Pay no attention to the Lying Liars of the Right -- inequality of economic opportunity was NOT always the law of the land

The sainted Ronald Reagan bequeathed Americans the right to revel in their ignorance, bigotry, and savagery even as they were being so carefully lined up in the bent-over position.


"What [William Lazonick] has uncovered is a shift in corporate conduct that transformed the U.S. economy -- for the worse. From the end of World War II through the late 1970s, he writes, major U.S. corporations retained most of their earnings and reinvested them in business expansions, new or improved technologies, worker training and pay increases. Beginning in the early '80s, however, they have devoted a steadily higher share of their profits to shareholders."

-- Harold Meyerson, in his Washington Post column
"In corporations, it’s owner-take-all"

by Ken

Last night I shared Jen Sorensen's lovely Daily Kos comic strip that neatly and crucially made the connection between the institutionalized social inequality on display in Ferguson and the institutionalized economic and legal inequality on display in Bankster America. And as I said, while I was focusing yesterday on the social-inequality side of this coin, tonight I planned to flip the coin over to the economic-inequality side, noting that they are the twin legacies of the sainted Ronald Reagan.

When it comes to Saint Ronnie, I write a lot (to whoever said "incessantly," was that really helpful?) about his disastrous sociopolitical legacy, the benediction he bestowed that whatever you believe to be, or even wish to be, reality is the real thing -- assuming, of course, that it's compatible with an ultra-right-wing way of looking at, or not looking at, the world. I guess that's the side of the Reagan Legacy that usually makes me crazy, since the consequences are incalculable.

That benediction, after all, comes with an official Seal of Good Americanism for every crackpot chemical impulse flits through a person's brainm such that if it feels right, or just feels good, to you, then it's for real -- again assuming it's compatible with ultra-right-wing doctrine. Not to put too fine a point on it, the "it" here includes every species of ultra-right-wing hatred, savagery, bigory, and urge to violence. If you feel it, preached Saint Ronnie, and if it's real American (translation: compatible with ultra-right-wing doctrine), it's real.

It's called, you know, "Morning in America."

But I tend not to dwell on the other branch of the Reagan legacy, the more nuts-and-bolts kind. For while Saint Ronnie was bestowing upon Americans without access to the levers of power this blessing of unlimited ideological insanity, to those Americans manning the levers of power he was bestowing the country itself, tied in a bow -- again, assuming that those lever-manners subscribed to the ultra-right-wing vision of "free-market capitalism" wherein the mission of government is to force Americans without power to their knees, bent over, ready to receive what ever might be shoved up their posteriors.

It's possible to construct a working model whereby either branch of Reaganism can be seen as providing "cover" for the other. But the power of money being what it is -- which is to say the power of money -- if you were a betting person, you would probably want get behind the view that the crackpot, emotionally exhilarating savagery of Ronnie the empowerer of the masses was providing cover for the rape of those masses by followers of Ronnie the phony free-market capitalist.

One of the crucial elements of the permanent institutionalizing of crackpot ultra-right-wing reality, of course, was Saint Ronnie's open war on labor unions. And doggone if his folksy, largely reality-free or even reality-defying schmoozing skills weren't perfectly suited to turning large numbers of Americans against the only institution our economy has (or rather had) to resist the pulverizing will of the Economically Empowered. He pulled the trick of making the Great American Masses feel empowered while joyfully positioning themselves in the Great Bend-Over.

Now, it has probably always been true that if you tried to talk about equality of economic equality, the right-wing powers who depend so heavily on inequality of opportunity cried, "Class warfare!" And who would know better than the people who had made class warfare a way of life, except on their terms, which are roughly the class-war equivalent of the military-war C-in-C Reagan waged on Grenada. Make sure they're bent over for optimal insertion.

However, over the last decade or two, as the War on Equality of Opportunity has become the American Way, a wrinkle has been added: pretending that the way things are now is the way things have always been, so shut your pieholes, you whining "takers." Don't you know it's Morning in America?

With Labor Day approaching, Harold Meyerson -- bless his soul -- is here to tell us that uh-uh, this is not how it has always been, and what's more, there was a time in the not-so-distant past when this was understood by almost as many Republicans as Democrats. I provided a link last night to Meyerson's Washington Post Labor Day-themed column. For those who haven't already read it, and perhaps even those who have, it begins: "Labor Day -- that mocking reminder that this nation once honored workers -- is upon us again, posing the nagging question of why the economy ceased to reward work."

