Top Leaderboard, Site wide
August 2, 2014
Truthdig: Drilling Beneath the Headlines
Help us grow by sharing
and liking Truthdig:
Sign up for Truthdig's Email NewsletterLike Truthdig on FacebookFollow Truthdig on TwitterSubscribe to Truthdig's RSS Feed

Newsletter

sign up to get updates






My Age of Anxiety


Truthdig Bazaar
White Heat

White Heat

By Brenda Wineapple
$18.45

more items

 
Report

Reagan Didn’t Do It

Email this item Email    Print this item Print    Share this item... Share

Posted on Jun 3, 2009
Ronald Reagan
Reagan Library

By Robert Scheer

How could Paul Krugman, winner of the Nobel Prize in economics and author of generally excellent columns in The New York Times, get it so wrong? His column last Sunday—“Reagan Did It”—which stated that “the prime villains behind the mess we’re in were Reagan and his circle of advisers,” is perverse in shifting blame from the obvious villains closer at hand.

It is disingenuous to ignore the fact that the derivatives scams at the heart of the economic meltdown didn’t exist in President Reagan’s time. The huge expansion in collateralized mortgage and other debt, the bubble that burst, was the direct result of enabling deregulatory legislation pushed through during the Clinton years.

Ronald Reagan’s signing off on legislation easing mortgage requirements back in 1982 pales in comparison to the damage wrought 15 years later by a cabal of powerful Democrats and Republicans who enabled the wave of newfangled financial gimmicks that resulted in the economic collapse.

Reagan didn’t do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did. They, along with then-Fed Chairman Alan Greenspan and Republican congressional leaders James Leach and Phil Gramm, blocked any effective regulation of the over-the-counter derivatives that turned into the toxic assets now being paid for with tax dollars.

Reagan signed legislation making it easier for people to obtain mortgages with lower down payments, but as long as the banks that made those loans expected to have to carry them for 30 years they did the due diligence needed to qualify creditworthy applicants. The problem occurred only when that mortgage debt could be aggregated and sold as securities to others in an unregulated market.

Advertisement

Square, Site wide
The growth in that unregulated OTC market alarmed Brooksley Born, the Clinton-appointed head of the Commodity Futures Trading Commission, and she dared propose that her agency regulate that market. The destruction of the government career of the heroic and prescient Born was accomplished when the wrath of the old boys club descended upon her. All five of the above mentioned men sprang into action, condemning Born’s proposals as threatening the “legal certainty” of the OTC market and the world’s financial stability.

They won the day with the passage of the Commodity Futures Modernization Act, which put the OTC derivatives beyond the reach of any government agency or existing law. It was a license to steal, and that is just what occurred. Between 1998 and 2008, the notational value of the OTC derivatives market grew from $72 trillion to a whopping $684 trillion. That is the iceberg that our ship of state has encountered, and it began to form on Bill Clinton’s watch, not Reagan’s.

How can Krugman ignore the wreckage wrought during the Clinton years by the gang of five? Rubin, who convinced President Clinton to end the New Deal restrictions on the merger of financial entities, went on to help run the too-big-to-fail Citigroup into the ground. Gramm became a top officer at the nefarious UBS bank. Greenspan’s epitaph should be his statement to Congress in July 1998 that “regulation of derivatives transactions that are privately negotiated by professionals is unnecessary.” That same week Summers assured banking lobbyists that the Clinton administration was committed to preventing government regulation of swaps and other derivatives trading.

Then-Rep. Leach, as chairman of the powerful House Banking Committee, codified that concern in legislation to prevent the Commodity Futures Trading Commission or anyone else from regulating the OTC derivatives, and American Banker magazine reported that the legislation “sponsored by Chairman Jim Leach is most popular with the financial services industry because it would provide so-called legal certainty for swaps transactions. … ”

Legal certainty for swaps—meaning the insurance policies of the sort that AIG sold for collateralized debt obligations without looking too carefully into what was being insured and, more important, without putting aside reserves to back up the policies in the case of defaults—is what caused the once respectable company to eventually be taken over by the U.S. government at a cost of $185 billion to taxpayers.

Leach, an author of the Gramm-Leach-Bliley Act, which allowed banks like Citigroup to become too big to fail, is now a member of the board of directors of ProPublica, which bills itself as “a non-profit newsroom producing journalism in the public interest.” Leach serves as the chair of a prize jury that ProPublica has created to honor “outstanding investigative work by governmental groups,” and perhaps he will grant one retrospectively to Brooksley Born and the federal commission she ran so brilliantly before Leach and his buddies destroyed her.

Click here to check out Robert Scheer’s book,
“The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”


Keep up with Robert Scheer’s latest columns, interviews, tour dates and more at www.truthdig.com/robert_scheer.



Get truth delivered to
your inbox every week.

Previous item: GM’s Fall and the Cars of My Youth

Next item: Myth of the Lone Shooter



New and Improved Comments

If you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy.

prole's avatar

By prole, June 4, 2009 at 1:06 am Link to this comment

It certainly “is disingenuous to ignore the fact that the derivatives scams at the heart of the economic meltdown didn’t exist in President Reagan’s time” - and they must be green with envy that they didn’t think of it sooner themselves, since they were cut from the same corporate capitalist cloth. And it may be “perverse in shifting blame from the obvious villains closer at hand” but that shouldn’t detract from the crimes of Ray-gun’s Raiders. By playing one era of villians off against another it mitigates the culpability of each in their own right. No matter which you favor or disfavor vis-a-vis one another, the system stays the same. This is similar to John Dean’s plaints about the Bush shenanigans being “worse than Watergate.” Does anyone really miss Tricky Dick’s gang? As if they don’t all ooze from the same decrepit institutional cesspool regardless of which regime may be more villanious in comparative contemptibility. To even get immersed in such relativist recriminations is to allow the system itself to escape unchallenged. It probably won’t be long before ‘perverse’ pundits will be solemnly exonerating W. because he wasn’t as bad as Mr. Hope & Change ultimately proves to be. If the “iceberg that our ship of state has encountered… began to form on Bill Clinton’s watch, not Reagan’s”, it’s still the same ship of state, it just tacks slightly to left or right according to the passing political winds but maintains a steady course of power and privilege, through each “watch”. It is, of course, unpardonable to “ignore the wreckage wrought during the Clinton years” but how else could Krugman keep a regular column in the NY Times? Did anyone really expect to find an editorial in the Times denouncing the tight little NY Jewish financial cabal that ran the Clinton White House? Especially not now, when they’re back at the helm of the ship of state on Obama’s woeful “watch”. But if there are many obvious, and not so obvious, villians in this sorry morality play, it doesn’t mean that there has to be a hero, even an unlikely one like Brooksley Born (even if the name is straight out of central casting). If “the Clinton-appointed head of the C F T C… dared propose that her agency regulate that market”, it was mainly to save the investor class from themselves. The “heroic” Born came from the same class herself, she was a corporate lawyer at Arnold & Porter, one of Washington’s top corporate lobbyists, a typical path to government power. She was no radical egalitarian. and apparently not even very committed to regulating the market much at all. When asked in an interview in ‘03 about “the outcome of the regulatory effort” during her tenure, Born explained, “It wasn’t a regulatory effort. We were just asking questions! The concept release didn’t propose any rules. Alan Greenspan, Arthur Levitt, and Robert Rubin all said that these questions should not be asked…” So once again we have Right and farther Right to choose between, i.e. which is the best way to protect the investor class? As our heroine further explained it, “Although I was willing to be persuaded otherwise, I felt strongly that while heavy regulation was not required, transparency was needed, and some federal regulator should have information before a disaster occurred rather than only afterwards”.  It’s not exactly clear whether she should get an award for such “brilliance” but she was amply rewarded for her very brief stint in the federal bureaucracy. Born and several other CFTC colleagues returned to opulent Arnold & Porter -  to their derivitives practice, naturally. She didn’t exactly wind up in a refugee camp, so we can perhaps save our tears for those who have been literally destroyed by the Reagn/Clinton/Obama ‘ship of state’. Perhaps ProPublica can create a new prize for some real heroes in the resistance movements around the world defending themselves against this bipartisan battleship.

Report this

By aminahyaquin, June 4, 2009 at 12:31 am Link to this comment

My God! finally an analyst who is not ablinded, partisan idealogue. Yes, Mt. scheer—right on all counts.
If only the new administration is listening.
We elected President Obama to restore democracy. Clinton and GW Bush have enabled monopolistic corpocracy-


Small business must be the engine that drives a health democracy, and homeownership is integral.

in the horrific welfare so-called reform movement we have shoved poor people into a black market economy that compromises our nation’s survival. That black market economy, imcluding prostitution,drug sales, cybercrime, gambling, and child pornography, is corrosively entrenched now in our working lcasss. folks are making their living by exploiting others in vices that are addictive and like invasive plants, once cultivated very difficult to eradicate.
Moreover they have picked up the slack of the dearth of local business.

i hope we realize that corporate uberprofits, exploitive black market crime, and the loss of banking scruples take a mega toll on our society’s stability, security and capacity to provided life with dignity and happiness to our citizenry.

Report this

By hippie4ever, June 3, 2009 at 10:25 pm Link to this comment

Reagan was the first big GOP proponent for deregulation so yes, he too is responsible. Consider the S&L scandal as a trial run for subsequent raids on the Treasury by the GOP.

The big Fascist God has been made into a statue and the She-Mammy made an appearance with Obama. It was on the “news.” First time I’ve seen her not looking really scary; she’s frail and not long for the world. She said it was a remarkable likeness which it was; but it needed some splattered blood because Reagan was the death of thousands of innocents, here in the U.S. but especially in Central America.

Raygun was a killer President…most of them are and we are in perpetual war. But that’s okay—they are rewriting history.

Report this

By Marshall, June 3, 2009 at 10:17 pm Link to this comment

By ardee, June 3 at 8:19 pm #

Ardee - you’ve fallen prey to the deception of the visual graph vs. the actual data (and it doesn’t help that your graphs come from partisan sites like zfacts that try and portray data in a dem-positive light).  Here are the numbers for average debt vs. gdp during each president’s two terms:

Clinton - 64.4%
Bush - 63.2%.

