Peace through War.

War without Honour.

In the 1970s there was a power struggle in Washington between realists and idealists over foreign policy. Though it should be noted that there is very little practical difference between the two factions. Watergate had sunk public belief in politicians along with Nixon, whose administration had sought a balance of power in the world between the Soviet Union and the United States. This involved making peace with China, slaughtering millions of people in South-East Asia for the sake of "peace with honour", and propping up dictatorships around the world. After Nixon resigned, a caretaker administration followed with Henry Kissinger retained his dual roles as Secretary of State and National Security Adviser. The nationalists Dick Cheney and Donald Rumsfeld, both idealists, were introduced into the White House around the same time. As Kissinger attempted to seize all levers of foreign policy from President Ford, Cheney and Rumsfeld acted to ostracise and remove Kissinger from the government.

The Reagan administration turned away from the detente approach of realpolitik that had been a key-part of American foreign policy for many years by that time. This could not have been done had Kissinger won the power struggle in the 70s. The White House was heavily influenced by neoconservatives, self-described "democratic revolutionaries", who felt that America should lead the way for freedom and democracy in the world. Reagan had soon declared the "War on Terrorism" and went on to describe the USSR as the "Evil Empire". All of this provided a justification for increasing military spending, which is not just about pouring money into high-tech industry but also about expanding the influence of the US government and its economic interests around the world. Of course, spreading freedom and democracy around the world to defeat Communism involved propping up extreme right-wing governments.

As part of the new strategy, dubbed without irony as "peace through strength", the Reagan administration quickly acted to support General Zia ul-Haq, in his support of the Mujahideen against the Soviets in Afghanistan whilst turning a blind-eye to the General's nuclear ambitions and radicalisation of Pakistani society - the consequences of which we are still living with today. This policy succeeded in driving the Russians out of Afghanistan but it left the Mujahideen to tear apart Kabul, carrying out mass-rapes and slaughtering thousands, which in turn led to the rise of the Taliban - one of the most reactionary movements in the history of the Middle East. Incidentally, the US supported the Taliban  with aid from the time it took power in 1996 until 2001 when the US invaded. Though it was not just Pakistan which received such support from the US under Reagan, there is a long list of undesirable regimes supported by the US government.


The justification given for supporting such regimes is that these governments were anti-communist. Apartheid in South Africa was supported because the state was fighting Communism, specifically in the form of the ANC. General Pinochet and Suharto violently suppressed leftist elements in Chile and Indonesia, with total support from the US for the sake of "containment". The same can be said of General Zia ul-Haq, Hosni Mubarak, the House of Saud and the Taliban in Afghanistan. But what about Vietnam? The official justification for the Vietnam war was the "containment" of Maoism. The US used this to justify supporting the autocrat Diem, the nationalist regime was later overthrown and Diem was executed on orders from Washington in 1963. South Vietnam was subjected to a horrendous campaign of bombing from the US, far worse than the campaigns which the Communist North was subjected to. Where's the logic here?

The Perpetual War.

The Cold War was not really a conflict between two superpowers, between capitalism and socialism, a grand narrative which is a part of national myths - e.g. a white man's burden, democracy promotion and internationalism. The Cold War was real in the sense that it was violent and brutal, mostly for the people of places like Vietnam and Nicaragua, but the battle between two superpowers was almost nonexistent. If anything there was a competition between America and Russia over spheres of influence. All currents of independence are a threat, regardless of the political tendency of independence, so a country like Vietnam had to be torn apart not for any political reason. The suppression of independence in South and North Vietnam, to prevent the emergence of a state which might inspire others, was given the narrative of "containment" of Maoist China to provide a justification.

The Reaganites backed the Contras in Nicaragua in an attempt to bring down the Sandinistas and bring back the economic policies that led to impoverished Nicaraguans selling their blood at $1 a litre. The Reagan administration argued that if the left-wing movement triumphed in Nicaragua that could bring Communism to America's back yard and even fed deluded fears that Nicaragua could invade the US. Of course, the Sandinistas had no intention to take on the US as that would mean suicide and was a grass-roots reaction to the murderous regime led by Somoza with the complete support of the US government. The support the Reagan administration gave to the Contras went as far as outright violation of law. As Congress cut off funding to the Contras, the Reaganites permitted the CIA to use unscrupulous means to raise funds which went as far as running drugs and selling arms to Iran in exchange for hostages (all the while pouring arms into Iraq to fight Iran).

