How Reaganism/Corporatism Became Enshrined As Our Core Federal Economic Policy

[Yavin4]

Leaders of BOTH major political parties still believe in Reaganism/Corporatism, which is simply that the powers of the federal government, through taxation and regulation, should be used to help the rich and the powerful. Then, in turn, the powerful and the rich will employ the people and provide them with goods and services at reasonable prices. In addition, if the powers of the federal government are used to directly assist people, then that creates dependencies through entitlements which will lead soaring budget deficits.

This is why we've seen entire industries like the finance and telecommunications deregulated and allowed to merge, but rules making it easier to unionize have been stalled. This is why we've seen the top tax rate drop from 70% to 36%, but welfare has been reformed. This is why we saw hikes in the payroll tax, and cuts in the capital gains tax. This is why we saw cheap labor nations like China be given free access to the U.S. market with any compensating programs for job re-training. The list goes on and on.

But how did we get here? The simple answer is staring you right in the face as you read this post, the dawn of the Information Technology age. Before Reagan, the U.S. economy was in a decade long economic slump, which at the time was the worst economic decade since the 1930s. We had soaring unemployment, soaring inflation, an energy crisis, and an ugly end to the war in Vietnam. We had three failed presidencies in a row, Nixon, Ford, and Carter. The first two years of Reagan, little had changed. In fact, it got much, much worse, even though Reagan was able to pass his so called economic reforms into law.

By 1983, the economy started to turn around. What did it? It was the introduction of the personal computing age. When Reagan was inaugurated in 1981, the majority of businesses in America still used typewriters as their primary business tool, by the end of the Reagan term, that had changed to personal computing and then network computing. This lone innovation created entirely new categories of jobs that had not existed before, such as application developers, trainers, network techs, database administrators, etc.

By 1990, the economic boost given by tech had started to ebb, and the economy slipped back into recession. This lead to the election of Bill Clinton in 1992, but by then, Reaganism/Corporatism had been established as the primary federal economic policy. Clinton presented himself as a new Democrat, and he proved it by railing against welfare in his stump speeches. In his first year in office, Clinton attacked the deficit instead of reversing Reaganism/Corporatism, and he reformed welfare by eliminating it as a federal entitlement.

Later in the 90s, once again, Information Technology buoyed Reaganism/Corporatism. The ability of personal computers to share information with computers on other networks, the internet, gave rise to new technologies, new corporations, new jobs, etc., and the economy exploded. However, it was seen by the dullard political class credited Reaganism/Corporatism with economic growth, and not the real hero, innovations in personal computing.

In this past decade, Bush II ratcheted up Reaganism/Corporatism, with huge tax breaks and more deregulation, but the economy under him soured greatly. Why? There were no new dramatic innovations in personal computing. No new industries, no new companies, no new jobs. The mantra of tech companies became less and less about innovation, and became more and more about controlling costs and protecting the share price. With less Americans working and developing technical skills, there's less innovation in technology.

In sum, our current political leadership totally mis-read the economic progress of the 80s and the 90s as the Return on Investment of Reaganism/Corporatism when instead, it should have been read as the decades where huge leaps in personal computing innovation opened up entire new sectors of the economy.

[grassfed]

1. SNOWCRASH by Neal Stephenson

The story begins and ends in Los Angeles, which is no longer part of what is left of the United States, during the early 21st century. In this hypothetical future reality the federal government of the United States has ceded most of its power to private organizations and entrepreneurs. Franchising, individual sovereignty and private vehicles reign (along with drug trafficking, violent crime, and traffic congestion). Mercenary armies compete for national defense contracts while private security guards preserve the peace in gated, sovereign housing developments. Highway companies compete to attract drivers to their roads rather than the competitors', and all mail delivery is by hired courier. The remnants of government maintain authority only in isolated compounds where they transact tedious make-work that is, by and large, irrelevant to the dynamic society around them.

Much of the territory ceded by the government has been carved up into sovereign enclaves, each run by its own big business franchise (such as "Mr. Lee's Greater Hong Kong") or the various residential burbclaves (suburban enclaves). This arrangement resembles anarcho-capitalism, a theme Stephenson carries over to his next novel The Diamond Age. Hyperinflation has devalued the dollar to the extent that trillion dollar bills — Ed Meeses — are nearly disregarded and the quadrillion dollar note — the Gipper — is the standard 'small' bill. For physical transactions people resort to alternative, non-hyperinflated currencies such as yen or "Kongbucks" (the official currency of Mr. Lee's Greater Hong Kong).

SNowcrash (1992)
http://en.wikipedia.org/wiki/Snow_Crash

[Democrats_win]

2. I also look at the bottom line: jobs created.

The 70s still had quite a few jobs created--many more than the "naughties." The ninties had a massive numer of jobs created. Yet it is true that the return on investment is such a massive philosophical driver in our economy. If a company can't make big profits, they close. We all lose because worthwhile businesses that make smaller profits are shut down. This is contrary to the claim of the GOP that this consumer economy gives us so many choices. It gives us fewer choices in many instances.

[Yavin4]

3. In the 70s, The Federal Govt Was Not Practising Corporatism

The government created a ton of jobs in the 70s.