How This Crisis Spells the End for the Reagan Revolution

by washingtoncritic, Tue Sep 30, 2008 at 01:03:12 PM EST

I recently published an editorial over at The Guardian regarding the current economic collapse. It is my opinion that the failure of House Republicans to pass the economic stimulus package represents the beginning of the end of the Reagan Revolution. Allowing this crisis to continue without any viable alternative represents the end of an era for the Republican party. With uncertainty growing in a market built on expectations, our economic woes will worsen. Ironically, as this crisis expands and continues to collapse major corporations, Americans will demand greater government intervention. A party whose platform opposes nearly any proposal that uses government as the medicine for a financial disease will not be able to survive this crisis.

I don't want to go into the economics of the bailout package - many of you agree or disagree about various aspects of this proposal. Obviously, I supported the bailout package and view its failure to be passed as a major reason why the Republicans are in trouble (I will address the 94 Democratic holdouts in a moment). I know Jerome has a different view of this crisis, and frankly, it bewilders me from an economic perspective. I am not sure how his analysis would fit into history - could we have viewed Roosevelt's first few steps as the "end" of a Progressive dream? I suppose...

Nevertheless, it's not my intention to debate the necessity of credit in the economy or the best way to open up the flow of credit, merely to discuss Republican ideology and this crisis.

But in any event, the thrust of my thesis is as follows.

Allowing this crisis to continue without any viable alternative represents the end of an era for the Republican party. With uncertainty growing in a market built on expectations, our economic woes will worsen. Ironically, as this crisis expands and continues to collapse major corporations, Americans will demand greater government intervention. A party whose platform opposes nearly any proposal that uses government as the medicine for a financial disease will not be able to survive this crisis.

I received many emails from British readers who felt that I afforded no blame on the 94 Democrats who voted against the proposal (for various Progressive reasons).  While there were many good reasons to vote against the bill, the primary purpose of my article was to talk about the Reagan philosophy's impact on Congressional Republicans.

The 94 Democrats, if presented a bill they could support, are more than willing to permit government intervention during a financial crisis. By contrast, the Reagan Revolution crowd only seem to offer: more tax cuts, deregulation, and a face-saving "insurance" system which really wouldn't infuse any cash into the system in the short term.

More importantly, they can't spin their failure.

Republicans can spin "victory" in Iraq, they cannot spin "profit" on Wall Street.

Overall, I believe that this financial crisis, as it worsen, will demand greater government intervention into the markets, and it will put the "anti-government" crowd (which ironically has been running the government) into a serious bind.

Reagan's principles, although tested in mild crisis, cannot survive an economic collapse the size of the Great Depression.




Tags: John McCain, Ronald Reagan, Economics, Economic Crisis, Republican Revolution, Conservatives. (all tags)

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That was a great editorial... (2.00 / 2)

...and expressed, with much more information and cogency the instincts I was trying to express in my diary here.

http://www.mydd.com/story/2008/9/30/1019 22/018

Great to find you on a blog like this. Would be even better to see you on another (see below)

Meanwhile I'm going to reference this in my diary.

Thanks, rec'd


Now Loose on the Moose
by brit on Tue Sep 30, 2008 at 01:24:57 PM EST

Re: That was a great editorial... (2.00 / 3)

I read your editorial and it was really well articulated as well.

I am personally a fan of Hayek for some of his other arguments (The Road to Serfdom), so I think we could have a debate about what his philosophy really was directed towards, but I would concede libertarians are a stitch in time!


by washingtoncritic on Tue Sep 30, 2008 at 02:05:43 PM EST
[ Parent ]

Re: That was a great editorial... (2.00 / 1)

There are many elements about Hayek (AND Adam Smith) which I really admire. And they had the merits of being consistent believers in classic liberal values.

One of the most egregious of which is mobility of capital AND labor. That's one of the areas where Republican/Reaganite social authoritarianism does not sit well with free markets. And as you know better than I do, there are many others.

I'm a great believer in the free and OPEN marketplace, with all barriers to entry and monopolistic practices curtailed.

But to be a truly open market in terms of labor, it seems to me that that universal access to education and healthcare are as important to this mobility of labor as migration


Now Loose on the Moose
by brit on Tue Sep 30, 2008 at 02:13:39 PM EST
[ Parent ]

Does anybody know about the right's 'alternative' (none / 0)

This article proposes that the right has an even more extreme plan that they are pushing..

http://www.alternet.org/workplace/100857 why_conservatives_led_the_fight_against _the_bailout_deal?page=1


Health Care: WHY do we pay MORE and GET LESS?
http://content.healthaffairs.org/cgi/con tent/full/hlthaff.28.1.w1/DC1
by architek on Tue Sep 30, 2008 at 08:46:49 PM EST
[ Parent ]

Wonderful insights... (2.00 / 3)

Rec'ed BIG TIME for raising the quality of the discussion away from raw politics and finger pointing.

