Reagan's mean-spirited legacy of economic disaster

by: Paul Rosenberg

Tue Feb 01, 2011 at 09:00

As we approach the centenial of Reagan's birth, conservatives are whipping up the country into a frenzy of addled adulation.  It's time for a bit of a reality check. Yesterday, in my diary, "History repeating itself ", I briefly touched on the fact that the fall of the Soviet Union--which he is widely credited for--was not only a surprise to Reagan's CIA, it was arguably delayed by his war-like posture strengthening Soviet hardliners, which in turn was premised on the baseless neocon fantasy that the Soviets were militarily superior to us when Reagan took office.  That's an area in which there are some very clear-cut facts and some things that are more debatable.

But when it comes to Reagan's economic legacy, the record is crystal clear:  Before Reagan, we were on a path on reducing our debt-to-GDP ratio, the most fundamental measure of national fiscal responsibility.  With him, we began using irresponsible increases in the debt-to-GDP ratio to produce extremely skewed economic growth targeted narrowly toward the very top of the income ladder. The so-called "Reagan miracle" is a complete and utter myth, as one can see from these simple comparisons of basic economic growth statistics.  As one can readily see, the 1970s were a troubled decade compared to the 1960s, but we still managed to keep reducting our debt-to-GDP ratio.  Then Reagan came along, and gave us a junk-food "cure" that was only marginally better in terms of GDP growth and income growth for the bottom 99%, was actually worse in terms of job creation, and showered the top 1% with wealth--at the very time that their taxes were being slashed as never before:

Reagan's policies--modified slightly under Clinton, and put on steroids under GW Bush--are the root cause of the economic distress we are experiencing today.  And the newsletter Too Much has the goods on the root of Reagan's selfishness that helped lead our nation astray economically:

The Tax that Turned Ronald Reagan Right
With the centennial of our 40th President's birth fast approaching, how about a shout-out for the soak-the-rich tax rates that he so despised - and more civic-minded Hollywood stars so enthusiastically embraced.

Did Ronald Reagan change history? Well, we all change history in our own way. The more interesting question: What changed Ronald Reagan?

What changed the labor advocate - with enough street cred to get elected president of Hollywood's actors union - into a labor basher extraordinaire? What turned Reagan the standard-issue New Deal Democrat into the 20th century's premiere pusher for almost entirely unrestrained "free enterprise"?

The answer? According to Reagan himself, the federal income tax - specifically the over 90 percent top rate on top-bracket income that went into effect during World War II - changed Ronald Reagan. That tax levy absolutely incensed the amiable actor.

At his Hollywood height, actor Ronnie Reagan was making $400,000 per picture. With the top federal tax rate over 90 percent, Reagan used to tell his White House chief of staff Donald Regan, he always chose to "loaf" around rather than make more than two pictures a year.

"Why should I have done a third picture, even if it was Gone with the Wind?" Regan remembers Reagan asking. "What good would it have done me?"

Actually, instead of griping about his tax bill, the World War II-era Ronnie Reagan should have been counting his lucky tax stars. Things could have turned out much worse for Reagan - and the rest of America's high-income set - if Congress had let President Franklin D. Roosevelt have his way.

In April 1942, just a few months after Pearl Harbor, Roosevelt asked Congress to enact a 100 percent top federal income tax rate, in effect a "maximum wage." No individual, FDR told lawmakers, should be taking home, after taxes, over $25,000 - the equivalent of about $335,000 today.

FDR's call for a $25,000 personal income limit struck millions of patriotic Americans as right on the mark. A Gallup poll, in late 1942, found 47 percent of Americans supporting the notion of an income limit and only 38 percent in opposition. And the supporters of FDR's $25,000 cap even included some of Ronnie Reagan's fellow Hollywood stars.

"I regret," the widely admired Ann Sheridan told reporters, "that I have only one salary to give for my country." ....

Paul Rosenberg :: Reagan's mean-spirited legacy of economic disaster

Sheridan was following in the footsteps of an even more widely admired film star, Carole Lombard. In 1937, notes film historian Eric Hoyt, Lombard paid over $300,000 in federal taxes on $465,000 in income.

