1. The "Unimportant People"
2. Political Successes
3. The Achievements of Economic Management
4. Restoring the Faith
5. Public Vices
From Z Magazine, May 1989.
The Reagan era was widely heralded as virtually revolutionary in its import. Reality was considerably less dramatic, but the impact on the domestic social order and the world was not slight. Some reflections follow on what was bequeathed to the new administration in early 1989. The focus in this chapter is at home, and in the next, on broader international issues and policy implications.
These matters have large-scale human consequences, and should therefore be faced dispassionately. That is not an easy matter. It is first necessary to dispel the most vivid images conjured up by the words "Reagan," "Shultz," and "Bush," images of tortured and mutilated bodies by the tens of thousands in El Salvador and Guatemala and of dying infants in Nicaragua, succumbing once again to disease and malnutrition thanks to the successes in reversing the early achievements of the Sandinistas. And others like them in Mozambique, Gaza, and other corners of the world from which we prefer to avert our eyes -- by "we" I mean a larger community for which we all share responsibility. These images we must somehow manage to put aside.
We should not move on, however, without at least a word on how easily we refrain from seeing piles of bones and rivers of blood when we are the agents of misery and despair. To truly appreciate these accomplishments one must turn to the liberal doves, who are regularly condemned for their excessive sensitivity to the plight of our victims. To New Republic editor Hendrik Hertzberg, who writes of the "things about the Reagan era that haven't been so attractive," like sleaze, Rambo movies, and Lebanon -- referring, presumably, to dead Marines, not dead Lebanese and Palestinians -- but without a word on Central America, where nothing has happened that even rises to the level of "unattractive," apparently. Or even to Mary McGrory, in a very different category, who nevertheless tells us that "the real argument, of course, is what is more important in Nicaragua: peace, as the Democrats cry; or freedom, as the Republicans demand." The shred of truth in these words is that the Democrats are as committed to peace as the Republicans are to freedom. 1
Or we can turn to the journal Indochina Issues of the Center for International Policy, which has compiled a very laudable record in its work for peace and justice. Here, a senior associate of the Carnegie Foundation for International Peace calls for reconciliation with Vietnam, urging that we put aside "the agony of the Vietnam experience" and "the injuries of the past," and overcome the "hatred, anger and frustration" caused us by the Vietnamese, though without forgetting "the humanitarian issues left over from the war": the MIAs, those qualified to emigrate to the United States, and the remaining inmates of reeducation camps. These are the only humanitarian issues that we see, apparently, when we cast our eye on three countries littered with corpses, broken bodies, hideously deformed fetuses and hundreds of thousands of other victims of chemical warfare in South Vietnam, destruction on a colossal scale -- all caused by some unknown hand, unmentioned here. Meanwhile we contemplate what they have done to us, the agony and injury they have forced us to endure. 2
On such assumptions, we can perhaps even read without cringing that James Fallows "is now fully aware after a recent visit to Vietnam that the war `will be important in history mostly for what it did, internally, to the United States, not what difference it made in Indochina'" (Dissent editor Dennis Wrong, quoting Fallows with approval). The slaughter of millions of Indochinese and destruction of their countries is far too slight a matter to attract the attention of the muse of history while she ponders the domestic problems caused for the important people, those who really count. Perhaps, some day, a thoughtful German commentator will explain that the Holocaust will be important in history mostly for what it did, internally, to Germany, not what difference it made for the Jews. 3
A leading authority on Native Americans, Francis Jennings, once observed that "In history, the man in the ruffled shirt and gold-laced waistcoat somehow levitates above the blood he has ordered to be spilled by dirty-handed underlings." We will not be able to face the problems that lie ahead realistically unless we come to grips with these striking and pervasive features of our moral and intellectual culture.
