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Greed Is Not Enough Reaganomics
Takes a critical look at the Reagan administration's economic policies, and considers whether supply-side economics and reduced government regulation will really benefit the nation
213 pages, Hardcover
First published February 1, 1982
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Displaying 1 - 2 of 2 reviews
October 4, 2017
Not required reading by any stretch. This is very much a book of its time. Does a modern reader really need to spend 200 plus pages on a book predicting what Reagonomics would do? Obviously we have 35 years of evidence, we don't need predictions.
However, this book is not without its charms. Right here you have proof that before Reaganomics even had a chance to go into effect there were people who already knew the score. Lekachman correctly foresaw a future of class warfare against the poor and increasingly reactionary politics. Even then there were people who could see supply side theory for what it was - a giveaway to the rich.
Sadly the internal contradictions of monetarism combined with supply side theory did not make anyone give up on these ideas as Lekachman had hoped. Even though Reagan-era policy proscriptions have not achieved their advertised results (despite a three decade trial run) modern Republicans like Paul Ryan still flog these ideas to this day.
A fairly breezy read considering the content.
However, this book is not without its charms. Right here you have proof that before Reaganomics even had a chance to go into effect there were people who already knew the score. Lekachman correctly foresaw a future of class warfare against the poor and increasingly reactionary politics. Even then there were people who could see supply side theory for what it was - a giveaway to the rich.
Sadly the internal contradictions of monetarism combined with supply side theory did not make anyone give up on these ideas as Lekachman had hoped. Even though Reagan-era policy proscriptions have not achieved their advertised results (despite a three decade trial run) modern Republicans like Paul Ryan still flog these ideas to this day.
A fairly breezy read considering the content.
November 8, 2023
A SHARP CRITIQUE OF THE POLICIES OF REAGAN AND CONGRESS FROM 1981-1982
Author Robert Lekachman wrote in the Preface to this 1982 book, “Reaganomics works. In less than two years, murderously high interest rates in alliance with the alarming prospects of escalating deficits generated by reckless tax cuts and soaring Pentagon budgets, have propelled unemployment to heights unprecedented since 1940. Nearly half the nation’s black teenagers walk the streets. In states like Michigan and cities like Detroit and Flint, the label of choice is Depression. How else can one justly acknowledge unemployment rates in excess of 20 percent?” (Pg. vii) He continues, ‘In 1982, the Reagan administration’s year of reckoning, corporations that were expected to … [be] buying new machines and gambling on novel processes and products glumly reduced their spending plans below Carter-era totals. Why add new plants when the customers can’t afford to buy the products of the old ones?” (Pg. viii)
He adds, “Sensible folks never expected Reaganomics to work. George Bush the presidential candidate quite accurately labeled his future boss’s economic nostrums ‘voodoo economics.’ It hasn’t taken long for the all-out wager on sheer greed to be a dead loss. Reaganomics is a flat failure… That Reagan is president … constitutes a dangerous exaltation of image over substance… Reagan has presided over, if we are fortunate, or last national fling of nostalgia for the rugged life of the frontier … [but] this was a president more likely to dive widows and orphans into the snow than rescue them from foreclosure of the old homestead.” (Pg. x-xi)
He summarizes, “Let me hazard a pair of concluding guesses. For Democrats to … present themselves as friends of business is tantamount to a recipe for alienating unionists, liberal professionals, and minorities---without converting the corporate community… My second guess is … [that] Democrats will succeed in this decade by tuning to the political left… [which] includes public control of investment… egalitarian tax reform; and public restraint of corporate plant closings. Great Society liberalism faltered for reasons more substantial than the personality defects of Jimmy Carter. It failed because Lyndon Johnson desperately endeavored to combine funding for a calamitous war with sustenance for his Great Society War on Poverty. It failed because economic growth slowed… Johnson’s political compromise---tax cuts for the prosperous and benefit increases for the poor—could no longer be funded without inflation.” (Pg. xiv-xv)
He adds, “Liberals and radicals should be clear about where responsibility for the unsatisfactory state of the American economy lies. Business has long been our dominant interest group. Economic failure is as much a corporate product as past success… the next few years are an opportunity. They are also a period of great danger… the president, ominously, has begun to endorse… the program of the lunatic right: public school prayer, abortion bans, limitations on court jurisdiction over school integration, and balanced budgets buy constitutional fiats… I am enough of an American to expect a cheerful sequel to the parade of horrors now on display in the Reagan era.” (Pg. xv)
He recounts, “Republicans half a century ago could not curtail welfare, unemployment benefits, free medical care for the medically indigent, and Social Security… Since then, Americans have traveled in the direction taken by Western Europe…Americans expect shelter from the misfortunes of severe illness, disabling accident, unemployment, and indigent old age… with little enthusiasm, conservatives take the permanence of these shelters for granted… Ronald Reagan is no conservative. He is… a reactionary, intent upon a return to an earlier and more desirable set of relationships between citizens and their government. He is… the first reactionary President.” (Pg. 25)
