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Good sleep is everything. That's why Ollie's science back support is made with a blend of Melatonin and L theanine for both kiddos and grown ups. So when your mind won't switch off, you've got something that can help your racing thoughts and restless nights won't stand a chance. Find Ollie Sleep Solutions for the whole family@ollie.com that's o l l y.com on the morning of January 20, 1981, the sun rose over Washington, D.C. and Ronald Wilson Reagan placed his hand on a Bible that belonged to his mother, Nell, and took the oath of Office as the 40th President of the United States. The Bible was open to 2nd Chronicles 7:14, a verse about healing a nation that has gone astray, and Reagan chose it with the same deliberate care he brought to every prop and every performance he had ever delivered. He had spent decades learning how to make a moment feel sacred. And at this moment, in front of hundreds of thousands of people gathered on the National Mall and tens of millions more watching at home on television, this was the greatest stage he had ever commanded. The country he was inheriting was in genuine pain. Real pain. And the pain was the kind that people feel not just in their savings account, but in their bones, in their fatigue. The 1970s had been a decade of economic misery unlike anything most Americans had experienced since the Great Depression. Inflation, which is the steady rise in the price of everything from groceries to gasoline, had been running at the double digits for years, meaning that the dollar a working family earned on Monday was was worth measurably less by Friday. The same time unemployment was high, factories were closing, interest rates that banks charged. People who wanted to buy a house and a car had climbed so far into the sky that the dream of home ownership felt out of reach for millions of young families. Feel familiar? Economists had a word for this particular combination of misery. Stagflation. The word was ugly and clinical, but what described it was far more personal than any textbook would capture. It described a father in Ohio who had worked at the Same factory for 20 years and was now watching the purchasing power of his patrons check shrink every single week. It described a mother in Texas who had cut her grocery list down to the bare essentials and was still coming up short at the checkout counter. It described an entire generation of Americans who had grown up believing that hard work and patience would be rewarded. And we're now watching that promise dissolve in the heat of an economy that seemed to be breaking down in every direction at once. I say again, feel Familiar. Reagan understood the emotional texture of this suffering in a way that his predecessor, Jimmy Carter, had not been able to project. Carter was deeply intelligent, empathetic, and a genuinely decent man who had tried to tell Americans the truth about the difficult choices ahead. And Americans had responded by rejecting him in the most decisive electoral repudiation a sitting president had faced in decades. What the country wanted was not a lecture. What the country wanted was a story. A story in which the problems had a clear cause. They had an enemy, a villain. And there was also a hero that had a clear plan with a bright ending to make the darkness of the present feel temporary. Ronald Reagan was the most gifted storyteller in the history of American politics. And In January of 1981, he stood before a wounded and scared nation and told it exactly the story it wanted to hear. The story had an economic theory at its center, a theory that supporters called supply side economics and that its critics called trickle down economics, and that George Herbert Walker Bush, before he became Reagan's running mate, famously called voodoo economics in the heat of the 1980 Republican primary campaign. Whatever name you gave it, the theory was built on a set of ideas that were simple enough, write on a cocktail napkin. And as it happened, that is almost exactly how it was first explained. For today in part two of Ronald Reagan, we're going to talk about the economic impact of Reaganomics, how we are still living in the result of those decisions, how what was supposed to fix the stagflation and pain of the 70s ended up causing us more pain in 2026 today on flipping tables. Hello, everybody. Welcome back. I hope that everyone, as I'm recording this, this is Mother's Day, so it'll be late when I say this, but happy Mother's Day to everybody. Been a rough week here in Tennessee for me personally. I. I just moved, got out of the flood situation in my old condo, waiting for repairs on that, moved into this amazing house, building a studio. So it's really stressful, really busy. I'm in that really painful in between place where things aren't quite put away because I have to wait for some things to be done with the house and then I can move everything in its appropriate place. So it's been really stressful. But also I'm coming off the week where Tennessee called a special session to disenfranchise black voters in Memphis and essentially gutted the, the weight of the black vote in Shelby county and spent three days. I had this whole week planned of like, this is how I'm gonna handle the Move. And this is what I'm gonna do. And spent three days instead protesting at the Capitol, sitting in on committee meetings, meeting with people, trying to stop that decision and didn't happen. So if you're feeling a little heavy like I am, I just do want to say that, yes, the fight is on, but I do believe there is something bright on the other side of this. And it's our job to take breaks when we need them. But you also can't, we can't pull the covers over our head. We have to be willing to stand and to fight and to stay educated and to stay involved and just do that in a way that we can take care of ourselves. Not going to go too far into that. I'm going to hopefully I'm working on getting, hopefully Representative Justin Pearson is going to be joining us soon to be able to talk more in depth about that. The history of the civil rights movement as well as the history of what's been done to Memphis throughout the history of Tennessee to disenfranchise the black community there, to take their citywide power away. A lot of governmental infringement coming from these small government folks here in Tennessee, as long as the government being seized is not white. So been a really discouraging week and heading into a very intense month for me with several projects again, the move, some travel. I also, if you've been following my Instagram for a while, you know that last year I had some pretty severe health struggles that have kind of resurfaced. So I'm going to be also on an elimination diet, which translates to you can't eat anything. So, you know, it's going to be great. It's going to be great. It's going to be really a really intense may. But we're here, we're going to learn together. We're going to support each other. I do want to say that as things heat up, especially towards the midterms, if you have not signed up for my newsletter yet, go to montymajor. Com and go to the contact page and sign up. I send one newsletter a week at the most, unless something really severe happens. But there's going to be a lot of organization and a lot of calls to action leading into the midterms coming up on that newsletter. So if you want to be involved and you want to have clear steps, clear action items, please sign up for that newsletter. It's really, really helpful. And again, you'll only get one email a week unless something just absolutely gargantuan happens. So right now, as we look at what's happening with the economy, with how the markets have shifted and fluctuated with tariffs. Last year, Iran this year. We're going to talk about really where a lot of this propaganda rhetoric around trickle down economics around give tax breaks to the corporation and the rich and it's going to benefit the middle class came from and why since the time of Reagan's presidential reign, if you will, there has been such an increase in wealth disparity between the very, very rich and the middle class and the poor, and why this doesn't work, but why it was sold to us the way that it was. So first let's jump in and we're going to talk about the magic napkin. The story of supply side economics began at a restaurant in Washington, D.C. in 1974, at a dinner that has since become one of the most debated meals in the history of American economic thought. The people gathered at the table included Dick Cheney and Donald Rumsfeld, both of whom were senior officials in the Ford administration, a young Wall Street Journal editor named Jude Winisky, and an economist from University of Chicago named Arthur Laffer. At some point during the evening, Laur picked up Laffer, excuse me, picked up a cocktail napkin and drew a curve on it, a simple arc that was supposed to illustrate a single powerful idea that the relationship between tax rates and tax revenue. The idea was this. If a government charges a tax rate of 0%, it collects no revenue, which is obvious. But if a government charges a tax rate of 100%, it also collects no revenue, because no rational person would bother working if everything they earned was immediately taken away. Somewhere between 0 and 100, there was a rate that produced the maximum amount of revenue. And Laffer's argument was that the United States had gone past that rate, that taxes were so high they were actually discouraging people from working, investing and building businesses. The solution, therefore, was to cut tax rates not as a gift to the wealthy, but as a stimulus to the entire economy. Because when rich people had more money to invest, they would build more factories, hire more workers, and generate more economic activity than any government program could ever produce. We're gonna, we're gonna get so into the weeds on this. Winisky, who was one of the most energetic promoters of this idea in the country, gave the concept a name that was designed to sound scientific and respectable. Supply side economics. Because drawn on a napkin, economics doesn't have quite the same ring to it. The argument was that the traditional approach of stimulating the economy by putting money in the hands of consumers, which economists call demand side or and economics had failed to solve stagflation and that the solution lay instead in stimulating the supply of goods and services by giving investors and businesses the incentive to produce more. In practice, this meant cutting the highest income tax rates dramatically and trusting that the resulting explosion of economic activity would eventually generate enough new tax revenue to replace what had been lost. What this actually does is creates really, really wealthy people who hoard their wealth and no tax breaks for the lower classes, or very minimal. David Stockman, who would become Reagan's budget director, the man tasked with turning this theory into a federal budget, later described in his memoir the electric excitement that surrounded these ideas in the late 1970s. The supply side formula was a natural, Stockman wrote, describing how the combination of big tax cuts and optimistic economic projections felt in those early days like a genuine revolution in thinking about how government and the economy related to each other. He was a true believer, a young man in a hurry, and who was convinced that he and his colleagues had found the key to unlocking a new era of American prosperity. What Stockman would eventually discover, and what his memoir documents with candor that made it one of the most devastating insider accounts of a presidency ever published, was that the theory contained a flaw that its proponents had either overlooked or decided to ignore. The flaw was this Cutting taxes by hundreds of billions of dollars while simultaneously spending hundreds of billions of dollars more on the military did not add up. No matter how optimistic your projections were, the supply side revolution as it was actually implemented was not a coherent economic plan. It was a political promise dressed in very nice language that the country would have to borrow against its future to keep. And we are suffering the punishment of that. President Ronald Reagan, in his first address to the Nation on Economy, February 5, 1981, talks about this.
