Wednesday, September 7, 2011

Robert Reich's Muddied Tale about Republican Government Expansion

Check  out this Reich overview:
In the late 1950s and 1960s, the Republican Party had a brief flirtation with the twentieth century. Mark Hatfield of Oregon, Jacob Javits and Nelson Rockefeller of New York, Margaret Chase Smith of Maine, and presidents Dwight Eisenhower and Richard Nixon lent their support to such leftist adventures as Medicare and a clean environment. Eisenhower pushed for the greatest public-works project in the history of the United States — the National Defense Highway Act, which linked the nation with four-lane (and occasionally six-lane) Interstate highways. The GOP also supported a large expansion of federally-supported higher education. And to many Republicans at the time, a marginal income tax rate of more than 70 percent on top incomes was not repugnant.
It's true that there were many big government types in the Republican Party in the 1950s and 1960s, but by omission Reich fails to point out that government expansion continued even under Ronald Reagan.

Ron Paul  set the record straight about the Reagan years out in a letter he wrote when he left the Republican Party for a period, a letter that the Rick Perry campaign is now waving in front of the media. Ron Paul wrote in part:
In 1976 I was impressed with Ronald Reagan’s program and was one of the four members of Congress who endorsed his candidacy.  In 1980, unlike other Republican office holders in Texas, I again supported our President in his efforts.

Since 1981, however, I have gradually and steadily grown weary of the Republican Party’s efforts to reduce the size of the federal government. Since then Ronald Reagan and the Republican Party have given us skyrocketing deficits, and astoundingly a doubled national debt.  How is it that the party of balanced budgets, with control of the White House and Senate, accumulated red ink greater than all previous administrations put together?  Tip O’Neill, although part of the problem, cannot alone be blamed.

Tax revenues are up 59 percent since 1980. Because of our economic growth?  No.  During Carter’s four years, we had growth of 37.2 percent; Reagan’s five years have given us 30.7 percent.  The new revenues are due to four giant Republican tax increases since 1981.

All republicans rightly chastised Carter for his $38 billion deficit. But they ignore or even defend deficits of $220 billion, as government spending has grown 10.4 percent per year since Reagan took office, while the federal payroll has zoomed by a quarter of a million bureaucrats.

Despite the Supply-Sider-Keynesian claim that “deficits don’t matter,” the debt presents a grave threat to our country.  Thanks to the President and Republican Party, we have lost the chance to reduce the deficit and the spending in a non-crisis fashion.  Even worse, big government has been legitimized in a way the Democrats never could have accomplished.  It was tragic to listen to Ronald Reagan on the 1986 campaign trail bragging about his high spending on farm subsidies, welfare, warfare, etc., in his futile effort to hold on to control of the Senate.

Instead of cutting some of the immeasurable waste in the Department of Defense, it has gotten worse, with the inevitable result that we are less secure today.  Reagan’s foreign aid expenditures exceed Eisenhower’s, Kennedy’s, Johnson’s, Nixon’s, Ford’s, and Carter’s put together.  Foreign intervention has exploded since 1980.  Only an end to military welfare for foreign governments plus a curtailment of our unconstitutional commitments abroad will enable us really to defend ourselves and solve our financial problems.

Amidst the failure of the Gramm-Rudman gimmick, we hear the President and the Republican Party call for a balanced-budget amendment and a line-item veto.  This is only a smokescreen.  President Reagan, as governor of California, had a line-item veto and virtually never used it.  As President he has failed to exercise his constitutional responsibility to veto spending. Instead, he has encouraged it.

Monetary policy has been disastrous as well.  The five Reagan appointees to the Federal Reserve Board have advocated even faster monetary inflation than Chairman Volcker, and this is the fourth straight year of double-digit increases.  The chickens have yet to come home to roost, but they will, and America will suffer from a Reaganomics that is nothing but warmed-over Keynesianism.

Candidate Reagan in 1980 correctly opposed draft registration.  Yet when he had the chance to abolish it, he reneged, as he did on his pledge to abolish the Departments of Education and Energy, or to work against abortion.

Under the guise of attacking drug use and money laundering, the Republican Administration has systematically attacked personal and financial privacy.  The effect has been to victimize innocent Americans who wish to conduct their private lives without government snooping.  (Should people really be put on a suspected drug dealer list because they transfer $3,000 at one time?)  Reagan’s urine testing of Americans without probable cause is a clear violation of our civil liberties, as are his proposals for extensive “lie detector” tests.