Of the 1981 Kemp-Roth tax cuts, he says, “The best to be said on behalf of Kemp-Roth is that in its absence, most Americans with incomes below $30,000 would fare even worse. Nevertheless, the apparent fairness of across-the-board tax reduction dissolves once account is taken … of bracket creep and the financing of Social Security… Kemp-Roth will not, by any reasonable assumption, leave the 61 percent of the taxpaying public with incomes below $20,000 better off in 1984 than they were… in August 1981… On the other hand, if you are an income aristocrat… the 0.7 percent… who reside in the $100,000-$200,000 bracket will typically add … 11 percent of current after-tax income to their net proceeds.” (Pg. 66)
He notes, “Estate taxation has been historically light in this country. Congress in 1981 acted almost to eliminate it, by exempting entirely bequests to spouses… 1981 will be recalled as the year when the White House and a complaisant Congress engaged in large-scale income redistribution, from the bottom 60 percent to the top 5 percent of the population. No single action will more surely promote concentration of wealth than its amendment… of inheritance taxation.” (Pg. 68)
He points out, “Like Kemp-Roth, administration business tax alterations seem to be fair and attractive, not least because they simplify complex regulations… Could any artifact of the political process possibly be more clearly in the national interest? Well, yes. For starters, about 80 percent of the tax savings will flow to the 1,700 largest corporations that during the last twenty years have generated only 4 percent of all new employment opportunities, possibly because their presiding geniuses have been preoccupied with financial manipulation instead of research and development. There is no guarantee that with additional funds to play with, the inhabitants of executive suites will not multiply takeover efforts, divert cash flow to foreign ventures, or simply enlarge dividend payments to the stockholders.” (Pg. 71)
He reports, “At Columbia University… an economist and engineer has made an impressive case against the defense sector as the consumer and waster of inordinate numbers of scientists, engineers, and skilled workmen. Some… note that American managers in recent years have scanted research and development and devoted their talents to corporate mergers and financial manipulations.” (Pg. 91)
He observes, “A dangerously high fraction of private saving is wasted in speculation, tax shelters, mergers and corporate takeovers. The American economy in the last decade has not been afflicted by a capital shortage. Its growth has been sabotaged by misdirection of available funds.” (Pg. 196)
He concludes, “Americans… crave fair treatment. As the Department of Justice continues to withdraw from civil rights enforcement, as the president continues to appoint anti-union members to the National Labor Relations Board, as the amended tax code even more outrageously indulges corporations and wealthy individuals, as the victim of industrial disease and preventable accidents endure their disabilities on smaller benefits, as fragile protections against illness, unemployment, and old age are one by one dismantled, the sense of individual outrage will seek political expression. Time is not on President Reagan’s side. The damage done by Congress in 1981 will blight many lives in 1982 and afterwards… the democratic left may indeed have begun to mobilize… If such is the shape of the near future, those of us who have spent our lives and energies on the democratic left will have reason to thank Ronald Reagan.” (Pg. 207)
This book will be of keen interest to anyone seeking critiques of ‘Reaganomics,’ and economic issues of the 1980s.
Author Robert Lekachman wrote in the Preface to this 1982 book, “Reaganomics works. In less than two years, murderously high interest rates in alliance with the alarming prospects of escalating deficits generated by reckless tax cuts and soaring Pentagon budgets, have propelled unemployment to heights unprecedented since 1940. Nearly half the nation’s black teenagers walk the streets. In states like Michigan and cities like Detroit and Flint, the label of choice is Depression. How else can one justly acknowledge unemployment rates in excess of 20 percent?” (Pg. vii) He continues, ‘In 1982, the Reagan administration’s year of reckoning, corporations that were expected to … [be] buying new machines and gambling on novel processes and products glumly reduced their spending plans below Carter-era totals. Why add new plants when the customers can’t afford to buy the products of the old ones?” (Pg. viii)
He adds, “Sensible folks never expected Reaganomics to work. George Bush the presidential candidate quite accurately labeled his future boss’s economic nostrums ‘voodoo economics.’ It hasn’t taken long for the all-out wager on sheer greed to be a dead loss. Reaganomics is a flat failure… That Reagan is president … constitutes a dangerous exaltation of image over substance… Reagan has presided over, if we are fortunate, or last national fling of nostalgia for the rugged life of the frontier … [but] this was a president more likely to dive widows and orphans into the snow than rescue them from foreclosure of the old homestead.” (Pg. x-xi)