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Our spending cuts will not be at the expense of the truly needy. We will, however, seek to eliminate benefits to those who are not really qualified by reason of need. As I've said before, on February 18, I will present this economic package of budget reductions and tax reform to a joint session of Congress and to you in full detail. Our basic system is sound. We can, with compassion, continue to meet our responsibility to those who, through no fault of their own, need our help. We can meet fully the other legitimate responsibilities of government. We cannot continue any longer our wasteful ways at the expense of the workers of this land or of our children. Since 1960, our government has spent $5.1 trillion. Our debt has grown by 648 billion. Prices have exploded by 178%. How much better off are we for all that? Well, we all know we're very much worse off when we measure how harshly these years of inflation, lower productivity and uncontrolled government growth have affected our lives. We know we must act and act now. We must not be timid. We will restore the freedom of all men and women to excel and to create. We will unleash the energy and genius of the American people, traits which have
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never failed us Before Ronald Reagan could sell his economic plan to Congress in the country. He had to do something that no purely economic argument could accomplish on its own. He had to make cutting taxes for the wealthiest Americans feel like a moral act. This was not a simple task. The United States in 1981 still had a powerful tradition of progressive taxation built on the belief that those who had benefited the most from American society owed the most back to it. The rich can afford to pay their taxes and they should be. I say again, the fact that you and I pay more federal taxes than Disney and Jeff Bezos do is a problem. But at the time they had to convince people that no, no, no, no tax cuts for the wealthy is, is the right thing. It's the good and moral thing to do. The top marginal income tax rate which applied to the highest earners in the country and fueled our economy stood at 70% when Reagan took office. A rate that had been in place in various form deal era with the majority of Americans in poll after poll said they considered it fair. Again, this is not their entire income is taxed by 70%. This is once they hit past a certain top margin, only what remains above that very, very top margin is taxed at that rate. In order to change this ideology and this belief that the wealthiest of the wealthy should pay a higher tax rate on that super margin above. To change this, Reagan needed an argument that went beyond economics and touched deeper. He found it in the alliance he had forged with the religious right during the 1980 campaign. The same alliance that part one that we talked about last week has examined in detail. The evangelical leaders who had helped put Reagan in the White House believed that the market was not just an efficient mechanism for allocating resources, but was a divinely ordered system that rewarded the virtuous and punished the slothful. In their reading of Scripture, poverty was a sign of moral failure and wealth was a sign of God's. God's favor. If you listen to my episode on the Family with Abraham Verde, the lot of this ideology comes from him as he founded the Family in opposition to the new Deal. This theology mapped almost perfectly onto the supply side argument that the rich deserved to keep more of their money and that the government redistribution was an interference in the natural order of things because the poor people clearly did something wrong and they should suffer for it. Kevin Cruz, in his landmark study One Nation Under God, documented how corporate leaders and religious figures had been working for decades to confuse Christian language with free market ideology in the minds of ordinary Americans. If you are an American and you were born and raised here and you don't think that you have been propagandized, you're wrong. We have all been heavily propagandized to buy into systems that don't benefit us, but benefit the ultra wealthy. And they took people's faith and used it as a weapon to make sure that people would vote against their own self interest. This effort had begun in the 1930s and the 1940s, again as a response to the New Deal. The when business groups hired ministers to preach that capitalism was not just an economic system, but a system blessed by God. And that the welfare state was not just a wasteful but spiritually dangerous condition because it encouraged dependence on the government rather than reliance on the divine. How many of us are sitting in our cars or in wherever you're at right now being like, oh my God, I, I remember hearing all of this not realizing that what they were doing was that corporations hired preachers to code an economic system that benefited the rich to you, so that you would not just mix your faith with your economics, but you would vote that way because you truly believed it was part of God's divine order without realizing that you had been propagandized and bought into the system. By the time Reagan arrived in Washington, this fusion of faith and economics had been baked into the conservative movement for two generations. And Reagan, of course, was its most skilled salesman. Reagan spoke about his economic plan in language that was saturated with moral urgency. He described government spending on social programs not as compassion, but as cruelty because it trapped the poor in cycles of dependence that destroyed their dignity and stole their incentive to improve their lives. And we know this isn't true. We know that social programs, there's very minimal fraud, there's very minimal abuse. It helps people get back on their feet. We have seen how this helps and how if we properly funded public schools, social services, they work really well, but the more funding we cut, the less they work. And we can't say that social services are the problem, but we also refuse to pay a living wage where people can, can work a full time job and Afford an apartment. But he described tax cuts for the wealthy not as a gift to the privileged, but as an act of liberation, freeing the most productive members of society to do what they did best, Create jobs, build businesses, and spread prosperity to everyone below them. He described the free market not as a system that sometimes produced winners and losers, but a system that, when left alone, produced justice because it rewarded effort and punished laziness with fairness that no government bureaucrat. Bureaucrat could replicate. How many times have we heard this? If you just work hard enough, well, you're just not working hard enough. Meanwhile, we're talking about people that are working two, three jobs and cannot afford to live. But this was the way that they used religion and married it to an economic system that would benefit them, their corporate donors, and their wealthy friends. In August of 1980, Reagan stood before 18,000 evangelical Christians at the national affairs briefing in Dallas, Texas, and delivered a speech that represented the clearest statement of this fusion between religion and economics he had ever made. He looked out at the crowd and said in a line that has become one of the most quoted moments of his campaign, he said, quote, I know you can't endorse me, but I want you to know that I endorse you. End quote. Genius line. Genius line. Evil again. Weaponizing religion so that people will vote against their own self interests. But genius line. The crowd erupted. In six words, Reagan had told the entire evangelical movement that their values, their vision of America, their understanding of the relationship between faith and public life were not in the margins of American politics, but at its very center. And we're going to hear not only that line from this speech, but a lot of the content around the separation of church and state and how this was blurred in this clip.
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You know, a few days ago, I addressed a group in Chicago and received their endorsement for my candidacy. Now, I know this is a nonpartisan gathering, and so I know that you can't endorse me. But I only brought that up because I want you to know that I endorse you and what you are doing. Since the start of my presidential campaign, I and many others have felt a new vitality in American politics. A fresh sense of purpose, a deeper feeling of commitment is giving new energy and new direction to our public life. You are the reason religious America is awakening, perhaps just in time for our country's sake. I've seen the impact of your dedication. I know the sincerity of your intent, and I'm deeply honored to be with you here tonight. You know, I'm told that throughout history man has adopted about 4 billion laws. It's always seemed to me, however, that in all that time and with all those laws, we haven't improved by one iota on the Ten Commandments. Today, you and I are meeting at a time when traditional Judeo Christian values based on the moral teachings of religion are undergoing what is perhaps their most serious challenge in our nation's history. Nowhere is the challenge to traditional values more pronounced or more dangerous than in the area of public policy debate. So it's fitting that the topic of our meeting should be national affairs. For it is precisely in the affairs of our nation where the challenge to those values is the greatest. In recent years, we've seen a new and cynical attack on the part of those who would seek to remove from our public policy debate the voice of traditional morality. This tactic seeks not only to discredit traditional moral teachings, but also to exclude them from public debate by intimidation and name calling. As we were so eloquently told just a short time ago, we have all heard it charged that whenever those with traditional religious values seek to contribute to public policy, they're attempting to impose their views on others. We are told that any public policy approach incorporating traditional values is out of bounds. This is a matter that transcends partisan politics and demands the attention of every American, regardless of party. If we have come to a time in the United States when the attempt to see traditional moral values reflected in public policy leaves one open to irresponsible charges, then the structure of our free society is under attack and the foundation of our freedom is threatened.