Source: http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf

Now to be fair, I should point out that pinning debt to the start and end of a president’s term is misleading for a couple of reasons:

1) A new president’s budget and tax code don’t even take effect until Q3 of the first year in office, before which the outgoing president’s budget is still in force.

2) Congress holds the purse strings and is often a major influence on the budget so, for example, the republican congress under Clinton significantly pared down his proposed spending (in fact, a chart showing debt vs. congressional party in power yields very different results).

Your graph correctly shows a downward trend of debt vs. GDP during Clinton, followed by an initial rise during Bush’s first term which then tapered off.  Nevertheless my statement remains true when you crunch the actual data.

Again I’m not claiming these numbers mean much - i was simply pointing out to Ron that debt is measured as a percentage of GDP and that using that measure alters the common perception of a debt happy Bush vs. a thrifty Clinton.

Report this
Night-Gaunt's avatar

By Night-Gaunt, June 3, 2009 at 9:50 pm Link to this comment

“One really messed up society. Watched O’Reilly and Dennis Miller tonight, it was absolutely revolting. The left is no better, radicalism and cheap mockery and bombastic BS.”Hawkeye

The fallacy of equivalence is telling in your statement. You certainly don’t watch Schultz, Olberman and Maddow or you wouldn’t say such an incorrect thing about them. Where is the BS in what they say? You will find them mocking, but also they have the facts in the cases of which they speak. One isn’t the other and such false comparisons are used all too lightly and constantly by those who are uninterested in facts just to say both “sides” are just wrong. Without actually giving examples of how the bombastic wrong of Fark News over MSNBC are also wrong in their information. How about some examples please?

Report this

By Michael Shaw, June 3, 2009 at 9:41 pm Link to this comment
(Unregistered commenter)

Davol you are right. You too Beetleguese. In as much as I respect Robert Sheer, I would remind him the GOP needs no further ammunition to apply to their patron saint. I believe they already have plenty of people doing that. Take Mark Levin for example. And no Robert I don’t see you in the same light as this hack.

The bottom line is, Washington and damn near all of it’s politicians are owned by Wall Street aka MIC. They didn’t have to own it under Reagan. He provided them with everything they wanted and every president since has continued that trend. Like many I was hoping Obama would break that tradition. Hiring a general who says we’ll be in Iraq another ten years after Obama pledged removal a year from now and escalating the war in Afghanistan and spreading it into Pakistan is no route to ending this economic crisis. It merely adds more debt to the already insurmountable debt someday someone is going to have to pay back. It won’t be Wall Street, nor the defense contractors, not the rich in general. It will be all of the little guys, us.

Report this

By Rontruth, June 3, 2009 at 9:34 pm Link to this comment

I must stand up for Bill Clinton as president. Reagan has, more or less, been fairly accurately treated. The fact is, that while Reagan fell asleep during important staff and other meetings, the guy whbose close family friend down in Texas tried to shoot (assassinate is the word used by the high and mighty) Reagan, did the actual governing. Speaking of George H. W. Bush. His were the policies that actually were signed into law by Reagan, who was likely too afraid to do otherwise, just based on the cozy friendship he later found out about between George, his Vice President, and John Hinckley, his would-be assassin.

This is where Iran-Contra came from, through the venue of Reagan and Bush’s “October Surprise” when Bush and his secretary who later wrote a book about it, Barbara Honegger, flew secretly to Paris, France during the 1980 election campaign against Carter whose negotiations were almost successfully completed. Bush made a deal with the Iranians he met with their to have them hold off releasing the 52 US hostages until after the 1980 elections. Carter’s numbers were rapidly catching up to Reagan and Bush’s numbers.

The Iranians were promised weapons and strategic help in their war with Saddam Hussein of Iraq, in return for holding the hostages til after the 1980 election. Ms. Honegger tried to get her story out on talk shows, etc. as well as the book. Her life had been threatened, but she was smart enough to call in to the radio talk shows and let them know she had been threatened. They told the public. That is likely the only reason she was allowed to live.

What is needed is for the elder Bush, and his son, to stand before a Federal Grand Jury to face the facts of what they did. We can no longer just say, “Oh, well, it’s been going on for so long now.”
First thing is we need to admit the documented truth about what has gone on in our names.

Does anyone have the courage to do that? Call 202-224-3121, the US Capitol, and demand full investigations, and hearings that are FULLY televised, with NO secret, hehind the scenes BS as happened during the House Select Committee on Assassinations, and the 9/11 Commission. Democrat, Ben Venista, tried to get major points of truth out about what Bush and Cheney knew was coming BEFORE 9/11. But, the Republicans ran it, and stopped him.

You know the rest of the story.

Report this

By Nathan Snail, June 3, 2009 at 8:06 pm Link to this comment
(Unregistered commenter)

proof positive that even Paul Krugman can be either threatened or blackmailed into pinning the tail onto the wrong donkey.  Reagan was part of this, but he was only the one who kick started the machine.  These fuckers in power now are racking the throttle and chortling to themselves as they rape the taxpayers blind.  Krugman just lost me as a reader for this nonsense.

Report this

By Rontruth, June 3, 2009 at 8:02 pm Link to this comment

One of the big problems, it seems to me, is that we all seem to describe, each of us in our own way, the basic current fact that Americans have been given spoonfed pablum for so long now, that they don’t know what it is like to chew on granola multigrain cereal, if you get my drift. But, if we do not come to an agreed-upon understanding of our real history, then we have lost the ability to use the past to explain what is going on in the present.

Only one or two respondents in this blog even began to understand that the lied-about history of the early and later years of the 1960’s were a very seminal period in our country’s political/economic history. This is true because, though many might deny it, there are yet older people alive today, who are still influencing political goings on inside government in America, and who were, as is now proven by the recorded testimonies of many of the key players, directly involved in some of the most shocking political crimes in our history.

The reason many do not really care is because, first of all, to know would, for their own moral reasons, require them to do something, both personally and collectively, to change not what happened in the past, but keep it from happening in the present and future. People know, because of fraudulent “Commissions,” and “Congressional Committees”,etc., that, because politicians are not only paid by government, but under the table as we all keep discovering, where most of the influence is peddled by corporate bagmen.

They don’t pay for drugs like Jack Ruby did in Dallas, Texas, up to the time he shot and killed an FBI Informant (Oswald) who tried to stop the JFK assassination but got caught in his role attempting to do so by those who were to be Kennedy’s actual killers. Kennedy tried to change things, but became too big a threat to the big money interests. They felt they had to stop him, and knew that he would be handsomely re-elected a year later, with poll numbers at 70% average approval ratings.

He was wealthy, and did not owe them anything, and they knew it. But the mob stuffed voting envelopes and caused him to win. It was the mob who did it for him in Chicago. When brother Bobby went after the mob,they went after Pres. Kennedy. What’s important is that the same kinds of thugs did the same things in southern Illinois for Nixon. But, Kennedy’s mobsters did a better job of cheating. Nixon and the mob were JFK’s achilles heal.

The same types of criminals now pay their money directly to Congress and candidates, so that they don’t have to kill politicians who do not do their bidding with legislatio

What we need is the history, for example of the fact that, no sooner had Hillary Clinton’s healthcare initiative been defeated in Congress, but the doctors all quickly raised their office visit fees back up to, or even higher than, where they were before Mrs. Clinton tried to really change things for the uninsured. It was all paid for by lobbyists and others.

Thus, we have full-blown neo-fascists in government who hide behind “democracy” by saying one thing in public in front of TV cameras, then voting for the oligarchs who paid for their actual votes.

As “church-lady” used to say,“Now, isn’t that special!

Report this
CJ's avatar

By CJ, June 3, 2009 at 8:02 pm Link to this comment

Well, after reading Krugman’s piece… He certainly states facts of the dismal (actually horrifying) Reagan regime. Indeed, S&Ls; did go under during that regime. (Some might recall Charles Keating and a certain Neil Bush, among countless others.)

Krugman: “But there was also a longer-term effect. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down.”

Yeah, uh, huh. Krugman might have put it differently: Americans got greedy, very much encouraged by the fraud occupying the White House at the time. Reagan was, among other self-serving things, claimant that any could both have and then eat cake. “Shining” (not so shiny as seven-foot statue of the Gip unveiled just today) atop some hill was “vision” even Dem voters wanted to believe in.

“Government, declared Reagan, is the problem, not the solution; the magic of the marketplace must be set free. And so the precautionary rules were scrapped.”

“Together with looser lending standards for other kinds of consumer credit, this led to a radical change in American behavior.”

Yes sir. Reagan was the kind of nut-case anarchist reasonable humans would prefer never. Turned out—according to Reagan speech and act(ing)—that one really could have all for just about nothing down. True for him, if not likely for most. (Bearing in mind capitalist context, wherein usually better to put down more than take celebrated risk that almost always leads to ruin for any not on the inside. All were encouraged—by speech—to believe they really could beat the house. Then—by act—S&Ls; were “liberated.”)

Krugman goes on to cite highly relevant stats regarding rate of personal savings, Reagan’s hypocritical (in light of proclaimed anti-gub creed) monumental spending (my note here) that led to “[E]xplosion of debt that made the U.S. economy so vulnerable.” (Even I got to thinking I could have it all, or least a little more, despite knowing better.)

Krugman also notes:  “Now, the proximate causes of today’s economic crisis lie in events that took place long after Reagan left office…”

Obviously.

Scheer too appears to have facts in order, as readers can read for themselves.

I don’t read Krugman as ignoring “wreckage wrought during the Clinton years by (Scheer’s) gang of five.” I read him as reporting that what Reagan wrought (leaving aside Carter, and Nixon, I guess) laid the foundation for what Clinton made worse. If presidents really do impact U.S. economy. Which they do, if only mostly by means of espousal of only slightly varying “free-market” creed.

But also by signing various legislation that directly impacts the economy.

None who’s been around for as long as Scheer and me can seriously doubt that Reagan was principle in instigating ruin. Absurdly enough.

But sure, Clinton out-Reagan-ed Reagan. (Which I hope Krugman knows well enough. But, thus, one of my many complaints regarding liberalism, especially of Clinton “neo” and/or DLC kind.)