Central America has been a foreign policy obsession throughout the eighties, and the effects are evident. Prior to this grim and shameful decade, Central America had been one of the most miserable corners of the world. That its fate might teach us some lessons about the great power that has long dominated the region and repeatedly intervened in its affairs is a thought foreign to the minds of the important people, and it is understood that they are not to be troubled by such discordant notes. Thus in the New York Times Magazine, James LeMoyne ruminates on the deep-seated problems of Central America, recalling the role of Cuba, the Soviet Union, North Korea, the PLO, Vietnam, and other disruptive foreign forces. One actor is missing, apart from the phrase that in El Salvador, "the United States bolstered the Salvadoran Army, insisted on elections and called for some reforms." In another Times Magazine story, Tad Szulc gave a similar treatment to the Caribbean, observing that "the roots of the Caribbean problems are not entirely Cuban"; the "Soviet offensive" is also to blame along with the consequences of "colonial greed and mismanagement" by European powers. The U.S. is charged only with "indifference" to the brewing problems. 4
In a later Times Magazine story, Stephen Kinzer concedes that in Guatemala -- which he had offered as a model for the errant Sandinistas -- the progress of "democracy" leaves something to be desired. To be sure, there are some encouraging signs; thus murders by the security forces we bolster have declined to perhaps two a day, definitely an improvement over the period when Reagan and his cohorts were enthusiastically hailing Lucas Garc¡a and R¡os Montt, whom Kinzer now describes as "two of the most ruthless military presidents" (in fact, mass murderers). But Kinzer, who knows the role of the U.S. in Guatemala well, also knows the rules of decorum: in his version, Guatemala's democratic interlude of 1944-54 ended for some unstated reason, and the subsequent U.S. role, until today, receives no mention whatsoever. We find again only an oblique reference to general indifference: "rich countries -- notably the United States -- welcomed, and in some cases helped to force the transitions to civilian rule in Latin America," but without sufficient commitment or recognition of "longer-term challenges." If in Guatemala "more people are unemployed, and more people now eat out of garbage dumps, than ever in memory," if the army maintains its vicious and murderous regime, if the military and super-rich who rule behind a thin civilian façade persist in what the Catholic bishops call the "inhuman and merciless" abuse of the impoverished peasants, then it must be a reflection of their inherent worthlessness. Surely no respectable person could imagine that the United States might share some responsibility for instituting and maintaining this charnel house. 5
The practice is virtually a literary convention. Reporting the Bosch-Balaguer 1990 election campaign in the Dominican Republic, Howard French tells us that Juan Bosch, "a lifelong Marxist," "was removed from office in a military coup shortly after winning the country's first free elections, in 1963," and that his rival, Joaqu¡n Balaguer, defeated Bosch in the 1966 presidential election. Omitted are a few pertinent facts, among them: that there had been no prior free elections because of repeated U.S. interventions, including long support for the murderer and torturer Trujillo until he began to interfere with U.S. interests; that "the lifelong Marxist" advocated policies similar to those of the Kennedy Democrats; that the U.S. was instrumental in undermining him and quickly backed the new military regime; that when the populace arose to restore constitutional rule in 1965, the U.S. sent 23,000 troops on utterly fraudulent pretexts to avert the threat of democracy, establishing the standard regime of death squads, torture, repression, slave labor conditions, increase in poverty and malnutrition, vast
emig0ration, and wonderful opportunities for U.S. investors, and tolerating the "free election" of 1966 only when the playing field had been levelled by ample terror. 6
Even such major atrocities as the slaughter in Cambodia that the U.S. conducted and presided over in the early 1970s have faded quietly away. As a matter of routine, when the New York Times reviews the horror story of Cambodia, it begins in April 1975, under the heading "The Cambodia Ordeal: A Country Bleeds for 15 Years." No one bled, apparently, from the time of the first sustained U.S. bombings in March 1969 through April 1975, when 600,000 people were killed, according to CIA estimates. 7
The moral cowardice would be stunning, if it were not such a routine feature of intellectual life.
Returning to Central America, a decade ago there were glimmerings of hope for constructive change. In Guatemala, peasants and workers were organizing to challenge one of the most primitive oligarchies on the face of the earth. In El Salvador, church-based self-help groups, unions, peasant associations and other popular organizations were offering a way for the general population to escape grinding poverty and repression and to begin to take some control of their lives and fate. In Nicaragua, the tyranny that had served as the base for U.S. power in the region for decades was overthrown in 1979, leaving the country in ruins, littered with 40,000 corpses, the treasury robbed, the economy devastated. But the National Guard was driven out and new popular forces were mobilized. Here too there was hope for a better future, and it was realized to a surprising degree, despite extreme adversity, in the early years.
The Reagan administration and its liberal Democrat and media accomplices can take credit for having reduced these hopes to ashes. That is a rare accomplishment, for which history will assign them their proper place, if there is ever an honest accounting.
But let us put aside such disquieting thoughts -- as we all too easily do -- and try to assess the impact of these years where it matters to history by the lights of the sophisticated: internally, for the domestic society of the United States, and in particular for those who hold its reins.