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On August 13th of 1981, Ronald Reagan signed the Economic Recovery Tax act into law at his ranch at Santa Ynez Mountains of California. Sitting at a table in the open air, with the rolling hills of Rancho de Ciello spread out behind him and a group of smiling supporters gathered around him. The signing was staged with the same attention to visual symbolism that characterized every public moment of his presidency. The rugged outdoor setting communicating a message about simple American values and life, and the uncomplicated pleasure of cutting the government down to size. But the legislation he signed that morning was anything but simple, and its consequences would reshape the American economy and the lives of ordinary Americans in a way that we feel right now. The Economic Recovery Tax act, known by the acronym ERTA or ERTA, was the, the time of its passage, the largest tax cut in American history. It reduced the top marginal income tax. Again, so this is only the money remaining above the very, very, very top tax bracket gets taxed like this, it dropped that income tax rate from 70% to 50% immed with further reductions scheduled over the following years that would eventually bring it down to 28%. 28%. For context, for context, from 100, if you make 103,000 to $197,000 a year, you pay a 24% tax rate. 24% and six figures doesn't get you nearly as much as it used to. Which means that the people that are make that are so far above the tax bracket that they are, they are out of the margin, are paying 4% higher tax rate on that income as someone who's making six figures. And again, the six figure number comes from 2025. But it's, you get the comparison of, we're talking people that are making over $600,000 a year, people that are making millions of dollars a year, paying a effective tax rate similar to someone who is making 103,000 a year. And at $48,000 a year. So this is from 2025, from $48,000 a year to $103,000 a year, you're paying a 22% effective tax rate. If you make under $12,000, you still pay 10% in tax. But people who are making millions, anything above that top margin, which, the top margin right now is $626,000. 3. Sorry, $626,351. Anything above that is taxed at the same rate. It doesn't keep going up and it should. I'm not opposed to people being super rich. I have no issue with that. You invent something, you work, whatever. But I think, personally, I think that the bulk of society should be able to buy a home, have health care and be able to go to school before someone can buy his fifth yacht. Call me crazy, but that's the change. So it cut this, this top income tax rate from 70% to 28% by the end of his presidency. It's at that time was the largest upward transfer of wealth in American history, ever. The only thing that has surpassed it is the big ugly bill that was passed last year. It cut taxes for every income bracket. Though the cuts were largest in both absolute dollars and percentage of income for the highest earner. So everybody did get a tax break, but it by far benefited the richest in the country. It also reduced the tax rates on investment income, which meant that people who made their money from owning stocks and bonds rather than a salary from going to work every day received a disproportionate benefit from the new law. Which is why the ultra wealthy do not pay themselves salaries. They make investment income, capital gains, because especially coming anyone who follows in the Reaganomics tradition dramatically tax cuts those. So these people are making more and more money by making sure they're not on a salary, while you who have to get up at 5 in the morning to make sure you can get to your job, get taxed at a higher effective rate because you're on an hourly or a salary. The theory behind the tax cut was that the wealthy would use their new resources to invest in American businesses, create jobs and economic growth that would eventually raise the incomes of everyone in the country. It doesn't work if you don't raise the minim wage. Because what they have shown that they will do instead is wage theft. They will steal wages, they will overwork people, they will not budge on that minimum wage. So people are not making more, they don't have more buying power. But the CEOs and the owners and the investors are now super, super wealthy. That's what we've seen happen. If this was true, if this is really how this worked, then our minimum wage, our federal minimum wage would reflect that increase in wealth. But it doesn't. Reagan described this process as a tide that would lift all boats, an image so appealing in its simplicity and so optimistic in its promise that it became one of the defining metaphors of the era. The economy, he insisted, was not a competition between the wealthy and everyone else, but a system in which everyone's prosperity was ultimately connected, in which the success of those at the top was the engine that powered everyone else's advancement. That's not true. The success of the middle class is the tide that lifts all boats. The rich are still going to get rich, and they're still, they may not get rich as fast. They're still going to get wealthy. And as the middle class grows and expands upward, the poverty level comes up with it and people come out of that poverty level. It is not the ultra wealthy that are the engine. It's the middle class. David Stockman, who negotiated the final shape of the legislation on Capitol Hill and watched the process from the inside, later described what actually happened during the legislative fight as something closer to a free for all than disciplined implementation of a coherent theory. He said, quote, the hogs were really feeding. And he said that in a series of candid conversations with journalist William Greider that were published in the Atlantic Monthly In December of 1981, in what became one of the most explosive pieces of political journalism of the decade, Stockman described how members of Congress had used the tax cutting momentum to slip in special favors for the industries and donors who had funded their campaigns, loading the bill with provisions that had nothing to do with supply side theory and everything to do with the simple desire to give wealthy supporters a reason to keep writing checks. This economic system has to be flipped. Citizens United has got to go. We need to get rid of packs, corporations shouldn't be able to be involved in elections and there needs to be a cap on donations from individuals to campaigns. And Stockman went further in his confession, saying something that the White House found so damaging that Reagan had to summon him to the Oval Office for what the President publicly described as a trip to the woodshed. Asked by Grider whether supply side economics was really just a cover for cutting taxes on the rich, Stockman replied with candor that his political allies would spend years trying to walk back. He said, quote, it's kind of hard to sell trickle down. So the supply side formula was the only way to get a tax policy that was really a Trojan horse to bring down the top tax rate. End quote. He was like, yeah, it was a Trojan horse so that we could give the wealthy tax break. It was the most honest sentence uttered by a senior member of the Reagan administration in the entire eight years of the presidency. And it cost Stockman almost everything. And before we get into the recession of 1981 and 1982, I'm going to take our first of two mid show sponsor breaks. If you would like to get these episodes ad free as well as all the extra videos I'm making around how we got the Bible and it's its relationship to this moral majority and the marriage between American politics and biblical history. You can sign up@patreon.com montemater this episode is brought to you by Redfin. You're listening to a podcast, which means you're probably multitasking, maybe even scrolling home listings on Redfin, saving homes without expecting to get them. But Redfin isn't just built for endless browsing. It's built to help you find and own a home with agents who close twice as many deals. When you find the one, you've got a real shot at getting it. Get started@redfin.com own the dream. You thought this was your run club era. Turns out it was more of a thinking about run club era. The good news? Someone's marathon training is about to start. Sell your workout gear on Depop. Just snap a few photos and we'll take care of the rest. They get their race day fit and you get a payout for trying. Someone on Depop wants what you've got. Start selling now. Depop where taste recognizes taste. Thank you for listening to those ads. Thank you for sharing and rating the show. It really helps a lot. The promises that Reagan made in 1981 were bold enough to justify bold expectations. And the American people were watching closely to see whether this supply side revolution would deliver the prosperity that it promised. What arrived instead in the fall of 1981 and most of 1982 was the worst economic recession the United States had experienced since the Great Depression. The unemployment rate climbed past 10% for the first time since the 1930s, meaning that 1 in 10Americans who wanted work could not find a job. Manufacturing communities in Ohio, Michigan, Pennsylvania and Illinois watched factories close at a pace that had not been seen in living memory. The steel towns of western Pennsylvania, which had anchored the American industrial economy for a century, began the long, painful process of collapse that would define them for the next generation. The recession was not entirely Reagan's fault, of course, and defenders were quick to point this out. That's fair. The Federal Reserve under Chairman Paul Volcker, had been deliberately tightening the money supply since 1979 as a way of wringing inflation out of the economy, a painful and necessary treatment that worked by making borrowing expensive and slowing economic activity down until prices could stabilize. This policy had been put in place under Carter, but it reached its most painful phase during Reagan's first two years in office. And the recession it produced was in many ways the price of curing inflation that had tormented the country through the 1970s. Reagan supported Volker's approach and deserves credit for not interfering with the process. That was politically costly in the short term, but economically necessary in the longer view. But the recession also revealed a contradiction at the heart of the supply side program and that its architects hoped would stay hidden behind the optimistic projections they had submitted to Congress. While cutting taxes, Reagan was simultaneously proposing a dramatic increase in military spending, a buildup that he argued was necessary to confront the Soviet Union and restore American strength in the world. Does this sound familiar? I mean, every year we are further, further in debt. We don't have money for healthcare, we don't have money for schools, we don't have money for the American people. We don't have money for infrastructure, but we always have money for the military. The combination of less revenue coming in, more spending going out meant that the federal government was borrowing money at a rate that was without precedent in peacetime American history, still technically the Cold War, but really at the very tail end of it. The deficit, which had been the source of genuine concern under Carter, exploded under Reagan, and the national debt became climbing toward levels that would have seemed absolutely insane and unreasonable to anyone who had grown up believing that balancing the budget was a fundamental conservative virtue. It used to be a fundamental conservative virtue to balance the budget. Since Reagan, the spending under Republican presidents, especially in the military industrial complex, has far outpaced the revenue that we bring in and the our deficit continues to compound. The human cost of the 1981-82 recession was concentrated in communities that Reagan's rhetoric had promised to rescue. He had promised to rescue the steel workers in Youngstown, Ohio, who had voted for Reagan because they believe the promises about reviving American industry. And now they found themselves in an unemployment line line. The farmer in Iowa, who had voted for Reagan because he believed the promises about reducing government interference in the free market found himself facing foreclosure because of the combination of high interest rates and falling crop prices made it impossible to service the loans he had taken out to buy the land and his family had farmed for generations. These were real people, real pain. And the political consequences for Reagan should have been severe, but they were not. Because by the end of 1982, the economy had turned a corner. And the story that Reagan told about the turning was more powerful than an accounting of one, what had actually turned the economy, and two, who had actually suffered in the process. The economic recovery that began in late 1982 and accelerated through 83 and 84 was very real. And it was dramatic enough to transform the political landscape in ways that no amount of criticism could overcome. Inflation, which had been the defining misery of the Carter years, had been broken by the Federal Reserve's tight money policy, not by Reagan's economic policy. The Federal Reserve did the right thing, and even though it was painful, they choked out the money to choke out inflation. That was what turned the corner. But by 1983, prices were rising at a manageable rate for the first time in nearly a decade. Reagan and his supply side economist team took credit for it. Economic growth surged, unemployment began to drop, the stock market climbed. And that created a new generation of investors who believed they had discovered a permanent law of American capitalism. The country is, after years of unease and self doubt, felt