ustxtxb_obs_1984_10_12_50_00012-00000_000.pdf

Austin ONE OF THE PARADOXES of the 1984 presidential campaign is Ronald Reagan’s effort to convince workers that he is on their side, despite the unassailable evidence that his is the most anti-worker administration in modern history. The administration’s hostility to worker interests is rooted in Ronald Reagan’s basic “laissez-faire” law-ofthe-jungle philosophy, in which such worker protections as social security, disability benefits, unemployment compensation, minimum and prevailing wages, collective bargaining, equal opportunity, and occupational safety and health are seen as bad for the country. It is, therefore, not surprising that this administration has weakened or sought to weaken all of these protections. Strangely, Ronald Reagan juxtaposes his law-of-the-jungle philosophy with public piety and beneficence. It doesn’t seem to concern him that his is the first administration ever to be censured by the National Council of Churches, which has claimed that Reagan’s domestic and foreign policies “threaten the vision of America as the model and embodiment of a just and humane society.” Instead of showing a sense of community, caring, and compassion, President Reagan’s statements, his associations, and his appointments reveal a belief that wealth is the surest sign of personal merit. He shows little but contempt for the ordinary workers, the unemployed, the disabled and the poor. He believes that hunger in America is mainly anecdotal, the homeless are homeless by choice, the unemployed could find work if only they would read the want ads, that lower wages are in the national interest, and that only the morally unworthy have actually been hurt by his policies. Former U. S. Secretary of Labor Ray : Marshall is the Bernard Rapoport Professor of Economics and Public Affairs at the University of Texas at Austin. The centerpiece of Reaganomics the 1981 regressive tax cut is probably the single greatest economic policy mistake in U.S. history. President Reagan would like us to forget his promise that these policies would greatly stimulate economic growth painlessly and without inflation or unemployment. You know what happened: the regressive supply-side tax cuts for business and the well-to-do caused a dramatic decline in federal revenue, which, together with increases in defense spending, produced record increases in the budget deficits, causing the federal government to absorb over two-thirds of net saving just to service the debt. \(In fact, under Reagan the interest on the debt was more than double the average deficit during four years of the Carter administration and greater than President Johnson’s of limited money supplies and these huge federal debt serving requirements, real interest rates more than doubled their 1980 level, and the prospect of high real interest rates for as far as anybody could see choked off the 1980-81 The unemployment level in Reagan’s best year will be worse than the worst year under Carter. recovery and sent the world economy into the deepest recession since the 1930s. Investment went down, not up as predicted; unemployment reached 10.8 percent; and poverty reached the highest level since the 1960s, as did business, farm, and bank failures. Because our real interest rates became the highest in the world, foreign investors bid up the price of the dollar, greatly raising the price of our exports and lowering the price of imports, creating huge trade deficits, which cost millions of American jobs. We are, in fact, paying for Reagan’s deficits by heavy foreign borrowing. In 1985 the United States will become a net debtor nation. In three years the Reagan administration has eliminated America’s overseas investment position built up over the years. Your children and mine will have to reduce their living standards to pay the escalating compound on this debt. To put the deficit and debt figures in more comprehensive terms, in 1984: The deficit was $1,900 per worker The national debt was $11,420 per worker The federal interest bill was over $1,000 per worker; with no policy changes, it will be $2,000 in 1989. President Reagan is like a good-time Charlie who is financing a consumption binge on credit, apparently oblivious to the fact that this debt must be repaid. And, with Reagan’s tax philosophy, you can guess who will pay that interest as well as who will get it. Inflation came down because of lower energy and food prices and because of the recession, not because of increased productivity. It certainly was not “painless” as the administration promised Reagan’s recession cost at least half a billion dollars and incalculable human misery. Moreover, to this day the only anti-inflation program the administration has is massive unemployment and that is a barbaric way to deal with the problem. The administration makes much of the fact that unemployment has come down from the high of 10.8 percent we saw during the recession. But unemployment of 7.5 percent is still unacceptable. And in terms of unemployment, Reagan’s best year will be worse than the worst year under President Carter. Huge budget deficits, high real interest rates, the overvalued dollar, high worldwide unemployment levels, the huge and growing trade deficits, and seriously destabilized international financial markets guarantee another economic collapse in the near future. The Reagan administration’s economic policies have been especially damaging to workers. The essence of Reaganomics is supply-side economics and monetarism. Supply-side economics is the traditional Republican “trickle down” approach: wealth and power transferred to the wealthy and powerful is somehow supposed to “trickle down” to workers. Monetarism is the belief that inflation will be checked by unemployment. If workers try to raise wages, so the theory goes, limitations on the growth of the money supply will make it impossible for companies to pay those higher wages, so unemployment will Workers and the Law of the Jungle By Ray Marshall 12 OCTOBER 12, 1984