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Don't add Reagan's face to Mount Rushmore

April 3, 2011 12:15 am

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Presidential candidate Ronald Reagan addresses the jubilant Republican National Convention in 1980.

LOS ANGELES

--The nation recently celebrated the hundredth anniversary of Ronald Reagan's birth, but we should not forget that many of the serious problems facing America today began or worsened during Reagan's presidency.

Why not let Reagan, who died in 2004, rest in peace? Because a growing chorus of journalists, politicians, and pundits are using this milestone to rewrite history and bestow on Reagan a status as one of our greatest presidents.

That's hogwash.

During his two terms in the White House (1981-89), Reagan presided over a widening gap between the rich and everyone else; declining wages and living standards for working families; an assault on labor unions as a vehicle to lift Americans into the middle class; a dramatic increase in poverty and homelessness; and the consolidation and deregulation of the financial industry that led to the current mortgage meltdown, foreclosure epidemic, and lingering recession.

These trends were not caused by inevitable social and economic forces. They resulted from Reagan's policy and political choices based on a "You're on your own" ideology.

Reagan is often lauded as "the great communicator," but what he often communicated were lies and distortions. During his stump speeches, while promising to roll back welfare, Reagan told the story of a so-called "welfare queen" in Chicago who drove a Cadillac and had ripped off $150,000 from the government. Journalists searched for this "welfare cheat" and discovered that she didn't exist. But this phony imagery of "welfare cheats" persisted and laid the groundwork for cuts to programs for the poor.

Reagan's most famous statement--"Government is not a solution to our problem. Government is the problem"--has become the unofficial slogan for the resurgence of right-wing extremism. The rants of Glenn Beck and Rush Limbaugh, the Tea Party, the policy ideas promulgated by outfits like the Cato Institute and the Heritage Foundation masquerading as think tanks, and the takeover of the GOP by its most conservative wing were all incubated during the Reagan years.

Many Americans credit Reagan with reducing the size of government. In reality, he increased government spending, cut taxes, and turned the U.S. from creditor to debtor nation. During his presidency, Reagan escalated the military budget while slashing funds for domestic programs that assisted working-class Americans and protected consumers and the environment.

RETHINKING GOVERNMENT

Before Reagan took office, the American public was already growing more skeptical about government and politicians, exacerbated by the lies told by Lyndon Johnson about the Vietnam war, by Richard Nixon about the Watergate scandal, and then Jimmy Carter's inability to deal with rising prices and unemployment ("stagflation"). But Reagan--with his avuncular style, optimism, and plain-folks demeanor--turned government-bashing into an art form.

Accompanying the Reagan era was the rise of a corporate-funded conservative propaganda machine--including think tanks and lobby groups, endowed professorships at universities, legal advocacy organizations, magazines, and college student internships to train the next generation--designed to demonize government and glorify unregulated markets.

Reagan's fans give him credit for restoring the nation's prosperity. But whatever economic growth occurred during the Reagan years mostly benefited those already well off. The minimum wage was frozen at $3.35 an hour while prices rose, eroding the standard of living of millions of low-wage workers. The number of people living beneath the federal poverty line rose from 26.1 million in 1979 to 32.7 million in 1988. Meanwhile, by the end of the decade, the richest 1 percent of Americans had 39 percent of the nation's wealth.

After signing the Garn-St. Germain Depository Institutions Act in 1982, Reagan presided over the dramatic deregulation of the nation's savings-and-loan industry. The law allowed S&Ls to end their reliance on home mortgages and permitted banks to provide adjustable-rate mortgage loans. The S&Ls began a decade-long orgy of real estate speculation, mismanagement, and fraud. The industry indulged in a wild ride of merger mania, with banks and S&Ls gobbling each other up and making loans to finance shopping malls, golf courses, office buildings, and condo projects that had no logic other than a quick-buck profit.

When the dust settled, hundreds of S&Ls and banks had gone under, billions of dollars of commercial loans were useless, and the federal government was left to bail out depositors whose money speculators had looted to the tune of more than $130 billion.

This was just the first chapter in the slide toward today's financial crisis. Things got even worse--much worse--in the decades after Reagan left office. Both Bushes, and Clinton, took up where Reagan left off in granting banks and insurance companies permission to wreak havoc on consumers and the economy, leading to the epidemic of subprime loans and foreclosures of recent years and the federal bailout of "too big to fail" Wall Street banks.

WHAT URBAN PROBLEMS?

Reagan's indifference to urban problems was legendary. He failed to deal with the growing corruption scandal at Housing and Urban Development that resulted in the indictment and conviction of top Reagan administration officials for illegally targeting housing subsidies to politically connected developers.

Reagan didn't invent the pay-to-play game or the revolving door of top government officials becoming well-paid lobbyists and government contractors. But his hands-off attitude toward government oversight contributed to the deepening culture of corruption.

The 1980s saw pervasive racial discrimination by banks, real estate agents, and landlords, unmonitored by the Reagan administration. Community groups uncovered blatant redlining by banks. But Reagan's HUD and Department of Justice failed to prosecute or sanction banks that violated the Community Reinvestment Act, which prohibits racial discrimination in lending. Of the 40,000 applications from banks requesting permission to expand their operations, Reagan's bank regulators denied only eight on grounds of violating CRA regulations.

The declining fiscal fortunes of America's cities began during these years. By the end of his second term, federal assistance to local governments had been slashed by 60 percent. He eliminated general revenue sharing to cities, cut funding for public-service jobs and job training, almost dismantled federally funded legal services for the poor, cut the antipoverty Community Development Block Grant program, and reduced funds for public transit.

These cutbacks had a disastrous effect on cities with high levels of poverty and limited property-tax bases, many of which depended on federal aid to provide basic services. In 1980 federal dollars accounted for 22 percent of big-city budgets. By the end of Reagan's second term, federal aid was only 6 percent. The consequences were devastating to schools and libraries, hospitals and clinics, and sanitation, police, and fire departments--many of which had to shut their doors.

The most dramatic cut in domestic spending was for low-income housing subsidies. In his first year in office, Reagan cut the budget for public housing and Section 8 rent subsidies in half. Congress thwarted his plan to wipe out federal housing assistance to the poor altogether, but he got much of what he sought.

Another of Reagan's enduring legacies is the steep increase in the number of homeless people, which by the late 1980s had swollen to 600,000 on any given night--and 1.2 million over the course of a year. Many were Vietnam veterans, children, and laid-off workers.

Since his death, we've named a major airport, many schools, and many streets after Ronald Reagan. Perhaps a more fitting tribute to his legacy would be for each American city to name a park bench--where at least one homeless person sleeps every night--in his honor.

Peter Dreier is professor of politics and director of the Urban & Environmental Policy program at Occidental College. © 2011 The Nation--distributed by Agence Global





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