Reagan weaving myths, creating a Fantasyland filled with Zombie Economic Ideas. Image from Nagourney (2020), who credits it to the Los Angeles Public Library.
Krugman (2020b) frames it this way, 2020 Was the Year Reaganism Died: The government promised to help — and it did. And, he clarifies what he means:
What I mean by Reaganism goes beyond voodoo (also see Krugman, 2020a) economics, the claim that tax cuts have magical power and can solve all problems. After all, nobody believes in that claim aside from a handful of charlatans and cranks, plus the entire Republican Party ... No, I mean something broader — the belief that aid to those in need always backfires, that the only way to improve ordinary people’s lives is to make the rich richer and wait for the benefits to trickle down. This belief was encapsulated in Ronald Reagan’s famous dictum that the most terrifying words in English are “I’m from the government, and I’m here to help.”
Said framing led to the Government can do no good, and stories of mythical proportion like the welfare queen story (Wise, 2015, loc 273) who was a millionaire driving a Cadillac (there was one incident found, and that person had fraudulently collected about $20000). By the time Right Wing radio turned and twisted it, lazy welfare queens were everywhere. It was part of what led to a Culture of Cruelty for the less fortunate from a position of often unearned Meritocracy by the more fortunate. Even the unemployed, no matter for what reason, where labeled by the Right as "lazy welfare queens" (see Wise, 2015, loc 1651). Also, people tracing ancestry back to the American slave population were made especially suspect, as Andersen (2017, p. 253) says it:
Ronald Reagan popularized the term welfare queen—a powerful caricature, based on a single criminal case, that exaggerated the pervasiveness of welfare fraud and spread the fiction that black people were the main recipients of government benefits.
Myths and fictions in Fantasyland hurt people, and Reagan was good --- lots of Hollywood film experience --- at weaving same. The Reagans, together, both weaved and live a Hollywood myth of the American Life, while working to diminish and in some case destroy it, e.g. the drug crisis that grew rapidly during that time as people lost hope.
The 4-part documentary titled "The Reagans" (See https://www.sho.com/the-reagans) also helps in making sense of the Reagan Revolution, pointing to many of the destructive elements of that Revolution --- the Economic Narrative (an "ism" represented in Neoliberalism, The Neoliberal Order) framed during that time, like a perverse movie script --- that are still represented in the American system. That script and Narrative made it virtually impossible to achieve the American Dream ostensibly framed by it, except for the Meritorious few. The American Dream is possible only with a balanced, joint market&government system --- investing in the viability of both, jointly --- as Metaeconomics makes clear.
Fantasies and myths from the Reagan Revolution aside, the Government did get involved in 2020, and hopefully will continue to come in 2021. And, it did and does help. Unfortunately, the help still had a lot of Zombie Trickle Down represented in massive tax cuts for corporations and the wealthy, which actually worked to do what they do: Increased the wealth of the already wealthy. And, that is based in empirical reality, not Zombie Fantasy. The President of the Hoovervilles of the 1930s believed in trickle down, too, as the Will Rogers observation makes clear.
Image 1. Will Rogers Trickle Down --- Really a Metaeconomics --- Perspective (Will Rogers observation posted by Jeff Northrup on Facebook, November, 2020).
And, a pause here: Saying “fortunately” on Government involvement and referring to Trickle Down as a Zombie Idea (one that has died from the lack of empirical support over and over again, but it keeps coming back), sounds like a political bias, Right (or is it Left)? Not. Metaeconomics is apolitical. It does not care, nor does it support either Right or Left, or any inbetween framing on the political economic spectrum. Metaeconomics is based --- as made clear in Lynne, 2020 --- in scienceðics, with implications for which point to select on the political spectrum to solve real (pragmatism) problems. Metaeconomics brings ethical reflection back into the core of analytical system, and requires empirical support for any and all contentions.
And, more pause here: In contrast, mainstream Microeconomics, which has generally supported not bringing Government into help, and claiming that Trickle Down works, is in effect anti-science&unethical. Or, saying it somewhat more charitably, Microeconomics based analysis “questions” and often outright ignores the empirical science coming out of Behavioral Economics supporting the need for balance in Market&Government and the need for shoring up the bottom of the income and wealth ladder directly. Unfortunately, the questioning and ignoring empirical reality is both ideological (as in minimize Government and public property even when it does good things --- which Microeconomics claims are few and far between, admitting only the pure public goods like a lighthouse are legitimately provided by Government --- and shift everything over to private property and Markets) and opposed to ethical reflection, as it is claimed on methodological grounds that economics is to remain “objective, not normative.”