good about itself. And Ronald Reagan, of course, instinctively knew that this feeling was the political asset of just incalculable value. He knew I made them feel good. I can convince them, that's me, it's my face in the office. Even though he did not turn the economy, but he was able to take credit and further promote his ideology. In 1984, Reagan's reelection campaign produced a television advertisement that became one of the most celebrated pieces of political marketing in American history. Over a series of warm, golden images of everyday American life, the narrator's voice simply said, it's morning again in America. The ad did not mention policy. It did not cite statistics. It simply showed people going to work, children playing in sunlit yards, couples getting married, a man raising the American flag outside his home, and invited viewers to feel that the darkness of the recent past was behind them and the warmth of a new day had arrived. The ad was a masterpiece of emotional communication, and it worked because the feelings it evoked were connected to genuine economic improvement movements that Americans had experienced with after the recession. The question that Reagan's critics raised and that the administration spent a lot of time trying to answer was the question of who exactly was experiencing the mourning when. When I think about this with Donald Trump, you know, we're going into a golden age of America. For who? For who? Because when you look at the Gilded Age, you know, the, the late 19th century, it was great if you were a Vanderbilt or a Carnegie or a Rockefeller. It was not great if you were a poor worker or a lower middle class. Like the middle class functionally didn't really exist. It was not great for you, was not great if you were an average family with a bunch of kids. But it was really great if you were super, super rich. So it's always a good question to ask is when someone says, oh, it's going to be great, okay, for who? Who's it going to be great for? Explain it to me like I'm five. The recovery, of course, was not evenly distributed across the American economy. The industries and communities that had suffered the most during the recession, like the steel towns, the auto manufacturing, agricultural reasons, didn't regions did not recover with the same speed or completeness as the financial centers and the technology corridors did. The stock market, which rose by more than 150% during Reagan's two terms, created enormous wealth for the Americans who owned stocks. And in 1983, the 12th, 20% of Americans owned more than 80% of all stocks and financial assets. So go back to this plan, remember? So he's able to bring the stock market up. They've also dramatically cut taxes on anyone who makes their revenue from stocks. So 80% of all the stocks are already owned by the wealthiest 20 of Americans. Before this happens, they then get a tax break on all the income they're making from the stock market. The morning that was arriving in America was arriving first and most brilliantly for those who had already been living in the most comfortable houses. For everybody that was already having a good morning, their morning was getting better. David Gellis, in his study of how the rules of American business changed during this era, describe what happened to the idea of corporate responsibility during, during the Reagan years as a fundamental transformation in how people who ran large companies understood their obligations. Before the Reagan era, the dominant model of American corporate leadership held that the company had responsibilities not just to its shareholders, but to its workers. Now I want to clarify that this, this belief happened after the labor rights movement. Prior to that, they felt like they could treat their workers how they wanted. But after the labor rights movements, the solidification of unions, workers rights, this really became the American corporate leadership idea that yes, I have a responsibility to my shareholders, but I also have a responsibility to my workers, my customers, my community and my country. Under the new rules that Reagan era introduced and celebrated, the only obligation that mattered was the obligation to maximize shareholder value. And any expendit of corporate resources on workers wages, benefits or job security that did not directly serve the goal of making shareholders more money was a failure of management. Workers now became pawns that were expendable and could be cheated. And that was fine as long as your bottom dollar went up and that became the margin of success. How many of us have heard or we've seen something, oh this, this company blew up, they've made so much money, they've done this, their stocks did this, and, and, and we see that as this modicum of success. And I say this, I'm saying this to and about myself. Growing up, I didn't think to ask, well, how much, how much, what's the salary of their workers? Do their workers, what's their benefits package look like, how are they treating. I never thought to ask that because I had been programmed to believe that the modicum of success was how rich the company was getting, how rich the shareholders were getting, what that number on the stock market I didn't quite understand look like instead of well, how, how are they, are they polluting their economy? Are they treating their workers well? I had a very warped version of success that was taught to me because of the policies of this era. And this happened through a shift in culture, in the, in the culture of business world that Reagan's ideology accelerated and legitimized. And again, a lot of it was wrapped in religious language. The consequences of this shift, of course, were not immediately visible in the gleaming statistics of the mid-1980s boom. The stock market's going up. But they were accumulating beneath the surface in way that economists and lab researchers were documenting even as the political world was celebrating this recovery. Union membership, which had already been declining for a decade, fell sharply during the Reagan years, accelerated by the signal Reagan sent in 1981 when he fired more than 11,000 striking air traffic controllers and banned them from federal employment for life. The professional air Traffic Controllers organization had been one of the few unions to endorse Reagan. And when they went on strike for fair treaty treatment, he fired 11,000 of them. Fired them. And so instead of thinking that they earned his goodwill, Reagan's decision to treat their strike as a fireable offense sent a message to every employer in the country that the balance of power between workers and management had shifted and that unions were not your friend. Right. That the, that the corporation could fire people for striking or for demanding workers rights. It was a huge blow, blow against being able to fight for a fair wage, to fight for reasonable working conditions, to fight for safety. And now striking and demanding fair treatment became a fireable offense. And Reagan sent that message to corporations loud and clear, like, oh, you know, they want to, they want to get paid more. Just fire them all. Oh, they want you to actually give them the benefits you promised in their contract. Just fire them. Just fire them now. While the economic recovery of the mid-1980s was generating headlines about prosperity and renewal, the different story was unfolding in communities. That recovery had just kind of skipped over, over. And the story was being written in the language of cuts to the programs that the poorest Americans depended on for survival. And we have seen this in the last two years. So in such a heavy handed way, Reagan had campaigned on the promise to reduce the size of government. Who else did that? That's weird. That sounds familiar. And in the years following the passage of his tax act, he made good on that promise by targeting the social safety net with systemic determination that his most ardent supporters celebrated as fiscal responsibility and that his critics described as a war on the poor. Because it is, is he was loading money into the pockets of the rich while depriving people who needed help getting back on their feet of any kind of resources, while not demanding that the federal minimum wage would increase, while not demanding systems change. Understand that poverty is a political policy result. It is a choice in policy that leads to poverty. We're the richest nation in the world, we don't have an excuse. So the cuts to these social services Programs. We see this right now with the Trump administration getting ready to cut public education further, further. So then they can claim that, oh, the public education system doesn't work, let's shut it down, let's get rid of it. And then they can put that money in private schools like they've been doing here in Tennessee to fund money back into segregation academies. Now, these cuts to social programs were sweeping in their reach, precise in their targeting. The Omnibus Budget Reconciliation act of 1981, that was, that was a ride. Omnibus Budget Reconciliation act of 1981, which Reagan signed less than two months after taking office, reduced or eliminated benefits for hundreds of thousands of Americans who had been receiving assistance through programs including Aid to Families with Dependent Children, food stamps, Medicaid, school lunch subsidies, and housing assistance. It's always amazing to me that the con, like the conservative super religious people, will be the first to make sure kids can't eat at school. They'll be the first to take money from kids to eat, to get food. You know, the eligibility rules were tightened in ways that pushed working poor families, families that had been relying on a combination of very low wages. These are people that are working, working. They can't make enough. But they had been relying on government assistance to make ends meet and to feed their kids, kicked them off the program entirely. So they still have their jobs, but they're not getting paid enough off the rolls and into a condition of that statistics politely described as being above the poverty line and that the families described as being unable to feed their children. Reagan framed every one of these cuts in the moral language he had been honing since his General Electric days because, remember, he was a crony for George long before he ran for president. The programs being cut, he argued, were not acts of compassion, but acts of cruelty that created a culture of dependency, a permanent underclass of Americans who had been taught by a misguided government to expect something for nothing and who had lost the dignity that came with self reliance. A reminder most of these people were working, they had jobs, but they couldn't make enough to feed their kids. In February of 1986, Reagan delivered a radio address to the nation on the subject of welfare reform that distilled this argument into its most polished form. He said, quote, misguided welfare programs instituted in the name of compassion have actually helped turn a shrinking problem into a national tragedy by removing the financial incentive for families to stay together, end quote. He described communities where the traditional family had broken down so completely that even the memory of what family was supposed to look like had become dim again. How? I mean, it's the same rhetoric over and over and over. And if you remember from our last episode, we listened to part of President Reagan's radio address to the nation on welfare reform where he talks about that. We're going to hear part of that clip again, slightly different part of his speech.
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But while we must let loose the creative energies of our states and localities, I think there are some critical improvements we can make at the federal level. Under the laws now in place, all mothers who have children under age 66 are exempt from participating in work activities that as several demonstration projects have shown, can help Aid for Dependent Children recipients become more self reliant. Fewer than one fifth of all recipients now participate in work activities. We must lift this counterprotective exemption and thereby get early help to these women and their children before they become chronically dependent on welfare. We must also reform work requirements so that long gaps in school or in other work related experiences no longer occur. And so too work opportunities for AFDC recipients must be expanded. We must give teenagers on AFDC who have not completed high school the opportunity to continue their schooling and older recipients to participate in employment and training activities. Two proposals we've sent to the Congress. Grow or greater opportunities through work in AFDC and the AFDC Youth Training Initiative will allow us to do all of these things. So too changes in our child support enforcement system can reduce welfare dependency. Parents who bring children into the world have a responsibility for these children whether they live with them or not. The administration is taking steps to ensure that states are able to do a better job job in locating absent parents, establishing paternity and collecting child support on behalf of AFDC recipients. We also have asked the Congress for new laws that would increase child support award amounts for both welfare and non welfare families. Now the question I ask about any welfare reform proposal is will it help people become self sufficient and lead a full life or will it keep them down in a state of dependence residency? I'm afraid that several members of Congress have suggested some proposals that while claiming to require work related activities would make staying on welfare more attractive. Their misguided compassion would only bring more people into the welfare system, encourage them to stay on the welfare rolls longer and discourage work.