"I was glad to do it, too," she told reporters. "Income tax money all goes into improvement and protection of the country."

No other news item, the New Yorker magazine would later relate, probably "ever did so much to increase the popularity of a star."

Most of America's highest income-earners, predictably enough, didn't share either Lombard's or Sheridan's sentiments. They howled in protest at FDR's 1942 income cap proposal, and Congress felt their pain - but only to an extent. Lawmakers didn't buy FDR's 100 percent top rate, but they came close.

America's rich would end the war years facing a 94 percent tax rate on income over $200,000.

America's rich would see, after World War II, only limited relief from that 94 percent top rate. In 1948, over President Harry Truman's veto, the GOP-controlled Congress did drop the top tax rate down to 82 percent. But the top rate would jump back over 90 percent during the Korean War, and the top rate would sit fixed - at 91 percent - straight through the 1950s.

Not until 1964 did that top rate start dipping, down to 70 percent. In 1981, the newly elected President Ronald Reagan would make gutting that 70 percent rate his first major White House priority. By 1986, after two Reagan tax cuts, the top rate on the top income bracket had shrunk to a mere 28 percent.

Actor Ronnie Reagan had won. Never again would a B-movie star have to stew about lost windfalls. Unfortunately, never again - in our modern age - would America have an effective check on the accumulation of grand private fortunes.

In the middle decades of the 20th century, the steeply graduated progressive income tax that actor Ronald Reagan so detested operated marvelously well as just that sort of check. America's super rich - our top tenth of 1 percent - saw their share of the nation's income drop precipitously in those years, from nearly 12 percent before the Great Depression to under 3 percent by the 1970s.

The top 0.1 percent share in 2007, right before the Great Recession? Over 12 percent. The rich, in other words, have come all the way back - and more.

And average Americans? After enjoying historic levels of middle-class prosperity in the tax-the-rich mid-20th century, they've been treading water ever since.

And Carole Lombard, the Hollywood star who welcomed the high taxes on high incomes that Ronald Reagan so abhorred, whatever happened to her?

Lombard died in a tragic January 1942 plane crash, on her way back to Hollywood from a war bond rally in her native Indiana. She never had a chance, in all the subsequent tax-the-rich political battles, to stare Ronnie Reagan down. Too bad. Now that might have really changed history.

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In other words (4.00 / 2)
what made Reagan a conservative was that

1) He was lazy

2) He was selfish

3) He got rich

4) Therefore it was in his lazy, selfish best interest to be a conservative.

Educate, Agitate, Organize, Mobilize, Act!

He Was Also Corrupt (4.00 / 1)
But that's for another post.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Reagan (4.00 / 1)
Reagan's bullshit anecdotal memory of his supposedly high tax bracket makes me ill.  

When he was whining about all the taxes he was sending to the federal government, many  were getting shot at by Nazis and Japanese in faraway places while making less than $75/mo.

So Reagan and his ilk can suck it.

So 1 in 9 dollars of income go to the wealthy (4.00 / 3)
What do they do to add value to society in exchange for that payoff? The decide who they are going to buy with their "investments" - their wealth. They do almost nothing themselves of any value, but they get to promote or prevent others from acting. These decisions are quite authoritarian and capricious in nature.

For this they "own" great wealth, wealth that is both defined and protected by the very government they refuse to pay for.

Don't get me wrong. There are some wealthy people who feel guilt at their uselessness, so they go out and perform good deeds. Of course, their behavior is so rare that they make a great deal of news.  