The Iran-Contra scandal rocked Washington to an extent not seen since Watergate and its rightful exposure brought into public view the disgraces of the Reagan administration. Though it was only "exposed" in the West after it had been picked up by a Lebanese magazine Ash-Shiraa after Mehdi Hashemi arranged demonstrations in opposition to the dealings between the US and Iran. The White House would go on to admit only that $30 million was handed over to the Contras, actually the funding was probably far higher if you consider the millions of dollars that could be made from cocaine trafficking. Naturally President Reagan and Vice President Bush (who watched over the operation) were not indicted, the convicted would later be pardoned by Bush and only Oliver North served any prison time for the crimes. On an interesting side-note, today Oliver North often appears on Fox News and still holds that the illegal sales were justified by the cause of fighting Communism.

The idea that the US government backed right-wing extremists to contain and ultimately to defeat Communism is laughable considering, not only the bombing of South Vietnam, that the US government was actively supporting Ceauşescu in Romania right up until the end. Though it's certainly true that the Reagan White House acted to crush movements for independence wherever they emerged, but the Soviet Union should not be equated with such grass-roots movements. The ANC in South Africa and the Sandinistas in Nicaragua were the kinds of target that the US government acted to suppress because these were grass-roots emancipatory movements. If you want to know how much Washington really "feared" that the Russians were coming, you should consider the implications of the fact that since the fall of the Soviet Union military spending has increased considerably in the US and accounts for 50% of military spending in the world today.

Relevant links on Reagan:
Carter-Reagan-Bush: The Bipartisan Consensus
Noam Chomsky on Financial Markets and Bailouts
The Center Cannot Hold
Reagan and Friedman Economics
Reagan Speaks Out Against Socialised Healthcare 
Vietnam: What Really Happened
A Time for Choosing
Cornel West - The End of Reagan Era Politics  
Nicaragua - A Nation's Right to Survive
The Cold War summed up in 5 mins  
Proposals to Improve the US government 
Stoking the Beast 
The Trap
The Power of Nightmares

Reaganomics Review.

 Voodoo Economics.

On January 20th 1981, following the disappointment of Carter's administration, the Reaganites were rushed to power on a platform that attacked "big government" as the source of America's problems. It was an easy answer to grievances of ordinary Americans going back to the early 70s. As President, Ronald Reagan implemented an economic policy that would go on to be known as "Reaganomics" which could be said to consist of four pillars: reduction in government spending, reduction in the income rates and capital gains tax, reduce government regulation of the economy and control the money supply to reduce inflation. "Reaganomics" was presented as a return to the glory days of free-market capitalism before the Great Depression and the New Deal reforms. Supposedly, President Reagan was working in accordance with the economic principles of Milton Friedman and Friedrich Hayek.

The economic policies of the Reagan administration are often described in ecstatic terms, as if such policies were the edicts of a free-market papacy, but what should be noted is that capitalism in its laissez-faire variant does not exist in the US. The Reaganites did not act to bring back the mythical halcyon days of the free-market and were a radically statist administration. For instance under Reagan protectionist measures doubled and at one point were three times higher than most other industrial countries. During these years state-expenditure increased significantly - breaking post-war records - in response to calls for "re-industrialisation" and the means to accomplish this was mostly Pentagon spending. By increasing the defence budget and cutting taxes the Reaganites effectively increased subsidies to the markets, specifically to lower the costs of firms - socialising costs and privatising profits.

A pillar of "Reaganomics" was the trickle-down theory which stipulated that cuts to the top rate of income tax and corporation tax, the state can encourage investment and expansion by entrepreneurs which leads to greater job creation and keep unemployment low. In fact, the opposite happened and the cuts lead to higher unemployment, lower wages and greater inequality. The wealth was hoarded as productivity has increased by around 45% while wages for working-people stagnated. The amount of debt per household doubled from 1982 to 2008 as workers substituted the cuts to their wages with credit cards, loans and mortgages - which later led to the $8 trillion housing bubble that caused the financial crisis of 2008. The number of illegal firings increased by a factor of six, as the state failed to enforce the laws that protected workers and unions from abuse. As a result, there are on average 65,000 deaths due to work-related injuries and illnesses in the US today.
 

