The End of the Reagan Era

| Educate!

Above Photo: From Piketty.blog.lemonde.fr

Note: We saw the shift in public opinion as we were planning the Occupation of Freedom Plaza in Washington, DC in 2011. We looked at where the public stood on issues and where the government was going — two different directions despite super majorities wanting a more progressive approach. See We Stand With the Majority published in August 2011. The seven point plan we discussed is essentially the Sanders platform, plus we had a section on ending wars and militarism. In the article below economist Thomas Picketty sees the Sanders campaign as a symbol of the end of Reaganism whether or not Sanders wins. I suspect this is possible as public opinion has continued to build in our directions since 2011 but we will only make this transformation if the movement keeps pushing no matter how the election turns out. Our job in this post-occupy phase of the movement is to build national consensus. This does not happen quickly and we are not there yet, but we are moving in the right direction.

How should we interpret the incredible success of the ‘socialist’ Bernie Sanders in the American Primaries? The Vermont senator now has the lead over Hillary Clinton amongst the Democrat supporters under 50 years and only the senior citizens’ vote has enabled Hillary to maintain her advantage. Faced with the Clinton electoral machine and the conservatism of the major media, Bernie will perhaps not win the primary. But it has been demonstrated that another Sanders, possibly younger and less white, could one day soon win the American presidential elections and change the face of the country. In many respects, we are witnessing the end of the politico-ideological cycle opened by the victory of Ronald Reagan at the November 1980 elections.

Let’s glance back for an instant. From the 1930s to the 1970s, the United States pursued an ambitious policy of reduction in social inequalities. Partly to avoid any resemblance with Old Europe, seen then as extremely unequal and contrary to the American democratic spirit, in the inter-war years the country invented a highly progressive income and estate tax and set up levels of fiscal progressiveness never used on our side of the Atlantic. Between 1930 and 1980, for half a century, the rate of taxation applicable to the highest American incomes (over one million dollars a year) was on average 82%, with peaks at 91% from the 1940s to the 1960s, from Roosevelt to Kennedy, and it was still 70% when Reagan was elected in 1980. This policy in no way affected the strong growth of the post-war American economy, doubtless because there is not much point in paying super-managers 10 million dollars when one million will do.

The estate tax, which was just as progressive, with rates in the range of 70-80% applicable to the biggest fortunes for decades (whereas this rate has rarely risen above 30-40% in Germany or in France), considerably reduced the concentration of American capital, without the wars and the destructions which did the job in Europe.

In the 1930s, the United States also implemented a federal minimum wage, well before the European countries and at a level (expressed in 2016 dollars) which was above 10 dollars per hour at the end of the 1960s, by far the highest at the time. All this took place with practically no unemployment because the level of productivity and the educational system could allow it. This was also the period when the United States finally put an end to the legal racial discrimination still operational in the South, which was far from democratic, and launched new social policies.

But all this aroused strong resistance, in particular amongst the financial elites and in the reactionary fringes of the white electorate. Humiliated in Vietnam, the America of the 1970s was further concerned by the fact that those who had been defeated in the war (with Germany and Japan in the lead) were catching up at top speed. America was also suffering from the oil crisis, inflation and the under-indexation of the tax schedules. Reagan surfed on all these frustrations and was elected in 1980 on a programme designed to reinstate a mythical capitalism said to have existed in the past.

The culmination was the 1986 fiscal reform which ended half a century of steady fiscal progressivity and lowered the rates applicable to the highest incomes to 28%. This choice was never genuinely challenged by the Democrats of the Clinton years (1992-2000) and the Obama era (2008-2016) who were to stabilise the rate at around 40% (roughly half the average level for the period 1930-1980), the key element being an explosion of inequalities and huge salaries, in a context of weak economic growth (but slightly higher than in Europe, bogged down by other problems) and stagnation of the incomes of the majority.

Reagan also decided to freeze the level of the federal minimum wage which, as from the 1980s, has been slowly but surely eroded by inflation (little more than 7 dollars per hour in 2016, as compared with almost 11 dollars in 1969). There again, this new politico-ideological regime has shown little sign of attenuation by the Democratic alternation of Clinton and Obama.

Today, Sanders’ success demonstrates that a substantial proportion of America is tired of the rise in inequality and these pseudo-alternatives and intends to return to a progressive agenda and the American tradition of egalitarianism. Hillary, who fought on the left of Obama in 2008, particularly on the issue of health insurance, today appears as the keeper of the status quo, the heir to the Reagan-Clinton-Obama political regime.

Audience members listen as Democratic presidential candidate, Sen. Bernie Sanders, I-Vt. speaks during a campaign stop at Daniel Webster Community College, Monday, Feb. 8, 2016, in Nashua, N.H. (AP Photo/John Minchillo)

Bernie clearly proposes to reinstate fiscal progressivity and a high minimum wage (15 dollars per hour). He also adds universal health care and free higher education in a country where inequality in access to education has reached incredible heights and has thus revealed the wide gulf between the reality and the winners of the system with their somewhat enervating speeches advocating a meritocratic approach.

