Reaganomics.
In the 1980s Reagan proposed a four-pronged economic policy that was intended to reduce inflation and stimulate the economy and job growth:
1) reduce government spending on domestic programs;
2) reduce taxes for individuals, businesses and investments;
3) reduce the burden of regulations on business; and
4) support slower money growth in the economy.
If the reader recognizes these policies, it’s because today’s Republican Party still believes in the sanctity of these four policies. However, the issues that confronted Reagan (high inflation and high unemployment) do not exist today. Deregulating industry was so prevalent that during Reagan’s Presidency, businesses were allowed to use assets locked in retirement funds as a source for new venture capital. Unions have been decimated by Reaganomics; Reaganomics is a ‘supply-side’ policy, that is, provide products and people will buy them, raising employment as a factor of profit. However, the net result in today’s economic environment encourages capital investment rather than manufacturing.
By reducing or eliminating decades-long social programs, while at the same time lowering taxes and marginal tax rates, Reagan’s approach to handling the economy marked a significant departure from that of many of Jimmy Carter’s policies. The results spread the gap between the wealthy and working classes versus poverty levels. The number of children, ages 18 years and younger, below the poverty level increased from 11.543 million in 1980, 18.3% of children, to 12.455, 19.5%, in 1988. Also, the situation of low income groups was affected by the reduction of social spending, and inequality increased. Hence GOP resistance to universal health strategies and discretionary spending.
Today, the advantage granted to business and wealth has grown to the point of imbalance. The government is close to becoming a plutocracy as the wealthy, large corporations and lobby support for legislators have grown into disruptive proportions.
What needs to happen in 2020:
It’s time for Reaganomics to end. For both houses of Congress, this is done by replacing the old GOP with young centrist republicans and by increasing the number of democrats.
Lack of collaboration and compromise in Congress.
Newt Gingrich is considered the House Speaker who changed a more or less collaborative legislative process into a contest for party dominance. The old days of party leaders negotiating balanced compromises was replaced by a ‘my party first, the Nation second’ attitude in the 1990s (just like Mitch). The Democrats responded in kind, replacing statesmanship with gamesmanship. This situation has grown worse as big money and gerrymandering have become the tools of political power – causing significant damage to the classic strengths of one person, one vote and the democratic engine perceived by the Founders. Part of the reason for Donald’s success is that the electorate has grown tired of a do-nothing Congress.
What needs to happen in 2020:
The electorate always will be influenced by personality first but add a second awareness in 2020: Does the candidate talk about new solutions for current issues or repairing old ones? Pick the one with new solutions.
Corporatism
Corporatism is multifaceted. What will replace Reaganomics is an economy that engages several nations at once. Think of a strip mall with many storefronts and a couple of large box stores at each end. Each store contributes to the overall GDP of the mall. Different stores sell and buy different things but all the stores are dependent on the mall as a whole.
A couple of years ago a consortium of 12 nations participated in designing the Trans-Pacific Partnership (TPP)[1], a classic example of international economics. Sadly, it failed muster in the US because of a rift between Republican Congress and a Democrat in the Whitehouse. There were some rough spots where the corporate authors ignored human rights and economic obligations but the attempt was headed in the right direction to launch a new and different economy.
Another facet of corporatism is taxes. Very large corporations virtually are not taxed; they live in several nations at once so they aren’t really controlled by any given nation. The solution is something similar to the European Union or TPP where economic policy is centralized across all member nations.
A third facet (there are more but these three desperately need electorate assistance) is the issue of human rights, privacy and security. Today, giant multinational corporations have no obligation to provide living wages, decent benefits or working conditions. Further, they totally disregard privacy and security. The old Reaganites are afraid to tax corporations because they will locate in another country – which is true because the countries have not banded together to formulate common taxes. Not taxing is not a solution.
What needs to happen in 2020:
Economically speaking, what needs to happen is expressed in the first issue – it’s time for Reaganomics to end. Consider giving the vote to a candidate that doesn’t spout the four policies of Reaganomics.
Further, take notice of candidates that talk about information security (see the recent post, How someone can live your life for you to understand privacy). The security side has to do with national security and high-tech industries that would prefer not to worry about the expense of national security on a nation-by-nation level. If the electorate can fix one security item, let it be US election security.
Manufacturing
A Chinese Corporation won the bid to build Chicago’s new rail system. Electronic manufacturing for US products largely is performed everywhere but in the US. The US is falling behind other nations in knowledge-based industries. Historically speaking, the US doesn’t make things anymore. Even armchair doilies are made overseas.
This is so obvious that it’s Democrats who know how to fix manufacturing! Their proposal is called the Green New Deal (a reference to FDR’s New Deal). The democrats combined the requirements to meet climate change, improve transportation in all its forms and create new industries for a new era driven by Artificial Intelligence into one sweeping manufacturing economy. Generally, the Green New Deal will turn the US into a nation that builds stuff again.
What needs to happen in 2020:
The Green New Deal is the opposite of supply-side Reaganomics; it’s Keynesian demand-side economics. It’s a Democratic Party program that needs a Democratic majority in both Houses of Congress.
Cabinet-Based programs
A citizen is familiar with these issues: health, education, housing, equal rights, immigration, environmental protection, agriculture, and several other state and Federal policies – all managed by cabinet secretaries of one kind or another. Desperately needed immediately is a functioning State Department to restore US leadership in the world and to lead the US into a new economic and social age.
What needs to happen in 2020:
Get rid of Donald.
Ancient Mariner
[1] The TPP was between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. The countries involved produce 40 percent of the world’s total gross domestic product of $107.5 trillion.