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Paying for VooDoo Reaganomics

The Reign of George II: Voodoo Reaganomics, the Sequel

With the final confirmation of President Bush's Cabinet appointments, we seem to be entering a period of deja vu, a rerun of of an old Reagan movie with a partly new cast. Reagan's discredited Star Wars missle defense is getting a hard-sell revival, along with calls for increased overall defense spending. Likewise, Bush platitudes and cliches include promoting an across-the-board taxcut, expected to reduce federal revenues by $1.6 trillion over a decade. In an historical parallel, the Reagan/Bush-era tax cuts and increased defense spending plunged the federal budget into enormous deficits, increasing the entire accumulated debt from the 204-year history of the US from $750 billion at the end of President Carter's term to $4.35 trillion (Ronald Reagan, $2.2 trillion, and George I, $1.4 trillion) just 12 years later.

Circumstances playing into the Reagan-redux script include an energy shortage in the West, suspicions about terrorists from rogue nations, and a general slowdown in business activity, declining profits, and layoffs. Threatening to most of us, these difficulties fit right in with the Bush plans to drill for oil in the Arctic National Wildlife Refuge and, reminiscent of the supply-side theories of Reaganomics, a mega-taxcut with big bucks for the rich, trickle-down for the rest of us.

Occasional incidents of terrorism fuel Media and CIA hype about Saddam Hussain, Ossama binLauden, Rogue Nations, etc., etc.. These are background for orchestrated campaigns in search of replacements for the Cold War and The Evil Empire, new villains to support defense spending. Bush plans for the deployment of Star Wars Missile Defense System are already agitating both US foes and friends alike and generate instability in a kind of self-fulfillment of predictions of threats from abroad.

Allowing the energy crisis and business slowdown to worsen over the short term appears to fit into the Bush strategy. Along this line, the Western Governors' proposed stop-gap measure of price caps on wholesale electricity to stave off escalating energy prices was summarily rejected by Bush Energy Secretary Spencer Abraham and the head of the Federal Energy Regulatory Commission, Curt Hebert Jr., at a high-profile energy summit in PortlandOregonian, 2/3/01.

The deregulation schemes which have precipitated this crisis are now being faulted for not going far enough, for not allowing the cost increases to be passed on as higher rates to consumers. Somehow, in keeping with the faith in marketplace fixes, making the ratepayers pay more for electricity is dressed up as being a solution to the problem, instead of as a negative outcome. Higher rates, it is said, will promote conservation (no duh!). Next we may hear another echo from the past: that a return to federal deficit spending is not "Voodoo economics" at all, but a means to stimulate growth. Paraphrasing Shakespeare, "'Tis truly an ill wind that blows no good for anyone;" energy shortages that threaten the Northwest, economic recession, and threats of terrorism, all will significantly promote the Bush agenda.