Reagan selected a vice president -- in 1976 he announced he'd pick liberal Pennsylvania senator Richard Schweiker if he won the nomination; in 1980, he picked George H.W. Bush -- he went with pillars of the Northeastern GOP establishment.
By the time George W. Bush chose his fellow Houstonian Dick Cheney as his running mate, though, the Republicans had no Northeastern establishment remaining. Progressives had been banished; the socially tolerant had fled. Bush heads a party in which recent national leaders -- most certainly the trifecta of Newt Gingrich, Trent Lott and Tom DeLay -- are Southern right-wingers contemptuous of the traditions of both Roosevelts and not too crazy about the civil rights revolution of the '60s, either. Today's party narrowly clings to power in every branch of government, but it refuses to govern with, or listen to, anyone outside its ever-smaller tent. The post-Reagan Republicans have now shrunk to the party of culture war as well as class war -- to the nation's general woe.