- [47:56]
A
And again, the reality is it's not true. People that are on programs want to be off them. Nobody wants to be struggling to get by every week week like we and we've seen like and this is globally. When we look at the homeless population. When you take the homeless population and you put Them in a home, they get jobs, they have somewhere they can shower, they have somewhere they can sleep. They're much less likely to be homeless. Again, we've seen that these programs really work when they're run effectively. People don't want to stay on this. People don't want to stay barely getting by. People want something that's theirs. There is this beauty of like, I want to work, I want something that's mine. We saw that in the 1940s when women took over a lot of the factory industry to keep it afloat while the men were overseas. The women had to be forced out. They didn't want to leave. They had their own money, they had their own resources. They had something that was theirs. That is what most people want. So all of this was created of something that wasn't true. And again, it was women and children who were hurt the most by these cuts, by every measurable standard. They were not parasites of this welfare queen narrative they had created. They were in overwhelming numbers, families who were truly incredibly crisis working minimum wage jobs at fast food restaurants or working in nursing homes and cleaning services, who had been relying on a food stamp benefit of a few hundred dollars a month to bridge the gap between what they earned and what it cost to keep their children fed and clothed. Most of these people were working. And then we. People that weren't were people like elderly women in specifically rural communities who depended on Medicaid to pay for their blood pressure medication. And there were children in public housing, housing who had never asked for the circumstances they were born into. It's not their fault. Children coming to school where lunch is the only meal they get every single day. You can't make the argument to me, first of all, you can't make the argument to me of fiscal responsibility. When you're spending out the ass for the military complex. You're giving tax breaks to the people who have three houses so they get more money. But you don't have the moral, the moral capacity to feed children where it's not their fault. You can miss me with. With that. The rate of child poverty in the United States, which had been declining throughout the 1960s and 70s as a result of the programs that Reagan was now tearing down and the Trump administration is also tearing down, reversed course and began climbing during his first years in office. By 1983, more than 22% of American children were living below the federal poverty line, which was the highest rate in 20 years. And of course, in black and Latino communities, the rates were even higher, with poverty affecting more than half of all children in some urban ne neighborhoods. They were documented. Like these numbers were documented in real time by researchers, advocacy organizations, government agencies. They were reported by journalists who traveled to the communities where these cuts were being really, really painful. And the administration's response was to question the methodology and point to the stock market. But The Dow's at 50,000. Like who cares about real lives when, when the Dow's up. The community mental health centers that have been promised to the patients discharged from the state hospitals. Remember when Reagan was California, the governor of California signed the Lanterman Petra short act in 1967. Sorry, Petrus. Never materialized in the numbers that would be necessary to serve them. So when he signed that act, patients were discharged from state hospitals. They were promised community mental health centers to help people. And it just never materialized. Just. Nope, just kidding. Just, just kidding. We just don't want to fund these state hospitals. As president Reagan cut the federal funding for community mental health services that had been authorized under Jimmy Carter Harder. And the promise again of a network of local treatment centers that could serve thousands of people living on the streets of American cities as a result of deinstitutionalization remained permanently unfulfilled. Homeless crisis. And now we've criminalized homelessness as if someone who's suffering from a severe mental health condition that they cannot get treated is somehow to blame. The visible explosion of homelessness in America's cities during the 1980s was the direct documented consequence of this policy failure. Failure. Reagan's policy failure. That is why that problem exists today. A fact that administration officials consistently denied and that Reagan himself occasionally dismissed as a lifestyle choice that people made voluntarily. What a joke. And let's get into America's giant credit card military spending and the debt mountain. But before I do that, I'm going to take our second of two mid show sponsor breaks again. If you would like these episodes ad free, you can subscribe@patreon.com Monty Mater and welcome back. Let's talk about. Let's talk about military spending and debt. If there was a single policy decision that defined the internal contradiction of the Reagan economic program more clearly than any other, it was the decision to cut taxes and increase military spending at the same time, reducing revenue, increasing spending. A combination that every competent economist in the country understood could only be sustained by borrowing money on a scale scale the United States had never attempted to do in peacetime. Reagan came into office promising to balance the federal budget, a promise that his advisors knew from the first day was mathematically impossible given the commitments they were simultaneously making to cut taxes and build the military. The promise sounded good, right? Sounds good, looks good on paper. And Ronald Reagan had learned over the course of 40 years in public life and his work for GE that promise that sounds good is more powerful than one that is actually true. True. The military buildup that Reagan presided over was staggering in its ambition and the cost. Defense spending nearly doubled during his two terms, rising from roughly $134 billion in 1980 to nearly $300 billion by 1988. And this is in the 80s. The buildup included new generations of nuclear weapons, the dramatic expansion of the navy, the deployment of the Pershing 2 missiles in western Europe, and the development of an entirely new generation of conventional weapon systems that were designed to demonstrate superiority over the Soviet Union. Reagan believed he may, he may have been right, that the Soviet economy could not sustain the pace of military competition that he was setting and that by forcing Moscow to match American spending, he was hastening the collapse of the system that was already showing signs of internal rot. And maybe that was true, but realistically, that wasn't the reason that, like, the USSR was going to collapse, because their system was flawed, but also, I think, in large part accelerated by Chernobyl Noble in 86. But the most audacious element of Reagan's military vision was a program that critics called Star wars and the administration officially named the Strategic Defense initiative, or the SDI. In a nationally televised address on March 23, 1983, Reagan announced that he was asking the American scientific community to develop a system capable of intercepting and destroying nuclear missiles mid flight, effectively rendering Soviet nuclear weapons usually useless before they could reach American soil. The vision is extraordinary in its scope, obviously very optimistic, the kind of idea that only a man who had spent his career making audience believe the impossible could have proposed with a straight face and made half the country want to believe. However, scientists and military experts were, and this is putting it gently, skeptical. The technology required to intercept a nuclear warhead traveling several miles per second using lasers or other direct energy weapons fired from satellites in orbit did not exist and would not exist for decades if it ever came to exist at all. They were very honest. They were like, this is not gonna work. The cost of developing this was also estimated in the hundreds of billions of dollars. But the SDI served a purpose beyond this actual technical military strategy. It demonstrated to the Soviet Union that the United States had both technological ambition and the financial resources to pursue a military program of unlimited skills, scale. So, who knows, it may have just been, hey, we're gonna, we're gonna fuel the fires of what's this, this arms race, See how they react. But again, military, military people and scientists were like, hey man, we, we don't know how, how this would be possible. The bill for all of this arrived in the form of national debt. Of course, the number so large that it lost its meaning when it was stated in raw dollars and had to be translated into metaphors. When Reagan took office, the national debt stood at approximately $994 billion. When he left office office eight years later, it was at $2.6 trillion. It tripled during his tenure. So to put that in human terms, every man, woman and child in the United States owed collectively several thousand dollars more on the national credit card on the day that Reagan delivered his farewell address than they owed on the day he was inaugurated. Like three times as much. The interest payments on this debt consumed an ever larger share of the federal budget, crowding out the spending on education, infrastruct health that might have produced broadly shared prosperity that the supply side theory had promised. We are paying so much in interest and debt that we are losing the ability to take care of American citizens because we just keep overspending, especially in this. The arms race that has never ended. They used the USSR to justify it in the 80s. They have every other justification now. Stockman, whose memoir the Triumph of Politics Stand is one of the most honest autopsies of a political failure ever written by a participant, described the moment he realized the numbers would never add up. With a clarity that kind of honestly sounds a little bit despairing, he said, quote, the Reagan revolution was radical, imprudent and ultimately wrongheaded in its assumptions about how the American economy worked. End quote. The man who had been the loudest champion of supply side economics in the executive branch of the United States government, concluded after watching it in action from the inside that it did not solve the problems it promised to solve. And it created new problems that would burden the country for decades. And we feel that now. And let's talk about the Iran Contra affair. In November of 1986, a Lebanese magazine published a story that the Reagan White House had been hoping would never see print. That the United States government, which had publicly condemned the government of Iran as a sponsor of terrorism and had imposed an arms embargo designed to prevent Tehran from acquiring weapons it needed for its war against Iraq, had secretly been selling those weapons to Iran anyway. The story was startling enough on its own terms, but the full dimensions of the scandal, which came to be known as the Iran Contra affair went far beyond a single arms deal and reached into the deepest assumptions of the Reagan presidency about the relationship between the executive branch and the rule of law. This would also of course really lead into the conversation around the hostage crisis prior to Reagan taking office because it had been said that his campaign had been is in part responsible for keeping those hostages held until he could win the election. But for the Iran Contra affair, the scheme had been conceived and operated out of the National Security Council by Marine Lieutenant colonel named Oliver North, a man of ferocious energy and almost messianic conviction who believed that the cause was served, he was serving was justified by any means necessary to advance it. North and his colleagues had sold weapons to Iran, a country that was holding American hostages in Lebanon Lebanon in exchange for Iranian help in securing the hostages release, a direct violation of Reagan's publicly stated policy of never negotiating with terrorists. They had then taken the proceeds from those arms sales and secretly funneled them to the Contra rebels fighting the leftist Sandinista government in Nicaragua. A direct violation of the Boland Amendment which Congress had passed specifically to prohibit the United States government from providing military aid to the continent. Mantras Big scandal. Reagan went on national television on November 13, 1986 to address the American people and delivered a performance that revealed both the limits of his information and the bottomless bottomlessness of his political resilience. He acknowledged that the United States had shipped arms to Iran, but denied that the purpose had been to ransom hostages. He said, quote, the United States has not and will not make concessions to terrorists. He told the country in a sentence that was so directly contradicted by facts like this was not reality, his own Attorney General would publicly correct it. A week later. The correction revealed not only the lie, but something perhaps more troubling. And it was the possibility that Reagan genuinely did not know what his own National Security Council had been doing during this time. We're going to listen to President Reagan's address to the nation on the Iran contra controversy on November 13th, 1986.