At the same time, the Republican Party is sinking into a discourse which is hyper-nationalist, anti-immigrant and anti-Islam (a religion that is almost non-existent in the United States), and also into an endless glorification of rich whites. The judges appointed under Reagan and Bush have lifted all legal restrictions over the influence of private money in political life, which considerably complicates the task of candidates like Sanders. But new forms of political mobilisation and participatory financing can win the day and steer America into a new political cycle. We are very far from the doom and gloom of the prophecies predicting the end of history.

Translation of an op-ed published in Le Monde, February 14-15, 2016

  • jemcgloin

    I am not sure how revolutionary Sanders really is. A career senator, he is the lefty the Sunday shows bring on to make all of their Republican regulars look moderate. It may be that that has backfired or maybe he is just plan B if Bush (oops) or Clinton doesn’t make it.
    That said, Bernie has jumped to the front of our movement. That at least shows that he sees the wide arc of history. Going around telling the Bernie fans that he’s not socialist enough will just get them mad at you.
    This is an amazing opening for the left and we should be using it to co-op the Democratic primary.
    Even if Bernie is all he says he is, his coattails are not long enough to get risk adverse Democrats, much less Republicans to back his agenda. (And Hillary’s “experience” won’t either.)
    As most people that read this site know, the only way government will ever do anything approaching the right thing is if there are enough people outside their window to scare them.
    Another opening is the refusal of Republicans to consider any Obama nominee to the supreme court. Rank and file Dems are furious at this, but Obama and Clinton will triangulate.
    We can show the Hillary supporters what it means to have peaceful revolution and how you force government to act, the same way we are creating a new standard for the minimum wage. This is how you show Sanders is electable and might get things done.
    When the Republicans reject Obama’s nominee, let’s get tens of thousands of Bernie supporters protesting in front of the supreme court. (And if you don’t think it matters who the next justice is, remember Scalia spearheaded thirty years of giving corporations the rights of people, among other disasters.)
    We can use Sanders’ candidacy which Occupy made possible to push the country in the right direction. And if we are lucky, end up with adv ally on the inside.
    I am not asking anyone to join the Democratic Party, or even to vote. I am asking you to channel the peaceful fury of Bernie Supporters into fighting on the outside of the system as well as the inside. We need their fire, and they need us to realize that change comes from outside the system first.

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  • Aquifer

    We can use the Sanders’ candidacy which Occupy made necessary – for the DP …

    Sanders win or lose the DP nomination – the best candidate is still Stein – what Sanders’ candidacy has shown is that a) lots of money can be raised from the “little guy” and b) a candidate can go from the “can’t win” column to the “can win” one if enough folks decide to support ’em – it is not a matter of chance but of choice …

  • jemcgloin

    Well then go out and meet Sanders supporters and be ready to convince them to switch to Jill Stein if Hillary gets the nomination,

  • Aquifer

    If Sanders doesn’t get it – Stein is the obvious choice – but, been there, done that some years ago when i was still under the illusion that supporting a prog Dem, Kucinich at the time, with far greater prog cred, IMO, than Sanders, was worth it – only to see my fellow K fan Dems “hold their noses” and vote Kerry instead of Nader …

    My position is that Stein is the best candidate NO MATTER WHO gets the DP nomination …

  • jemcgloin

    I can’t argue with that. Vote Stein. I still might, depending where see Sanders going, but my point is that the young people that are going for Bernie are politically active (a rarity in our consumer culture) and looking to change the world. If we engage with them in the right way, they can become true activists in the evolution. But if we deride them as suckers who are just being tricked into supporting the democrats, and then let them go home disillusioned when Bernie doesn’t work out we will have blown a tremendous opportunity,
    (By the way it was Gore vs Nader, no?)

  • Aquifer

    I don’t deride them as “suckers” – many don’t have the historical context or political experience to know that this is, as Yogi would say (shucks, most don’t know who Yogi, either one, is) it’s “deja vu all over again” – I ask them to look behind the curtain, don’t get caught up in the infectious excitement of “feeling the Bern” to the point of failing to step back from the fire long enough to consider they might be the ones getting burned …. The D’d count on the relative lack of political experience of youth to suck them in – i .e. they are not the suckers but the ones sucked in …

    In ’04 it was Kerry v Nader … after Nader’s showing in ’00, the “spoiler” meme was stuck on him, and enforced the LOTE meme that folks used to go from K(ucinich) to K(erry) and not to Nader in ’04 ….

  • jemcgloin

    Yes, educate them.

  • Aquifer

    I think “education” is at least a 2 way street – we need to educate each other …