To face these questions sensibly we have to try to understand our own societies. It is not a simple picture. In the United States, we see, for example, the tiny Jesuit center Quest for Peace which, with no resources, was able to raise millions of dollars for hurricane relief in Nicaragua from people who have been able, somehow, to keep their independence of thought and their hold on simple moral values. On the other hand, we see the rigid fanaticism, willful ignorance, and intellectual and moral corruption of the elite culture. We see a political system in which formal mechanisms function with little substance, while at the same time dissidence, activism, turbulence and informal politics have been on the rise and impose constraints on state violence that are by no means negligible.
With regard to the political system, the Reagan era represents a significant advance in capitalist democracy. For eight years, the U.S. government functioned virtually without a chief executive. That is an important fact. It is quite unfair to assign to Ronald Reagan, the person, much responsibility for the policies enacted in his name. Despite the efforts of the educated classes to invest the proceedings with the required dignity, it was hardly a secret that Reagan had only the vaguest conception of the policies of his administration, and if not properly programmed by his staff, regularly produced statements that would have been an embarrassment, were anyone to have taken them seriously. The question that dominated the Iran-contra hearings -- did Reagan know, or remember, what the policy of his administration had been? -- was hardly a serious one. The pretense to the contrary was simply part of the cover-up operation; and the lack of public interest over revelations that Reagan was engaged in illegal aid to the contras during a period when, he later informed Congress, he knew nothing about it, betrays a certain realism.
Reagan's duty was to smile, to read from the teleprompter in a pleasant voice, tell a few jokes, and keep the audience properly bemused. His only qualification for the presidency was that he knew how to read the lines written for him by the rich folk, who pay well for the service. Reagan had been doing that for years. He seemed to perform to the satisfaction of the paymasters, and to enjoy the experience. By all accounts, he spent many pleasant days enjoying the pomp and trappings of power and should have a fine time in the retirement quarters that his grateful benefactors have prepared for him. It is not really his business if the bosses left mounds of mutilated corpses in death squad dumping grounds in El Salvador or hundreds of thousands of homeless in the streets. One does not blame an actor for the content of the words that come from his mouth. When we speak of the policies of the Reagan administration, then, we are not referring to the figure set up to front for them by an administration whose major strength was in public relations.
The construction of a symbolic figure by the PR industry is a contribution to solving one of the critical problems that must be faced in any society that combines concentrated power with formal mechanisms that in theory allow the general public to take part in running their own affairs, thus posing a threat to privilege. Not only in the subject domains but at home as well, there are unimportant people who must be taught to submit with due humility, and the crafting of a figure larger than life is a classic device to achieve this end. As far back as Herodotus we can read how people who had struggled to gain their freedom "became once more subject to autocratic government" through the acts of able and ambitious leaders who "introduced for the first time the ceremonial of royalty," distancing the leader from the public while creating a legend that "he was a being of a different order from mere men" who must be shrouded in mystery, and leaving the secrets of government, which are not the affair of the vulgar, to those entitled to manage them. In the early years of the Republic, an absurd George Washington cult was contrived as part of the effort "to cultivate the ideological loyalties of the citizenry" and thus create a sense of "viable nationhood," historian Lawrence Friedman comments. Washington was a "perfect man" of "unparalleled perfection," who was raised "above the level of mankind," and so on. To this day, the Founding Fathers remain "those pure geniuses of detached contemplation," far surpassing ordinary mortals (see p. 17). Such reverence persists, notably in elite intellectual circles, the comedy of Camelot being an example. Sometimes a foreign leader ascends to the same semi-divinity among loyal worshippers, and may be described as "a Promethean figure" with "colossal external strength" and "colossal powers," as in the more ludicrous moments of the Stalin era, or in the accolade to Israeli Prime Minister Golda Meir by New Republic owner-editor Martin Peretz, from which these quotes are taken. 8
Franklin Delano Roosevelt attained similar heights among large sectors of the population, including many of the poor and working class, who placed their trust in him. The aura of sanctity remains among intellectuals who worship at the shrine. Reviewing a laudatory book on FDR by Joseph Alsop in the New York Review of Books, left-liberal social critic Murray Kempton describes the "majesty" of Roosevelt's smile as "he beamed from those great heights that lie beyond the taking of offense... Those of us who were born to circumstances less assured tend to think of, indeed revere, this demeanor as the aristocratic style... [We are] as homesick as Alsop for a time when America was ruled by gentlemen and ladies." Roosevelt and Lucy Mercer "were persons even grander on the domestic stage than they would end up being on the cosmic one," and met the great crisis in their lives, a secret love affair, "in the grandest style." "That Roosevelt was the democrat that great gentlemen always are in no way abated his grandeur... [His blend of elegance with compassion] adds up to true majesty." He left us with "nostalgia" that is "aching." His "enormous bulk" stands between us "and all prior history...endearingly exalted...splendidly eternal for romance," etc., etc. Roosevelt took such complete command that he "left social inquiry...a wasteland," so much so that "ten years went by before a Commerce Department economist grew curious about the distribution of income and was surprised to discover that its inequality had persisted almost unchanged from Hoover, through Roosevelt and Truman..." But that is only the carping of trivial minds. The important fact is that Roosevelt brought us "comfort...owing to his engraving upon the public consciousness the sense that men were indeed equal," whatever the record of economic reform and civil rights may show. There was one published reaction, by Noel Annan, who praised "the encomium that Murray Kempton justly bestowed on Roosevelt." 9 Try as they might, the spinners of fantasy could not even approach such heights in the Reagan era.
