As the morality tale of the 2012 USA presidential election plays out, the decision we are all making together is often spun in the media as a referendum on Barack Obama, or as an appraisal of Mitt Romney. But the real historical significance of this election may turn out to involve a President who was elected 32 years ago. In 2012, we may finally manage to exorcise the ghost of flawed economics represented by the legacy of Ronald Reagan.
This is not to say that American citizens will ever stop revering Ronald Reagan, who stands at the very top level of the American cultural/mythological pantheon, along with George Washington, Elvis Presley and Jesus Christ. (Indeed, it's funny that conservatives often mock liberals like me for "worshipping" Barack Obama, because we never worship Barack Obama the unabashed way that conservatives worship Ronald Reagan.) The fond memory of Reagan is probably the strongest glue that currently unifies the whole wide Republican/conservative community, from the libertarians to the Tea Partiers to the bankers, from Ron Paul to Michelle Bachmann to Rick Santorum to John Boehner to Mark Levin. Reagan's immense popularity stands on three main pillars, and two of these pillars will survive the 2012 election debacle. One of the three will not.
Reagan will always be lovingly remembered for his confident approach to foreign policy, which is credited with bringing down the Soviet Union and at least half of the global Communist revolution. He will also always be fondly remembered for his sunny personality, so upbeat that even a liberal like me must occasionally smile back in acceptance (though, really, I never saw his charisma the way others did.)
It's a sure thing that these two pillars will always stand, that America will always love Ronald Reagan. But it seems that we are finally coming to terms with the painful fact that the third pillar of Reagan's legacy, the economic ideology known variously as supply-side economics, trickle-down economics or Reaganomics, is a complete failure. Its record could barely be worse.
Reaganomics, rooted in the economic writings of Ludwig von Mises, Friedrich von Hayek, Ayn Rand and Milton Friedman, is the idea that small government will create a thriving economy, that low taxes and permissive pro-business regulatory policies will produce a greater natural flow of success and growth than any central government policy ever could. Major tax cuts will turn out be revenue neutral, because individuals and businesses will pay taxes on greater amounts of base profit. The level of success will be so great that the poor and needy will have ample new opportunities to work hard and thrive, making social services like Medicaire and Social Security less essential.
Reaganomics looks exciting on paper, but it has never worked in practice. There was growth following Reagan's tax cuts, but the level of growth was never even close to the amount needed to make the tax cuts revenue neutral. Taxpayers were not paying what the government was spending, and the numbers did not add up. By the time Reagan left the presidency, he had burdened the United States with its worst budget deficit in history.
But this first failure of practical economics -- you cannot claim to be against federal budget deficits and also claim that Reagan was good for the USA economy, because Reagan invented the modern massive federal budget deficit -- barely dented the enthusiasm of Reaganomics's champions. After the blissfully sensible Bill Clinton/Newt Gingrich cooperation team finally managed to balance the federal budget in the late 1990s, a familiarly sunny "new Reagan" from Texas named George W. Bush was elected to give trickle-down economics a second try. This second try worked out even worse than the first.
We learned with Bush's second try -- the Bush tax cuts, the various deregulation programs -- that trickle-down economics does not only lead to horrific federal budget deficits and increased wealth disparity between the top 1% and the rest of the country. It also leads to shameful, ruinous corruption, shocking irresponsibility and complete financial incompetence in the deregulated business sector.
And yet the Republican party still looks for "new Reagans" every election season. Jack Kemp was a "new Reagan" when he ran for Vice President in 1996. George Allen of Virginia was a "new Reagan" before he made the foolish mistake (Ronald Reagan, a truly talented politician, rarely made these kinds of mistakes) of insulting an opposition journalist with a racial slur while the guy was obviously recording him on video. Early in the 2012 presidential race, a cowboy named Rick Perry sauntered up and tried to stage-manage some Reaganesque charisma, to hilarious and embarrassing effect. He had the barrel chest just right, but couldn't produce the smile, and also didn't have the brains.
But let's not forget that Mitt Romney was also originally seen as Reaganesque -- an upbeat personality, success-oriented, business-minded, a charismatic (yes, people once thought Mitt Romney was charismatic) optimist. It seems incredible today to realize that only a few years ago, Mitt Romney's similarities to Ronald Reagan were his main selling point.
Today, a month before election day, Mitt Romney appears to be a damaged candidate, and is certainly unfit to be President. His character was not strong enough to stand the test of a tough campaign, and many ascribe Mitt's public failures to basic flaws in his personality. I think this is a misperception. He is probably an okay guy deep inside.
Mitt's soul is not the source of his problem; the problem is that he has allowed his soul to be possessed by political ideas that have gone rotten. Try to avoid making gaffes when defending Reaganomics in 2012 -- you would probably make as many gaffes as Romney! It's an impossible position to uphold, because you can't sound sincere when spouting trickle-down policies during an economic crisis that has left the wealthy class untouched while the middle and lower classes suffer. It's impossible not to get tongue-tied when you are beholden to wealthy donors who insist you support a lie.
This, I believe, is why Mitt Romney has collapsed as a viable candidate. His running mate, the brutally enthusiastic Objectivist Paul Ryan, also seems to be collapsing as a credible candidate, as can be seen in this video of an interview with Chris Wallace.
Wallace has asked Paul Ryan to provide some hard facts to support the tax cut proposal that is part of the Romney/Ryan plan, and then stubbornly refuses to allow Paul Ryan to slither away as Ryan tries to do everything except answer the question. Exasperated, Ryan finally declares that "it would take too long for me to go through all the math."
Ryan and his televised math puzzle may even amount to the last gasp of the ghost of Reaganomics, a ghost that we will hopefully be putting to rest forever after election day. If we're lucky enough to remember the lessons we've learned, that is. Reaganomics, rest in peace.
(Thanks to J. J. Chandler's awesome Tombstone Generator for helping me create the image on this page!)