Reaganomics Celebrates 43 Years of Making the USA Worse
Last year, the only post on this site was one explaining how free market economics were the cause of the high gas prices and inflation that has dominated the news cycle. So far in 2023, the biggest news story in the US in my opinion has been the derailment of a train carrying dangerous chemicals in East Palestine, Ohio in early February. This is once again a problem whose cause lies entirely at the feet of the free market system and everyone who upholds it, meaning 2023 has already locked itself in as the 43rd straight year that the free market system has made the United States a worse country. We’ll address why free market economics are to blame, but first must set the table for how we got here.
Free market ideology – also called laissez-faire, Reaganomics, trickle-down economics, and horse-and-sparrow economics – is a set of economic beliefs that includes low taxes (primarily on the wealthy), little government intervention through regulations of industry, free trade agreements with other countries, low minimum wage, and opposition to labor unions. Once upon a time in the United States, during the late 19th century, these were the default policies. This was a time in which the wealthiest individuals were extremely powerful while the average worker struggled. Things were so bad for workers in this time that there was a series of deadly labor strikes and subsequent battles fought between workers and the capitalists, police, and US military, all to simply achieve safe working conditions.
When left to their own devices, as the free market intends, capitalists and corporations treat their workers so poorly, the workers would rather die than continue to work under the free market.
The US got a short reprise from the free market under Teddy Roosevelt, Taft, and Wilson, whose three presidencies led up to the start of the “Roaring” 1920’s. Unfortunately, during the 20’s, Presidents Harding, Coolidge, and Hoover returned the US to mostly laissez-faire economics. In 1924, Coolidge signed a new tax bill that implemented “scientific taxation” – the claim that lowering taxes will increase tax revenue by stimulating growth in the economy. Time has shown this claim to be a lie, which shouldn’t be a surprise considering it came from Andrew Mellon, a capitalist so wealthy his name is now half of one of the top universities in the US. His obvious incentive was to do whatever allows wealthy people to become more wealthy, not to help the average citizen. Despite this, the exact same claim, under a new disguise, would regain perceived legitimacy several decades later, as we’ll get to.
In 1929, 5 years after Coolidge’s tax cut and during Hoover’s first year in office, the stock market crashed. Hoover, being an advocate of the free market, did very little to address the economic issues, believing the market would sort them out. Instead, things continued to get worse, and the period became known as the Great Depression. Hoover was voted out of office after one term in one of the biggest landslides in US history, losing to FDR. Roosevelt’s economic policy was arguably the furthest any US President has been from laissez-faire, instead including higher taxes, strong government regulations and regulatory bodies to enforce them, a federal jobs program, and a more robust welfare net. These policies, sometimes called Keynesian economics, were so popular, they persisted for several decades. Richard Nixon famously remarked “we are all Keynesians now”, indicating his reluctant acceptance of an economic philosophy he (as a friend of big business) didn’t support, but his constituents did. The era of Keynesian economics – 1933 through the 1960’s, with the 1970’s seeing a drift towards the free market – was the most prosperous time in US history by most metrics, when the US middle class exploded, education levels increased, infrastructure improved, home ownership was easy, and workers had strong representation through labor unions.
But eventually a time arrived when most voters were born too late to experience and understand how awful it was to live under free market capitalism, and were instead constantly bombarded with Cold War propaganda about how great capitalism is. Once those people dominated the electorate, the US once again shifted back to free market economics. Nixon and Carter sowed some of the seeds of this during the 70’s, but it was the 1980 election of Ronald Reagan that pushed the US into full-on free market economics, which thus became known as Reaganomics.
Reagan started out as a Hollywood actor, and when that career was drying up, he became a corporate propagandist for General Electric. He was paid millions of dollars and given a TV show to host, in return for traveling around and giving talks to GE employees and others about the trickle-down lies he’d take to the White House.
This was Reagan’s springboard into politics: literally being a paid shill for corporations.
The voters saw nothing wrong with that, and Reagan won the 1980 election in a landslide. Unsurprisingly, the former actor served as an obvious puppet for whatever wealthy influences would pay him and his handlers most. He used the Laffer Curve – a graph of tax revenue vs. tax rate drawn on a napkin without any labels to make it mean anything – as his justification for lowering taxes. The Laffer Curve was just a hand-waving justification for repeating that “scientific taxation” the failed under Coolidge.