So does any long by now for Lyndon Johnson? Who, aside from war debacle, seems in retro to have given something of a damn? About more than ruling while benefiting those to whom Johnson never belonged, and to whom he had no ambition to belong. With all his gross faults, these humps ever since have proven to be…well, small-time humpers driven by the most ridiculous blather/myth, whether gleaned at Ivy League or Hollywood. (Nixon a whole other story, and about whom none knows more than Robert Scheer.)

Report this

By SINGLE PAYER, June 3, 2009 at 7:59 pm Link to this comment

No, Reagan did not understand much of anything. Just another “Willy Loman” character. Sad, really.

But somebody on this thread said it perfectly:

“Reagan didn’t do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did.”

I suspect what we have with Obama is another Reagan, a professional orator with some style, but who is in way over his head. Hope his back office is able to guide him through without starting WW3.

Report this

By Thomas Mc, June 3, 2009 at 6:29 pm Link to this comment

Reagan started to whole “Deregulate!” mantra, which led us into this mess. He and the GOP are to blame, but also the faux-Dems who went right along with it.

Report this

By ju, June 3, 2009 at 5:45 pm Link to this comment
(Unregistered commenter)

I have to disagree with Bob Scheerer on this one. Reagan set the ‘tone’ for the current meltdown with his “government’s the enemy” and deregulation rhetoric. All the markets that collapsed (sub prime, Alt-A, CDO’s, CLO’s,credit default swaps) were an unregulated Ronald Reagan dreamland….Reagan would have most certainly approved of all of it. The late 80’s / early 90’s S&L and junk bond collapses were just previews of what was to come. Scheerer is definitely right that Reagan acolytes Rubin and Summers didn’t do anyone any good.

Report this

By Inherit The Wind, June 3, 2009 at 5:25 pm Link to this comment

Bottom line is, folks: Reagan did it. Yes indeedy, he did it.

Report this

By ardee, June 3, 2009 at 5:19 pm Link to this comment

Marshall, June 3 at 2:33 pm #

By Rontruth, June 3 at 1:25 pm #

Ron - deficit and debt figures (which you confuse in your post) are meaningless as raw numbers.  These values are measured as a percentage of GDP (the debt under Bush was actually lower than under Clinton by this measure, even though the budget was balanced under Clinton).
......................................

Marshall, Marshall, Marshall…...

http://zfacts.com/p/318.html

National debt as a percentage of GDP, under Clinton a high of about 70%,but declined all during his Presidency. Under Bush 43, about 80% at its height, but it rose all during his Presidency

also:
http://mcdac.blogspot.com/2008/12/us-debt-under-clinton-compared-to-debt.html

Report this

By idarad, June 3, 2009 at 4:22 pm Link to this comment

Nice set of comments - thanks for the read.  I think I would only add that the only real difference between Reagan and Clinton is time, both were/are members of the elite who never did care about the people,  the economy or the Constitution.  There is the elite class that comprises about 3 percent of the population and there remains the rest. And with Obama it does not appear that change will come… look at the “elite economic advisers he tapped…..
Krugman/Sheer are arguing perspective not facts

Report this

By don knutsen, June 3, 2009 at 3:57 pm Link to this comment
(Unregistered commenter)

Steve L…..I think you’ve hit it exactly right. As I said in my post today, This mess of an economy is not all Reagan’s fault. He’s had plenty of help expanding on his initial wrong headed policies, culminating in GW Bush who like his Dad had no inkling or interest in the middle class, to them the middle class are chattle to be manipulated to help those in the upper class to benifit financially. We are all suckers to be taken advantage of. It was Reagan who ushered in that era that continues since. Culminating in Bush and a republican party that refused any form of oversite, any regulation was a liberal term and starting un-needed wars just happen to cost a hell of a lot. While they had us all distracted with the bogey-man hiding in a cave in the mountains, Bush, like he has every other buisness enterprise, ran this country into the ground. Now he’s making $150k giving speeches on the economy. Its a real indication of how behind the ball our media is, that anyone, anywhere, would be interested in GW Bush’s opinion on that subject.

Report this

By Mary Ann McNeely, June 3, 2009 at 3:51 pm Link to this comment

Reagan was as great a failure as a politician as he was as a parent and an actor.  His move from “Bedtime for Bonzo” to host of Death Valley Days, to shill for GE to governor of Kollyfornya to president is a neon testament to the laziness, gullibility and stupidity of the majority of Americans.

Report this

By aaron burr society, June 3, 2009 at 3:18 pm Link to this comment

Your facts are correct but you seem to miss the point. Reagan was the one who took Milton Freedman and Ayn Rand’s perverted ideas of the mythical free market economy and set the stage for what followed. The philosophy and strategy was laid out by Reagan’s people, the tactics that both parties followed were financed by Wall Street and their corporate cronies.

Report this

By BobZ, June 3, 2009 at 2:49 pm Link to this comment

Steve L,

“Example: The Enron’s of the country got to pick who ran the FEC so they could steel 10’s of billion’s from California. ”

California never fully recovered from the Enron rape. The U.S. should have reimbursed California for their failure to properly regulate Enron and their predatory practices. What is sad is that Gray Davis had a chance to call Enron’s bluff and he backed down instead. That cost him his job, and Arnold just dug the hole deeper for California.

Reagan also trashed California with his constant battles with the University of California, and throwing mentally ill patients out on the streets to become the start of our homeless problem. There seems to be pretty clear unaminity on this board that Reagan was a fraud as Governor of California and as President. Krugman got it right.

Report this

By don knutsen, June 3, 2009 at 2:30 pm Link to this comment
(Unregistered commenter)

Looks to me like Sheer has allowed himself to fall into the mode of forgettfullness when it comes to the legacy of Reagan. It is true that there is more then enough blame to go around, including ofcourse Clinton who too often appeared more like republican lite. And this last administration succeeded in turning any agency that might have helped curb these excesses of Wall St. / the banks into nothing but incompetant loyal “Bushies” that had no mandate what-so-ever to watch over who was playing with all our money. But most of this might not have been possible if not for the zeal of De-regulation that Reagan championed. And since our collective memory seems to have left us while Reagan rose to sainthood, many seem to have forgotten that it was this lousy actor that in large measure started the ball rolling to where it is now.

Report this

By SteveL, June 3, 2009 at 2:28 pm Link to this comment

What Reagan did do:  Deregulated the banks after 15 to 25 years of no bank failures, now we have plenty.  Dropped the top income tax rate from 71% to 28%, while he put tax on waiter’s tips and un-employment benefits (how decent).  This bought about deficits and the boom and bust economy we have now.  Raised the tax for Social Security,  changed the name to payroll tax (with the help of the media), put this tax in the General fund so the wealthy could keep their tax breaks (this is why the wealthy want to get rid of social security).  What Bush 2 did:  Put people in charge of regulatory agencies that publicly stated that they did not believe in what these agencies do.  Example: The Enron’s of the country got to pick who ran the FEC so they could steel 10’s of billion’s from California.  By the way the media never asked the simple question of “Where did all this money go?”  The FBI and the SEC could have easily stopped Bernie Madoff,  exposed AIG, the rest of the insurance fraud, banks reckless investment and so on.  However under Bush 2 none of these agencies believed in what they were supposed to do.  It does not matter what the laws are if the watch dogs are going to sleep anyway.

Report this

By Davol, June 3, 2009 at 1:53 pm Link to this comment
(Unregistered commenter)

Paul Krugman’s point was that Reagan was the one who started the privitize and deregulate trend that was a full-speed bandwagon by the time the Republican controlled Congress repealed the Glass-Seagall act.  Paul Krugman is right, and it was Reagan’s sympathy for this cause that originally turned me into an anti-Republican decades before it became cool to be against Republicans.  Now I get to enjoy my years of I-told-you-so mode regardless of how unpopular conservatives what to twist their arguments in the wind.

Report this

By Michael Shaw, June 3, 2009 at 1:52 pm Link to this comment
(Unregistered commenter)

Well if you only take into account the factors Mr. Sheer is pointing out as being the only reason we are in this debacle then he is right. But there is far more to this crisis that he isn’t mentioning, including the MIC. And what about Greenspan? He was one of the 5, dare I say the major proponent to this economic disaster. Who put him in there? It wasn’t Bill Clinton! Also who broke up the unions? Who allowed a trend of stagnated median wages for the working class from his time to date during the biggest corporate profits period in US history? Who increased defense spending while creating more tax loopholes for the rich? Who preemptively invaded Grenada for the hell of it, disregarding both national and international laws? Who cut funding for people with mental disabilities which tremendously added to the numbers in homelessness in this country? In fact even the dream of owning a home became less attainable under Reagan.

No Reagan did not cause this current economic crisis, but indeed he did lay the ground work. Under Reagan came Iran-Contra, the covert attacks on Nicaragua and the illegal business in dealing with our alleged enemy Iran. Who started the embedded journalist canard? Also who enabled Saddam Hussein which in part led to much of the hate aimed at us from the Middle East? His administration was the beginning of corporate consolidation of broadcast media, the deregulating of the FCC, which resulted in the gobbling up of independent broadcasters who were replaced in ownership for the most part by defense contractors and those who own stock with them. Under his watch came an end to independent journalists being allowed to track warfare from the onset without the permission of the military, starting with Grenada. How about the death squads via the School of the America’s in Latin America? The actions there are what resulted in most of Latin America going socialist. Perhaps that will be the next for profit battleground in the future.

Make no mistake the vast expenditures on warfare and the lucrative defense contracts that go with them are also a major reason we today are in such economic straights, insurmountable debt, why the infrastructure is crumbling and why the vast majority of us are far worse off then our parents were.

Yes Clinton and his boys(along with Reagan’s handpick FED chairman) did play a major role and deserves much of the responsibility. Believe me I know Clinton was no saint. But have you forgotten that Reagan ran us economically into the ground too or was the asking of Saudi royalty for hundreds of billions of dollars to bail him out nothing? He also started the era of the two paycheck family because the cost of living virtually doubled overnight.

So let’s not try and make a saint out of Ronald Reagan Mr. Sheer. I would even go back before Reagan to Eisenhower, the guy who started the MIC, then said oops, this could turn out to be a nightmare! Well hot-damn, he was right! And Reagan if anyone was their first poster boy! A tough talker, big on defense, he spent the duration of WW2 in a Hollywood parking lot! Later he would help Joe McCarthy weed out and destroy dangerous “communists” like Zero Mostel.