The political and social history of Western democracies records all sorts of efforts to ensure that the formal mechanisms are little more than wheels spinning idly. The goal is to eliminate public meddling in formation of policy. That has been largely achieved in the United States, where there is little in the way of political organizations, functioning unions, media independent of the corporate oligopoly, or other popular structures that might offer people means to gain information, clarify and develop their ideas, put them forth in the political arena, and work to realize them. As long as each individual is facing the TV tube alone, formal freedom poses no threat to privilege.
One major step towards barring the annoying public from serious affairs is to reduce elections to the choice of symbolic figures, like the flag, or the Queen of England -- who, after all, opens Parliament by reading the government's political program, though no one asks whether she believes it, or even understands it. 10 If elections become a matter of selecting the Queen for the next four years, then we will have come a long way towards resolving the tension inherent in a free society in which power over investment and other crucial decisions -- hence the political and ideological systems as well -- is highly concentrated in private hands.
For such measures of deterring democracy to succeed, the indoctrination system must perform its tasks properly, investing the leader with majesty and authority and manufacturing the illusions necessary to keep the public in thrall -- or at least, otherwise occupied. In the modern era, one way to approach the task is to rhapsodize (or wail) over the astonishing popularity of the august figure selected to preside from afar. From the early days of the Reagan period it was repeatedly demonstrated that the tales of Reagan's unprecedented popularity, endlessly retailed by the media, were fraudulent. His popularity scarcely deviated from the norm, ranging from about 1/3 to 2/3, never reaching the levels of Kennedy or Eisenhower and largely predictable, as is standard, from perceptions of the direction of the economy. George Bush was one of the most unpopular candidates ever to assume the presidency, to judge by polls during the campaign; after three weeks in office his personal approval rating was 76 percent, well above the highest rating that Reagan ever achieved. 11 Eighteen months after taking office, Bush's personal popularity remained above the highest point that Reagan achieved. Reagan's quick disappearance once his job was done should surprise no one who attended to the role he was assigned.
It is, nonetheless, important to bear in mind that while the substance of democracy was successfully reduced during the Reagan era, still the public remained substantially out of control, raising serious problems for the exercise of power.
The Reagan administration faced these problems with a dual strategy. First, it developed the most elaborate Agitprop apparatus in American history, its Office of Public Diplomacy, one major goal being to "demonize the Sandinistas" and organize support for the terror states of Central America. This mobilization of state power to control the public mind was illegal, as a congressional review irrelevantly observed, but entirely in keeping with the advocacy of a powerful and intrusive state that is a fundamental doctrine of what is called "conservatism." The second device was to turn to clandestine operations, at an unprecedented level. The scale of such operations is a good measure of popular dissidence.