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I wanted this time to talk with you about an extremely sensitive and profoundly important matter of foreign policy. For 18 months now we have had underway a secret diplomatic initiative to Iran. That initiative was undertaken for the simplest and best of to renew a relationship with the nation of Iran to bring an honorable end to the bloody six year war between Iran and Iraq to eliminate state sponsored terrorism and subversive and to effect the safe return of all hostages. Without Iran's cooperation we cannot bring an end to the Persian Gulf War Without Iran's concurrence there can be no enduring peace in the Middle East. For 10 days now, the American and world press have been full of reports and rumors about this initiative and these objectives. Now, my fellow Americans, there's an old saying that nothing spreads so quickly as rumor. So I thought it was time to speak with you directly, to tell you firsthand about our dealings with Iran. As Will Rogers once said, rumor travels faster, but it don't stay put as long as truth. So let's get to the facts. The charge has been made that the United States has shipped weapons to Iran as ransom payment for the release of American hostages in Lebanon. That the United States undercut its allies and secretly violated American policy against trafficking with terrorists. Those charges are utterly false. The United States has not made concessions to those who hold our people captive in Lebanon, and we will not. The United States has not swapped boatloads of planeloads of American weapons for the return of American hostages, and we will not. Other reports have surfaced alleging US Involvement. Reports of a sea lift to Iran, using Danish ships to carry American arms, of vessels in Spanish ports being employed in secret US Armed shipments of Italian ports, being used of the US Spending or sending spare parts and weapons for combat aircraft. All these reports are quite exciting, but as far as we're concerned, not one of them is true.
- [62:26]
A
The congressional hearings that followed were televised nationally and produced one of the most memorable witnesses in history of American political theater, which was Oliver north himself, himself the. The Marine behind all of this. He appeared in his Marine uniform, his chest covered with metals, and told the committee with a soldier's directness that what he had done, that he had done what he had done because he believed it was right and he would do it again. North was charming and passionate, completely unrepentant, and large segments of the American public responded to him the way they had responded to Reagan himself, with an admiration for the man who seemed to believe so fiercely in something that the normal rules just didn't apply to him. North became a conservative celebrity, a living symbol of the idea that the ends justified the means when the ends were American strength and the defeat of communism. Reagan survived the Iran Contra scandal the same way he had survived every other political crisis of his presidency, through a combination of personal likability and institutional loyalty that his supporters extended to him regardless of the evidence. The Independent Counsel's investigation, conducted by Lawrence Walsh, produced convictions of several administration officials. Officials. But the convictions were later overturned on appeal. Reagan himself was never charged with a crime. He testified that he could not remember the details of many of the decisions that had been made in his administration. A defense that his critics found insulting and his supporters accepted as evidence of his disengagement from the operational details of government when the forgetting was genuine, whether the forgetting was genuine or performed, it raised the same question that had followed him since the beginning. Who exactly is in charge of all of this? It's like. And what a convenient defense. I mean, I just. I don't remember. I don't remember for sure what happened. The answer to that question about who was in charge during at least some portion of the Reagan presidency appears to have involved a woman from San Francisco named Joan Quigley, who was a professional astrologer and who served in an unofficial but not inconsequential capacity as the scheduling consultant for the Reagan White House. This story is so wild. Nancy Reagan had first consulted Quigley after the assassination attempt on her husband In March of 1980, when John Hinckley Jr. Shot Reagan outside a Washington hotel and came terrifyingly close to killing him. After the shooting, Nancy became convinced that if she had known the astrological conditions of the day, she might have been able to prevent the attack. She turned to Quigley for guidance in protecting her husband from future harm. The arrangement that developed was just incredible, but also very secret. Quigley consulted her astrological charts and provided recommendations about which days were favorable and which were dangerous for president President to travel or appear in public, give speeches or make major policy announcements. These recommendations were conveyed through Nancy to the chief of staff's office and were incorporated into scheduling of a nuclear superpower without the knowledge of the people who worked in the White House and without the knowledge, of course, of the American public. Donald Regan, who served as Reagan's chief of staff from 1985-87, revealed that the arrangement in his own memoir after leaving the administration in bitterness and described the constant frustration of trying to schedule a press president whose wife was constantly telling them to change the schedules because the stars weren't correct. The revelation, when it became public in 1988, produced a burst of astonished commentary that quickly faded in the same way so many other revelations about Reagan administration produce like brief outrage and then it was absorbed into the background noise. He just truly, truly seemed to be above accountability. And as someone who I like a little witchy woo woo. I love learning about astrology. I think it's fascinating whatever like spectrum you're on about believing in it, but to using to use it for your presidential schedule in the 80s and for that to really not cause more than a quick blink is Wild, especially as someone who has married himself to conservative evangelical republic like this kind of Republican, moral, Christian, Christian nationalist hybrid, when many of those people consider that to be demonic or they consider it to be part of the occult. Very interesting. So the man who had closed the 1980 Republican National Convention with prayer and told the evangelical leaders of America that he endorsed their vision of a God ordered society was making the decisions of the most powerful government in the world based on the alignment of the planets. It's. The contradiction is so, so enormous. It, it, it's comical. If it wasn't so scandalous, it'd be comical. It was simply another layer, of course, in this endless performance of the Reagan president presidency. On January 11th of 1989, nine days before George Herbert Walker Bush was inaugurated as the 41st President of the United States, Ronald Reagan sat behind the desk in the Oval Office for the last time and delivered a farewell address to the American people that was by any measure one of the finest speeches of his career. And it truly was. He was a great orator. He spoke about what he called the two things he was most proud of from his eight years in office, the economic recovery and the recovery of American morale from the dark years of the 70s. He spoke about what he called the, quote, new patriotism that he had seen grow, growing in the country during his years in the White House. A renewed pride in being American that he described with the warmth of a man who genuinely loved his country and who genuinely believed with every fiber of his being that it was the greatest nation the world had ever produced. And then at the end, he returned to the image that had been with him since the beginning, the image that he had first borrowed from the Puritan governor John Winthrop, that he had made so thoroughly his own that the Americans probably thought he had invented. Invented it. He said, quote, I've spoken of the shining city all of my political life. Yeah, that's a stretch. Reagan said in his voice, you know, very. It's like gently carrying the roughness of a man of his late 70s who'd lived a full life. And he continued by saying, but I don't know if I ever quite communicated what I saw when I said it, but in my mind it was a tall, proud city built on rocks stronger than oceans, windswept God blessed and teaming with people of all kinds, living in harmony and peace. A city with free ports that hummed with commerce and creativity. End quote. What a beautiful line. Like truly, truly beautiful. And it's a beautiful vision that Reagan, and Reagan believed it with sincerity, that at least was performative. And maybe he truly did believe it. We don't know. But the vision was not really about policy or economics or the measurable outcomes of government programs. It was about a feeling. It was the feeling of possibility and pride and confidence in the feeling future that Reagan had been selling since the days he stood in front of factory workers in the Midwest on behalf of general election and told them that the best days of America are ahead. And there is something valuable to this feeling, right? You want this feeling of hope and optimism and possibility, but the numbers have to match, the action has to match, the policy has to match. Otherwise you have an empty feeling. Otherwise it's not real. And the feeling is real for a lot of people. And I'm sure in the economic, it felt that way. But the consequences of his policies that were supposed to produce this feeling were also real, and they were more complicated and painful, and they would cause a lot of pain in the decades following. Five years after leaving the White House on November 5, 1994, Ronald Reagan wrote a letter to the American people in his own hand, in the careful, large script of a man who was paying a close attention to his words. And he told them that he had recently learned that he was one of the millions of Americans who would be afflicted with Alzheimer's disease. He said, quote, I now begin the journey that will lead me into the sunset of my life. And sad, beautiful, direct. The letter was, in its way, the purest expression of the man himself. It was simple, clear, warm, and just. Just kind of honest, just transparent. And as much as I despise Ronald Reagan and his choices, I really do. I. I will say for me, like, Alzheimer's would be my greatest fear for, like, you know, I know that I'm going to get old. I know my body's gonna break down. I know there's gonna come a point where I can't do the things that. That I do now. But. But to lose my mind and to know it's coming is. Is particularly. That's. That's a particularly terrifying fear for me. The decade that followed was a long and slow disappearance, the fading of the voice in the mind who had been one of the most powerful instruments in reshaping American political persuasion. Marrying the religious with government, blurring the line between the separation of church and state, and, of course, enriching the wealthy. Nancy Reagan became his constant caregiver and advocate. Emerging from the private world, she preferred throughout his presidency to testify before Congress and publicly speak in favor of stem cell research funding that might someday help treat Alzheimer's and other neurological diseases. Her advocacy