Report this

By ocjim, June 3, 2009 at 1:34 pm Link to this comment

Scheer says, “Reagan didn’t do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did. They, along with then-Fed Chairman Alan Greenspan and Republican congressional leaders James Leach and Phil Gramm, blocked any effective regulation of the over-the-counter derivatives that turned into the toxic assets now being paid for with tax dollars.”

Now, I didn’t read Krugman’s article closely but I remember that he mentioned Reagan’s penchant for deregulation and his deridement of government as overriding influences on the ruling culture that followed.

Reagan was such a object of worship by growing conservative figures and neocon think tanks were spending so much propaganda money that all politicians balked at regulation.

Krugman mentioned that the S&L fiasco and taxpayer bailout did not prompt any learning for leaders.

I did not see that he directly blamed Reagan. Reagan began a movement that wimpish politicians wouldn’t counter, including Clinton who was dogged, attacked and derided by the powerful neocon forces.

Report this

By tp, June 3, 2009 at 1:04 pm Link to this comment
(Unregistered commenter)

The answers to our problems were not solved by either party in the last 30 years. Both were controlled by the too big to fail banks. Clinton and Reagan alike were used by the Banksters as were most politicians. Lobbyist money gets the power and representation that we should have.
  One of the first things Clinton did was ram NAFTA though while distracting us with the don’t ask don’t tell policy. Reagan busted the unions as soon as he took office and the steel industry started migrating to Mexico. Manufacturing labor left for Asia in all administrations since Nixon. Companies like Enron started all kinds of over seas ventures and off shore scams to get around taxes. There was a boom that delivered much more money to the upper class and less to the working class. The “haves” got more and the “have nots” got less out of our American dreams.
  The Banksters were in control. They have always pulled the strings for their bottom line. They know the word patriatism but don’t have a clue what it really means. Oh, they know how to use the word to recruit. 
  FDR regulated the banks and insurance companies only under a great deal of pressure, mostly from his wife. At least he regulated and controlled them some what. But they still printed our money and was able to use their so called tool boxes to keep us patriotically stupid and controlled.
  The answer is well known in history. The wizard of OZ is a satire about it. Our government ‘SHOULD’ be in the banking business. The government should print our money not the privately owned Feds. The Civil war was won with green backs not bailouts. Banks should be a public service not a Las Vegas slot machine. “The Web of Debt”, written by Ellen Brown explains how we got in this mess and how to solve our economic problems. Go to http://www.webofdebt.com/
  If all this commit energy could be harnessed a real change could begin to take shape in the form of protests and rallies. There is a new way forward already in progress here: http://www.anewwayforward.org/the_idea/. It is a movement across this country forming to bust the banks down to size. Reagan and Clinton would not have liked this movement as they were in bed with the banks, nor will Obama. He has handed complete control to the same Banksters that put us in this situation. Check it out: http://www.anewwayforward.org/the_idea/
tp

Report this

By Folktruther, June 3, 2009 at 12:56 pm Link to this comment

g. Anderson, that is precisely the problem.  The owners and manaagers of the corporations andk banks own and manage the mass media and finance the parties, and consewuently own the US government.  This hasn’t changed power wise since Marx wrote.  Until the population understands this clearly, and mobilizes against it, nothing can change, powerwise.

The first thing that must be done is to develop an ideology that focuses on the major people problems, and combats the deception and evasion of the mainstream Truth.  This will take years if not decades. The American population has been dispowered by the US powerstate.

The powerstate includes not only the violence organs, the military intellignece and police agencies, but the Truth system as well, the mass media, schools, universities and other learned bureacucies, churches, the Entertainment industry, etc.  The ruling class usses all of these organs to manipulate the minds of the population.  It is not violence that keeps the powerful in power, but Truth, what Hume called Opinion.

Polls have shown that most of the world’s people think that the US plays a negative role in the world.  The US powerstate also plays a negative role in the US, promoting interests of the class based power structure incompatible with those of the vast majority of the people.  IF a powerstate commits atrocities, it will purvey absurdities, and these power delusions are chaining the people to the American power structure.  It is these Truth chains that must be broken.

Report this

By Mark Biskeborn, June 3, 2009 at 12:48 pm Link to this comment
(Unregistered commenter)

You’d have to agree that Reagan took some of the largest initial steps. Remember Reaganomics? Supply side economic theories? Reagan’s pro-big business and extremely pro-large-corporations got this ball rolling like nothing else.

Yes. It’s true that many other politicians, Clinton and certainly Greenspan included, added to what Reagan initiated.
At the end of the day, though, the crisis came to an explosive end under G.W.Bush’s watch. Many huge blunders and catastrophes occurred under W’s watch as if he were a victim who just didn’t look both ways while crossing the highway and was smacked by a MAC truck, not really the profile of the Decider. And in the earliest days of W’s administration, many experts and journalists were giving warning about the looming financial services industry’s fall.
This was especially obvious in the real estate industry. Everyone working in mortgages and house sales constantly made jokes how banks were throwing loans to anyone with a pulse. It was a big joke for people who merely sell houses and never cracked open a book of economics. Why then didn’t W began to take measure to curb the looming disaster?

I offer one reply. Bush and his team were blinded by their ideology that included a fanatic belief in freewheeling, unbridled capitalism. It’s their blind fundamentalism and fanaticism that we still hear when Cheney defends the pre-emptive bombing of Iraqi and torture to this day.

W and his fanatical team were initially appointed into office by the Supreme Court’s own extremists.
They were not elected by the people.

Have we lost all sense of accountability?

Report this

By psickmind fraud, June 3, 2009 at 12:20 pm Link to this comment

Paul Craig Roberts, former Asst Sec of the Treas, has some more doom and gloom statements about the economy on counterpunch.com today. 

It’s difficult to see how we can pull out of this for more than a short glimpse of daylight when we don’t manufacture anything anymore, we spend sh*tloads on wars and on maintaing bases throughout the world, and our gummint gives money to those who’ve already looted.

Report this

By Palindromedary, June 3, 2009 at 12:19 pm Link to this comment
(Unregistered commenter)

Hang in there, Gloria!  A revolution can’t be fought with dead people. Let’s all live to enjoy the day when we roll out the guillotines and lop off some bankers, politicians, and corporate heads.

Report this

By Rontruth, June 3, 2009 at 12:05 pm Link to this comment

liecatcher. I would just add to your third point in which you said, “When Reagan, the actor, went beyond his script, a HIT was put on him,” by simply, and remembering John Hinckley, Jr., a friend of George and Barbara Bush, the “hit” nearly succeeded back in 1981 when Reagan almost suffered the same fate as President Kennedy had some 18 years earlier. Some have made credibly documented statements that both “hit(s)” involved one of the same guys at or near the top of both conspiracies.

This statement is essentially backed up by none other than Republican, and actor, Bruce Willis two years ago, just after E. Howard Hunt’s death and the release of his confession of his and CIA involvement in the public execution of President Kennedy.

Report this

By KDelphi, June 3, 2009 at 11:57 am Link to this comment

Scheer—you will probably never be forgiven for this..lol Reagan didnt “launch the idea”—the “founding fathers ” did.

THEY ARE BOTH THE SAME PARTY, folks!

Did anyone catch (on c-span) Rep Kaptur’s questioning of Bernancke this morning? When she asked about democratizing the Fed ? (answer: no) When she asked about Geithner, Summers and Ratt-basterd’s (you thought Geithner was young? This guy’s 31!!) signing of 5 contracts with BlackRock, whch is paying kickbacks to Summers? (Bernancke “doesnt recall”..oh, no not again!)

We need to pass legislation that no one is allowed to say, “I dont recall” in a Hearing ever again!

Krugman does say this, (which is an obvious dodge to shift blame from Clinton…)“There’s plenty of blame to go around these days. But the prime villains behind the mess we’re in were Reagan and his circle of advisers — men who forgot the lessons of America’s last great financial crisis, and condemned the rest of us to repeat it.”

Yes, there’s alwaye “plenty of blame to go around”, but it seems we never get around to punishing anyone but the working classes! There ARE people to BLAME folks! Its not a “blame game”! There is FRAUD.

How can we lock these guys up if presidents keep appointing them???

Report this
G.Anderson's avatar

By G.Anderson, June 3, 2009 at 11:52 am Link to this comment

NABNYC - Bravo!

Report this

By NABNYC, June 3, 2009 at 11:45 am Link to this comment

Excellent article.

People used to hate New York City.  They would say things like “It’s so dirty, and there’s so much crime.”  But after 9/11, newspapers around the country ran the banner “We’re All New Yorkers Now.”

I remember how so much of the country seemed to detest Hillary Clinton for such a long time.  Somehow her husband managed to deflect criticism from him to her, and people criticized her for everything he did.  She knew the truth about her husband, yet he came out much beloved by democrats and she came out the villain. 

But after Clinton left office, we began to see how much he had betrayed us, lied to us, deceived us, sent our jobs overseas, conned us, sold out the working people, turned the Democratic Party into the Republican Party.

I think we should have headlines today saying:  “We’re All Hillary Now.”  Now we all know what a snake that guy Bill was.  Then he left office and solicited close to a billion dollars from corporations and foreign countries that he benefited while he was the President.

Bill said forget about jobs going to China—we’ll all be so rich that all we’ll have to do is sit around and read our stock statements every day.  Bill said we need open borders, the world is flat, you can’t fight globalization, American workers need to get with it and don’t be silly and selfish about trying to keep their jobs. Look to the future.

Well, the future is here, and working people are screwed.  The insiders have stolen the jobs and sent them to third world countries.  The trade secrets and know-how created by generations of American working people have been transferred to China.  Tens of millions of immigrants have been brought into the country in the last 10 years to further increase the supply of labor and decrease wages, wipe out benefits and pensions.  People have lost half their savings at least twice (2000 and 2008), healthcare is unaffordable, there are no employer-sponsored pensions, and now the Democrats join the Republicans in trying to eliminate Social Security and Medicare.

All of this started with Slick Bill Clinton selling the working people of this country a pile of hooey.