Clandestine operations are typically a secret only from the general population at home, not even from the media and Congress, pretense aside. For example, as the Reagan administration turned to the task of dismantling the Central American peace accords immediately after they were signed in August 1987, the media and Congress chose not to know that illegal supply flights to the contras almost tripled from the already phenomenal level of one a day as Washington sought desperately to keep its proxy forces in the field in violation of the accords, so as to maximize violence and disruption, and to bring the people of Nicaragua to understand that removal of the Sandinistas was a prerequisite to any hope for decent survival. A year later, the media and Congress chose not to know that CIA supply flights from the Ilopango air base near San Salvador to contras within Nicaragua were being reported by the same sources that had been ignored in the past, then proven accurate, as finally conceded; the "Hasenfus route," publicized at last when an American mercenary was shot down in October 1986 and the long-known facts could no longer be suppressed -- for a few weeks. 12
Similarly, the media (like Congress) pretended not to understand the absurdity of the historic agreement between the Bush administration and congressional liberals "committing the Administration and Congress to aid for the Nicaraguan rebels and support for the Central American peace efforts" (Bernard Weinraub, New York Times); a flat and transparent self-contradiction, since the "peace efforts" explicitly bar the aid. A Times editorial solemnly explained that U.S. goals are now "consistent with the regional pact" that was flagrantly violated by the agreement that the editors hailed. The historic agreement "reaffirms the policy that the strong may do whatever they wish, regardless of the will of others," exactly as Daniel Ortega was reported to have said on the same day as the Times editorial. 13
The practice was uniform as the media followed their marching orders, quite oblivious to the fact that explicitly, and without ambiguity, "the Central America peace efforts" ruled out any form of aid for the U.S.-run forces except for resettlement, and that the aid provided did not qualify as "humanitarian" by any standards, as was unequivocally determined by the World Court in a ruling that displeased U.S. elite opinion and therefore was never mentioned in the long and vigorous debate, or what passed for such, over "humanitarian aid." The blatant self-contradiction in the (quite typical) statement quoted from the Times is evident and transparent, whether we consider the terms of the Esquipulas II Accord of August 1987 that was successfully demolished by Washington and the media within a few months, the Sapoa cease-fire agreement of March 1988 which Congress and the Administration immediately violated with the support of the media, or the February 1989 agreement of the Central American Presidents, at once undermined by the Administration and Congress with the usual support of the media, which exhibit a tolerance for fabrication, even direct self-contradiction, that would have impressed Orwell mightily.
The facts are clear and unambiguous. The February 1989 declaration of the Central American Presidents (Esquipulas IV) was for the most part a reflection of the triumph of the U.S. government and the media in demolishing the August 1987 accords. Thus the crucial "symmetry" provisions were eliminated so that the U.S. terror states were exempt, and Nicaraguan efforts to restore the international monitoring of Esquipulas II, eliminated under U.S. pressure in the session of January 1988, were once again rejected, allowing the U.S. and its clients full freedom to violate any agreement as they like -- confident, and rightly so, that the press would play along. But despite this capitulation to U.S. power, the agreement
firmly repeated the request contained in Numeral 5 of the Esquipulas II Accord that regional and extra-regional governments, which either openly or secretly supply aid to irregular forces [the contras] or insurrectional movements [indigenous guerrillas] in the area, immediately halt such aid, with the exception of humanitarian aid that contributes to the goals of this document,
which are stipulated to be "the voluntary demobilization, repatriation or relocation in Nicaragua and in third countries" of contras and their families. The article of Esquipulas II to which reference is made specified one "indispensable element" for peace, namely, a termination of open or covert aid of any form ("military, logistical, financial, propagandistic") to the contras or to indigenous guerrillas. The Sapoa cease-fire agreement of March 1988 reaffirmed the same principles, designating the Secretary-General of the Organization of American States as the official in charge of monitoring compliance; his letter of protest to George Shultz as Congress at once voted to violate the agreement (while explicitly pledging to observe it) was excluded by the media as improper. It would hardly have been helpful to their task of uniting in applause for the congressional decision to advance the cause of peace by undermining the cease-fire agreement and contradicting the terms of Congress's own legislation. 14
Throughout, the media, and the Western intellectual community generally, successfully concealed what was happening before their eyes, operating much in the style of a totalitarian state, though without the excuse of fear. As regularly in the past, the cost is paid in blood and misery by the unimportant people.
The basic principle, rarely violated, is that what conflicts with the requirements of power and privilege does not exist. Therefore it is possible simultaneously to violate and to support the Esquipulas II accords, the March 1988 cease-fire, and "the Central American peace efforts" narrowed to satisfy Washington's demands in February 1989.
The purpose of the government-media campaign to undermine the peace process is not obscure. It was important to ensure that Nicaragua would remain under at least a low level of terrorist attack within and military threat at the borders, so that it could not devote its pitiful resources to the awesome and probably hopeless task of reconstruction from U.S. violence, and so that internal controls would allow U.S. commentators to bemoan the lack of freedom in the country targeted for attack. The same logic lay behind the Pentagon directives to the proxy forces (explicitly authorized by the State Department, and considered reasonable by liberal doves) to attack undefended "soft targets." The reasoning was explained by a contra defector who was so important that he had to be as rigorously avoided by the independent media as the Secretary General of the OAS: Horacio Arce, chief of contra (FDN) intelligence, whose nom de guerre was Mercenario ("mercenary") -- talk about "freedom fighters" and "democrats" is for the educated classes at home. Contras were accorded ample media attention, more than the Nicaraguan government, but Arce received a different treatment.