put her publicly at odds with the conservative movement her husband had built which opposed embryonic stem cell research on religious grounds. This is what I was raised in. They and it revealed the degree to which her loyalties had been first and last to Reagan rather than the ideology. And this is, this also ties into the the choice of choice argument and also as well as like the conservatives and odds with ivf because if you truly do believe that life begins at conception, then all of these IVF is off the table. All of these research like things that could truly cure major neurological diseases are off the table again as a lot of flawed thinking the Bible is used to justify it, even though the Bible says nothing of the sort. But the stem cell research she came out and publicly advocated for was directly at at odds with this moral majority super conservative Christian nationalist movement that was at this point already fighting to try to take women's reproductive rights away. Ronald Wilson Reagan died on June 5th of 2004 in his home in Bel Air, California at the age of 93. The country mourned him with formality and the breadth of affection that surprised many of his dedicated critics. His body lay in state in the Capitol rotunda for two days and tens of thousands of Americans waited in line for hours to pay their respects. Respects. President George W. Bush delivered a eulogy that described him as a man who had restored the confidence of a generation. The television networks devoted days of continuous coverage of his life and legacy. They called him the great communicator, which is accurate. That's a very, it's again amazing speaker who had communicated his way into the permanent mythology of American leadership, especially for conservatives and what I would call traditional Republicans. And the story that was told in those days of mourning was the story that he had always wanted to told. The story of mourning in America. The shining city, the triumph of optimism over doubt. But even though he's gone, a story of Reaganomics did not end when Reagan left the White House in January of 1989. And it did not end when he died in the summer of 2004. It has not ended yet because the ideas that Reagan introduced into the bloodstream of American politics were not policies that could quickly be shifted when a new administration arrived in Washington. Washington again this had been work since the 30s. It had been through paid pastors preaching about anti unions from their pulpits like this had this had been years building. What we're experiencing now is 100 years in the making, you know. And what Reagan was Able to sell was 50 years in the making. It was something deeper and more durable. It was a set of assumptions about what the government is and who it's for and who it's supposed to serve that reshaped the boundaries of what was considered possible in American political life. We are in the moment, we are in because of what Reagan did. The most consequential of these assumptions was the idea stated most plainly in Reagan's first inaugural address that, quote, the government is not the solution to our problem. Government is the problem. End quote. Disagree. A good secular government provides a lot of protection when it is focused on the people, not on the corporation. This sentence, which Reagan delivered with confidence, represented a fundamental departure from the governing philosophy that had dominated American politics since the New Deal. Again, that philosophy was that the federal government had both the ability and the obligation to intervene in the economy to protect citizens from the worst consequences of unregulated capitalism. Unregulated capitalism, like any extreme of any type of economic system, is dangerous. And after the New Deal, there was the belief that the federal government had the ability and the obligation to protect people from the most dangerous parts of unbridled capitalism, and that the government's loyalty in its job was to its citizens, not to corporations and not to capitalism. Reagan changed that. He declared that philosophy illegitimate, and he said so every chance he got with a smile. That made the declaration feel less like attack on the poor and the worker and more like liberation. The consequences of this shift became fully visible only in decades later, as the wealth gap between the richest Americans and everyone else grew wider with each passing life year by night. In 1980, the richest 1% of Americans earned roughly 10% of all income in the country. That's a lot. That's a lot. 1% of the people, 10% of the income. By 2010, they were earning more than 20%. The share of the national income that went to workers in the form of wages declined steadily throughout the Reagan era and continued to decline in the years that followed, while the share that went to investors and corporate shareholders were grew. The promise that a rising tide would lift all boats turned out to be half true. The tide rose for those who owned the boats, but everyone else was left swimming in a rising tide. The tax code that Reagan reshaped in 1981 and again, the Tax Reform act of 1986, established a template that subsequent administrations. Administrations built on. Rather than dismantling, H.W. bush, who had called supply side economics, quote, voodoo, and who genuinely believed in fiscal responsibility, nonetheless found himself unable to raise Taxes without paying a catastrophic political price. And again, for the average Joe listening to this, when Republicans say cut taxes, they do not mean for you. They do not mean for you. When people say tax the rich, we're saying reinstate fair tax rates for the wealthiest in the country to stop building the deficit, just to be clear. Clear. Because there's a lot of, a lot of mix matching around that. And then every time someone hears tax cuts, they think, oh, it's for me. No, not necessarily. Not necessarily. And HW didn't actually believe in this type of policy, but felt like he had to align himself with it or he would lose out politically because Reagan had made those tax cuts feel like a constitutional right and tax increases feel like a moral betrayal. So. And because under Reagan, to be fair, again, people did get a little bit of a tax break, there just was continuing increases in tax breaks for the rich. And because they weren't being honest about that, it was hard to help Americans reframe what was going on in their mind. Bill Clinton raised the top marginal tax rate in 1993 and balanced the federal budget, but he did so within a political framework that Reagan had established in which the size and role of government was perpetually on the defensive and the market was perpetually presumed to be the answer. And also, also, I don't, I forgot to include this. I don't remember the name of the actual bill, but like Bill Clinton also was the person who signed the agreement with China to essentially ship all of our manufacturing over there, which got rid of so much work and so much livelihood here in the country, was a shit dick move. But again, it was because it would cost corporations less. They could make more money making cheaper products. It all came back to Reaganomics. Ultimately. Ultimately, George W. Bush cut taxes twice in his first term, in 2001 and 2003. Explicitly citing Reagan as his model and invoking the supply side argument that tax cuts would pay for themselves through economic growth, and they never have. The national debt doubled under W. The financial crisis of 2008, which was in part the product of deregulatory philosophy that Reagan had introduced and the subsequent administrations had extended, wiped out trillions of dollars of household wealth and threw millions of Americans out of work. The deregulation argument is another one. They will say government's, you know, too big, it's too powerful. We need to deregulate. We need to understand that regulations protect you. It is regulations that say a corporation can't pollute the air you breathe or the water you drink. They can't Run over your town. They can't overwork you if you get injured at work, you have rights. These are all regulations. Regulations are part of the obligation that government has to protect protect its citizens from unbridled, unregulated capitalism. Again, I believe that the the American work philosophy from the 1930s until this change in the 80s was correct. That the government's job is to stand between its citizens and harm. And that harm includes unbridled capitalism and abusive corporations. The communities that have become most damaged by the factory closures of the early 1980s, communities that had never recovered during the first round of de industrialization, were hit again in the crisis of 2008. And the social saf net that might have cushioned the blow had been weakened over the preceding decades. It's progressively been weakened. The political coalition that Reagan Assembled in 1980, the alliance between corporate interests and evangelical Christians that part one of this series really examined, proved to be the most durable electoral coalition in modern American political history. The evangelical voters who delivered their support to Reagan in exchange for symbolic victories on abortion, school prayer, the Equal Rights Amendment. Again, how dare we have an amendment in the Constitution that says that women are guaranteed equal rights. How dare we have remained the most reliable voting bloc of the Republican elections for more than four decades. The corporate interest that funded the movement received the material rewards. Lower taxes, looser regulations, weaker unions, and a government that consistently interpreted its role as clearing the way for private enterprise and corporations, rather than constraining and restructuring, draining it. The young people who grew up in the communities Reaganomics bypassed, the children who were counted in the child poverty statistics that climbed through the 1980s are adults today. And many of them are still facing the same structural barriers that the Reagan era either created or deepened. We see this all over. Manufacturing jobs that their parents lost to factory closures have not come back. Unions that might have provided those jobs with decent wages and benefits have continued to decline. They're continuously under attack. Unions protect you. The affordable housing that a functional social safety net might have provided is never built. The community mental health services that were promised before people fell into homelessness and addiction were never funded. The bill for the decisions made in the 1980s that led to all of this fallout, that led to these problems that have led to the affordability crisis we're in right now are still being defended by the people who are least able to pay for its cost. It is still be being defended, defended by the impoverished people who think that this is actually going to help them, that this is going to turn things around and it's only pushing them deeper in the hole. Ronald Reagan is remembered by a significant portion of the American public as one of the greatest presidents in the nation's history. A man who won the Cold War, restored American confidence and proved that optimism and determination could overcome any obstacle. And obviously the documented record as we've covered is much more complicated. Much more complicated. Not good. Very shitty backdoor deals. And somehow was able to avoid every scandal he came up against. The Cold War ended through a combination of Reagan's pressure and the. But it was really the Soviet system's own internal contradictions. Chernobyl, all of the. Because they had built a system that they did