Congressman Tom McClintock’s recent constituent newsletter praises the “conservative” philosophy. But what is it conserving, really? Certainly not historical accuracy.
In it, McClintock (R-Granite Bay) complains the current administration is taxing and regulating us too much. In contrast, he says, “Ronald Reagan responded [to high unemployment] by cutting taxes and reducing regulatory burdens…producing the biggest peacetime economic expansion in the nation’s history.”
Virtually none of that is accurate.
Reagan’s “regulatory burden” reduction led to the Savings & Loan bailout–until recently, the most expensive financial scandal in U.S. history, far more expensive than Teapot Dome. The Reagan administration had so little respect for regulations that its members received 29 indictments for malfeasance in office–a total exceeded only by Nixon’s administration. Clinton’s administration had zero such indictments, yet who is supposedly the crook?
And Reagan just cut taxes? What about the eight tax increases that he signed–all regressive, that is, all falling most heavily on the poor? McClintock also ignores Reagan’s record as California governor. There, he raised taxes far more than the current sales tax rise (inflation adjusted), and, of recent governors he presided over the largest spending increases.
So it’s the “conservatives” who have been taxing and spending!
Even more bizarrely, on McClintock’s website, he yearns for the days when “California offered … FREE university education.” But Reagan was the governor who terminated that!
At the Federal level, between Reagan and his successor, payroll taxes quadrupled. Actually, Reagan cut taxes on the richest roughly in half. Poor folks got a tax hike.
Far from being “the biggest peacetime economic expansion,” the economy after Reagan “cut” taxes experienced an average business cycle recovery with one small exception: Capital spending–the engine of future real income and productivity growth–was flat because the $3+ trillion in Reagan’s deficits sucked all the money out the capital markets.
You may also remember the neo-cons’ promise that lower taxes would lead to higher government revenues, yet the Reagan deficits exceeded all previous administrations’ deficits combined. When Reagan came into office, the U.S. was the world’s largest creditor. When he left, it was the world’s largest debtor. You can read about this in Nobel Laureate economist Paul Krugman’s book Peddling Prosperity .
As usual, McClintock ignores the actual biggest expansion in history. That occurred after the Clinton administration balanced the federal budget by raising the top rates a mere 3%. Neo-cons like McClintock, and Newt Gingrich gravely prophesied economic doom following these tax hikes, but again, as usual, history contradicts them.
The truth is that the U.S. economy performed best during periods when the top progressive rates were very high indeed–92% in the 1950’s and 70% in the 1960’s. Yet you will never hear McClintock cite this history because it contradicts the neo-con narrative he recites, no matter what the facts. (see Larry Beinhart’s “Why the Economy Grows Like Crazy Amid High Taxes” for more)
In the wake of Reagan’s lower taxes on the rich, and higher taxes on the poor, the U.S. has had nearly 30 years of declines for the lowest 90% of real incomes, while those in the 99.99th percentile of incomes have seen their real incomes nearly quintuple.
McClintock concludes his condemnation of Obama’s policies with “As they say, those who refuse to learn from history are condemned to repeat it.”
All I can say to Brother McClintock is “Amen!”