He ticks off a couple of frequently proposed culprits, globalization and technological change, but then directs "anyone seeking a more fundamental answer" to the article "Profits Without Prosperity" by William Lazonick in the September Harvard Business Review, which he later says "does nothing less than decode the Rosetta Stone of America’s economic decline."

Like Thomas Piketty, Lazonick, a professor at the University of Massachusetts at Lowell, is that rare economist who actually performs empirical research. What he has uncovered is a shift in corporate conduct that transformed the U.S. economy — for the worse. From the end of World War II through the late 1970s, he writes, major U.S. corporations retained most of their earnings and reinvested them in business expansions, new or improved technologies, worker training and pay increases. Beginning in the early ’80s, however, they have devoted a steadily higher share of their profits to shareholders.

How high? Lazonick looked at the 449 companies listed every year on the S-and-P 500 from 2003 to 2012. He found that they devoted 54 percent of their net earnings to buying back their stock on the open market — thereby reducing the number of outstanding shares, whose values rose accordingly. They devoted another 37 percent of those earnings to dividends. That’s a total of 91 percent of their profits that America’s leading corporations targeted to their shareholders, leaving a scant 9 percent for investments, research and development, expansions, cash reserves or, God forbid, raises. [Emphasis added.]

"As late as 1981," Meyerson writes, "corporations directed a little less than half their profits to shareholders." But then came Morning in America.

[T]he shareholders’ share began rising in 1982, when Ronald Reagan’s Securities and Exchange Commission removed any limit on corporations’ ability to repurchase their own stock and when employers — emboldened by Reagan’s destruction of the federal air traffic controllers’ union — began large-scale union-busting. Buybacks really came into their own during the 1990s, when the pay of corporations’ chief executives became linked to the rise in the value of their company’s shares. From 2003 through 2012, the chief executives of the 10 companies that repurchased the most stock (totaling $859 billion in aggregate) received 58 percent of their pay in stock options or stock awards. For a CEO, getting your company to use its earnings to buy back its shares might reduce its capacity to research or expand, but it’s a sure-fire way to boost your own pay.

And it gets better, Meyerson notes. "With companies lavishing virtually all their net income on shareholders and executives, the way many of them cover their actual business expenses -- their R-and-D, their expansion -- is by taking on debt through the sale of corporate bonds." And better still:

A number of companies, however — most prominently, IBM — borrow specifically to increase their payout to shareholders. And IBM is not alone. Friday's Wall Street Journal reported that U.S. companies are currently incurring record levels of debt, much of which, the Journal noted, “is being used to refinance existing debt, being sent back to shareholders as dividend payments and share buybacks, or banked in the corporate treasury as executives consider how to potentially deploy funds as the economy expands.” Many of the companies that have spent the most on buybacks, Lazonick demonstrates, have also received taxpayer money to fund research they could otherwise afford to perform themselves.

"What Lazonick has uncovered," Meyerson writes, "is the present-day American validation of Piketty’s central thesis that the rate of return on investment generally exceeds the rate of economic growth."

Indeed, Lazonick has documented that wealth in the United States today comes chiefly from retarding businesses’ ability to invest in growth-engendering activity. The purpose of the modern U.S. corporation is to reward large investors and top executives with income that once was spent on expansion, research, training and employees. To restore a more socially beneficial purpose, Lazonick proposes scrapping the SEC rule that permitted rampant stock repurchases and requiring corporations to have employee and public representatives on their boards. [Emphasis added.]

"The lesson for Labor Day 2014 couldn't be plainer," Meyerson says. "Unless we compel changes such as those Lazonick suggests to our model of capitalism, ours will remain a country for investors only, where work is a sucker’s game."

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Reaganism’s Dark And Lasting Shadow

-by Danny Goldberg

If David Sirota is right, and the culture of the nineteen eighties is defining most of modern America maybe there’s a connection between Charlie Sheen’s “issues” and American political culture. Sheen’s first film role was in the mid-1980’s as one of the young anti-Soviet revolutionaries in the right wing kitsch classic Red Dawn. Oliver Stone then cast him as one of the idealistic young soldiers in Platoon and as the center of his 1987 critique of Reagan-era financial malfeasance in Wall Street. To the extent that the public internalized him as “Charlie Sheen,” and not just the characters he played, his compelling 2011 meltdown is a cautionary tale about the spiritually dead end street of hyper-individualism. (And if Sheen bounces back as his gift for self-mockery suggests he might, his comeback could be a metaphor for the defeat of that very same darkness ).

