Tuesday, April 22, 2014

The Man Who Sold The World

obama 2008 hope photo:  Winter.jpgOn the campaign trail in 2008 Barrack Obama correctly identified Ronald Reagan as one of the few presidents in our nation's history who actually "transformed" the American government.  If there was ever an era when the U.S. was ripe for being transformed it was the late 1970s.   The "era of malaise," to paraphrase a term that Jimmy Carter inspired, was a low point in U.S. history that compared to the Great Depression and the Civil War.  

American's of the Malaise Era had not only spent the last decade watching America lose its first war in our military history, but they watched U.S. soldiers commit unspeakable atrocities to Vietnamese women and children and weaklings on a nightly basis.  The TV was loaded with soldier's testimonies about young girls being raped, savagely beaten and killed in front of their parents and siblings.  The magazines and newspapers were filled with confessions that detailed innocent children being burnt in their villages.  Furthermore, the Americans of the Malaise Era had just witnessed Watergate, a televised live action national tragedy that questioned the very soul and purpose of our nation.  Doubts about America's soul were compounded further as, after 30 years of economic prosperity and expansion, the nation's economy slowed and sunk so low that new terms actually had to be created in order to describe it (i.e. "stagnation").  The Malaised Americans watched hostilities in the Middle East lead to an oil embargo by OPEC and an Iran hostage crisis.  

If this wasn't bad enough, the malaised lived through the disintegration of the American nuclear Family, which added to the general confusion of the era. Everything Americans had grown up believing in - God, country and family - was suddenly being pulled right out from under them.  The assassinations and turmoil and civil right's activism of the 1960's had ushered in the "culture wars" of the 1970's - which not only pitted father against son, but father against mother, mother against daughter, and daughter against son.  The divorce rate doubled in America every single year from 1965 to 1975.  The Pill was suddenly available.  Abortion was legalized.  Gays were not only coming out of the closet but demanding attention and equal rights.  Blacks were forcing controversial affirmative action laws upon legislatures.  Women were burning their bras and speaking up for equal rights.  There was wife-swapping, disco music.  The Malaise Era American witnessed the happy, hippy recreational drug use of the 1960's give way to frequent overdoses of drug addicts and street punks.  Crime was running rampant, hitting all-time highs, urban areas were experiencing white flight and cities were going bankrupt.  The headlines were full of hi-jackings, kid-nappings and cult abductions. By the time Jimmy Carter made his famous "malaise" speech in 1979, the average American was not just in a fog of malaise, but they were exhausted, out of work, resentful and suspicious of their government.  They were confused about the present, afraid of the future and without any hope for tomorrow.
The Man Who Sold the World: Ronald Reagan and the Betrayal of Main Street America
And then right on cue, as if scripted from a Hollywood screenplay, with his easy smile, in rides the tall, handsome hero on his white horse to save the day, to give our nation the sure-footed direction that it so badly needed, to give our citizens hope and to bring America back to simpler more wholesome times. 

That was the promise at least.  But of course, instead of steering our nation to greater heights, as William Kleinknecht explains in his book The Man Who Sold the World: Ronald Reagan and the Betrayal of Main Street America, Reagan actually transformed our nation into a vehicle of Greed and set in motion America's seemingly irreversible spiral downward.  

The Reagan administration created the corporate political economic model that continues to this day, a system where corporations and politicians work hand-in-hand to line their own pockets at the expense of the working class minions.  A system that every Administration since has perpetuated, Bush 41, Clinton, Bush 43 and even Obama.  But as Klineknecht's book explains, it was the Reagan Administration that really started it all.  It was Reagan who let the foxes into the hen house to such a degree of infestation that they were able to grow to the status of "too big to fail".  It was on Reagan's watch that corporate interests were allowed to become so entrenched in our political economic system that it would take nothing short of a revolution to actually get the corporations out of the political economic system.

