The Beatification of Ronald Reagan.

Ronald Reagan behind a podium giving a speech. Image Description: Ronald Reagan behind a podium giving a speech.

Summary: Mark my words, the beatification of Ronald Reagan is already underway, so it’s time to brush up on Dutch and remember his most fucked accomplishments, including one caper so diabolical we’re still living with it today. 

The most potent weapon in the GOP’s arsenal has always been nostalgia. The good old days. You know who used the campaign slogan Make America Great Again? Donald Fucking Trump. And do you know who used it first? Ronald Fucking Reagan. So pay attention, Unf*ckers, because everything old is new again.

You see, nostalgia works in waves. It’s most effective when it’s just long enough ago that you can revise the narrative to fit your agenda. But recent enough that it’s tangible. We’re just far enough away from the Reagan era now to remember it fondly. The music was silly. The market was ripping. We got our global mojo back and beat the fucking Commies once and for all.

That’s why, dollars to donuts, you’re about to witness the beatification of Ronald Reagan, patron saint of the Grand Old Party.

Obviously we’re talking about the '80s, but you really can’t talk about Reagan without talking about what he stood for, which was the opposite of his predecessor Jimmy Carter. And boy did my man Jimmy get a bad fucking rap. Ask adults of a certain age about Jimmy Carter, and they’ll likely give you the same old reflexive response that he was one of the worst presidents of the modern era.

But Jimmy Carter was an honest man. The least warmongering of the modern presidents, fully committed to the environment and hopeful that he would usher in an era of peace and tranquility in the world. A little religious for my taste, but undeniably a good man. Unfortunately for him, the world had other plans, and economic circumstances were such that Carter was dead in the water before he ever really got started. By the end of his one and only term, the world had pretty much gone to shit.

At the pinnacle of American despair, along came a relic of yesteryear. A glib former actor with shiny Brylcreem hair, an aw-shucks delivery and twinkle in his eye that said, “It’s okay white people, Uncle Ronnie’s here and ready to Make America Great Again.”

Ronnie was already an established figure in Republican politics as governor of California and a household name to an older generation from his days as an actor. The man himself embodied frontier individualism from his cowboy movie days, and free markets from his time in government. And at the time, the country was sorely in need of a psychological boost.

Reagan brought the promise of a new day with his theory of Reaganomics, which is the central theme of this essay.

So we’re not going to cover how he was the first president to talk about fiscal conservatism while blowing up the deficit and doubling the national debt, or how he waged a holy war on poor people by race baiting and demonizing so-called welfare queens, boosted the private prison system, ushered in the era of mass incarceration, sold arms secretly to Iran, sent military aid to extremist guerrilla groups in Indonesia, Central America, Africa and the Middle East to overthrow democratically elected governments and sat atop an administration that saw investigations, indictments or convictions of more than 130 officials. No, that’s not this essay.

What has been sold to us by Republican revisionists is that the Reagan-era tax cuts to the rich flooded the system with liquidity and trickled down to the masses, brought down skyrocketing interest rates and got inflation under control, thereby restoring sanity to the markets. The fairytale continues with Reagan wrangling out-of-control gas prices, which then steadily declined for years to come thanks to his no-nonsense stance against OPEC and tax breaks to domestic oil companies.

It’s an enticing narrative. It’s bullshit, but enticing, nonetheless.

To start, advances in offshore oil drilling technology allowed the United States to become more competitive. The spike in oil prices and the immediate reversal had little to do with our domestic policy and everything to do with the beginning and end of the Iranian Revolution. Prices were beginning to revert back to normal when Reagan took office, and OPEC nations, operating under a new quota system, artificially doubled their reserve estimates, giving the appearance that the world’s supply of oil was bigger than it actually was.

We know from President Obama’s first years in office that it takes a while to turn a ship around, and sometimes your successor winds up with the credit. The same was true when Jimmy Carter took office in 1977. Carter inherited a mess created by President Nixon and the forgettable Ford years.