In any case, in light of the of significant influence of the Tea Party and their ilk, progressive and Democratic communications professionals must come to the grips with the fact, once and for all, that logic and rationality are not the primary motivators of political culture. But what to do about it? George Lakoff and Drew Westen have both written usefully about how progressives and Democrats can improve the way they address various American publics. It’s not enough, however, to simply frame an issue or to speak emotionally to make an impact; communicators and movements need to understand the existing psychology and the unconscious of the people they are trying to move. Many culturally induced nerve endings, hidden from the view of polls and focus groups, help determine political currents. These hidden psychological currents cut both ways. In the last year Democratic researchers did not anticipate a populist susceptibility to the whopper about “death panels” and Republicans failed to unearth a residual affection for labor unions.

Sirota’s brilliant new book Back To Our Future: How the 1980s explain the world we live in now-- Our culture, our politics, our everything (Ballentine) describes modern America in the context of the cultural by-products of the Reagan era that Sirota and others of his generation were exposed to, particularly popular American films, TV shows and advertisements of the decade. He widens our understanding of the psychological terrain where political battles are fought and his book should be required reading for anyone who presumes to measure or influence public opinion.

Americans who were High School seniors when Ronald Reagan started his second term in 1985 are in their forties today, many of them occupying positions of power in business, the media and government.

Most public discussion in the wake of Ronald Reagan’s one-hundredth birthday centered on his administration and his opaque personality but Reaganism, the philosophy of conservatives who have appropriated him (sometimes in direct contradiction of some of the Gipper’s actual policies) has had a much bigger impact on modern day America than has the man himself. Reaganism’s agenda included the reversal of the economic egalitarianism of the New Deal and the Great Society and a revival of militarism to counteract the effects of the anti-Viet Nam protest era. Many of the dark and irrational currents in modern politics originate in the culture of the eighties including Islamophobia, hatred of government, excessive deference to the military, exaltation of the rich and individualism to the exclusion of community in the tradition of Ayn Rand, and a nasty contempt for anything that gets in the way of profits including concerns about the environment and human rights.

The primary cultural trope of Reaganism was to deglitimize many of the progressive cultural ideas that had gained power in the nineteen sixties and seventies, what Sirota calls the “Die hippie, die” initiative (the phrase was the title of a South Park episode). The policy trends that Reaganism aimed at quashing fell into two broad categories: the expansion of government limits on big business (through environmental laws, work-place regulations, support for unions, and financial regulation) and the politically salient questioning of militarism that had been spawned by the Viet Nam War protest movement.

Of course, Reagan also helped enable socially conservative Christians whose support he cheerfully accepted but in part because of the support of libertarian Republicans, progressives have won more of those battles than they’ve lost. Of course, if you are an abortion provider in a red state, those culture wars are still painfully relevant, but as Thomas Frank points out in What’s The Matter With Kansas, most of the real conservative big shots never cared that much about these battles and still don’t.

One pivotal anti-hippie vehicle in the Reagan era was the hugely successful TV series Family Ties, a family sitcom the premise of which was, according to the Baltimore Sun,"rejecting the counterculture of the 1960s and embracing the power that came to define the 80s.” Michael J. Fox became a star playing Alex P. Keaton, a materialistic, Reagan -loving son of former sixties activists who were shown as ineffectual anachronisms. In one episode Keaton makes fun of his parents’ old friends: “Every time these hippies come prancing in from yesteryear, we got get out the love beads, put on the ponchos, and pretend we care about people.” The subtext, so often amplified by right wing populists from Rush Limbaugh to P.J. O’Rourke, is that social programs, compassion, etc. are naïve at best and corrupt at worst. Winners win and losers lose and any attempt to change fate helps no one and undermines stability. Compassion and collective responsibility are for charlatans or suckers.

How did the American political zeitgeist shift from John Kennedy’s “Ask not what your country can do for you, ask what you can do for your country,” to Ronald Reagan’s “The nine most terrifying words in the English language are I’m from the government and I’m here to help”?