But nobody in our government is going to do a thing to help working people until enough of us get out in the streets, sit down and sit in and shut down everything, and demand jobs, a living wage, benefits, protection of American jobs, taxes on the rich, increases in social security, single-payer healthcare, free education through college. 

Bust up every monopoly, starting with Wall Street.  Fine the insiders who have paid themselves millions.  We need to stop the wars, stop the continued corporate looting and plundering, and shut down everything until the federal government finally realizes that we are awake, and we are angry. 
 
The politicians in D.C. should look out their window at night and worry about the working people in this country who, eventually, are going to stand up for themselves and demand justice:

“Things fall apart, the centre cannot hold.  Mere anarchy is loosed upon the world.  Somewhere in the sands of the desert a shape with lion body and the head of a man, a gaze blank and pitiless as the sun, is moving its slow thighs.  What rough beast, its hour come round at last, Slouches towards Bethlehem to be born?”  From “The Second Coming” by Yeats.

Report this
Virginia777's avatar

By Virginia777, June 3, 2009 at 11:34 am Link to this comment

to Ed Harges:

I think you have to look to the end of the 1960’s as the beginning of the advancement of the far right in this country.

As John Weiss says in his book “The Fascist Tradition”:

“The radical right thrives in societies where older but still powerful conservative classes are threatened by rapid and modernizing social change; change which creates or gives strength to liberal and radical classes and groups antagonistic toward “the old ways”.”

Report this

By liecatcher, June 3, 2009 at 11:34 am Link to this comment

Hey Robert Scheer:

Thanks for writing an outstanding article.

My first answer to the question:

“How could Paul Krugman, winner of the Nobel Prize in economics and author of generally excellent columns in The New York Times, get it so wrong? “

is that it’s easier to blame the dead.

My next choice is that if he named the living villians, the mainstream media shows would no longer invite him even though he represents a form of respectablity.

And finally, unless studied carefully, the average person doesn’t realize that Bush one, under the guise of V.P., was actually running the show

& when Reagan the actor tried to go beyond his script, a hit was put on him.

Report this

By Marshall, June 3, 2009 at 11:33 am Link to this comment

By Rontruth, June 3 at 1:25 pm #

Ron - deficit and debt figures (which you confuse in your post) are meaningless as raw numbers.  These values are measured as a percentage of GDP (the debt under Bush was actually lower than under Clinton by this measure, even though the budget was balanced under Clinton).

Virtually all commenters here ignore the role of congress in shaping a President’s budget, instead preferring to blame any negative economic consequences on a republican president (even during a democratic congress), and ignoring the role of republican congress in any economic progress during a democratic president.  This is what i’d expect from a partisan group, but it deserves mentioning.

Ron - do the 22 million jobs clinton allegedly created include the bloat of dot-com economy jobs that ultimately began evaporated at the end of his term?  I don’t blame creation of these fake jobs on Clinton anymore than i blame their loss on him because the fallacy of presidents “creating jobs” is rampant.  Obama is attempting to do so by unprecedented expansion of the public sector - we’ll see how that works out.

And i’m curious how a right wing conspiracy lured monica into the oval office and convinced clinton to lie about it.  Nice theory, but stretching reality.

Report this

By Ted Swart, June 3, 2009 at 11:21 am Link to this comment

YES Diamond when you say”

” Another startling fact is that America’s Gross Domestic Product now contains only something like 28% manufacturing. America, under Reagan’s ideology, stopped making things (which is how you create genuine wealth as opposed to cyber wealth) and went into ‘financialization’ of the economy -the creation and selling of ‘finance products’.”

Making credit too easy to come by and destroying manufacturing capacity are the twin pillars which brought us to this sorry state of affairs. Ross Perot was one of the few presidential candidates who spoke openly about the need to maintain manufacturing capacity.  The US could be and should be as independent as possible and that goers for other countries as well. The corporatists (who effectively run the government)are only interested in short term gain which inevitably causes long term and long lasting pain.

Report this

By diamond, June 3, 2009 at 10:56 am Link to this comment

Reagan and Margaret Thatcher are both responsible for the 30 year neo liberal experiment which has ended in chaos and failure. As it was always going to. Reagan and Thatcher believed in the ‘pure’ capitalism espoused by Ayn Rand - a mixed economy such as the social democratic model of the Scandanavian countries was anathema to them. Under Reagan’s blueprint everything that could be privatized should be privatized. This is how you ended up with wars that are manufactured the way any product is manufactured and for the same reason: to make profit. This is how you ended up with the abysmal health care system you have, which exists only to make profit and not to look after people. It’s how you got an army which has been privatized to such an extent that it’s now effectively a private militia in the employ of the rich and powerful. The US army doesn’t exist now to protect America and Americans, it exists to go out and attack other nations and steal their oil and other resources and convert them by force to the same amoral neo liberal/fascist policies that Bush and his government used so destructively and so brutally once 9/11 gave them the green light to do so.

To try to shift the blame to Clinton is ridiculous, as it is to focus on derivatives as if they’re some kind of Rosetta stone that can decode the mess Reagan and his fellow ideologues have created. Derivatives are nothing new: exactly the same kind of thinking and the same kind of activity caused the great depression. Then came the New Deal which introduced regulation meant to prevent it from happening again. Reagan hated the New Deal and believed the market should decide everything the way the Romans read entrails to decide what wars to have or who to marry. Another startling fact is that America’s Gross Domestic Product now contains only something like 28% manufacturing. America, under Reagan’s ideology, stopped making things (which is how you create genuine wealth as opposed to cyber wealth) and went into ‘financialization’ of the economy -the creation and selling of ‘finance products’. The attraction in getting out of manufacturing was that it did away with the concept of a working class and destroyed unions. Of course the working class still exists, but it is poorer, more overworked and more vulnerable than ever before. Under Reaganomics America has been returned to the 19th century and the cruel, unjust, unequal Victorian era, complete with overcrowded jails to house the poor and the mentally ill. The Reaganites have so much to be proud of.

Report this
Blackspeare's avatar

By Blackspeare, June 3, 2009 at 10:42 am Link to this comment

It doesn’t matter who did it.  The USA is becoming more like it’s Central and South American neighbors with a strong right wing/oligarchy political structure.  However, at this time the opposing political party is only slightly left, but eventually enough lower class citizens will be created to establish a bona fide left wing party and that’s when real trouble will begin.

Report this

By Rontruth, June 3, 2009 at 10:25 am Link to this comment

That’s right. Reagan didn’t do this one. That said, he sure as zippity do-dah did set an example with taxcuts to the wealthy at the expense of his “welfare queens,” driving around in Cadillacs that only Reagan and his GOP ctonies could afford, and did so with his three 10% taxcuts in each of three consecutive years that led to the addition of $4.6 Trillion to the national debt that only Bill Clinton was able to reverse, turning a healthy $610 Billion reduction of that Reagan-era debt.

Added to the $1 Trillion federal deficit that it took 204 years before Reagan to create, Clinton inherited from the father of George W. Bush, a total of $5.6 Trillion, and reduced that by $610 Billion.
He created an economic buttressing by creating 22,500,000 new, better-paying jobs. That is why, when the rightwing conspiracy tried to impeach Clinton, that people said “NO” to, they also, that same year, ousted 5 Republican senators.

And, don’t forget the RTC that was created while Reagan was in office, to “BAIL OUT THE BANK”(s)
Taht cost us an additional $500 Billion.

Only Reagans foreign policy got any support from me. His was far more “humble” (George W. Bush, while he was actually plotting to attack Saddam Hussein’s Iraq, way back before he was even appointed president.) Now,try that one on, Bill Maher. Ain’t I good??

Report this
Virginia777's avatar

By Virginia777, June 3, 2009 at 10:13 am Link to this comment

Jack Abramoff and his “political entrepreneurs”,

described themselves as “the sword and shield of the Reagan Revolution”.

I think the mess we’re in can definitely be traced back to Ronald Reagan.

Report this

By Les Weinstein Esq., June 3, 2009 at 10:05 am Link to this comment
(Unregistered commenter)

Sorry Bob: Check the history.
This one time you are wrong. If you look back far enough it was Reagan and his cronies who in effect dismantled antitrust enforcement in favor of Chicago School thinking and the misguided notion that that market will solve everything.
That lead to the merger waves, deregulation legislation and the notion that bigger is better, less competition in favor of the “efficiencies” that never came, the privatizing of saving and loan mutuals into stock companies gobbled up by management that then lent other peoples money with reckless abandon. If you look at todays financial culprits they merged with anything that had a balance sheet, gobbled up competitors and integrated vertically virtually destroying competition. Had antitrust enforcement under existing laws been honored we NEVER would have been here. The big purchased congress through lobbyists and spewed bullshit about how consumers were the intended benificiaries.
I am a former USDOJ antitrust lawyer and think I know where the bodies are buried.

Report this

By PKam, June 3, 2009 at 10:02 am Link to this comment

Classic straw man argument. Sure, if you declare that Krugman was saying that Reagan was ENTIRELY responsible for our current problems, it’s an easy point to refute. But he didn’t say that, only that Reagan gave political momentum to the conservative agenda whose wrong-headed thinking (built-upon by his successors) did absolutely get us into this mess.

Kurgman hit the nail on the head. Scheer hit his thumb.

Report this

By allan, June 3, 2009 at 9:42 am Link to this comment
(Unregistered commenter)

Well shame on Robert Sheer. The problem with most analysis of the financial crisis is that it looks for villains next door or near by. Krugman’s piece tries to put this into some historical perspective; of course it is easy to blame neo-liberal policies, de-regulation, greed, etc… but the ideological basis (or we should say its extension) for the current crisis (which has yet to be resolved) was propelled by the Reagan era policies; in fact it is simple to see the particularities of the special anglo-american relationship being spelled out in the Thatcher/Reagan duet. Come on Robert you can do better than this…

Report this

By gabistan, June 3, 2009 at 9:29 am Link to this comment

ahhh!!! i thought ProPublica was legit!!! why is nothing safe!?!?!

Report this

By ScottNieman, June 3, 2009 at 9:05 am Link to this comment
(Unregistered commenter)

Scheer only looks at mortages as the cause of the economic meltdown. That is tunnel vision at its worse. Krugman looks at the big picture, what happens when you borrow and borrow, deregulate, and loosen mortgage criteria.  Key point: if the assets are devalued as worthless, the economy comes crumbling down.

