Evil Geniuses

Andersen

The specific policy changes in the 1980s were profound in the aggregate, but beyond the nostalgic Reaganite Morning in America and freer-free-markets messaging, most of the changes were complicated and esoteric and seemed small, so they had a stealth quality. It didn’t feel quite like a paradigm shift because it was mainly carried out by means of a thousand wonky adjustments to government rules and laws, and obscure financial inventions, and big companies one by one changing how they operated and getting away with it—all of it with impacts that emerged gradually, over decades. Social Security and Medicare benefits were not cut, the EPA wasn’t abolished, labor unions weren’t banned. As it turned out, the 1980s were the ’30s but in reverse: instead of a fast-acting New Deal, a time-release Raw Deal.

But the reengineering was helped along because the masterminds of the economic right brilliantly used the madly proliferating nostalgia. By dressing up their mean new rich-get-richer system in old-time patriotic drag. By portraying low taxes on the rich and unregulated business and weak unions and a weak federal government as the only ways back to some kind of rugged, frontiersy, stronger, better America. And by choosing as their front man a winsome 1950s actor in a cowboy hat, the very embodiment of a certain flavor of American nostalgia.

Government

Every two or four years, a gold-standard academic survey asks Americans if they “trust the government in Washington to do what is right just about always, most of the time, or only some of the time?” In 1964, 77 percent of them said always or most of the time. By 1970 that majority had shrunk to 54 percent, where it remained for a couple of surveys. But the Vietnam War continued, and we continued losing it... Once a large majority of Americans came to believe that the federal government was uninspiring or incompetent or corrupt or evil, as they rapidly had over the previous decade, it was going to be a lot easier for the economic right to persuade people that regulating big business and taxing the rich were just plain wrong. Those people wouldn’t necessarily become crusaders for free enterprise, but if they started focusing more of their resentment and anger on the federal government, the smart right-wingers knew, it could have the same effect.

The Deal

The pivotal year for the energized economic right was 1978. Its dreams were starting to come true. Americans were now more skeptical of government than of big business. At the beginning of the year a CBS News/New York Times survey found that 58 percent of Americans agreed that "the Government has gone too far in regulating business and interfering with the free enterprise system," up from 42 percent during the 1960s.

A critical mass of the people elected to run the government had also been persuaded to give big business what it wanted. Democrats held the presidency and a two-to-one House majority and a historic sixty-two-seat Senate majority. Yet in early 1978, a bill to create a new consumer protection agency was defeated in the House because 101 Democrats voted against it, including a majority of the Democratic freshmen, thanks in large part to lobbying by CEOs from the Business Roundtable.

And 1978 was also a tipping-point year in the economic right's crusade to persuade people that because government now sucked, all taxes paid to all governments by everyone, no matter how wealthy, were way too high and also sucked. The overwhelmingly Democratic Congress overwhelmingly passed and the Democratic president signed into law a huge reduction in taxes on income from selling stocks, capital gains - a definitive turn toward making extra-sure the rich got richer faster...

In retrospect, Milton Friedman's 1970 manifesto on behalf of shameless greed amounted to a preliminary offer by the philosopher-king of the economic right to forge a grand bargain with the cultural left. Both sides could find common ground concerning ultra-individualism and mistrust of government. And by the end of the 1970s, only the formalities remained to execute the agreement. Going forward, the masses would be permitted as never before to indulge their hedonistic and self-expressive impulses. And capitalists in return would also be unshackled, free to indulge their own animal spirits with fewer and fewer fetters in the forms of regulation, taxes, or social opprobrium. 'Do your own thing' is not necessarily so different from 'every man for himself'. That could mean.. smoking weed, or wearing blue jeans every day, or refusing to agree to gun regulation— or rich people paying themselves as much as they wanted, or banks misleading borrowers and speculating recklessly. Deal? Deal.

Clintoncare

In the 1960s and ’70s, Daniel Moynihan had been pigeonholed as a moderate or a conservative, but as a U.S. senator during the 1990s, when the rest of his party went Republicanesque on the political economy, Moynihan was a kind of heroic last left-winger standing...

At the start of his presidency, Clinton tried to legislate an expansion of the private U.S. health insurance system to make it cover more people. 'Mr. Clinton and his allies,' a Times analysis explained in 1994, 'were trying hard to redefine the Democratic Party away from traditionally liberal approaches to domestic policy; they were almost inevitably drawn to the ideas of managed competition. Though still largely theoretical, the concept relies on market forces, not government, to hold down costs and expand access to health insurance.' That is, Clinton tried and failed to pass a version of Obamacare sixteen years before Obama succeeded..

[Moynihan said of Clintoncare back then] 'He hated unnecessary government complexity' and the Clinton plan.. was complex and hard to explain (as Obamacare would be as well). Also, Moynihan 'could see the [so-called reform] policies' proposed by Clinton would 'not perform as promised.