not regulate correctly, they cut too many corners and it fell inward. And yeah, I'm sure the pressure from Reagan contributed, but the Soviet Union was on its way way out. The confidence that Reagan had restored was real, but it was built on a foundation of borrowed money and manufactured mythology. The obstacles he overcame, also real sometimes. But the solutions he deployed created other bigger problems. The Great communicator communicated one thing above all others. He communicated it so effectively that it reshaped political imagination of our whole country. The belief that the story matters more than the fact that. And that confidence is more persuasive than evidence. And that a man who can make the people feel hopeful is more powerful than the one who can make them informed. This is Zohran Mamdani's superpower. He is able to make you feel hopeful and informed at the same time. But that hopefulness is really the selling point. It truly is. The ghost of Reagan is not in the details of the tax code or the military budget. It's the way that American politicians talk about government, the market, the poor, welfare, the future. It's the assumption now so deeply embedded that it's almost invisible that the role of government is to get out of the way and let the powerful do whatever it is they want to do. The the this idea of this shining city on a hill is a beautiful image. The question that the history of Reagan era demands we ask is again beautiful. For whom and at whose expense? Events. Who is this city built for? Who lives there? Who were the people building it? Who were the people buried under the walls? Because the records show clearly that the city Reagan built was built with the labor of people who never got to live in it. The shine on its towers came from a light that cast very long shadows over the communities and the lives that this great performance left behind. And we're still paying for for it. We're still paying for It I still find myself even trying to overcome some of the indoctrination around economy and politics that I was raised with, realizing, wait, no, that's not fiscally responsible. In, during my deconstruction, you've probably heard people say this where there's like, I'm socially liberal, I'm economically conservative. But then I started actually looking at the numbers and realized that the GOP leaders, Republican presidents, were not fiscally conservative at all, at all. The debt exploded under them, the wealthy got exponentially richer while the middle class shrank and the poor suffered more. I've totally changed my mind. What is fiscally conservative is much different than I grew up thinking it was. And what I want to talk about a little bit briefly because there is this whole idea of pull yourself up by your bootstraps, you know, the government shouldn't be giving you this money and blah, blah. But the thing is, is that we make money money off of increasing minimum wage. We make money off of social services. And these were the numbers that really changed my mind about economics and what I believed. I, because I, I, at my core, am a girl who loves some data. So let's talk, let's first talk about minimum wage. A Chicago Fed study found that each $1 increase in minimum wage produces about $2,800 in additional spending per affected household. Household per year, largely because low wage workers spend nearly all their income immediately. I'll say that again. For every $1 increase, each household is spending 2, 800 more dollars in the economy. The Economic Policy Institute estimated that by phasing in a $15 federal minimum wage would raise pay for about 32 million workers by roughly $107 billion in total wages. The more modest $1.75 increase. Projected $22 billion in new economic activity and roughly 85,000 new net jobs, huge for the economy. Why? Well, when people can afford to live, guess what they do? They stay in local economies. They, they, they have a nice apartment there or they buy a house, they raise their families there. Now their kids grow up there and they're fueling the economy. They, they go out to eat, they spend here, they buy this. Let's talk about food stamps. The USDA's Economic Research Service found that during an economic downturn, every $1 of SNAP benefits generates about $1.54 in GDP. So we still make money back. Moody's analytics chief economist Mark Zandi has put it slightly higher at A$73 per $1. We are not losing money. We're making, making it in economic Growth. SNAP ranks consistently as one of the most stimulative federal expenditures because recipients spend it within weeks at local grocers. Fuels the economy. And again, we're not talking $1 increase creates $2,800 in spending, but we are still making more money back in GDP than we are when we spend it. So for every $1, anywhere between $1.54 and $1.73 comes back. Okay, let's talk about unemployment insurance. So 100, 100, $161 in economic activity per $1 of unemployment insurance. Again, we're still making over 1.5 more back for every dollar we spend. Let's talk about earned income tax credits. Brookings and the center for Budget and Policy Priorities cite local economy multipliers of roughly $1.50 cents to $2 per $1 of earned income tax credit with effects concentrated in low income neighborhoods. In 2021, this tax credit expansion alone delivered 12.7 billion in additional credits to about 17 million workers. Again, every single one I've read to you so far, we are making money and increasing GDP by having these social services and these, these nets available. Why? It helps people get on their feet. Feet. It puts money into the local economy. Snaps going to local grocery stores and, and well, you know, I, I will throw shade at Walmart because Walmart is notorious for underpaying their workers. So their workers have to be on SNAP even if they're full time. And then Walmart is also one of the largest recipients of snap. So they're, they're double dipping there. But outside of that, it puts money into the local economy. Let's talk about the expanded child tax credit. Columbia center on Poverty and Social Policy found the 2021 expansion cut child poverty by 46%. About 3.7 million children were lifted above the poverty line. The Niskaynen. Hang on. Here we go. The Niscanin center estimated making it permanent. So making that child tax credit of 2021 permanent would generate roughly $27 billion in consumer spending annually and support 500,000 full time equivalents jobs. Enormous. Enormous. The expansion's expiration would be followed by an increase in child poverty. Let's talk about affordable housing. The national association of Home Builders estimate that building 100 affordable rental units generates. These numbers are wild. 100 affordable rental units. $11.7 million in local income the first year. $2.2 million in local taxes and fees. So we're generating tax revenue. 161 local jobs in the first year. Ongoing $2.6 million per year in local income and 44 permanent jobs. The low income housing tax credit has financed roughly 3.5 million units since 1986 and supports an estimated 96,000 jobs annually. That's a lot of money to put in affordable housing. But again, think about it, long term economics. If someone can afford to get a house, then they stay there. They're, they're working in that economy now. So they're working, they're, they're part of the process. They're going out to eat, they're buying their food there, their kids go to school there, their kids grow up and then they get married and then they have kids. You're boosting local small economies by making sure people have somewhere they can live. The amount of money you make on what you spend is staggering. Staggering. For every dollar spent on affordable housing, we get roughly $3.40 in economic output a three times return. These are, these are not systems that hurt our economy. They build our economy. They build it for us. We could live in such a better place if we were willing to invest in these. But we aren't told these numbers. We're told it's just an expenditure. We're told it's just a loss. And because a lot of us, I wasn't trained in economics, these were things that I had to learn on my own. And we don't know this. We don't understand that we would actually be building our economies by having these programs instead of continuously increasing our military spending budget and continuing to decrease taxes for the rich. All right, let's talk about early childhood and pre K. And I know Zoran Mamdani has been working on this. He's already established Free2UK. They're trying to do this in Kentucky. It's a really big push for Governor Bershear. James Heckman's longitudinal research finds that 7 to 13% annual return on investment on high quality early childhood programs. That means for every dollar you spend on early childhood care and free pre K, every dollar you make seven to $13 back in economic stimulus. Stimulus and return on investment, you would be stupid not to have free pre K at rates that high. Let's talk about Medicaid. Also, by the way, when it comes to health care, Health care. If we had universal health care, which they tell us is too expensive, we can't do it. There's no way universal health care would save us $450 billion a year because of how wasteful our system is. So why don't we get it when it would save us that Much money. Well, because the insurance companies would go out of business and too many of them are paying for Congress $450 billion a year. We would be saved. And then everyone could go to the doctor. No one's at risk of medical bankruptcy. And I love, I love Australia's system. Australia has universal health care everyone has access to, but then you also have the option to buy private insurance. And there's also a kind of parallel private health care system that you can use if you want, want to. And the great part about that is the private health care system incentivizes the public health care system to stay efficient. The public health care system incentivizes the private health care system to be affordable. Let's talk about Medicaid. Commonwealth Fund and Center budget analysis of the ACA Medicaid expansion found that each dollar, each dollar in federal Medicaid spending generates about A$35 to $2 in state economic activity. We're making money back expansion. States saw measurable gains in hospital finances, employment and health care and reductions in medical debt. Kentucky alone, Kentucky's been killing it in some of these areas. Kentucky alone projected 40,000 new jobs and $30 billion in economic activity over a decade of Medicaid expansion. So, and a couple caveats to these. So these multipliers are often most powerful during kind of recessions, economic downturns, low income recipients. But we know we make money back, produce a more stable economy, a larger middle class, a smaller poverty class by having these programs. These programs are game changers and make us money back. I, I say all this to say that I know, like the midterms are coming and everything feels so intense and so hopeless sometimes. Know and start to learn, start to ask questions, start to dig around, start to read some numbers. Numbers know that a better life is possible because when we can believe that a better life is possible without all the suffering, without barely getting by, then we can start to say, okay, I know this is possible. I know the numbers work. How do I get there? How do we start changing the rhetoric around economics, especially that was given to us by Reagan in his campaign so that we can have a better future for ourselves, so that there's health care for me when I'm older and college for my great niece in 18 years. And I'll see you next week on Flipping Tables.