Lisa Longo


How Trickle-Down Theory is Ruining Our Schools and Closing Our Libraries, Thank You Ronald Reagan


Economic theory is complex. My macroeconomics professor loved to use the “guns vs. butter” analogy. Does a country build its economy by helping the citizenry (supply butter) or by protecting itself (supply guns)? The current argument over whether to raise the debt ceiling and deficit has the same feel to me.

Take the pithy patter that falls from Sarah Palin’s mouth, “To have a balanced trade arrangement with other countries across the world so Americans can have our jobs, our industries, our manufacturing again. And exploiting responsibly our natural resources. We can do that again if we make good decisions.” (emphasis added)

Do you really think she understands the environment, let alone economics? Is there any way to exploit something responsibly?  Here is the definition of the word exploit:

Take advantage of somebody: to take selfish or unfair advantage of a person or situation, usually for personal gain.

Does that sound like something anyone could reasonably do “responsibly”? This is the problem with conservative dogma; it simply does not make sense.

When I stop and really think about The Sarah’s comments, it comes to me that the essence of the “small government, less tax” crowd is to exploit us, the American workers. We the ever-shrinking middle class.

They are trying (and successfully so far), to dupe--I mean convince--the average American worker that somehow this is to their benefit. That the evil Democrats will come and take their savings, their jobs and their homes, kill the ill and the aged (remember death panels?) and let gays violate their sons while their daughters spend their days getting abortions.

Where the Republican Party excels, thanks mostly to Karl Rove, is semantics. They can make you believe almost anything just by the way they frame it. The first time they used this scam--I mean plan--was in the 1980s. The great Ronald Reagan and the Reagan Doctrine, the Democratization of Money.

It was this that started the whole Ponzi--I mean party--line. So here is how this worked, prior to the 1980s, American workers had great benefits. Companies rewarded loyal workers with health care and pensions. Workers rewarded companies with dedication and dependability. It was a system that created one of the strongest, largest, most entrepreneurial economies in the world. The American worker was a paragon of virtue. And those that decided to enter into public service? Well, they were duly rewarded as well. Sure they had smaller salaries than workers in the private sector, but their positions were secure and offered great benefits. No one begrudged them what they received. It was part of our social contract.

If you took care of our children, our ill, our aged, fought our wars and fires, protected us both here at home and on foreign soil, we would contribute to your care and well being for your lifetime. We were proud of our schools, respected our teachers and trusted our politicians.

How times have changed.

And I think the beginning of the end was the Reagan Doctrine. The "Democratization of Money", sounds great doesn’t it? Everyone would be able to “invest like the wealthy.” No more “big business” interfering. You would have total control. And the billions the companies saved by terminating pension plans? Well of course that would “trickle down” to the American worker. They would be paid more and companies would use those funds to “invest” and create new jobs.  Except the “trickle down” part never happened.

Why not? Well, you see, to paraphrase Alan Greenspan, they forgot to factor in greed.  The Democratization of Money did one wonderful thing (if you were an investment banker), and one horrible thing (if you were an average American worker, a Joe Six Pack if you will). It created the 401k.

“Nonsense,” you cry, “I have a 401k, and it is great, my nest egg, a tax-free, compound-interest-earning, high-yield, money market fund.” Add the silent, thank you Ronald Reagan.
Uh-huh. And what exactly are you invested in? What are your earnings? Who runs the fund? What do you pay them? Wait, you didn’t know you paid them? Yes, a portion of every dollar you invest goes to the “market makers” on Wall Street, the same people who looted your account during the economic tsunami, hey they had no “fiduciary” responsibility did they? This is the FREE market after all. But you do realize your “fund” is actually shares of stock, that you actually have a very diversified portfolio of stock that entitles you to vote on corporate behavior and policy? You didn’t know that either? Well, then you’ve been signing your proxy vote over to the investment bank, basically giving your vote to the bankers. Yup, those very same “market makers” who make their living off your wages.
Guess what they did with your money, and more importantly, your proxy vote? They made sure that the boards who were appointed would make the “right” types of decisions, that the “right” kind of people would be selected to be on the Compensation and Audit Committees, the “right” people would be hired, oh, and the “right” kind of people would make decisions regarding how workers would be paid.