Obama actually talked about this as he campaigned in 2008 but maybe he didn't fully understand it.  He spoke a good game, but once in office what has he done to reverse the corporate takeover of our government?  To be fair and to be honest, maybe Obama just doesn't really have the skill or the will or the ability to institute the change that he promised in 2008.   Maybe he does not have the mojo to transform America as Reagan had.  To really understand exactly how Reagan transformed America, a good place to start your research would be William Kleinknecht's book, The Man Who Sold World.  But that is only if you can overcome the one huge flaw in Kleinknecht's book, which is his tone - especially in the introduction - which was overly partisan, petty and even pointless at times. For instance, in the opening pages, Kleinknecht seems outraged that the mainstream media's coverage of Reagan's funeral in 2004 did not bad-mouth Reagan enough. I mean come on, first of all its a funeral. If there is ever a time that the old adage "If you can't say anything nice about someone then don't say anything at all" applies it is at a funeral. And second of all, its the fucking mainstream corporate media - what person with half a brain really gives a shit what the mainstream corporate media does/says? 

Kleinknecht is obviously an intelligent guy, so to be so petty and to give so much importance to the "toilet paper of documentation" that the mainstream corporate media is, was really a distraction that would have served the book better had it been edited out.  The amped up faux-rage only went to discredit his authority.  It made Kleinknecht immediately seems less reliable as he comes off as hyper-Partisan - just another typical close-minded, lock-step, knee jerk hack who goes into his research with his conclusions already drawn without looking at all sides of the argument. 

milton friedman photo: Conservatives Do Not Want Governent Involved governmentrelief_zpse3312947.jpg But if you can get past the introduction you will see that Kleinknecht was somewhat more balanced as he detailed Reagan's biographical material and Reagan's eventual conversion to the Conservative ideology. Then Kleinknecht goes into a left-leaning but accurate account of the progression of thought and the influences on the American economy for the last century, starting with the Progressive Era, continuing onto the New Deal Era and then up to LBJ's Great Society. His even-handed explanation of the back and forth pendulum of American thought in economic theory from the ideas of Adam Smith, to John Maynard Keynes to Milton Friedman, allowed the scope of the narrative to widen and open up to an examination of the unique conditions of the 1970s that set the stage for the rise of Reaganomics.

At that point in the narrative, Kleinknecht introduced the ranchers, oilmen and developers from the booming sunbelt who were among Reagan's largest supporters.  These were all men who had pulled themselves up by the bootstraps to make their fortunes in the post WWII American economy.  They shared Reagan's sensibilities - they were men with conservative social values and buttloads of new money who were looking for ways to make more buttloads of new money.  They were men who saw high taxes and government regulations as the main obstables between them and their desired buttloads.  That desire would be the main motivation behind Reagan's disasterous policies of defunding government regulatory offices and routinely placing white-collar criminals in charge of regulatory agencies. 

To begin his case against Reaganomics Kleinknecht explains how Reagan reached into the boardrooms of large corporations to fill his administration's cabinet: Sec of Defense Casper Weinberger, Sec of State George Schultz, Sec of Treasury Donald Regan, Secretary of Labor Raymond Donovan.  Then he goes on to detail how Reagan installed business leaders to fill the positions at the top of the Federal Government's regulatory apparatus. For the most part these were men from within their respective industries who had made a career of violating business regulations and finding loop holes around the laws. Robert Burford, James Watt, John Crowell, C.W. McMillan, Richard Lyng, Joseph Tribble, Thorne Auchter, John Van de Water.