We have lived through almost 8 years of "the dumb guy is just like us" concept of who to vote for.

I want Obama to get all the smart guys in the room, and THEN let them come up with a plan.

Yeah, I know. I want the profs in charge.

Guess that makes me a liberal elite!

So, sue me!


On Nov 4th, Barack Obama officially ends the Southern Strategy....
by WashStateBlue on Tue Sep 30, 2008 at 01:29:49 PM EST

Re: Wonderful insights... (2.00 / 1)

thank you!


by washingtoncritic on Tue Sep 30, 2008 at 02:03:14 PM EST
[ Parent ]

Re: Wonderful insights... (none / 0)

I think this is a great commentary as well, but really, it is ALL about finger-pointing.  Done in a very well-informed and congenial matter, mind you.  But nonetheless, the fingers are a flyin'.


by the mollusk on Tue Sep 30, 2008 at 04:18:11 PM EST
[ Parent ]

Re: Three More Steps (2.00 / 2)

I agree that the failed bailout attempt and yesterday's seven percent collapse of the Dow Jones Stock Index is signaling to the end of the Reagan era. However, before the Reagan era ends, three more steps must be made: (1) Obama must win the election, (2) Obama and the new Democratic Congress must implement change, and (3) Years later, the change must be perceived by the public as good.

If McCain wins the election, then obviously the conservative era continues. But if Obama wins and does not implement change, then the conservative era still continues. Finally, if the change is perceived to be bad, he'll become another Jimmy Carter and the country reverts back to the conservative era. If Obama wins, then the key tests will be in 2012 and 2016. If Democrats win both elections by landslide margins, then the Obama era in politics will be in full force.


Dizzy Zzyzzy
by Zzyzzy on Tue Sep 30, 2008 at 01:46:33 PM EST

Re: Three More Steps (2.00 / 3)

that's a possibility.

I think, however, that financial crisis will demand a response by the government or watch a Katrina-like collapse in support.


by washingtoncritic on Tue Sep 30, 2008 at 02:03:51 PM EST
[ Parent ]

A continued embrace of unsustainability and denial (2.00 / 2)

The "failure" to pass the trickle down economics-blighted "bailout" is basically a sudden flash of common sense in an otherwise blighted landscape of greed.

So, in that sense, Reaganism continues and is strong in its continued embrace of unsustainability and denial.

For all their talk about free market principles, the right and the Democrats as well still buy into a model that has the poor and middle class SUBSIDIZING the excesses of the rich. This so called "crisis" is merely a slight unmasking of the truth. Obviously, its a crisis for THEM because they would prefer we remain ignorant, at least for a few more months.

Don't fall for it.


Health Care: WHY do we pay MORE and GET LESS?
http://content.healthaffairs.org/cgi/con tent/full/hlthaff.28.1.w1/DC1
by architek on Tue Sep 30, 2008 at 04:51:57 PM EST
[ Parent ]

Do you really believe that? (none / 0)

Do you really believe that this crisis will not effect the majority of working Americans?  Do you really think this will have no effect on main street?


by shalca on Tue Sep 30, 2008 at 09:29:13 PM EST
[ Parent ]

Obama can win (none / 0)

By backing a better version of a bailout plan that protects the interests of middle class voters and prevents future calamities.


by Betsy McCall on Tue Sep 30, 2008 at 09:06:12 PM EST
[ Parent ]

Re: How This Crisis Spells the End for the Reagan (2.00 / 1)

The puzzling thing to me, and I haven't seen this discussed in any detail, is the initial strongly negative response to the bill by constituents of both Republican and Democratic representatives seemed to be based on a uniform, almost class oriented, resentment of financial markets, and actors, yet the opposition of these two recalcitrant factions in the House remained split on traditional ideological grounds.  Republicans were opposed to government intrusion and the erosion of free market policy, Democrats concerned, even outraged, that public revenue was being misapplied to the private sector.  

I have always noted a cognitive disconnect in the relationship between the true benefactors of the ideology of 'Reaganomics' and the economic status of the bulk of the Republican constituency which has supported it, but the principles which House Republicans cited so fervently in their opposition seem completely out of step with the social drivers of the voter backlash they were evidently so concerned about.  To my mind the Republican constituents were apoplectic for exactly the same reasons as Democratic constituents, none of which had anything to do with 'free markets' or 'socialism.'  Am I missing something or has this always been an internal fracture in the conservative economic ideology?


by Shaun Appleby on Tue Sep 30, 2008 at 02:44:22 PM EST

Some of them may not understand the GOP BigLie yet (2.00 / 1)

The right's issues all translate into subsidizing the rich by taking from everybody else in one way or another. Thats the ugly truth in issue after issue. For everyday Americans to have the clarity to see that revealed in all its ugliness - is really a miracle but it seems to be happening. The GOP insiders haven't reacted strongly because they are living a lie and have been for a long time. But many of the outer circle still have not been clued in to the hidden message of Republicanism. They think that the GOP cares about them, how quaint.