To start, Nixon unilaterally decided in 1971 that the United States would no longer peg the dollar to gold—the beginning of the end of the Bretton Woods Agreement—while simultaneously applying a 10%t surtax on imports. I’m not making an argument here for or against floating fiat currency, but the combined effect artificially drove down the value of the dollar to make U.S. exports more competitive, one of history’s greatest examples of currency manipulation.

While the markets responded favorably, the rest of the world was thrown into disarray, and the wheels began to come off global currencies, with inflation soon to follow suit. Combined with two Iranian revolutions causing severe interruptions in the global oil supply and the sudden devaluation of the dollar, global commodities went through the roof and inflationary consumer prices naturally followed suit.

Here’s the point about Reaganomics, before we unpack the long con that keeps on fucking.

When Reagan took over, the biggest economic issues we faced were rampant inflation and high interest rates that were choking consumers and crushing economic investment, respectively.

It wasn’t Reaganomics that saved the day, it was then-Federal Reserve Chairman Paul Volcker, a Carter appointee who Reagan kept on. Volcker steadily raised the federal funds rate over a couple of years to a peak of 20% in June 1981 as shock therapy. It eventually worked, and annual inflation collapsed from 12.5% in 1980 to 1.1% by 1986.

Even still, it wasn’t yet “morning again in America” and the newly elected Republican administration had a liquidity problem; and Volcker’s move, while staving off hyperinflation, plunged the country into an even deeper recession in the short term. Reagan’s 1981 tax cuts poured billions of dollars into the hands of the rich, and billions flowed into corporations. Only these funds never trickled down into the real economy. From this point forward, the equity markets would roar and never look back, but the situation on the ground for real working people in the U.S. never improved.

So, the wealthy were pretty psyched and the markets started going crazy, but Reagan had effectively bankrupt the government. So, beginning in 1982, he started raising taxes.

In fact, he raised taxes 11 times throughout his terms. 11 times.

When you blow up the national debt with uncontrollable spending and increase taxes, that’s called “tax-and-spend.” But because Republicans are so much fucking better at messaging than Democrats, the labels have been effectively reversed. The real fuck you part of this is that the top marginal tax rate dropped from 70% in Reagan’s first year to 28% when he left, which means the tax hikes were laid exclusively on the middle class.

Now, let’s talk about one of the greatest cons the Gipper ever pulled off. A con that lives on to this very day.

Reagan had a problem. He campaigned on cutting taxes and did just that upon entering office. The result was catastrophic. The budget deficit exploded and the economy tanked further than the mess he inherited. It was unsustainable. Reagan needed a plan, and needed it fast, because his tax cuts were so deep that Social Security was in danger. So the issue they faced was how to raise revenue without it looking like a tax hike, and prop up Social Security without losing face. The con was on like Donkey Kong, (which was actually released around this same time).

Now, in order to pull off a con you need the right team. The anatomy of a proper confidence team:

  • First, you need ‘the Roper.’ This is the person that pulls you into the con.
  • Then there’s ‘the Grifter’. The real confidence man on the job.
  • ‘The Shill’ is seemingly unrelated to the caper, but does some quiet heavy lifting.
  • ‘The Fixer’ plays an important organizing role, but should be in the background. A forgettable figure.
  • You’ll need an ‘Inside Man’ as well. This is your crew member in charge. Kind of an operations person.
  • Lastly, ‘the Face.’ This is the pretty face that sells the plan to the unsuspecting mark.
Now, let’s unmask the roles on Reagan’s confidence team.
  • Enter the Roper. The Heritage Foundation issued reports on the instability of Social Security and the need to revisit how it is funded. More than 60% of what the foundation published made it into Reagan-era policy, so they knew how to spin a tale.

  • The Grifter was Alan Greenspan, a Washington gadfly who had just the plan Reagan needed.

  • The Shill behind the con was a veteran legislator named Bob Dole. Dole had a reputation as a deal maker, and as head of the senate finance committee, he was in a prime position to make moves behind the scenes.

