Reagan: Upward Socialism

One of the few voices I've heard during this entire financial meltdown that I trust is Ravi Batra, an SMU professor of economics and bestselling author. He predicted this entire house of cards - massive securities instruments bundled upon shaky mortgages, squeezed to generate short-term financial profit for the banks - would fall back in the summer of 2008.

His latest piece in truthout.org examines the legacy of Ronald Reagan, who promoted and signed massive cuts at the top end of income taxation, exploded the deficit and essentially transferred huge amounts of post-tax wealth to the top, while implementing incrementally increasing taxation on the middle class. Here's a quote:

Let's go back to the early 1980's. In 1981, Reagan signed a law that sharply reduced the income tax for the wealthiest Americans and corporations. The president asserted his program would create jobs, purge inflation and, get this, trim the budget deficit. However, following the tax cut, the deficit soared from 2.5 percent of GDP to over 6 percent, alarming financial markets, sending interest rates sky high, and culminating in the worst recession since the 1930's.

Soon the president realized he needed new revenues to trim the deficit, bring down interest rates and improve his chances for reelection. He would not rescind the income tax cut, but other taxes were acceptable. In 1982, taxes were raised on gasoline and cigarettes, but the deficit hardly budged. In 1983, the president signed the biggest tax rise on payrolls, promising to create a surplus in the Social Security system, while knowing all along that the new revenue would be used to finance the deficit.

The veil of incompetence and naked preference for the wealthy - which for Reagan constituted his rich Orange County Hollywood pals - is finally being lifted in both this piece and the recently published Will Bunch book on the lies and historic revisionism that have led to Reagan's canonization amongst modern conservatives.

Much of what Reagan did to promote the vampirization of American society will take generations to undo. What we are seeing now is the result of years of making the wealthy wealthier, and unregulated, flag-draped, knee-jerk ideology of sucking the lifeblood out of people who actually work for a living.

The latest entrant in the Ronald Reagan Memorial Rich Guy Benevolence Society is Mitt Romney, a guy who made millions throwing Americans out of work by buying up their companies and offshoring their labor.