From there Kleinknecht's bombardment against Reaganomics (aka 'trickle down' economics) kicked into high gear as he specifically took aim at Reagan's deregulation policies.  One illustration of how Reagan's most effective tactic to undercut deregulation policy was simply to appoint white-collar criminals as heads of the various agencies that they were supposed to regulate can be seen in the communication industry.  Klienknecht explains how in just 6 years time, Mark Fowler, Reagan's chairman of the Federal Communication Commission(FCC) abolished 89 percent of the regulations governing broadcasting (even doing away with the fairness doctrine). He also points out the ramifications of Fowler's “liberalizing the multiple-ownership rule” - which essentially allowed a few large companies to control all the radio and TV waves with in just a few years.  Unfortunately, Kleinknecht's partisanship tainted the narrative at times as witnessed in such far-reaching passages as this from page 132: “[Because of Reagan] we find the beginning of a movement that would pick the pockets of American consumers, penalize rural communities, and reduce radio and television to commercial drivel.” As though radio and TV had such high standards prior to Reagan. In the next sentence Kn actually blames Reagan for the Telecommunications Act of 1996, an act that was passed under Clinton, almost 8 years after Reagan had left office. 

But Klienknecht's argument was more effective as he detailed Reagan's deregulation process toward other industries.  For instance, the Department of Health and Human Services's 1982 proposal to put a warning label on aspirin after scientific evidence concluded that aspirin was causing Reye's syndrome in young children. The proposal was shot down by Reagan's Office of Information and Regulatory Affairs (OIRA). This deregulation policy directly resulted in the death of 1500 children over the next five years--until finally, in 1986, the OIRA flip-flopped its stance and required the warning labels to be displayed on aspirin bottles. Reyes Syndrome in the US then dropped from 555 cases in 1986 to only 36 the following year.  

Although Klienknecht pointed out how abusive Reagan's policies of deregulation were in various industries, he was at his most convincing when demonstrating how the banking and commerce industry was completely transformed by Reagan's deregulation policies.  It began with Reagan's appointment of  Donald Regan (chairman of Merrill Lynch and the creator of cash management accounts) as his Sec of the Treasury.  Secretary Regan set out to transform the banking and investment industry by diminishing the industries regulations to the point that the market would come as close to a free for all as anytime in the history of American capitalism.  Immediately he went after the McFadden Act of 1927 – which prevented large national companies from gobbling up smaller community banks.  Then he took aim of the Glass-Steagall Act of 1933, which prohibited investment banks to be housed under the same roof as commercial banks and investment companies.  The intention of the Glass-Steagall Act had been to prevent the kind of “self-dealing” that largely contributed to the Crash of 1929 where commercial banks and brokerage houses had colluded to artificially inflate their books by lending to themselves.  The result of these artificially inflated books was that they attracted investors, but under false pretenses.  Secretary Regan also immediately began eliminating regulations on ceilings for interest rates and regulations on the types of loans that financial institutions could make.  Basically he set out to get rid of all banking and investing regulations.  With the help of FED chairman Alan Greenspan, the result of Reaganomics, as administered by Sec. Regan, was a total transformation of the American banking and investment industry.  A transformation, which as Klienknecht noted, has been responsible for the multi-trillion dollar fleecing of the American tax payer over the last 30 years in the form of everything from the Savings and Loan scandals to the Too Big To Fail Bailouts during the Bush/Cheney Recession of 2008-2010.

By the end of The Man Who Sold The World its easy to understand Klienknecht's partisan tone, for you would be hard-pressed to argue against the notion that Reagan transformed America into the corporate greed pit that it is today.  Klienknecht sites example after example, including the far-reaching cause and effects of Reagonomics on America.  He explains how Reagan invited the corporate foxes en masse into the government hen house.  He explains that Reagan's policies had not shrunk Big government - as Reagan promised - but they had in fact, just redirected the influence of big government from the working class people to the needs of corporate enterprise. Reaganomics was a champion for Greed.  Business leaders who had spent the 1970s funding free market think tanks flooded into DC once Reagan took the white house. Their corporate industry lobbyists were no longer at the gates of the government looking in, they were now inside the government, soon to BE the government.  It started a trend that has become an institution and none of the four presidents since Reagan have done much, if anything, to reverse that.  In fact, they've all pretty much enabled the corporate political economic model to grow and to strangle the American working class - as is evident by the accelerated disparity in the earnings between the lower/middle and the wealthy class over the last 30 years.


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