At the same time, corporate profits surged from the early 80s to the late 90s and by 2007 the ratio of financial assets to GDP had doubled. By 2000 the richest 1% of Americans owned 40% of stock, while the bottom 80% owned less than 10%, this is indicative of the massive increase in the gap between the rich and the poor which resulted from "Reaganomics". There is a correlation between inequality and social deprivation, in more unequal societies there is typically greater signs of social deprivation such as illiteracy, obesity, teenage pregnancies, violent crime, drug addiction, alcoholism, mental illness and depression. During the Reagan years, there was an increase in mental illness and depression among workers which later led to the anti-depressant boom of the 1990s. The rate of incarceration has increased and today over 2 million Americans are in the prison system, mostly for drug-related offences whilst drugs became stronger and cheaper than ever before.

Starve the Beast.

The richest 1% of the American population, who were paying an income tax rate of 70% had that rate chopped down to 50% and then to 28% under the Reagan administration. The Democrats were complicit in these massive tax-cuts and the increase of tax-breaks for the ultra-rich. Between 1978 and 1990 the government lost $840 billion in tax revenue whilst 1% of Americans accumulated $1 trillion. When Reagan first entered the White House the national debt was at around $700 billion, by the time he left the debt had exceeded $3 trillion. The US had become the world's leading debtor, as opposed to the world's leading creditor as it had been prior to the Reagan years. The massive tax-cuts for the wealthy enacted by Reagan to necessitate cuts in public spending at a later date, a strategy known as "starving the beast", left the state borrowing to make up for the losses in the meantime. Incidentally the projected interest burden of the debt is equal, as a proportion of GDP, to the interest of the debt incurred by Obama's "fiscal irresponsibility".

The debt was a result of "Reaganomics" specifically the "too big to fail" bailout of Continental Illinois, the doubling of protectionist barriers, the deregulation of industry which led to mass-redundancies for short-term profits and the massive increase in military spending - which is a way of discretely pouring money into high-tech industry and enriching the likes of Bill Gates. It is likely that the collapse of tax revenue, which the Reaganites were responsible for, contributed greatly to the budget deficit as the economy descended into recession. This later led to the first Bush administration to raise taxes in a pragmatic move to secure the recovery, but as a result George HW Bush lost the election to Bill Clinton - who immediately followed up the tax-rises with massive spending cuts. Of course, the savage cuts furthered the ongoing decline of the  New Deal reforms, while spending in areas such as defence increased because only social programmes that are beneficial to the poor should be slashed.

One result of the enormous deficit accrued by "starving the beast" under Reagan were the pragmatic actions undertaken by Bush I and Clinton, namely the tax hikes that helped elect Clinton and the spending cuts that followed under him. The economic policies of Bush I, Clinton and Bush II sustained and furthered the changes made by Reagan, which all together amounted to the financialisation of the economy. In short the impact of budget deficits on politics has been to stifle radical change in favour of the kind of "pragmatism" we saw under Clinton, massive public spending cuts to shrink the deficit. The same is being seen under Obama, the enormous deficit accumulated by the second Bush administration functions to constrain any progressive tendencies left in the Democratic Party. Now that Obama has renewed the Bush tax-cuts which could cost $4 trillion and no doubt continue to "starve the beast" thereby justifying even greater cuts under whoever wins in 2012. 


The impact of "Reaganomics" is a shift to neoliberalism and supply-side economics, which are inclusive of all forms of driving economic growth by pumping money into 'Big Business' but don't see the need to fund welfare provisions or public education. All the theory behind this is reliant on the assumption that markets are innately efficient and will always clear without government intervention. A consummate nonsense, as supply and demand are in nearly constant flux which means that there is always disequilibrium - e.g. unemployment. Nonetheless, you'll find this ideological sewer running beneath theories of "trickle-down" and "starve the beast" in which tax-cuts pay for themselves and cash runs downhill for some reason. This sophistry meant that conservatives no longer had to worry about cutting spending before cutting taxes, it provided an intellectual gloss to slashing taxes for the highest earners whilst cutting spending on welfare.

Revolution and Reaction.

A Rich man's Revolution.

In a nostalgic moment, John McCain once described himself as a "foot soldier" in the "Reagan Revolution". The tenure of Ronald Reagan is often described as a revolution for the Republican Party, but it should be considered part of an ongoing counter-revolution against the American working-class. Gore Vidal once said "Class is the most difficult subject for American writers to deal with as it is the most difficult for the English to avoid." The political discourse in the US is framed as if there is only one class, the middle-class, which involves anyone who owns a car. But the fact that there is a middle-class presupposes that there is an upper-class and a working-class. The global shift in paradigm from social democracy to neoliberalism, a counter-revolution in itself, that commenced with the changes to monetary policy made by Paul Volcker under Carter after Nixon pulled apart the Bretton-Woods system.