REAGAN FIRSTS (4.00 / 1)
RONALD REAGAN RECORDS AS FIRST---------------------------

  (Peggy Noonan pay attention)

1.First to turn America into a DEBTOR nation in Peacetime
2. First to increase DEBT faster  than growth of national income in eight years
3. First to increase DEBT faster  than growth of  gdp over eight years
4. First to double the deficit in just eight years
5. First to "almost": triple the national DEBT in just eight years
6. First to increase SPENDING by 80%--over  8 years.
7. First to SPEND more in eight years than was spent in prior 50 years.
8. First to have  "real"   INTEREST RATES of  8% after averaging 1% over 35 years.
9. First to keep PRIME INTEREST RATES at 20%.
10.First to over value the dollar to the yen at rate of 262 yen  to 1 dollar.
11.First to have served as Governor and increase STATE SPENDING by 112%
12.First to have HOME LOAN INTEREST RATES as high as 16%
13. First to CUT TAXES by 60% for his rich pals
14. First to allow the SAVINGS AND LOAN INDUSTRY to be raided after signing a deregulatory bill and proclaiming "I think we have hit  the jackpot". Come and get it the vaults are unguarded.
15. First to deal with   TERRORISTS
16. First to send an AUTOGRAPHED BIBLE to a man he called "The Satan of Terrorists".
17. First to have an ADMIRAL plead the Fifth Amendment.
18. First to have a stealing, lying, gutless wife abusing MARINE LT. COLONEL plead the Fifth Amendment.
19. First to have a "sitting" CABINET MEMBER INDICTED
23. First to have more members of his administration charged with crimes than  CUMULATIVE TOTAL OF ALL OTHER  PRESIDENTS in the twentieth century
24. First to set a record for the LARGEST ONE DAY PERCENTAGE DECLINE in the DOW in history. 10-19-87
25. First to have over $10,000,000  INCREASE IN WEALTH from serving for 8 years as president.
26. First to testify "under oath" 130 times that "I DON'T REMEMBER" .
27. First to have an Admiral with a photographic memory testify 128 times " I DON'T REMEMBER".
28. First to undergo BRAIN SURGERY a few months after leaving office. No pain no gain.
29. First to, repeatedly, FALSIFY HIS WIFE'S AGE. As tho anyone cared.
30. First to  promote his religious faith and never have an ACTIVE CHURCH MEMBERSHIP.
31. First to rarely use the term JESUS CHRIST  in  speeches.
32. First to seek GUIDANCE FROM THE STARS not from God
33. First to have had a SHOTGUN WEDDING.
34. First to have worked as a lead-on in  Las Vegas.
35. First to call a Stealing, Lying, Psychotic, wife abusing Marine a "LIAR.
36. First to have been OPENLY ALIENATED from his children.
37. First to have served with ALZHEIMERS
38. First to have UNEMPLOYMENT AT 10.8% since great depression.
39. First to attack a small unprotected nation with 88,000 inhabitants and 10,000 bb guns then PROCLAIM -"America stands tall again"- "we have whipped the Vietnam Syndrome"-we have defeated communism". Gosh! What if we had whipped Cyprus?.
43. #1-In Percent increase in PERSONAL BANKRUPTCIES
44. #1-In recorded MISSTATEMENTS
45. #1-In never having a single press conference in which he did not make at least one or more  INCORRECT  STATEMENTS.
46. #1-In needing a staff person standby during press conferences to tell  the press "WHAT HE REALLY MEANT".
47. #1-In having SERVICEMEN KILLED during  peacetime.
48. #1-In largest DROP IN POPULARITY in one week.
49. #1-In being first to HONOR NAZI STORM TROOPERS by calling them" Innocent Victims"
50. #1-In being first to be labeled "BRAIN DEAD AFFABLE DUNCE' by this writer.
51. First to lie-over and over-to reporters "I DO NOT DYE MY HAIR my barber uses a special shampoo"
52. First to have a wife who "forced" him to WEAR THREE SUITS in one day
53. First to boast "Not bad for a DUMB GUY who worked only 20 hours per week".
54. First to have his wife sit nearby and WHISPER ANSWERS to questions
55. First to FALL ASLEEP while the Pope spoke
56. First to invite the Pope to visit the White House and "BRING THE WIFE AND KIDS"
57. First to have his press secretary remove him from the microphone because he could not answer questions. Then, as the reporter  
yelled out  "answer my question" he replied "MY HANDLERS WON'T LET ME SPEAK". Quick get the white coat.
58. First 20th Century president to have historians RATE HIM BELOW every president of the 20th except for Richard Nixon. 1994   Poll.
59. First to give us a First Lady with a past reputation for giving the BEST BJ in Hollywood.
60. First to suggest his eldest son undergo PSYCHIATRIC examination
61. First to have been voted in British polls (twice) as the "MOST FEARED LEADER IN THE WORLD" sic em Rambo.