Arce had a good deal to say when interviewed in Mexico in late 1988 after his defection. In particular, he described his illegal training in an airforce base in the southern United States, identified by name the CIA agents who provided support for the contras under an AID cover in the U.S. Embassy in Tegucigalpa, outlined how the Honduran army provided intelligence and support for contra military activities, and reported the sale of CIA-supplied Soviet-style arms to the FMLN guerrillas in El Salvador (later offered as "proof" of Cuban and Nicaraguan arms shipments). Arce then explained: "We attack a lot of schools, health centers, and those sort of things. We have tried to make it so that the Nicaraguan government cannot provide social services for the peasants, cannot develop its project...that's the idea." Evidently, the careful U.S. training was successful in getting the basic idea across.
It was never seriously in doubt that congressional liberals and media doves would support measures of economic strangulation and low-level terror guided by these principles until Nicaragua would achieve "democracy" -- that is, until political power passed to business and landowning elites linked to the United States, who are "democrats" for this reason alone, no further questions asked. 15 They can also be expected to lend at least tacit support to further Washington efforts to undermine and subvert any government that fails to place the security forces under effective U.S. control or to meet proper standards of subservience to domestic and foreign business interests.
A government turns to clandestine terror and subversion, relatively inefficient modes of coercion, when it is driven underground by its domestic enemy: the population at home. As for the Reaganite propaganda exercises, they achieved the anticipated success among educated elites. It was scarcely possible to imagine any deviation from the basic principles of the Party Line, however absurd they might be: for example, that El Salvador and Guatemala are (perhaps flawed) democracies with elected presidents, while Nicaragua under the Sandinistas is a totalitarian dictatorship that never conducted an election approaching the impressive standards of the U.S. terror states (the 1984 elections did not exist by Washington edict, faithfully honored in respectable sectors). But the propaganda was less effective, it appears, among the general population. There is reason to believe that the substantial improvement in the general cultural and moral levels set in motion in the 1960s continued to expand, setting conditions that any system of concentrated power must meet.
The Reagan era largely extended the political program of a broad elite consensus. There was a general commitment in the 1970s to restore corporate profitability and to impose some discipline on an increasingly turbulent world. In the U.S. variety of state capitalism, that means recourse to military Keynesian devices at home, now adapted to the decline in U.S. power and therefore with a right-wing rather than liberal slant, the "great society" programs being incompatible with the prior claims of the important people. Abroad, the counterpart is large-scale subversion and international terrorism (whatever term is chosen to disguise the reality). The natural domestic policies were transfer of resources to the rich, partial dismantling of the limited welfare system, an attack on unions and real wages, and expansion of the public subsidy for high technology industry through the Pentagon system, which has long been the engine for economic growth and preserving the technological edge.