Reagan’s job was to give some nice speeches to distract people from the horrible policies they were enacting, and he was great at that job. So great, that since then he’s been dubbed Saint Ronald, and every President has continued the same disastrous policies he popularized and implemented. To this day, the GOP very publicly idolizes Reagan – in the 2016 Republican presidential primary, everyone made sure to compare themselves to Reagan. A certain campaign, ran by many of the same people as Reagan’s, drew obvious inspiration from Reagan’s 1980 campaign slogan:
During the Reagan/Bush years, the Democratic Leadership Council was created by powerful Democrats in an attempt to reclaim the White House from the Republicans who dominated the 80s. The DLC was led for a year by Bill Clinton, and advocated for “Third Way” policies, basically adopting some of Reagan’s policies to the Democratic platform. The New Democrats coalition in congress was formed by members who subscribed to these Third Way policies. This shift to the right, brought on by Reagan’s dominance, led Bill Clinton into the White House, where he met his campaign promise to “end welfare as we know it”, signed the Republican bill to repeal Glass-Steagal regulations on banks, and signed NAFTA, a free-trade agreement whose discussions mostly happened under Reagan and Bush. These met three of the main pillars of Reaganomics, and came under a Democratic President. Later, Obama would repeatedly praise Reagan and state that he’d (Obama) be a Republican in the 1980’s. As for Joe Biden? As a Senator, he voted in favor of Reagan’s 1986 tax cut and was a member of that New Democrats caucus that tried to more closely mirror Reagan.
So in the past 43 years, we’ve had Reagan himself, Reagan’s VP (Bush), Kennedy Reagan (Clinton), Connecticut Cowboy Reagan (W), Black Reagan (Obama), Reality TV Reagan (Trump), and Even More Geriatric Reagan (Biden). Al Gore and John Kerry were also members of the New Democrats caucus, and Hillary Clinton is married to the face of Third Way Democrats and ran a Third Way campaign in 2016. The RNC and DNC are basically just factories churning out Reagan copies of various demographics to play identity politics with, distracting the public, all the while pushing free market philosophy, at the direction of corporate donors.
In 1981, Reagan took office and told us wealth would trickle down from the rich, and it still hasn’t happened. It’s well past time to recognize that trickle down economics was a lie to convince us to allow wealthy people to get wealthier by making the other 99% poorer. I mean come on, his budget director openly told the press that was their plan. His deregulation of industry, attacks on labor unions, and tax cuts to the wealthy are and always were acts that only benefit the extremely wealthy people who own the corporations. You know...the people who hired Reagan to lie to the public.
Regulations ensure corporations don’t harm people; we should be in favor of them. Labor unions ensure corporations don’t abuse their workers; we should be in favor of them. Higher taxes on the rich help fund public goods and prevent elites from becoming so wealthy that they can control politics; we should be in favor of them.
But Reagan convinced a generation to oppose these things, which led to decades of both political parties shifting to the right, doubling down on the lies Reagan told us. In the time that this has happened, things have consistently gotten harder for average Americans, who benefited from the programs that Reagan, Republicans, and conservative Democrats have removed. In terms of average well-being, technology may have made up for the USA’s political failures in this time, but we’re still worse-off than we needed to be at this point, and Reaganomics is the reason.
Just to summarize the history lesson up until now:
Civil War through McKinley: free market policies, workers are poor and treated horribly while wealthy get wealthier and gain more power over the government
Teddy through Wilson: more government intervention in economy, followed by a booming decade
Harding through Hoover: free market policies enacted, followed by the worst economic crash in history
FDR through 70’s: Keynesian economics enacted, most average prosperity the US has ever had
70’s through now: free market policies enacted, middle class shrinks, college/housing becomes less affordable, wealthy get wealthier and gain more power over government, increasingly devastating recessions including the worst since the last time the free market was followed
It says a lot about Americans that so many of them still support the free market system that has made things worse for people like them, in largely the same way, all three times it has been tried.
So how did the free market cause the train derailment?
One of the tenets of free market capitalism is removing regulations of industry and the ability of regulatory bodies to enforce existing regulations. For example, just last year, in separate cases, GOP-appointed judges made it harder for both the EPA and SEC to enforce their rules. As a result, we get to look forward to our air and water quality declining, and financial markets becoming more corrupt. Much has been said about a regulation on train braking systems, enacted under Obama then removed by Trump, but that wouldn’t have actually stopped this issue. That doesn’t mean removing the regulation was a good idea though (it wasn’t). If anything, this shows a need for more regulation, not less. The cause was a bearing failure, which could have been prevented by regulations requiring stricter maintenance standards or higher factors of safety in design. Free market advocates like to claim that companies will regulate themselves if you get the government off their backs. This talking point is meaningless to anyone who knows history, since history unambiguously shows that companies do not regulate themselves.
That’s literally why regulations happened in the first place: Because people died without them.
Just like people died in the 2021 winter storms that took down Texas’ power grid, which was/is independent specifically to avoid regulations. Once upon a time, those evil regulators told them to winter-proof their grid. They instead split off from the national grid under the premise that the energy company should choose what’s best instead of the government. The government wanted them to ensure Texans could get power in the winter, but the company saw that as an unnecessary expense and decided not to winterize. After all, in the free market, profits are more important than lives. In short, the free market “regulating itself” killed those Texans. If you believe that companies will regulate themselves, you are ignoring all the relevant history that clearly shows otherwise, and instead believing the lies of companies that want to harm you in the pursuit of profit.