  • The forgettable figure lurking in the background, our Fixer, was none other than Vice President George Herbert Walker Bush.

  • The Inside Man, largely lost to history now, was a looming figure in Reagan’s first term and the biggest promoter of what would be known as Reaganomics. A man named Donald Regan.

  • Then, of course, there was the Face. The man who could sell anything with a wink and a smile. Folksy old Ronald Reagan himself. Surely he would never lie to his adoring public.

Here’s how they pulled it off.

Because their tax cuts could potentially drain Social Security over time, the team hatched a scheme to shore up the program in a way that protected the wealthiest Americans. Alan Greenspan drew up an ingenious plan to steadily increase the Social Security deduction from 9% to 15% by 1990.

Effectively, it was the largest tax increase in U.S. history, though they never called it that. Instead, they sold it as a way to sustain Social Security for years to come and that we were all in this together. All of us, that is, except for the wealthy. You see, Republicans couldn’t risk losing their wealthy donors, so Greenspan created a deduction cap on one’s income. So once someone hit that cap, they were allowed to simply stop paying into it.

The Shill, the Fixer, the Inside Man and the Grifter went into high gear to sell the plan to policymakers, leaving the Face to sell it to the Mark.

Oh, and in case you haven’t guessed it by now—you, my darling reader—you’re the Mark.

Brilliant. Because inequality has massively widened beginning with, and because of, Reagan’s policies, real wages for 90% of Americans haven't grown since the late 1970s. Meaning the amount of money we all take home relative to inflation hasn’t budged in over 40 years. But the percent you contribute to Social Security increased by 70%.

As we well know by now, the top 10% of Americans recognized all of the wealth and income gains from Reagan’s first term forward. But a billionaire in this country pays the same dollar amount into Social Security as someone making $142,000. Put another way, if you make 50 grand, you’ll have Social Security deducted from your check all year long. If you make a million dollars, you’ll be done paying into Social Security by mid-February.

In Reagan’s day, Social Security deductions impacted about 90% of total income in the U.S. Today, it’s around 80%. As the wealth gap widens, this downward trend will continue.

Now, back to the beatification of Ronald Reagan by Republicans today. True-blue Republicans who like to evoke imagery of the Gipper could use a refresher course and remember that when Reagan cut taxes in the beginning of his administration, the jobless rate jumped to 9.7 percent and the federal deficit grew to a then-unprecedented level, prompting his administration to raise taxes on the middle class 11 times before leaving office.

He and his crew also left the working class holding the bag on Social Security, something that remains unresolved to this day. There was nothing fiscally conservative about the Reagan era, but the next phase in GOP propaganda will try to convince you that this is the era we need to return to.

Time for a callback!

This is the part where I remind that this financial fuckery is on top of Reagan blowing up the deficit and doubling the national debt, demonizing so-called welfare queens, boosting the private prison system, ushering in the era of mass incarceration, selling arms secretly to Iran, directing military aid to extremist guerrilla groups in Indonesia, Central America, Africa and the Middle East to overthrow democratically elected governments and running an administration that saw investigations, indictments or convictions of more than 130 officials.

And you know, Unf*ckers, the Republicans are better at messaging and Trump left behind the ultimate playbook on how to leverage mass disinformation campaigns. It’s a bad recipe.

So don’t be on the lookout for the next version of Trump. Be on the lookout for someone far more insidious. He’ll be smart, glib, good looking and remind you a whole lot of the version of Reagan they’re about to shove down our throats.

And remember, you’ll never be in on the con. You’ll always, always be the Mark.

Here endeth the lesson.

Max is a basic, middle-aged white guy who developed his cultural tastes in the 80s (Miami Vice, NY Mets), became politically aware in the 90s (as a Republican), started actually thinking and writing in the 2000s (shifting left), became completely jaded in the 2010s (moving further left) and eventually decided to launch UNFTR in the 2020s (completely left).