It wasn’t long before all these right-minded people decided that the billions that had been promised to the American worker would be better spent on jets, bonuses and themselves. After all, they had every “right” to enjoy the fruits of our labor. So what if American workers now had to pay a much bigger percentage into their retirement account?  The CEOs and Board Members had plenty of money, our money.

Thus was the first battle of the class war lost.

After this early success, corporations decided they could take some of the billions they had saved on pensions and buy--excuse me, contribute--to political campaigns to ensure that they, the CEO’s, crafted--rather I mean, drafted--legislation that would ensure less regulation (small government) and small economic impacts (less taxes). And so, the Semantic Olympics had begun.

No one is better at the Semantic Olympics than Karl Rove, or as ex-President George Bush dubbed him, that turd-blossom. He must have sold his soul to someone to get that silver tongue of his. I mean, really, he convinced the protectionist, self-centered American public to stop using their cell phones to vote for their “idol,” and go buy duct tape. It was masterful, the color- coded terror alerts choreographed to tell us how afraid we should be if the Democrats were actually allowed to win an election.

Who could fail to be moved by the powerful dogma, I mean drama, of tearing down that statue? Or the image of ex-Pres Bush landing on that carrier? One thing I can tell you: his mission was definitely accomplished. Karl Rove’s that is. After ensuring George Bush was appointed President, he orchestrated the selling-out of the American worker for real.

Corporate taxes? How dare we even suggest it! After all corporations were creating all those jobs in China and India. No one said they had to create American jobs. Even Sarah Palin isn’t specific, she just wants us to have “our jobs." What exactly does that mean?

It was during the 8 years of the Bush-Rove-Cheney Administration that bank regulators were pulled out of banks. The SEC staff was replaced. Instead of accountants, they brought in lawyers. The FDA, FEMA, CDC, NHI, FCC, were all “revamped”—in other words, downsized. If it had an acronym they cut the funding (less taxes), and replaced qualified, long-time staff with their cronies (small government).And when these inexperienced, under-qualified, ill-equipped appointees flooded New Orleans, and allowed Wall Street to run off with our life savings, all they could say was “oops.”

See the Boards appointed with our proxy votes had rigged the game by putting their own cronies on Compensation Boards and giving themselves big fat bonuses. While we were busy paying for our daughters’ big fat weddings and dancing with the stars, they were pumping money into their own private economy and making sure the fatted calf, the American worker, would be laid out, apple in mouth.

Why do you think they next attacked teachers and other public workers? Do you actually believe that Republicans think that teachers, firefighters, and police pensions are the problem? I doubt it. It may have something to do with the fact that these unions provide private pension funds, manage them, and vote their shares.

Hmm, so what’s next? Well, it is odd how Republicans constantly try to relate the sinking of the economy to public sector employees, forgetting that they themselves are public sector employees. I mean really, why don’t they cut their salaries and pensions? Instead they suggest we close our libraries and take away teacher pensions.

I also question the conservative policy of cutting funds for public education. Of course they and their CEO buddies don’t care; their children go to private schools. But you and me? What happens to our children when they trail in math and science? When Pell Grants and student loan programs have been decimated to accomplish their “small government, less tax” mission? How do our children live long and prosper in a world that does not provide them with the tools they need to compete?

When we allow corporations and the wealthiest 1% to receive blatant tax welfare but want to deny care to Veterans, the Elderly, the Ill, and our Children, it is time to say enough is enough. Every dollar we take out of federal budgets that results in cuts to state budgets, which then limits county budgets and leads to the decimation of local budgets, which trickles down as cuts to school budgets, which means larger class sizes, cuts to the arts and sports programs and teacher layoffs, is an act of class warfare and the absolute consequence of Trickle-Down Theory, also known as Supply Side or Voodoo Economics.

Most of us will be hurt profoundly by the policies concocted--I mean enacted--in the name of “small government, less taxes." We, and more importantly, our children, cannot afford to allow simpleton slogans to dictate the future.

So that’s it, how Trickle-Down Theory, and the Democratization of Money, are ruining our schools and closing our libraries. Thank you Ronald Reagan.

Comments (3) Trackbacks (4)
  1. How’s that “HOPE AND CHANGE” working for you,

    •  @JonGalt Well Jon I know it’s difficult to grasp but the “hope and change” message is not the only alternative to the way things are run.  Moreover, you can’t change much when congress spitefully blocks your every effort.  

  2. Um, go Galt Jon.

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