Quoted from here:
LETTERS FROM AN AMERICAN: Democracy Needs to Find the Will to Roar
Heather Cox Richardson, December 31, 2020 [Moyers on Democracy]
But I had a chance to talk with history podcaster Bob Crawford of the Avett Brothers yesterday, and he asked a more interesting question. He pointed out that we are now twenty years into this century, and asked what I thought were the key changes of those twenty years….
In America, the twenty years since 2000 have seen the end game of the Reagan Revolution, begun in 1980.
In that era, political leaders on the right turned against the principles that had guided the country since the 1930s, when Democratic President Franklin Delano Roosevelt guided the nation out of the Great Depression by using the government to stabilize the economy. During the Depression and World War Two, Americans of all parties had come to believe the government had a role to play in regulating the economy, providing a basic social safety net and promoting infrastructure.
But reactionary businessmen hated regulations and the taxes that leveled the playing field between employers and workers. They called for a return to the pro-business government of the 1920s, but got no traction until the 1954 Brown v. Board of Education decision, when the Supreme Court, under the former Republican governor of California, Earl Warren, unanimously declared racial segregation unconstitutional. That decision, and others that promoted civil rights, enabled opponents of the New Deal government to attract supporters by insisting that the country’s postwar government was simply redistributing tax dollars from hardworking white men to people of color.
That argument echoed the political language of the Reconstruction years, when white southerners insisted that federal efforts to enable formerly enslaved men to participate in the economy on terms equal to white men were simply a redistribution of wealth, because the agents and policies required to achieve equality would cost tax dollars and, after the Civil War, most people with property were white. This, they insisted, was “socialism.”
To oppose the socialism they insisted was taking over the East, opponents of black rights looked to the American West. They called themselves Movement Conservatives, and they celebrated the cowboy who, in their inaccurate vision, was a hardworking white man who wanted nothing of the government but to be left alone to work out his own future. In this myth, the cowboys lived in a male-dominated world, where women were either wives and mothers or sexual playthings, and people of color were savage or subordinate.
With his cowboy hat and western ranch, Reagan deliberately tapped into this mythology, as well as the racism and sexism in it, when he promised to slash taxes and regulations to free individuals from a grasping government. He promised that cutting taxes and regulations would expand the economy. As wealthy people — the “supply side” of the economy — regained control of their capital, they would invest in their businesses and provide more jobs. Everyone would make more money.
In America, the twenty years since 2000 have seen the end game of the Reagan Revolution, begun in 1980.
In that era, political leaders on the right turned against the principles that had guided the country since the 1930s, when Democratic President Franklin Delano Roosevelt guided the nation out of the Great Depression by using the government to stabilize the economy. During the Depression and World War Two, Americans of all parties had come to believe the government had a role to play in regulating the economy, providing a basic social safety net and promoting infrastructure.
But reactionary businessmen hated regulations and the taxes that leveled the playing field between employers and workers. They called for a return to the pro-business government of the 1920s, but got no traction until the 1954 Brown v. Board of Education decision, when the Supreme Court, under the former Republican governor of California, Earl Warren, unanimously declared racial segregation unconstitutional. That decision, and others that promoted civil rights, enabled opponents of the New Deal government to attract supporters by insisting that the country’s postwar government was simply redistributing tax dollars from hardworking white men to people of color.
That argument echoed the political language of the Reconstruction years, when white southerners insisted that federal efforts to enable formerly enslaved men to participate in the economy on terms equal to white men were simply a redistribution of wealth, because the agents and policies required to achieve equality would cost tax dollars and, after the Civil War, most people with property were white. This, they insisted, was “socialism.”
To oppose the socialism they insisted was taking over the East, opponents of black rights looked to the American West. They called themselves Movement Conservatives, and they celebrated the cowboy who, in their inaccurate vision, was a hardworking white man who wanted nothing of the government but to be left alone to work out his own future. In this myth, the cowboys lived in a male-dominated world, where women were either wives and mothers or sexual playthings, and people of color were savage or subordinate.
With his cowboy hat and western ranch, Reagan deliberately tapped into this mythology, as well as the racism and sexism in it, when he promised to slash taxes and regulations to free individuals from a grasping government. He promised that cutting taxes and regulations would expand the economy. As wealthy people — the “supply side” of the economy — regained control of their capital, they would invest in their businesses and provide more jobs. Everyone would make more money.
The opposite of the “supply side” is the “demand side,” which was a major issue in the 1930s through 1950s. Coming out of the First Great Depression was recognition by all except conservatives and rich reactionaries that the underlying cause of the Depression had been the failure to fairly distribute income, and hence buying power: working people simply were not being paid enough for them to purchase all that could be produced. Franklin Roosevelt’s Federal Reserve chairman from 1934 to 1948, Marriner S. Eccles, explained in his memoir, Beckoning Frontiers (New York, Alfred A. Knopf, 1951):
”As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nation’s economic machinery. Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants.
The most progressive and militant labor unions, led by the Congress of Industrial Organization (CIO), framed this demand side issue as “under-consumption.” The most militant union, the United Auto Workers (UAW) — led by Walter Reuther, probably the greatest union leader in American history — began its November 1945 strike against General Motors by demanding a 30-cent an hour wage under the slogan, “Purchasing Power for Prosperity.”
Focusing national economic policy on the demand side — the purchasing power earned by the nation’s workers — instead of the supply side of how much money rich investors have to “trickle down” to the masses below, is firmly in the uniquely American economics tradition of the Doctrine of High Wages, which has been written out of mainstream economics.
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