So one way to prevent this crash would’ve been better regulations, but those aren’t allowed in the free market. Don’t you know the most important Freedom™ is the freedom to unsafely transport chemicals, harming the health of millions of people? As long as they’re poorer than you, your freedom to poison them is more important than their freedom to not be poisoned!
Beyond regulations, infrastructure quality is another important factor. Large infrastructure projects require massive government coordination and funding, which doesn’t fly according to free market advocates, so our infrastructure has unsurprisingly deteriorated over the past 40+ years. Over 15 years ago, a major bridge in Minnesota collapsed, killing 13 people. At the time that happened, it was already known that US infrastructure was desperately overdo for renovations. Since then, very little has changed, except for the already-outdated infrastructure becoming 15 years more outdated.
Rails are some of the most neglected infrastructure in the US, because a good train system is much harder to profit off of than a car-based system, where everyone needs to buy a separate vehicle and then constantly buy gas for it. When money is spent on infrastructure, it’s usually on roads; the oil and car companies make sure of it.
This gets at a separate issue that, once again, is a symptom of the free market: trains shouldn’t be privatized in the first place. The idea that everything is handled by private companies, as opposed to government programs, is probably the single biggest non-negotiable of free market ideology. But just like the rest, it’s only that way because that allows wealthy people to profit, not because things are better that way. Laying train tracks requires massive coordination to decide where to put them, relocate people out of the way if needed, and actually lay them. This can really only be done by the government. But in the US, the government has a long history of selling out to car and oil companies (who are allowed to bribe them thanks to the free market!), making sure trains aren’t an effective mode of transport, since that would hurt their profits.
Beyond the building of the tracks, operating a train company requires planning, and doing so under one umbrella is much easier than having a bunch of separate companies competing for space on the limited tracks we have. Simply having one entity oversee and coordinate all of that is much more efficient.
“But we need competition!” free market advocates reply, evoking one of the most timeless defenses of the free market: competition will drive down prices and improve the product. This defense always misses the fact that capitalism hates competition and without government intervention you’ll just have monopolies. In this specific case, it also misses the fact that driving down prices is only necessary/relevant in a system (like the free market) where everyone’s strategy is “extract as much wealth from the population as possible”. A private train company, like every large company, exists for one reason: to make a profit. Government programs exist to provide a service, and don’t seek profits, meaning the prices of a government-run shipping company would be precisely as low as they can be to cover operations. No amount of competition between private companies will ever beat that. UPS, FedEx, and DHL have been competing with each other for decades and are all still significantly more expensive than the USPS. The other side of the competition defense (that it improves the product) doesn’t really apply when the “product” is operating something that’s gone more-or-less unchanged in the past 100 years, like a train.
Now that I’ve dispelled the likely complaints about nationalized trains, here’s how it’s relevant to the East Palestine crisis: competition in the free market promotes sociopathic behavior. For example, doing regular maintenance on trains is an expense. If a train company wants to keep up with or beat their competitors, one way of doing so is to reduce expenses – like train maintenance. Doing so could put the health and lives of others at risk, but as long as the expected outcome is more profits that simply doesn’t matter in the free market. I’ve said it before, but it bares repeating: this doesn’t happen because of bad apples in the system, it’s the result of a system designed in a way that ensures bad apples succeed. The free market drives companies to cut their costs at the expense of the general public, and if they don’t do that, they’ll get beat by a company that does. None of this exists in a nationalized industry, so they could order more reliable trains and keep proper maintenance schedules without risk of losing to those who cut corners. Both of these differences could’ve prevented the faulty bearing and subsequent derailment – a better designed and maintained train would not have failed.
Instead, we have a system in which private companies need to buy cheap train cars, squeeze every inch of travel out of their lifetime, while skimping on maintenance, or else they’ll be overtaken by someone else who does that. Road infrastructure being prioritized over rail (because that helps those free market capitalists) gives on-road logistics an advantage over trains, making cutting corners even more necessary for train companies. Regulations could make this better, and nationalizing the trains would be even better still, but neither of them will happen as long as the US remains devoted to the free market system that continues to harm most of its residents.
One last bonus point: The reason FEMA hasn’t been able to give much assistance to East Palestine is because, unlike in a hurricane or tornado or such, no property was destroyed, which is required for FEMA funds. Even before the train derailment, people had critiqued that law, known as the Stafford Act, for unnecessarily restricting FEMA’s ability to respond to crises. Who signed the Stafford Act? Well, who else.. Ronald Reagan!