Sunday, July 31, 2016

RONALD REAGAN'S LEGACY

Dodgy Roger Stone worked on Reagan's election campaign. Stone contributed to the global austerity most of us are currently suffering by scuttling Eliot Spitzer's investigation into corrupt Wall Street practices.

As POTUS, Reagan deregulated Wall Street, kicking off the reckless gambling that led to the financial crisis of 2007/8.

But he did so much more, most of it benefiting the top 1% at the expense of the 99%.


During his two terms in the White House (1981–89), Reagan presided over a widening gap between the rich and everyone else, declining wages and living standards for working families, an assault on labor unions as a vehicle to lift Americans into the middle class, a dramatic increase in poverty and homelessness, and the consolidation and deregulation of the financial industry that led to the current mortgage meltdown, foreclosure epidemic and lingering recession.

...But, unfortunately, so did Bill Clinton. During his first campaign for the presidency, Clinton correctly observed that “the Reagan-Bush years have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect.” But a few years later, as president, Clinton proclaimed, echoing Reagan, that “the era of big government is over,” which he carried out by slashing welfare benefits for poor children.

...Reagan’s fans give him credit for restoring the nation’s prosperity. But whatever economic growth occurred during the Reagan years mostly benefitted those already well off. The income gap between the rich and everyone else in America widened. Wages for the average worker declined and the nation’s homeownership rate fell. During Reagan’s two terms in the White House, the minimum wage was frozen at $3.35 an hour, while prices rose, thus eroding the standard of living of millions of low-wage workers. The number of people living beneath the federal poverty line rose from 26.1 million in 1979 to 32.7 million in 1988. Meanwhile, the rich got much richer. By the end of the decade, the richest 1 percent of Americans had 39 percent of the nation’s wealth.

After signing the Garn–St. Germain Depository Institutions Act in 1982, Reagan presided over the dramatic deregulation of the nation’s savings-and-loan industry. The law allowed S&Ls to end their reliance on home mortgages and permitted banks to provide adjustable-rate mortgage loans. The S&Ls began a decade-long orgy of real estate speculation, mismanagement and fraud. The industry indulged in a wild ride of merger mania, with banks and S&Ls gobbling each other up and making loans to finance shopping malls, golf courses, office buildings and condo projects that had no financial logic other than a quick-buck profit.

When the dust settled in the late 1980s, hundreds of S&Ls and banks had gone under, billions of dollars of commercial loans were useless and the federal government was left to bail out the depositors whose money the speculators had looted to the tune of over $130 billion.

Under Reagan, government’s role shifted from policing Wall Street and protecting consumers to a see-no-evil enabler, encouraging banks to engage in irresponsible practices. This was just the first chapter in the slide towards today’s financial crisis. Things got even worse—much worse—in the decades after Reagan left office. Both Bushes, as well as Clinton, took up where Reagan left off in granting banks and insurance companies permission to wreak havoc on consumers and the economy. This lead to the epidemic of subprime loans and foreclosures of the past three years and the costly federal bail-out of “too big to fail” Wall Street banks.

...The 1980s saw pervasive racial discrimination by banks, real estate agents and landlords, unmonitored by the Reagan administration. Community groups uncovered blatant redlining by banks. But Reagan’s HUD and Department of Justice failed to prosecute or sanction banks that violated the Community Reinvestment Act, which prohibits racial discrimination in lending. During that time, of the 40,000 applications from banks requesting permission to expand their operations, Reagan’s bank regulators denied only eight of them on grounds of violating CRA regulations.

[source : Reagan’s Real Legacy, The Nation, https://www.thenation.com/article/reagans-real-legacy/, 4th February 2011]

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