Under Reagan, the IRS has grown bigger, richer, more powerful, and more arrogant.  In the words of the founders of our country, our government has “sent hither swarms” of tax gatherers “to harass our people and eat out their substance.”  His officers jailed the innocent George Hansen, with the President refusing to pardon a great American whose only crime was to defend the Constitution. Reagan’s new tax “reform” gives even more power to the IRS.  Far from making taxes fairer or simpler, it deceitfully raises more revenue for the government to waste.

Knowing this administration’s record, I wasn’t surprised by its Libyan disinformation campaign, Israeli-Iranian arms-for-hostages swap, or illegal funding of the Contras.  All this has contributed to my disenchantment with the Republican Party.
Reich discusses 1950s and 1960s Republican interventionist views but ignores Reagan and Bush government expansionism because he wants to paint a misleading view that the current economic problems are because of laissez faire programs adopted by Reagan and expanded by the George W. Bush, and that will take an even more  extreme form if  Tea Party supporters gain power. The facts are different. As we all know, under the Bush administrations, government expanded dramatically both domestically and in foreign adventures. Ron Paul's letter describes exactly what was going on during the Reagan years.

Reich wants to muddy the waters about this period and create the belief that the current economic crises are a result of free markets. They are nothing of the kind. They are largely the result of central bank money manipulations, which have gone on during both Republican and Democratic administrations.

Reich expansionist programs are more of the same. Nothing new, but he needs to make them sound new and direct attention from the Ron Paul views  that are truly limited government views.

As Ron Paul's 1987 letter makes clear, Reich and Reagan are on the same team, and it is only Dr. Paul that would like to see a real alternative.


  1. Anyone who wants a good inside picture of Reagan's administration should read David Stockman's The Triumph of Politics: The Inside Story of the Reagan Revolution. You have to look past Stockman's obvious anger at his treatment as Chairman of OMB, but it's an excellent insider's view.

    I was frustrated with Reagan's administration. In 1988, I read Stockman's book, and I knew what I was reading was true because it explained precisely the public versions of the events I'd seen that frustrated me so much. The day after finishing Stockman's book, I registered Libertarian (and voted for Ron Paul) and remained so until I reregistered Republican in 2008 to vote for Ron Paul.

  2. Fancy that!!! rich elitist republicans of the 50s and 60s finding things in the New Deal/Great Society Plans created by rich elitist democrats, that they liked.

  3. When I became an Austrian in 1973, the work had already been done by Rothbard and others showing that the "robber barrons" did not support laissez faire, that "progressive" legislation was pushed by the super rich and that Hoover was not a laissez faire guy. This was all well known and understood in libertarian circles. Nevertheless, we still get the same phony statist narratives that Reagan and Dubya were "market fundamentalists" just like the current Republicans in the house.

    Lies and phony historical narratives are all that the "progressives" have left (or ever had in the first place).

  4. per Greenspan's book Kissinger met with Reagan and gave him an offer he couldn't refuse "pick George Bush former CIA head as your VP or else".

    Reagan did as he was told, but he got shot anyway thanks to long time Bush supporters(the Hinckley's).

  5. Reich is almost as bad a historian as he is an economist. From Teddy Roosevelt to FDR, ALL Repubican nominees were progressive Republicans except for Calvin Coolidge who was Harding's VP and inherited the office when Harding died. Liberal historians like to classify the failed Republican progressives as conservatives, but Hoover proudly called himself a progressive. After FDR, Republicans continued to nominate liberal candidates in Alf Landon, Wendell Willkie, and Tom Dewey. The conservative leader of that day, Senator Robert Taft of Ohio, failed to win the nomination even once although he did come very close to beating Eisenhower in 1952.

    So this "brief period" of Republican sensibleness that Reich claims was decidedly the rule, not the exception. Conservatives did succeed in nominating Goldwater, but that was followed by Nixon/Ford.

    Reagan's victory, insofar as even it can be classified as conservative, is still a spit in the ocean, and was followed by the first Bush, and Eastern Establishment liberal from the very beginning of his career, and the second Bush who became a bigger spender than any Democrat except LBJ.

    Of this crew Taft, Goldwater, and Reagan were the only ones who even gave lip service to free market principles.