Report this

By Herk, June 3, 2009 at 9:03 am Link to this comment

NAFTA, anyone? Free markets/free trade? Most of our current problems can be traced back to the Reagan years, from his attitude of threats to his animosity toward Iran.

No, he didn’t do any of this alone, but he supplied the derailment and eventually the trackless train had to hit something.

Who armed Iraq, gave them military aid? Tactical aid?

http://blog.buzzflash.com/editorblog/081

Report this

By socalcde, June 3, 2009 at 8:59 am Link to this comment

I respectfully, yet wholeheartedly disagree with you on this.

Report this
G.Anderson's avatar

By G.Anderson, June 3, 2009 at 8:55 am Link to this comment

Bless you Robert Scheer..

Frankly America’s economic problems are a result of the take over of our government by corporations, Bill Clinton did their bidding, as did George Bush the first and the second. Reagan was just the wake up call, letting us know who was really in charge.

Just like now, American’s voted for a Democrat who they thought would bring economic reform, but the cards have always been stacked against that. The corporations are in control of the political process.

They want obediant workers, wherever they can get them, they want them to be disposable, without unions, without health care, without a living wage. Each day that passess brings us closer to that.

The structure and function and interests of the Corporation, is directly antithetical to the Bill of Rights, The Constitution, and the United States of America. Until the people realize this no amount of reform will save this country from what’s on the Horizon.

Report this

By robertsgt40, June 3, 2009 at 8:52 am Link to this comment

You just wasted a lot of print space.  Reagan was just another puppet in a long line of controled political hacks.  The official point of crime started with the Federal Reserve Act in 1913.  Since then, the nation’s wealth has systematically been transfered into the hands of the financial elite.  Now we’re toast.

Report this

By Steve Wimer, June 3, 2009 at 8:38 am Link to this comment
(Unregistered commenter)

Reagan championed the de-regulation that led to this debacle, and that’s a fact.  Truthdig just lost all credibility in my eyes.  It is true that Clinton went along with the GOP agenda, and America suffers as a result.  Both parties have sold out the common citizen to the wealthy class.

Report this

By Ted Swart, June 3, 2009 at 8:38 am Link to this comment

Leefeller has it right when he says:

“When it comes to bedding down with the corporatist’s, neither party has much difference to show, for the people come in last.”

There is not much profit to be had by attempting to apportion blame when all the previous presidents share the guilt.  And the guilt lives on since the current government under Obama is trying to cure over reliance on easy credit by doing nothing other than transfer—and increase—the credit by shifting it into the government’s hands.

Report this

By Folktruther, June 3, 2009 at 8:30 am Link to this comment

Good for Scheer, an arrogant bastard but he does the best he can within the ideological constraints of the mainstream media.  Reagan laid the ideological basis for deregulation but the actual crime was perpetrated by neoliberal Dems, the same ones now in power. Naturally the Dem cheerleaders won’t acknowledge this but it is the simple truth of the matter.

Report this
Night-Gaunt's avatar

By Night-Gaunt, June 3, 2009 at 8:24 am Link to this comment

I must disagree with Robert Scheer concerning Reagan & Krugman. It was the “Reagan Revolution” that started us on this ball rolling down hill and the destruction of the New Deal. Under Reagan’s watch the USA became a debtor nation and stayed that way. All the presidents after, both Democrat and Republican, did their share of chipping away and redistributing the wealth upward. All we got from the “trickle down” is what you get living under livestock, with a mesh ceiling, in an abattoir.

It is no coincidence that the best and only times of the Middle Class were from 1945-1980.

I consider it a long term strategy to bring down this gov’t and our country by a cabal of the richest families and corporations to replace our Republic with a theocracy. Obama is carrying on that tradition. Just look at how the money given has done nothing but delay the Great Depression, not end or forestall it. Same with health care, we only get a “choice” with what kind of corporate death care as the only accepted model.

Report this

By Gerald Sutliff, June 3, 2009 at 8:04 am Link to this comment
(Unregistered commenter)

It’s nice to notice that there are people out there who hate Reagan as much as I do.

Report this

By haroldmh, June 3, 2009 at 8:02 am Link to this comment
(Unregistered commenter)

Krugman and Sheer identify the lackeys that committed the foul deeds.  But who are the wizards behind the curtain.  For that, see http://www.opednews.com/articles/America-s-Axis-of-Evil-by-Harold-Hellickson-090528-597.html.

Report this

By Rollercoaster De Doom, June 3, 2009 at 8:00 am Link to this comment
(Unregistered commenter)

The Carter administration deregulated and started funding a rather notorius group in Afghanistan. Scheer aptly shoves aside political parties and rightfully attacks the Clinton administration. Krugman is on ABC on Sunday mornings, plus he writes for the NYT. There’s only so much blame allowed in those capacities.

Report this
Leefeller's avatar

By Leefeller, June 3, 2009 at 7:58 am Link to this comment

As things seem to be, Obama is bringing in Republicans to bolster the two party system.  Alleged differences are always necessary for the two party system to work.

Looking at the whole picture, results from either party seem to be the same.  Differences may only be for show, key concepts of contention would be gays, abortion and illegals and a few others. Emotional issues for the ignorant to stew on.

When it comes to bedding down with the corporatist’s, neither party has much difference to show, for the people come in last. 

So we have business as usual, with either party in charge.  Republicans are faltering, it seems Obama is trying to keep the Repubs afloat. 

A wild card party would could be difficult to argue against, sort of like in the first Democrat debate, when the old Alaskan Senator, Mike Gravel caught the democrats with their pants down, when he attacked the military complex.

Report this

By haroldmh, June 3, 2009 at 7:58 am Link to this comment
(Unregistered commenter)

Both Krugman and Sheer identify the lackeys that committed the foul deeds.  But what of the wizards behind the curtain.

From http://www.opednews.com/articles/America-s-Axis-of-Evil-by-Harold-Hellickson-090528-597.html, “The Democrat Party, the Republican Party, and Corporate Elite form an Axis of Evil within the U.S.A.  The Axis of Evil most frequently meet in the Halls of Congress; Congress, whose members are their lackeys, is their primary tool.  The Axis of Evil, through the two political parties, own the Presidential Debate Commission (PDC). Primary weapons of the Axis of Evil are “think tanks”, 35,000 Washington registered lobbyists, the Federal Reserve System, the World Bank, the International Monitory Fund, the PDC itself, cash in the form of political contributions to control Congress, and the availability of high paying jobs “when politicians are out of office”. 

Thus, the Axis of Evil maintains its control of the many for the enrichment of the few.  Obfuscation and deceit through media control, unfettered free market capitalism, and war are the primary methods used by the few to prevent their overthrow by the many.

The PDC guarantees collaboration rather then competition between the Democrat and Republican duopoly to the exclusion of any opposing organization.  The PDC assures the duopoly’s monopoly and perpetuity will not be defeated by ballot.

Report this

By psickmind fraud, June 3, 2009 at 7:29 am Link to this comment

I really see no use in assigning blame here, to me that’s part of the government plot to keep American’s attention diverted from the thievery that’s going on. And it’s very successful.  Our attention should be on stopping this. 

I don’t think credit should be easily attainable (and then outrageously expensive once the hook’s set). The credit markets only serve to “redistribute” more wealth to the slimy schemers and robber barons that are in control.  I’ve actually decided to make a concerted effort to live within my means, though they’ve been reduced by the Wall Street Weasels in the last year.

Report this
Ed Harges's avatar

By Ed Harges, June 3, 2009 at 7:27 am Link to this comment

Scheer makes a good case. Reagan can be accused, at most, of fostering the general anti-regulatory ideology that eventually led to these “financial innovations”, but they clearly didn’t exist until the Clinton team - with plenty of GOP help in Congress - brought them into being.

This is just more evidence of how far right the country has moved over the last 40 years, on both economic and foreign policy. Today’s “liberal Democrat” is in many ways well to the right of Richard Nixon.

I wonder: did the GOP ever attempt to introduce these changes during the Reagan or Bush Sr. administrations? Were they something proposed but repeatedly defeated in Congress over the years, and then finally adopted under Clinton? Or did the whole idea come up for the first time during the Clinton years?

Report this
thebeerdoctor's avatar

By thebeerdoctor, June 3, 2009 at 7:26 am Link to this comment

Adding to Purple Girls insights, it is good to remember that Reagan delivered a devastating blow to organized labor, with the firing of the air traffic controllers. His obsession with Ghadafi also lead to the senseless bombing of Libya. Iran-Contra and the obsessions in South America, required substantial amounts of borrowed cash. When the stock market crashed, Reagan announced: “there is nothing wrong with the economy”. Robert Scheer is myopic. They didn’t need credit default swaps in those days, they had a booming business in junk bonds. As far as government policy was concerned, borrow and spend was Reagan’s answer to nearly everything.

Report this

By coco, June 3, 2009 at 7:02 am Link to this comment

As I remember it, the national debt went up to 4 and a half trillion dollars under Reagon and Bush and the country was looking for a president to bring down the national debt. Clinton came in with an economic plan that worked and the country had the best economic gain in the history of the country. In the process of this economic victory the republican party harassed the Clinton family to the tune of 157 million dollars. All they got was Monica. By the end of Clinton’s terms the national debt was going down instead of up and the country had forgotten the republican word of jump start. Over the last 28 years the republicans have controlled the government 20 years. So now your telling me that Clinton was the cause of all the problems in our government. Common sense would tell me Krugman is a lot smarter than Scheer. 90 percent of 10 trillion dollars and no economic plans might tell you that the republican party might be nothing more than blowhards. Bait, switch and spin. Right wing radio should of proven that to any responsible person.

Report this

By H, June 3, 2009 at 7:01 am Link to this comment
(Unregistered commenter)

I almost always agree with you on matters political.  However, I almost always agree with Paul Krugman on matters political and economic. In this case, he’s closer to the truth than you are.  Ronald Reagan started our downward moral slide with his “greed is good” speech many years ago. That made greed officially acceptable.  All other things and people you cite flow down from that.