Unfortunately, some Democratic leaders have a similar lack of understanding of just how much Americans are being milked of their futures and don't get it either. They don't understand that Americans from all walks of life are telling them that this so called "bailout" crosses a line. That giving money to these banks to cover their bad bets is a slap in the face to all of us.

That is really depressing.


Health Care: WHY do we pay MORE and GET LESS?
http://content.healthaffairs.org/cgi/con tent/full/hlthaff.28.1.w1/DC1
by architek on Tue Sep 30, 2008 at 04:59:05 PM EST
[ Parent ]

Re: How This Crisis Spells the End for the Reagan (none / 0)

You may have just described the whole reason that Congress has always been so bad at legislating.

With regard to the bailout plan.  It's as if you go too far one way or the other the over all support for the bill will go down (ie. full socialization will cause more Republicans to vote against it, less oversight will cause more Democrats to vote against it).

There's a really good piece on openleft from a few days ago talking about the language of the bailout in public discourse and why we need to keep our frames in mind:
http://www.openleft.com/showDiary.do?dia ryId=8630

Does this mean that the plan that just failed is really the best thing progressives can hope for?  We will see.


$439Billion spent on the US Military and still no universal health care.
by jlars on Tue Sep 30, 2008 at 05:16:30 PM EST
[ Parent ]

Re: How This Crisis Spells the End for the Reagan (2.00 / 0)

Another interesting insight on why this might be:


Only a few years ago, on the night of Bush's victory in 2004, the conservative movement seemed indomitable.  In fact, it was rapidly falling apart.  Conservatives knew how to win elections, however, they turned out to be not very interested in governing.  Throughout the decades since Nixon, conservatism has retained the essentially negative character of an insurgent movement.

George Packer - The Fall of Conservatism New Yorker 26 May 08


by Shaun Appleby on Tue Sep 30, 2008 at 07:45:08 PM EST
[ Parent ]

Right's alternative giveaway to the rich (none / 0)

I am just reading this now, and it seems like it makes sense.

http://www.alternet.org/workplace/100857 why_conservatives_led_the_fight_against _the_bailout_deal?page=1


Health Care: WHY do we pay MORE and GET LESS?
http://content.healthaffairs.org/cgi/con tent/full/hlthaff.28.1.w1/DC1
by architek on Tue Sep 30, 2008 at 08:50:17 PM EST
[ Parent ]

Re: How This Crisis Spells the End (2.00 / 1)

I think Bill Clinton ended the Reagan revolution when he brought a lot of Reagan Democrats back into the fold again.


by RichardFlatts on Tue Sep 30, 2008 at 02:48:59 PM EST

Talk about your nonsequitors (1.50 / 2)

If you could be more obscure with your off-kilter references, I'd appreciate it.  Do you know what the Reagan Revolution really was, or why Clinton really won?


The pebbles have voted and the avalanche has begun.

President-Elect "That One"

by Dracomicron on Tue Sep 30, 2008 at 03:49:03 PM EST
[ Parent ]

Re: Talk about your nonsequitors (1.00 / 1)

You could be less of an a-hole.


by RichardFlatts on Tue Sep 30, 2008 at 03:53:03 PM EST
[ Parent ]

I could. (2.00 / 1)

But then I would be exposing you to uncomfortable truth.  Come on, you know that the Reagan Revolution was an economic and social philosophy that Clinton benefitted from and still affects us today.

You're being disingenuous to say the least by suggesting what you did.


The pebbles have voted and the avalanche has begun.

President-Elect "That One"

by Dracomicron on Tue Sep 30, 2008 at 03:58:53 PM EST
[ Parent ]

Re: I could. (2.00 / 0)

Just to make sure we're WAY off topic here-

I heard someone a few weeks ago describe this election as the competition to fulfill Reagan's eighth term.  


by the mollusk on Tue Sep 30, 2008 at 04:16:27 PM EST
[ Parent ]

Hilarious (2.00 / 1)

And yet strangely accurate.

Actually the only chance we have of escaping that is if Obama wins and really does pull a FDR.


The pebbles have voted and the avalanche has begun.

President-Elect "That One"

by Dracomicron on Tue Sep 30, 2008 at 04:44:16 PM EST
[ Parent ]

Re: Talk about your nonsequitors (2.00 / 1)

He would if you weren't such an obvious McTroll. Trolls deserve nothing but contempt and scorn.


by venician on Tue Sep 30, 2008 at 04:39:00 PM EST
[ Parent ]

Re: Talk about your nonsequitors (2.00 / 1)

That was meant for RichardFlatt


by venician on Tue Sep 30, 2008 at 04:39:37 PM EST
[ Parent ]


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