He summarizes, “Let me hazard a pair of concluding guesses. For Democrats to … present themselves as friends of business is tantamount to a recipe for alienating unionists, liberal professionals, and minorities---without converting the corporate community… My second guess is … [that] Democrats will succeed in this decade by tuning to the political left… [which] includes public control of investment… egalitarian tax reform; and public restraint of corporate plant closings. Great Society liberalism faltered for reasons more substantial than the personality defects of Jimmy Carter. It failed because Lyndon Johnson desperately endeavored to combine funding for a calamitous war with sustenance for his Great Society War on Poverty. It failed because economic growth slowed… Johnson’s political compromise---tax cuts for the prosperous and benefit increases for the poor—could no longer be funded without inflation.” (Pg. xiv-xv)
He adds, “Liberals and radicals should be clear about where responsibility for the unsatisfactory state of the American economy lies. Business has long been our dominant interest group. Economic failure is as much a corporate product as past success… the next few years are an opportunity. They are also a period of great danger… the president, ominously, has begun to endorse… the program of the lunatic right: public school prayer, abortion bans, limitations on court jurisdiction over school integration, and balanced budgets buy constitutional fiats… I am enough of an American to expect a cheerful sequel to the parade of horrors now on display in the Reagan era.” (Pg. xv)
He recounts, “Republicans half a century ago could not curtail welfare, unemployment benefits, free medical care for the medically indigent, and Social Security… Since then, Americans have traveled in the direction taken by Western Europe…Americans expect shelter from the misfortunes of severe illness, disabling accident, unemployment, and indigent old age… with little enthusiasm, conservatives take the permanence of these shelters for granted… Ronald Reagan is no conservative. He is… a reactionary, intent upon a return to an earlier and more desirable set of relationships between citizens and their government. He is… the first reactionary President.” (Pg. 25)
Of the 1981 Kemp-Roth tax cuts, he says, “The best to be said on behalf of Kemp-Roth is that in its absence, most Americans with incomes below $30,000 would fare even worse. Nevertheless, the apparent fairness of across-the-board tax reduction dissolves once account is taken … of bracket creep and the financing of Social Security… Kemp-Roth will not, by any reasonable assumption, leave the 61 percent of the taxpaying public with incomes below $20,000 better off in 1984 than they were… in August 1981… On the other hand, if you are an income aristocrat… the 0.7 percent… who reside in the $100,000-$200,000 bracket will typically add … 11 percent of current after-tax income to their net proceeds.” (Pg. 66)
He notes, “Estate taxation has been historically light in this country. Congress in 1981 acted almost to eliminate it, by exempting entirely bequests to spouses… 1981 will be recalled as the year when the White House and a complaisant Congress engaged in large-scale income redistribution, from the bottom 60 percent to the top 5 percent of the population. No single action will more surely promote concentration of wealth than its amendment… of inheritance taxation.” (Pg. 68)
He points out, “Like Kemp-Roth, administration business tax alterations seem to be fair and attractive, not least because they simplify complex regulations… Could any artifact of the political process possibly be more clearly in the national interest? Well, yes. For starters, about 80 percent of the tax savings will flow to the 1,700 largest corporations that during the last twenty years have generated only 4 percent of all new employment opportunities, possibly because their presiding geniuses have been preoccupied with financial manipulation instead of research and development. There is no guarantee that with additional funds to play with, the inhabitants of executive suites will not multiply takeover efforts, divert cash flow to foreign ventures, or simply enlarge dividend payments to the stockholders.” (Pg. 71)
He reports, “At Columbia University… an economist and engineer has made an impressive case against the defense sector as the consumer and waster of inordinate numbers of scientists, engineers, and skilled workmen. Some… note that American managers in recent years have scanted research and development and devoted their talents to corporate mergers and financial manipulations.” (Pg. 91)
He observes, “A dangerously high fraction of private saving is wasted in speculation, tax shelters, mergers and corporate takeovers. The American economy in the last decade has not been afflicted by a capital shortage. Its growth has been sabotaged by misdirection of available funds.” (Pg. 196)
He concludes, “Americans… crave fair treatment. As the Department of Justice continues to withdraw from civil rights enforcement, as the president continues to appoint anti-union members to the National Labor Relations Board, as the amended tax code even more outrageously indulges corporations and wealthy individuals, as the victim of industrial disease and preventable accidents endure their disabilities on smaller benefits, as fragile protections against illness, unemployment, and old age are one by one dismantled, the sense of individual outrage will seek political expression. Time is not on President Reagan’s side. The damage done by Congress in 1981 will blight many lives in 1982 and afterwards… the democratic left may indeed have begun to mobilize… If such is the shape of the near future, those of us who have spent our lives and energies on the democratic left will have reason to thank Ronald Reagan.” (Pg. 207)
This book will be of keen interest to anyone seeking critiques of ‘Reaganomics,’ and economic issues of the 1980s.
Displaying 1 - 2 of 2 reviews