Metaeconomics sees both positions as untenable, as Behavioral Economic Science is science, not ideology, and, the tired old debate about objective vs normative has no empirical reality to it. In technical terms, Metaeconomics sees the legitimacy of value V (reflecting the empathy-based ethical side of the value question) just as legitimate as price P (reflecting the ego side of the value question). Both are objective measures of reality, and, as result, both are scientific, empirically based.
Now back to the story about the Reagan Revolution and Reaganism having died in 2020. As depicted in the quote from Will Rogers, some parts of the story are quite old, like the Zombie Idea of Trickle Down, going back to at least the 1930s Great Depression and the Hoovervilles of the day. And, said Zombie Idea about Trickle Down rose-up from the tray of dead ideas again in 2020.
As Krugman (2020b) points out, “there were some people who advocated trickle-down policies even in the face of a pandemic. Trump repeatedly pushed for payroll tax cuts, which by definition would do nothing to directly help the jobless, even attempting (unsuccessfully) to slash tax collections through executive action.” So, that Zombie idea (again, see Krugman, 2020a) is still around. Making the help in the form of putting money in the pocket of the unemployed; businesses like small restaurants and shops; and lower income people hit the hardest because of lost day-labor and hourly work, actually works. Like the Will Rogers quote says it, the wealthy still in effect get all the money, it just passes through the hands of those who actually need it (and spend all of it) on the way to the final resting place for it!
Metaeconomics also clarifies that putting money in the hands of the hardest hit also reflects empathy --- the mindfulness that comes from putting oneself in the not-able-to-work-because-of-the-Pandemic shoes of said people. It is about the empathy-based other-interest tempering the ego-based self-interest of those not so affected. In fact, the top 1% could have stepped forward to help the bottom 10%, perhaps? Scrooge could have helped out? A MetaEcon would ask about Scroogism, because it is not opposed to ethical reflection, especially about both the distributive (progressive taxes help) justice and contributive (pay people at the lower levels higher wages; at minimum, raise the minimum wage) justice related to income and wealth .
Metaeconomics (Lynne, 2020) helps make specific, analytical sense of the issue. In particular, dual interest theory applied by a MetaEcon clarifies that the Government not only helps but is essential to achieve economic efficiency. Said efficiency is only possible with good balance in a joint Market&Government. Reagan did not see it, and, created the Government-Bad Myth, which actually worked to destroy both Market&Government. Disinvestment in Government, in effect dismantling Government, ensures it cannot do good things, so the Government-Bad Myth became true because the Reagan Revolution ensured it.
The Right has been dismantling Government for 3-4 decades, especially starting in the early-1980s when Reagan became the POTUS. Putting former actor Reagan in front of the television cameras and microphones was to encourage a kind of Fantasyland, a Myth which hurt a lot of people, and, still is doing so. Reagan lived the Myths of the movies within which he starred, especially the American Myth of the American Dream (a point in the Showtime documentary pointed to by Nagourney, 2020), which Reagan turned into being possible only by getting Government out of the way. Dismantling Government --- Reagan was also about neutralizing labor unions, taking away the offsets to power in the Markets --- destroyed the American Dream except for a few elite at the top.
In fact, the Market-Good and Government-Bad Myths also were major forces in driving the I-We-I cycle (Putnam and Garrett, 2020; See Blog) to “I” with the “We” damaged so badly that it led to chaos in the political system. The I-We balance was actually quite good in the mid-1950s when Reagan was the GE spokesperson. Ironically, Reagan contributed dramatically to destroying that balance, being a major force in driving it toward an “I” only situation by the early-2000s, as demonstrated especially in the 2008 housing market, banking, and financial crisis. The Economic Narrative was changed in the early-1980s; the economy crashed in 2008 mainly because of it, although the Friedman Doctrine (corporations are responsible only to shareholders, so minimize costs at all costs, which led to thousands of factory-line jobs being outsourced to low wage countries) from the early-1970s also played a substantive role (see Stiglitz, 2019; Lynne, 2020).
The Myth driven chaos is very apparent, really arising in both the US (election of Mr. T in 2016; see Nagourney, 2020) and the UK (prime minister became Mr. J), the latter driven by the Thatcher Revolution, which was jointly orchestrated with the Reagan Revolution starting in the early 1980s. Said Revolutions were major forces, contributors to the devastating state of the political economy not only of the US and the UK, but in many other countries who also bought into the Myths. Even the Nordic countries struggled for a bit (see Lakey, 2016), as the Myths were tried there: Fortunately, it was realized that a balance in Market&Government, seeing both as essential, worked much better, such that the Nordic countries returned to it, and are now far more viable systems.
And, the Market-Good Myth --- that the Market can do only good --- had and still has lots of enablers, essentially all of the mainstream economists, any engaged in the style of the Chicago School of Economics, especially the Libertarian Branch (the latter in the spirit of Milton Friedman). The single interest theory at the base of the contention --- Microeconomics --- is widely taught, used in research, and touted as though it has scientific reality in the foundation of it. Microeconomics sees only the Market: There is no place-holder in the framework or the theory for Government, other than to award and enforce private property.