Report this

By Terry Thomas, June 3, 2009 at 6:43 am Link to this comment
(Unregistered commenter)

Sometimes the commits are more accurate than the article!

Reagan was a piece of shit who gave new birth to old get rich quick through your young republican schemes like the ones Tom Delay and his side kick lobbyist Jack Abramoff perpetrated on the right wing religious dolts who bought every word. Larry Summers and Phil Graham was paying attention to the deregulating hype and attitude as young republicans with experience dating back to Nixon. Finally they turned loose the Banksters on the Clintons watch.

Reagan was absolutely part of the century old take over of the of the original JP Morgan conspiracy the privatizing of our money to the Feds which pulls the law making strings giving the banksters the dictating power of their banks money bought propaganda and ability to buy politicians with their every changing lobby rules in a world order of their forefather Benedict Arnolds as our enemies of the revolution - the aristocrats who we fought in the original American Revolution. It goes back long before that. Reagan was just a stepping stone as was Nixon, Andrew Jackson and Teddy Roosevelt. And now it appears we have finally lost the original American revolution war because they have finally turned us into consumers deep in debt with no ability to produce anything as our manufactories have been given to China, Mexico and India.

The Rothschild family descending from the Matriarch Nathan Rothschild came up with the original banking formula in which the bank could print money out of then air by multiplying its leverage by 10 times its assets then loan that out with interest.  It was a pracice Nathan Rothschild used long before our liberating war which his sons established in five different countries. These greedy con artist sold this idea and with the help of JP Morgan 100 years later, were the winners of our money in 1913 when the Feds was established as a private bank that controlled all our money.

Now, there is a new world order of Banksters. Check out the Bank for International Settlements (BIS) hiding for years in the Tower of Basel in Germany with ties to the Nazi. Funny about those ties as Nathan Rothschild was a Jew. Anyway, this bank(BIS) will issue the first world currency before long.

So, deregulation is simply a long term battle to control us. We could do as Abraham Lincoln did and as Benjamin Franklin did when they took the control of our money away from the banksters. It’s our history and all spelled out in “The Web of Debt”, written by Ellen Brown. Go to http://www.webofdebt.com/ or read one of her many articles on Global research http://globalresearch.ca/index.php?context=va&aid=13239.

tp

Report this

By Shift, June 3, 2009 at 6:40 am Link to this comment

Scheer is keeping the focus on our current crop of self serving public servants.  Even as the propaganda machine insists they are serving the public interest, they line their pockets openly in a quiet ejaculation of greed.  An enabling President, a money seeking Congress, and a Media that purports collapse as progress, is a triangle of corruption.  Attempts at stopping this robbery is just pissing into the wind.

Report this

By Steven, June 3, 2009 at 6:37 am Link to this comment
(Unregistered commenter)

The “beauty” about all of this is that both sides have enough ammunition to launch significant attacks on the other. 

What is disgusting about the whole thing is watching the people line up in support of the two sides and shoot each other to pieces all while pouring millions of dollars into the party coffers. 

Until the people of this country realize that the two partis have no real interest in fixing anything we will continue our downward slide.  Republicans didn’t cause these problems; Democrats didn’t cause these problems. THEY caused these problems and they will never, ever repair them.

Report this

By BobZ, June 3, 2009 at 6:31 am Link to this comment

Reagan solidified the conservative movement and set the climate for a return to the attitudes about big business that prevailed before the Great Depression turned the entire country against Wall Street and everything it stood for. Why do you think the Republican Party now views Reagan as some sort of God? They barely speak of any of the other GOP presidents. Reagan used that awshucks personality to perfection by conning an entire country back into true believers of unfettered free market captitalism. He brought the union movement to its knees, set the stage for the worship of CEO’s as celebrities, and made government again into a bad word. He also ignored Eisenhower’s adage about the military-industrial complex and set out to expand military spending on a grand scale to the exclusion of spending on education, health care, and infrastructure projects.  Reagan actually got voters to vote against their own self interest, not an easy thing to do. What happened later in the financial markets was the inevitable debacle once the handcuffs were taken off Wall Street during Clintons watch. And while on this was going on, trickle down economics weren’t even working - middle class wages stagnated but cheap credit and two income families successfully masked the erosion in real income. Don’t let Reagan off the hook just because his 100th birthday is approaching.

Report this

By Ivan hentschel, June 3, 2009 at 6:07 am Link to this comment
(Unregistered commenter)

As a rule, I defer to Mr. S., but I agree with some that he has strayed in the heat of passion. The era of Ronald Reagan, and his “lazy and unfair” approach to the economy, the military, the foxes and the fiscal henhouse, set the stage for the Clintonites, who got a taste of the chanpagne and decided to up the volume level at the party. Reaganomics started the “crap” tricklng down the hill, and afterwards it merely snowballed, fueled by greed and the insatiable desire for a quick buck. Everybody thought the financial world would run on clean coal technology.

Report this

By Johnson, June 3, 2009 at 5:58 am Link to this comment
(Unregistered commenter)

Robert Scheer said:
“How can Krugman ignore the wreckage wrought during the Clinton years by the gang of five?”

Krugman didn’t ignore the wreckage.  He simply asserted that the wreckage wrought during the Clinton years was made possible by the de-regulatory ideology that Reagan’s administration advocated and fought steadfastly to institute.  Clinton’s boys used the same ideological prop for their continuing:  “free” (unregulated) markets will produce endless streams of wealth.  Baloney

Report this

By AS, June 3, 2009 at 5:44 am Link to this comment
(Unregistered commenter)

NYT op-ed columnist, Paul Krugman, was not the first to point a finger at the former President!

  Andrew J. Bacevich (a professor of history & international relations at Boston University), in his 2008 book “The Limits of Power-The End of American Exceptionalism-,” points out that “The US today finds itself threatened by three interlocking crises…economic&cultural;...political, and…military. All three…are of our own making.”
In the first chapter of the book, titled “The Crisis of Profligacy, ” the author wrote on pages 36-37: “Carter’s appeal (to Americans to conserve, to settle for less…) failed completely. Americans showed little enthusiasm for the president’s brand of freedom with its connotations of virtuous austerity…”
“Reagan portrayed himself as conservative. He was, in fact, the modern prophet of PROFLIGACY (Webster = reckless extravagance, shameless consumption…), the politician who gave moral sanction to the empire of consumption…Reagan added to America’s civic religion two crucial beliefs: Credit has no limits, and bills will never come due… When it came to energy (consumption), Reagan was insistent (that) ‘We must decide that less is not enough…’ Balance the books, pay as you go, save for a rainy day—Reagan’s abrogation of these ancient bits of folk wisdom did as much to recast America’s MORAL constitution as did sex, drugs and rock and roll.”

To be fair, neither Krugman, nor Bachevich have said that Reagan had done all of the damage; he apparently, did open the door!
One thing that the two professors left out, is the fact that anti-intellectualism also became not just acceptable, but fashionable at the time of Reagan; subsequently, all three signs of utmost societal decadence - profligacy, immorality and anti-intellectualism - were widely embraced and practiced.

Report this

By tdbach, June 3, 2009 at 5:42 am Link to this comment

Mr. Sheer, understandably, reserves his worst venom for leaders within what is supposed to be the party that is most in line with his political philosophy - the betrayers. However, that peeve has clouded his judgment of history- and his reading of Krugman.

The Reagan administration, with the tide of anti-government sentiment, unfettered market Darwinism, and borrow-till-you-drop wing of capitalism it brought to the political debate, was indeed the foundation of this economic mess. By the time Clinton took office, the consensus view had shifted so far in that direction, no progressive could win office without “triangulating” into his political platform government “reforms” – deregulation, cost-efficiencies (Gore’s pet projects) , business-friendly policies, “the end of welfare as we know it.” I’m not excusing Clinton and Democrats in congress – they fed at the trough of corporate largess quite willingly. But only someone pre-disposed to do pretty much what they did would ever have been elected in the early 90’s.

That’s because Reagan – or really, the artfully and consciously contrived Reagan myth – established this anti-New-Deal path so effectively it looked like veering even slightly to the left would lead us over a cliff.

Reagan DID do it.

Report this

By At, June 3, 2009 at 5:41 am Link to this comment
(Unregistered commenter)

Thanks again Bob, that was very enlightened.

Report this

By idarad, June 3, 2009 at 5:15 am Link to this comment

Purple Girl - you nailed it - mike hit the rape ublicans, deservedly, but the dumbocrats are not without blame. Clintons false economy shattered when people started to ask about the foundation of the dot com bubble, and in months poof.

Report this

By idarad, June 3, 2009 at 5:08 am Link to this comment

I did not read Krugman’s piece, and I usually split with him on his analysis, but I think he got this right if he is saying the shift from having a manufacturing base middle class economy that in fact produced product to an economy that produced capital without substance began with Reagan.  Reagan believed that if capital is in the hands of the elite, they would, for their own prosperity, make certain money moved through the economy and trickle down.  He also made it possible for leveraged buy outs and for the greed stricken to steal pension funds to cover the costs of buying a company, break it up, reduce labor, sell the pieces take to money and move on.  None of the false economy of the 90’s and the borrow now and spend economy of the 2000s would be possible without Reagan’s base move of destroying labor and the manufacturing base.
Yes Clinton and his cronies are culpable, but don’t forget Phil Graham in this mess.  Unfortunately Obama also has swallowed the koolaid and deepened the collapse, pretending that if you get people to work they will buy more toys and get money into the system.  Problem, we don’t manufacture the toys, we sell them and other plastic crap at wallmart, then go get a starbucks to feel good.  The stimulus should have focused on manufacturing solar energy panels, wave and tidal power systems. thermal heating and cooling, etc.  So many opportunities and all we have to show for 18 trillion dollars out the window, is banks and credit institutions getting free money and 18 trillion out the window. 
Hate to tell you all, but we’re screwed.

Report this

By Inherit The Wind, June 3, 2009 at 5:04 am Link to this comment

Scheer shows yet again that he’s passion without brains.

Purplegirl, with whom I usually disagree, has it right.  To put it another way: How the house is built depends absolutely on the foundation. 

Reagan laid that foundation of deregulation, the idea that ALL government that isn’t military or preventing abortions is BAD government.  The idea of giveaways and busting unions is Reagan—he gave the airline gates we built to the airlines for free.