With the famous adept timing of the Reaganites, the US government was able to seize on the overwhelming disillusionment with government. The source of this disillusionment went back to the 1960s when the US embarked on the war in Indochina and President Kennedy was assassinated. The Democrats had made a desperate lunge to capitalise on a disillusioned electorate and pander to the radicals roused by the Vietnam war. Jimmy Carter  was put forward as a candidate for President as token to the generation of Americans who protested against Vietnam, Carter would serve one term and made some gestures to black people and the poor. But overall the Carter administration abandoned New Deal liberalism and paved the way for the Reaganites. The Reagan administration, with the Democrats in Congress, merely furthered the transition to neoliberalism. Thus, no one but reactionaries should idolise Jimmy Carter.

From 1978 to 1990 the richest 1% of the American population accumulated $1 trillion, $840 billion of which was a result of massive tax-cuts as part of an active attempt by the Reagan administration to "starve the beast" in order to justify massive cuts in public spending. In 1984 alone the tax-cuts amounted to $190 billion, the majority of which went to the wealthy, in the same year that $140 billion was cut and defence was increased by $181 billion. In the 1960s and 70s led to the share that the richest 1% held of assets collapsed dramatically to almost 20%. In the late 1970s the share of assets for the wealthiest Americans began to increase, a trajectory which was furthered throughout the 1980s and eventually peaked at around 1990 at 40%. Since this explosion can be traced back to the Carter administration, out of a partisan agenda Forbes have written off the inequality produced by "Reaganomics" as the consequence of Carter's economic policy.

In the US Budget of 1986 we can see that out of $794 billion in tax-revenue a total of $294 billion was to be spent on social security. $286 billion was spent on defence, $12 billion for foreign arms to client states and $8 billion on energy (e.g. nuclear weapons). $27 billion on benefits for war veterans and $142 billion for interest on loans on money spent to prop up the national security state. So out of the remaining $500 billion, left over once social security is taken out of the picture, $475 billion was spent on the national security state and fed the military-industrial complex. Other federal spending came to $177 billion, which would contribute to the size of the deficit. Naturally Alan Greenspan, a devotee of Ayn Rand, called for social security and medicare to be slashed in order to balance the budget. The billions poured into wars is a sacred cow no politician is willing to slaughter to avoid confronting the military-industrial complex.

During the "Reagan Revolution" it was not just a "revolution" in domestic and economic policy but in the discourse itself. The Fairness Doctrine, which was introduced in 1949 to ensure liberals and conservatives would be given a fair amount of airtime in political commentary, was repealed in 1987 and we're still living with the consequences. The rise of Rush Limbaugh and the Right would lay claim to talk radio in the 1990s. Lee Atwater and Roger Ailes injected the political debate with right-wing populism that championed the GOP through campaigns of appeals to bigotry, vilification and red-baiting. The same tools are used today, we can see them in the accusations hurled at Obama. Fox News was launched as the propaganda wing of the Republican Party as the so-called "liberal" media is complacent and sets the limits on criticism of government. The lack of meaningful discourse has hollowed out what little hope elections held for Americans.

Throughout the 1980s the Republicans succeeded in transforming the federal judiciary into a conservative institution and had filled over half of federal judgeships with right-wingers by 1991. This was a way for the Reaganites to overturn the rulings of liberal judges and harden a reactionary base along populist lines, which have had a long-term impact on the discourse particularly the attempt to appoint Robert Bork. Whether it takes fundamentalist or nationalist forms, in rulings it takes the form of supporting the death penalty, opposing affirmative action, gay rights and abortion. Following this transformation the death penalty was reinstated, the constraints over police power reduced whilst the legal protections of unions have been dismantled. Education was deemed not to be a "fundamental right" so poor people had to pay for public education. A recent ruling by Supreme Court removed the limits to how much corporations can spend on campaign donations.

30 years after Ronald Reagan came to power, the man's legacy can be clearly seen but is rarely understood for what it is. The vast gulf between the rich and the poor has led to social deprivation on a massive scale, from the way drugs have become a substitute for welfare to fear-driven politics that have led to lone-wolf terrorism and skyrocketing rates of gun crime. Again and again the GOP revives the notion that the government is the source of problems and not the solution as the economic system becomes increasingly dysfunctional and unconstrained. Millions of Americans are now superfluous, left jobless and abandoned by the government with no sufficient medical care and barely enough welfare to get by. The counter-revolution has succeeded in rolling back social democracy and pouring billions into warfare.