Also, in terms of political economy, the entire Republican party to this day, as Krugman (2020) makes clear, still runs on the myth that Market can do only good and the Government can only do bad, the latter on the order of stirring terror in people.
The real terror is pernicious selfishness in the Market, which is the underlying, main feature of the Market Myth. And, as this cartoon suggests, it often leads to massive failure as it did in the Pandemic. The real terror is too much in the way of ego based self-interest only choices, which is what a Market-only approach is all about. And, yes, a vaccine for selfishness could do wonders for everyone on the Spaceship!
Image 2. Vaccine for selfishness on the way to a Metaeconomic balance in selfish&selfless
The idea that self-interest only drivers (selfishness not tempered with selflessness, ego not tempered with empathy, greed not tempered with that which everyone can go along with) in a Market-only approach to everything is not only a Myth, but a Zombie Idea that keeps coming back. Said Zombie has been killed off and reburied over and over again in Behavioral Economics Empirical Research, like that used to develop Metaeconomics. Microeconomics does not work. The Reagan (and Thatcher) Revolution is a not only a Myth, but a Zombie Myth that keeps coming back.
Importantly, the new vaccines for Covid have been very much a partnership, empirical evidence that economic efficiency (as well as peace and happiness) is served by by good balance. The Moderna vaccine especially demonstrates it, as in Moderna&NIAID (National Institute of Allergy and Infectious Diseases) producing the vaccine in a record time, a clear case of joint Market&Government. Pfizer, too, as in Pfizer&Government, the latter from public investment in research, in the mRNA technology, as well as help from the Centers for Disease Control and the Food and Drug Administration. The Government is also buying vaccines and helping distribute same. Yet, overall, the Federal Government involvement since the Covid disease first appeared in late-2019 is best described (from the very beginning of the Pandemic) as a failure.
So, in light of the Pandemic, in what sense is the Government-Bad Myth descriptive? It is a Myth, in that when Government is well-supported and applied like it should be, it works, with the vaccine a case in point. The most recent Administration stayed too close to the framing of the Reagan Revolution, which is all about Mythical Zombies, and as a result it failed, with perhaps upwards of 150,000 or more unnecessary deaths.
In 2020, the Administration made the Myth real, with really bad government involvement. In contrast, well run Government can be the “vaccine” that works at tempering the selfishnesss of people --- an opt-out mask mandate would have saved 1000s if lives --- and, especially in tempering the excessive greed of the Market (some greed to motivate developing and selling Covid vaccine is good; too much is not) in order to make both work better. Metaeconomics (again, Lynne, 2020, and this Website) makes it clear.
References
Andersen, Kurt. Fantasyland: How America Went Haywire: A 500-Year History. New York: Random House, 2017.
Krugman, P. Arguing with Zombies: Economics, Politics, and Fighting for a Better Future. New York: W. W. Norton and Company, 2020a.
Krugman, P. 2020 Was the Year Reaganism Died. New York Times, Digital ed., December 28, 2020b https://www.nytimes.com/2020/12/28/opinion/reagan-economy-covid.html
Lakey, George. Viking Economics: How the Scandinavians Got It Right - and How We Can, Too. Kindle ed. Brooklyn, New York: Melville House Publishing, 2017, 2016. For the Metaeconomics Blog about Viking Economics, see https://www.metaeconomics.info/post/viking-economics-nordic-model-or-not
Lynne, G. D. Metaeconomics: Tempering Excessive Greed. Palgrave Advances in Behavioral Economics. New York: Palgrave Macmillan, 2020. See https://www.metaeconomics.info/post/just-in-time-for-xmas-presents
Nagourney, A. Was Reagan a Precursor to Trump? A New Documentary Says Yes. New York Times, Digital ed., November 11, 2020. https://www.nytimes.com/2020/11/11/arts/television/the-reagans.html
Putnam, R. D. and Garrett, S. R. The Upswing: How America Came Together a Century Ago and How We Can Do It Again. New York: Simon and Schuster, Kindle Edition, 2020. For the Metaeconomics Blog about the I-We-I cycle, and how to rebalance to a workable I-We (I&We in Metaeconomics) see https://www.metaeconomics.info/post/now-that-the-election-is-over
Stiglitz, Joseph E. People, Power and Profits: Progressive Capitalism for an Age of Discontent. New York: W. W. Norton and Company, 2019.
Wise, T. Under the Affluence: Shaming the Poor, Praising the Rich, and Sacrificing the Future of America. Kindle ed. San Francisco, CA: City Lights Publishers, 2015.