Plans reflecting these general elite perceptions of the 1970s were proposed by Carter and implemented by the Reaganites, including military spending, which, overall, largely followed Carter projections. The method adopted was to sink the country into a deep recession to reduce inflation, weaken unions, and lower wages, then to lift it out through deficit spending while organizing the subsidy to high tech industry and shaking a fist at the world, policy choices that commonly go hand-in-hand. It should be recognized that while talk about free trade is fine for editorials and after-dinner speeches, those with a stake in policy decisions do not take it too seriously. The historical evidence shows that the economies that developed and industrialized, including the United States, adopted protectionist measures when these were advantageous. The most successful economies are those with substantial state coordination, including Japan and its periphery, and Germany, where, to mention only one feature, the IMF estimates that industrial incentives are the equivalent of a 30 percent tariff. In the United States, the two major components of the economy that are competitive internationally -- capital-intensive agriculture and high technology industry -- are both heavily subsidized by the state, which also provides them a guaranteed market. These two sectors are also, not surprisingly, the "villains" behind the federal deficit, the Wall Street Journal observes. The other "villain" is the untouchable entitlements; correcting for statistical chicanery, if the Social Security surplus were removed from the budget, as it would be if properly devoted to capital formation for future needs, the deficit would rise by $50 billion, Franco Modigliani and Robert Solow estimate. 16
The right-wing military Keynesians were also highly protectionist, quite apart from the expansion of the protected state market for high-tech production under the euphemism of "defense." The Reaganites initiated a Pentagon-based consortium for semiconductor research and development, and increasingly gave the Pentagon the task of functioning in the manner of Japan's state-corporate planners, organizing R&D in chip and computer design, superconductivity, high-definition television, and other areas of advanced technology. Star Wars fantasies were only one of the methods concocted to induce the public to provide a subsidy to high technology industry, which will reap the profits if there are commercial applications in accord with the doctrines of "free enterprise." Reagan also introduced more import restrictions than the past six presidents combined; the percentage of total imports subjected to quota and restraint agreements doubled from 12% to 24% under Reaganite "conservatism." 17
The results of these policies were apparent by the mid-1980s, and became increasingly so as the presidential transition approached. Expressing a fairly general consensus among economists and business elites, David Hale, chief economist of Kemper Financial Services, observed that "seldom has a new American administration taken office against such a pervasive backdrop of economic gloom as that which now confronts President George Bush," with "the country seemingly awash in a sea of red ink as the Reagan era ends." 18 There was a rapid increase in the federal deficit, and a seventy-year climb to the status of the world's leading creditor nation was quickly reversed, as the U.S. became the world's leading debtor. Hale estimates that "by 1991 the United States will probably have a $1 trillion external debt," a transfer of well over a trillion dollars in a decade, not a mean feat on the part of those who regularly deride "Sandinista mismanagement." The investment balance also swung radically in favor of foreign investors. Private and corporate savings deteriorated to a historic low, relative to GNP. Private wealth rose more slowly than in the late 1970s, and real wages stagnated. Income was sharply redistributed upwards; the rich gained, the poor suffered, as intended. Government economic management led to consumption by the rich, speculation and financial manipulation, but little in the way of productive investment. "Investment is a smaller fraction of the GNP today than it was in the late 1970s, when we were not borrowing abroad," Lester Thurow observes, adding that "our current international borrowing is going into either public or private consumption and will therefore eventually extract a reduction in the future American standard of living." U.S. net investment, relative to GNP, is now the lowest of the big seven industrial countries. Even that low level of investment was maintained only by the large increase in capital imports, Modigliani and Solow note. Military R&D rose from 46% to 67% of federal spending from fiscal years 1980 to 1988, another development that in the long run will severely harm the U.S. economy. These and other factors also contributed to the trade deficit, which may be ineradicable if U.S. investors shift their operations abroad. 19
For the first time in its history, the General Accounting Office issued a study on the perilous state of the economy left by an outgoing Administration. 20 The report by the head of the GAO, the chief federal auditor and a Reagan appointee, outlined the "staggering" costs to be paid because of Reaganite economic mismanagement and environmental destruction. The GAO also noted the rapid rise in homelessness, the deterioration of the limited welfare net for the poor and the middle class, the lowered safety standards for workers, and numerous other consequences of the blind pursuit of short-term gain. There was an aura of prosperity thanks to the willingness of foreign investors to throw a party for the rich -- not, of course, out of charity; they can call in their chips. The same is true of the wealthy at home. Tax reductions induced lending to government by the beneficiaries, who will gain the further benefits. In this way too, fiscal policy constitutes a long-term shift of resources to the wealthy. The "staggering" costs discussed by the federal auditors will be paid by the poor and the working class who have been left out of the consumption binge that economists now blame for the clouds on the horizon, just as the taxpayer is called upon to bail out speculators hoping to profit from deregulation of the Savings and Loan institutions, and probably, before too long, the banks that reaped enormous profits by lending to the wealthy classes and neo-Nazi military rulers who took over much of Latin America with U.S. backing from the early 1960s.