De-legitimization of government was not solely a right wing enterprise. Many of us on the left were appalled by the government over-reach of the FBI Cointelpro program that targeted war protesters and civil rights leaders including Martin Luther King. Presidents Johnson and Nixon lied about various details of the War in Viet Nam. (See When Presidents Lie by Eric Alterman). Many hippies and civil libertarians hated the “war on drugs” that Nixon started in the early seventies. So when Ghostbusters or ET depicted government officials as thugs it wasn’t necessarily coming from a right wing perspective. But they still helped reinforce a psychology that supported the pro-big business agenda of Reagan’s mantra: “Government is not the solution to the problem, government is the problem.”

At the same time during the eighties there was a powerful campaign to undermine the moral basis of the criticism of the War in Viet Nam and to restore support for the military industrial complex. This campaign was explicitly supported by propaganda in films such as Red Dawn (1984) Rambo: First Blood (1985) and Top Gun (1986). Reagan himself called the Viet Nam War a “noble cause’ in his 1980campaign and suggested that anti-war critics made America “afraid to let American soldiers win.” This canard was echoed In Rambo: First Blood. The protagonist JohnRambo played by Sylvester Stallone popularized the lie that most Viet Nam veterans were spat on by peace activists.

It wasn't my war. You asked me, I didn't ask you. And I did what I had to do to win. But somebody wouldn't let us win. Then I come back to the world and I see all those maggots at the airport. Protesting me. Spitting. Calling me baby killer. ... Who are they to protest me? Huh?

The legend of peace protesters spitting at vets is one of the most successful lies ever perpetrated on the American public. Connecticut Attorney General Richard Blumenthal, running for the U.S Senate in 2110, claimed to have served in Viet Nam and lamented the way returning soldiers were treated saying in a campaign year speech "When we came back we were spat on." The New York Times later revealed that although Blumenthal had served in the Army during the Viet Nam War hehad actually never served in Viet Nam itself. Blumenthal apologized for pretending to have served in the War and survived to win election to the Senate but the myth of spit-upon Viet Nam vets had become so internalized that the media never pointed out that not only had Blumenthal not been spit on coming home from a war he never served in, but there is also no evidence that any soldiers were spit on by peace activists. Jerry Lembcke, a Viet Nam vet, argued persuasively that the story is bullshit in his 1998 book The Spitting Image: Myth, Memory, and the Legacy of Vietnam, in which he researched every supposed report of the kind of spitting that Stallone’s fictitious character described and could not find a single first hand account of such an incident. There is no question that Viet Nam veterans were not treated well by their country but the blame for that belongs with the governmental agencies that failed to provide them with the kind of support that World War II vets had enjoyed as a result of the GI Bill and the political leaders who sent them to fight a war which they ultimately could not justify.

In the real world many Viet Nam veterans, most famously John Kerry, were a significant part of the anti-war movement. Most importantly, the passage of time and the release of White House tapes from both the Johnson and Nixon administrations made it clear that the Viet Nam war was never related to a genuine American security interest but to domestic politics, largely the fear of being called “soft on communism." And the fall of South Viet Nam as a separate country did absolutely nothing to hurt the United States during the Cold War or thereafter. But you would never know any of these things if Rambo was your source of information.

The Hollywood feature Red Dawn was written and directed by John Milius. It was produced by MGM/UA who actually recruited former Reagan Secretary of State Alexander Haig “to consult with the director and inculcate the appropriate ideological tint.” MGM/UA executive Peter Bart wrote that “Haig took Milius under his wing and suddenly he found himself welcomed into right-wing think tanks.” The film absurdly depicted a Soviet/Cuban invasion of America’s Southwest in which the communists take over several American towns. A group of High School kids played by Patrick Swayze, Lea Thompson, C. Thomas Howell and, of course, Charlie Sheen, retreat to the mountains and form a guerilla army to fight the communists, calling themselves The Wolverines. Aware and proud of the film’s influence on some impressionable young minds, Milius later boasted, “Wolverines have grown up and gone to Iraq.” Although controlled by the Russians, the primary invading force of American in Red Dawn consists of Cubans, brown skinned Latinos (No Latino “Americans” of course). Conquered Americans are seen stockpiling food with a panic and ardor that must have been one of the proto-types for some of Glenn Beck’s current rants. (Beck was 21 years old, having just started his first radio job, when Red Dawn was released). The Mayor of the invaded city is shown as a craven weakling who collaborates with the Communists.