The idea that everyone on charity is a welfare cheat is strictly Reagan. 

The whole basis for the hateful, selfish, fascist Rush Limbaugh Republican party can be traced back to Ronald Reagan and is his deceptive, shallow, but effective attack and dismissal of Jimmy Carter: “There you go again”.

Reagan may not be the worst president we’ve ever had, but that’s only because the USA has suffered through John Tyler, James Buchanan and, of course, George W. Bush.  RR may have been the 40th president, but he’s the 41st best out of 44 (with Bush as 44th).

Report this

By mike kohr, June 3, 2009 at 4:53 am Link to this comment

Criminologists look for patterns to solve and prevent crimes. And in the comparison of the economic records of Democrat and Republican administrations there is a glaring pattern all but ignored by the corporate media. Nine of the last ten recessions have occurred under the direction of Republican economic policy. And proving that history does repeat itself, examine the three greatest slowdowns in US economic history, 1929*, 1982, 2007, all three were attributed to poor economic and tight credit policy, all three featured deregulation and lack of oversight of the financial markets, and all three were presided over by a Republican President.

Recession of 2007-present   George W. Bush(R) Greatest downturn since 1929,  blamed on lack of regulation of financial markets and collapse of credit markets

Recession of 2001   George W. Bush(R) Began in April of 2001, marked the beginning of greatest deficit spending in all of recorded human history

Recession of 1990-1991   George H.W. Bush(R) Deregulation of Savings and Loan industry led to a collapse and panic, which led to election of Bill Clinton, who produced the greatest increase in jobs and wealth in all of recorded human history

Recession of 1981-1982   Ronald Reagan(R) At the time, the most severe contraction of economy since the Great Depression, massive deficit spending/deregulation of markets, and tight fiscal policy in an effort to kill inflation were blamed for this downturn **

Recession of 1980 2nd & 3rd quarters   Jimmy Carter (D) Shortest and least severe slow down, generally attributed to Iranian Revolution and increase in oil prices, led to the election of Ronald Reagan

Recession of 1973-1975   Richard M Nixon(R) OPEC’s increase in oil prices and massive spending in the escalation of war in Vietnam led to stagflation, the second economic crash of Nixon’s administration. Real GDP fell by 4.9%, second greatest drop since 1937.

Recession of 1969-1970   Richard M. Nixon(R) Credited to Nixon’s escalation of and massive spending in Vietnam War and OPEC’s increase in price of oil

Recession of 1960 -1961   Dwight D. Eisenhower(R) Noted for high unemployment, low GDP, high inflation JFK ended the recession by stimulating the economy 10 days after taking office

Recession of 1957-1958   Dwight D. Eisenhower(R) Eisenhower achieved the dubious distinction of achieving a second economic downturn on his watch, a record later matched by Richard M. Nixon, and George W. Bush

Recession of 1953   Dwight D. Eisenhower(R) Increased outlays to National defense and restrictive credit policies blamed for this downturn.

There are few things that are certain in life but this economic record of the last 58 years provides one. When a Republican is elected to the White House, there is a 100% chance that the economy will slide into a recession and a 50% chance that two or more recessions will occur.

*The Great Depression of 1929   Herbert Hoover(R) Lasted for 10 years, blamed on Hoover’s economic policy and lack of regulation of financial markets

** “The Reagan Recession” which ran from July of 1981 thru November of 1982 is often categorized as starting under Carter’s watch during the 1st and 2nd quarters of 1980.  By the end of the July of 1980 that mild downturn had ended. Starting in the 3rd quarter of 1980, 3 of the next 4 quarters produced increased GDP.  Reagan’s tight fiscal policy and massive deficit spending contracted the economy again in late 1981, producing unemployment of 10.8% and prime interest rates that hovered between 15% and 21.5%

Report this
Purple Girl's avatar

By Purple Girl, June 3, 2009 at 4:53 am Link to this comment

“Wall Street”....“Greed is Good” 1987
Black Monday 1987
Keating 5 S&L Scandal 1989
Greenspan first was the Chair of the Coucil of Economic Advisors under Ford, Then into foreign relations with Reagan (‘82) until named Fed Chair in ‘87.
Summer also sat on the Council of Economic Advisors (‘82-87)
And lets not miss the year Krugman spent on that council during the Reagan era too as a staffer- so he has first hand knowldege.
The Trickle Down ideology was cast during Reagan.and lets not mistake what ‘Trickle Down’ actually is, Feudalism. This is the same greedy,self indulging ideology which has brought down many Great empires. and what did we see as this doctrine began to infest the economy- Bubble after bubble bursting and scandal after scandal through HW,through Clinton through W.
Lets be honest too-We can easily follow the Dots back to the Reagan era to explain 9/11 and both ‘Desert Storm’ and ‘Operation Iraqi Freedom’ Why would Krugman avoid laying blame at the feet of Clinton? You do Realize He was a avid supporter of Hillary’s? Was he promised that old offer made by her husband long ago, but had refused. Does he have an old Grudge with Summers now that he is advising Obama instead of Him?Bu the is correct as to where this New Age concept of Feudalism began.
So was the seed of Economic meltdown planted with the Reagan Admins ideology?Yes. Was It nourished during Clintons Lassaize Faire Presidency? Yes. Then finally collasped under W’s Reign of Recklessness- Absolutely.
Anyone with a Dictionary, a History Book and a degree of Deductive reasoning could have told you what Trickle Down was (Feudalism) and it’s effects (collapse). The Term is actually attributed to HUMORIST Will Rigers during the last Great Depression, as to it’s cause.

Report this

By Gloria Picchetti, June 3, 2009 at 4:22 am Link to this comment
(Unregistered commenter)

Reagon almost made me homeless. He took away the charitable deduction. I didn’t know until I filed taxes. Instead of getting a refund which always went into savings I owed taxes. Everyone said we had a larger paycheck. Not so. As a secretary at $250 dollars a week I made about five dollars more a week. I recovered I was fine for years. Now after eight years of Bush I have unemployed for almost two years. Please shoot me.

Report this

By ardee, June 3, 2009 at 3:23 am Link to this comment

Beetlejuice, June 3 at 4:57 am

You nailed it absolutely, beetlejuice, and Scheer fails the test I think.

Reagan’s poison pill weakened respect for govt involvement in economics, education and the social safety net and set the stage for the deregulation that followed.

The major culprit responsible for the derivative nightmare is Phil Gramm who, with his wife Wendy, worked tirelessly throughout their respective careers to establish a free market economy that now has wrecked our future.

It might be said that Clinton never even saw that rider to the Omnibus Bill inserted by Gramm at the eleventh hour in a lame duck Congress and signed by a lame duck President. I do not seek to defend the Clinton administration, only to add perspective.

Report this

By johannes, June 3, 2009 at 3:05 am Link to this comment

@ Hawkeye

Is that the good place to be as you are retired, start writing about how it was, in the old bloody Texas, as Cormac McCarthy writes.

I have some old books from my father from a originaly Dutch- Frisian writer Feike Feikema, books over the poverty of people on the deep rural land, I think Iowa their some place.

And than the stupid war, they had to fight their naburs, and their budy’s where German, Swis, and they song I meen the soldiers from the North Dutch and German songs, wath a crasy world.

Well it are some lose thoughts, Salutation

Report this

By tyler adams, June 3, 2009 at 2:57 am Link to this comment
(Unregistered commenter)

I agree.  Reagan laid the groundwork.  The lower taxes, less regulations mantras originated with him
and lead to the later disastrous deregulation.  I agree with the author, Larry Summers, Rubin, and Greenspan were the eventual culprits.

Report this

By Mitchell, June 3, 2009 at 2:51 am Link to this comment
(Unregistered commenter)

Of course Krugman’s right. He was discussing a sensibility unleashed, fostered and enabled by Reagan et ano. What’s so hard to understand? We got to where we are (including Sheer’s termination from the L.A. Times) because, in a word, Big Business was encouraged to focus on immediate personal profit-taking and disregard of societal needs instead of focusing on long-term economic health. If you still can’t see what happened… well, that’s how and why Obama’s getting away with simply reinflating the speculation bubble and doing no more than that. FDR my ass.

Report this

By CharlyAndy, June 3, 2009 at 2:49 am Link to this comment

I agree that Reagan didn’t start the problem.  I think the basis of the problem is the myth of the “rugged individual” and the visceral horror of the S-word that have been implanted in the American brain, that is the brains of people accustomed to working for a living.  “Let the buyer beware, “I made it on my own, nobody helped me,  “The best government is no government,” laissez-faire Capitalism, are myths that set people up to be suckers and ripe for the picking.  If I can’t understand a particular investment, e.g. Credit Default Swap, the big money man says, “That’s all right, you can’t be expected to understand the vast mechanism of the grand and glorious Oz (the Market). Since I’m smarter than you, I do, so trust me.”  This is what’s usually called a confidence game.  The con-man establishes confidence in the mark and then betrays it. (See Bill Black)  You don’t have to know the marvelous workings of the human body to know not to drink battery acid.  That is if you know it’s battery acid.  This is where the government, imperfect though it may be, has to be a firewall between the naturally greedy and the working people who traditionally must feed them.

Report this

By Beetlejuice, June 3, 2009 at 1:57 am Link to this comment

I didn’t get that impression when I read Krugman’s article. I understood him to be saying Reagan prepared the soil that eventually became the fertile grounds for derivatives and collateralized mortgage scams perpetrated by the banking and business elites. If Reagan hadn’t plowed up the financial fields in the first place, Clinton and his gang of thieves, both repuglican and democrat, wouldn’t have succeeded in gutting the last remaining barricades of effective regulation keeping the financial sector in check. I think you’re barking at the moon.

Report this

Page 2 of 2 pages  <  1 2

 
Right 1, Site wide - BlogAds Premium
 
Right 2, Site wide - Blogads
 
Join the Liberal Blog Advertising Network
 
 
 
Right Skyscraper, Site Wide
 
Join the Liberal Blog Advertising Network
 

A Progressive Journal of News and Opinion   Publisher, Zuade Kaufman   Editor, Robert Scheer
© 2014 Truthdig, LLC. All rights reserved.

Like Truthdig on Facebook