62. First to serve as Governor on a "conservative" platform and  INCREASE SPENDING BY 112%.
63. First Governor TO INCREASE personal income taxes by 60%, tax increase on cigarettes by 200%, state tax collections by 152%.
64. First Californian Governor to INCREASE TAXES BY ONE BILLION in one year.1967.
65. First to have a Special Assistant say on national TV  "sometimes you had to HIT HIM ON THE HEAD with a 2 x 4 to get his attention"
66. First to have his official biographer state on national TV  'After he was shot in 1981he GOT SLOWER AND SLOWER  EACH  YEAR. His speech got slower.  He deliberated more and he hesitated more when he spoke. He lost his physical quickness and would not make decisions on the spot. It was a very, very slow and steady mental and physical decline".
67. First to have a  POPULARITY RATING OF ONLY 35% after his first two years in office.
68. First president to have been DIVORCED
69. First president to have the Geriatrics Department of a major
     university  study his behavior and conclude that  AFTER THREE YEARS IN OFFICE HE HAD ALZHEIMERS.
70. First president to have been known to, before presidency, SHACK UP with the love of his life while his wife was in the hospital giving birth to their first child.
71. First president to have applied for PERMANENT DEFERMENT from the Draft.
72. First to increase CORPORATE TAX RATE from 46% to 51% in 1986.
73. First to replace strict regulator volcker with non regulator greenspan and create recessions in 1991-1992-1992-2007-2008-2009 plus big market crash 10-19-07
74. First to Tax Social Security Benefits-50% of income in 1984-big tax hater???
75. First to whup Soviet single handed-read debunking of myth in book-"Way out there in the Blue: "Reagan, Star Wars, and the end of the Cold War" by Frances Fitzgerald 2000
76. First to talk tough and one of first acts in office was to lift Carter sanctions on the evil empire which was still in Afghanistan.. Sic em Rambotongue.

------------------------------------ THE TRUTH SHALL SET YOU FREE----------------------

I ask only prove me wrong-I will correct

Clintonomics vs Reaganomics
Comparing Democrat's hero-CLINTON-versus Republican's hero--REAGAN
1.JOBS-grew by 43% more under Clinton.
2.GDP---grew by 57% more under Clinton.
3.DOW-grew by 700% more under Clinton..
4.NASDAQ-grew by 18 times as much under Clinton.
5.SPENDING--grew by 28% under Clinton---80% under Reagan.
6.DEBT-grew by 43% under Clinton-187% under Reagan.--Debt as percent of GDP--Public Debt as Percent GDP--Clinton-49.% in 1993---33.% in 2001--A cut of 32% Reagan-25% in 1981---40.% in 1989--An increase of 60%--
7 DEFICITS-Clinton got a large surplus--grew by 112% under Reagan.
8.NATIONAL INCOME-grew by100% more under Clinton.
9.PERSONAL INCOME-Grew by 110% more under Clinton.
SOURCES-Bureau of Labor Statistics (www.BLS.Gov )--Economic Policy Institute ( & World Almanacs from 1980 to 2003 (annual issues) (chart taken from NY Times)
National Archives History on Presidents.
LA Times 10-11-00 on Market--www.Find
A vote for a Republican is a vote for Less Success.
A vote to reduce the Standard of Living for all Americans.

Reagan used his "power of the people to do harm". (4.00 / 1)
He was a morally depraved individual hiding behind a phony hollywood made up persona. He was "the gipper". NOT! Hell is too good for him, Clinton should be scrubbing floors with all those he impoverished with NAFTS, AAFTA, GRAFTA  and W belongs is jail for war crimes. What have we wrought??


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