Top Gun was also made with Defense Department input. It implausibly showed American pilots in dogfights with the Soviets absent the context of any particular conflict between the Cold War superpowers and it glamorized military service to the level of a fashion layout. According to Sirota "Recruitment spiked 400% in the months after Top Gun was released leading the Navy to set up recruitment tables at theatres upon realizing the movie’s effect."

Of video games, Sirota quotes Army Colonel Casey Wardynski saying that at the Pentagon, “We realized we had to get the flow of information about life in the army into pop culture.” Space Invaders, Defender, Chopper Command, Asteroids, Missile Command (my own personal favorite), and Battlezone (directly subsidized by the Pentagon) entered the consciousness of millions of teenagers during the 80’s.

The World Wrestling Federation wrestling villain The Iron Sheik (an “Iranian”) was regularly vanquished by Sgt. Slaughter, a “good guy” wrestler wearing US camouflage who said in 1984, “We don’t want Iranians around. We’re going to clean up America of all the trash.” As Sirota points out: “If that seems exactly like the political rhetoric you might hear today in a talk-radio rant or a cable scream show or on the floor of the U.S Congress, that’s no coincidence. Those rants are deliberately using the same diction as Sgt. Slaughter because that’s the same lingo we were trained to respond to as eighties kids in our basement.”

Fortunately, not all unconscious notions of Americanism feed right wing goals.

In the same decade that spawned Top Gun, the finale of MASH, the popular anti-war TV series, aired a finale which was seen by 125 million people, the largest TV audience of the decade. During those same years 60 Minutes had its peak audience, often exposing the venality and limits of the corporate world. Gandhi won the Best Picture Oscar and when Warren Beatty, at the peak of his celebrity and show business power, created Reds, and won the Oscar for Best Director for celebrating the values of early idealistic American communists. Spike Lee’s 1989 masterpiece Do The Right Thing was the film Barack Obama took Michelle to on their first date. And the eighties also produced Oliver Stone who launched his own very un-Rambo-like narrative on Viet Nam and militarism through Born On The Fourth of July, Salvador, and, most successfully, Platoon which also won the Best Picture Oscar.

MTV was launched in 1982 and while the rock and pop culture of those years was certainly a mixed bag it was far from a rubber stamp of conservative think tank theories. Contrary to the Family Ties ethos there were a series of concerts, Live-Aid, Farm Aid and the Amnesty tours which celebrated collective responsibility and empathy for those who were suffering. Bruce Springsteen, REM, The Clash and U2, achieved superstardom, Bonnie Raitt, won the Grammys, punk rock started emerging form the shadows, and what is now called “old school” hip hop gave a cultural power to aspects of black America that the Cosby Show never touched.

Looking to the future, the next decade’s power elite will have grown up in the Clinton era when grunge and hip hop exploded, when The West Wing mapped out a positive case for government like no cultural product before it, and when The Lion King extolled “the circle of life.” And when A Bronx Tale gave us Robert DeNiro as a bus driver named Lorenzo telling his son not to admire the local gangster: “Get up every day and work for a living! Let's see him try that! We'll see who's really tough. The working man is tough.”

And even in the nineteen fifties, idealized by Reagan and the other classic Michael J. Fox franchise Back To The Future, there was The Birth Of The Cool and Ginsberg and Kerouac and Brando and Dean. There was Catcher In The Rye and Raymond Chandler’s 1953 novel The Long Goodbye. If you adjust the numbers for inflation the following passage could have been written yesterday:

There ain’t no clean way to make a hundred million bucks,” Ohls said. “Maybe the head man thinks his hands are clean but somewhere along the line, guys got pushed to the wall, nice little businesses got the ground cut out from under them and had to sell out for nickels. Decent people lost their jobs, stocks got rigged on the market, proxies got bought up like pennyweight of old gold and the five percenters and the big law firms got paid hundred grand fees for beating some law the people wanted but the rich guys didn’t on account it cut into their profits.”

So despite the presence of psychic toxins left by Reaganism, America’s future is still up for grabs. If we come to grips with the cynical toxins of Reaganism we may yet marginalize them from the ruling psychology of our country, even without a visit from a higher being like ET.