The state managers were selective in the forms of state intervention in the economy that they adopted. Where deregulation could yield short-term profits, it was considered a worthy goal. The Savings and Loan fiasco is one dramatic consequence. The wild abandon of these years has had its effects more broadly in the deterioration of infrastructure, health and education standards, the conditions of the environment, and the general state of the economy. Regulatory programs to encourage energy conservation went the way of plans to develop renewable energy resources, on the pretext that the price of oil would be lowered by the miracle of the free market (the price in practice has generally been administered by the U.S. client regime of Saudi Arabia and the major oil corporations, who maintain production at a level that will ensure prices high enough for rich profits but low enough so as not to encourage a search for alternatives, with U.S. government pressures in the 1980s to lower the price so as to sustain the recovery from the deep recession of 1982). This form of foolishness has ample precedent, and, as in the past, is bound to have grave repercussions. 21
Reaganite foot-dragging on environmental protection is likely to have other long-term effects. The issues are addressed in a scientific study submitted at an October 1990 U.N. conference. The international panel reached virtual unanimity on the conclusion that global warming had occurred over the past century and that the risk of further warming is serious, ranging from significant to near-catastrophic, largely a result of fossil fuel combustion. "The U.S. press has focused on the outlying views [that question the consensus] without pressing hard on justifying them," one American scientist on the panel told Science magazine. A British scientist who is an author of the section on observed climate change added that "In America, a few extreme viewpoints have taken center stage. There are none like that elsewhere." Not a single member of the panel of 200 people agreed with the skeptical views that have received wide attention in the United States, gaining such headlines as "U.S. Data Fail to Show Warming Trend" (New York Times) and "The Global Warming Panic: a Classic Case of Overreaction" (cover of Forbes), and with TV coverage structured to leave the impression that scientific opinion is uncertain and divided. 22
The British press reported that the consensus of the scientists was overridden by the U.N. political committees, under the pressure of the U.S. and Japan. Even Thatcher's England finally abandoned free market fantasies, leaving Washington and its media in the forefront of the effort to delay a constructive response to what might prove to be a major catastrophe. The guiding principle, again, is that government policy should be designed for the short-term gain of the privileged, the basic doctrine of Reaganite conservatism. 23
A congressional study released in March 1989 shows that the average family income of the poorest fifth of the population declined by over 6 percent from 1979 through 1987, meanwhile rising by over 11 percent for the richest fifth; the statistics are corrected for inflation and include welfare benefits. For the poorest fifth, personal income declined by 9.8 percent while rising by 15.6 percent for the richest fifth of the population. One reason is that "more jobs now pay poverty level wages or below," the chief economist of the House Ways and Means Committee commented. The National Association of Children's Hospitals and Related Institutions released a study showing that health care for children in the U.S. had declined to its lowest point in ten years, with appalling statistics. For example, the proportion of low birth weights (which contribute to the unusually high infant mortality rates) is 1.7 times as high as in Western Europe; for Black children the proportion is far worse. 24
The consequences for one wealthy city are outlined by columnist Derrick Jackson of the Boston Globe. He notes that UNICEF ranks the U.S. second to Switzerland in per-capita GNP, and 22nd in infant mortality, with a worse record than Ireland or Spain, a decline from its 1960 position of 10th. For African-Americans, the rate is almost double the U.S. average. In the Roxbury section of Boston, populated largely by ethnic minorities, the rate is almost triple the U.S. average, which "would rank Roxbury, supposedly part of the world's second-richest nation, 42d in infant mortality." Though Boston is one of the world's great medical centers, Roxbury's infant mortality rate is worse than that of Greece, Portugal, the Soviet Union and all of Eastern Europe, and much of the Third World. A Harvard medical school expert on infant mortality, Paul Wise, commented: "The only place where you see social disparities like you see in the US infant-mortality rate is South Africa," the only other industrialized nation without guaranteed health care. Jackson continues:
Long before pregnancy, women are outside the loop on nutrition and health education.... While the leaders in Washington are puffing their chests this week over the tearing down of walls in Europe, vast and growing numbers of African-Americans, Latinos, Cambodians, Haitians and Vietnamese are blocked from hospitals and clinics by lack of money, health insurance or language. 25
Facts such as these, which can be duplicated throughout the country, provide a most remarkable commentary on the variety of state capitalism practiced in what should be by far the richest country in the world, with incomparable advantages, frittered away during the Reagan years even beyond the disgraceful norm.
The spirit of these years is captured by Tom Wolfe, who depicts them as "one of the great golden moments that humanity has ever experienced." So they doubtless were for the important people for whom he speaks. 26 The intended goals of domestic economic management were achieved to a large extent, just as the bipartisan Washington consensus achieved its intended goal of deflecting the threat of democracy and social reform in Central America.
The greatest accomplishment of Reagan is supposed to be that he made us "feel good about ourselves," restoring the faith in authority, which had sadly flagged. As the editors of the Wall Street Journal put it, "he restored the efficiency and morale of the armed services [and] demonstrated the will to use force in Grenada and Libya" -- two military fiascos, but no matter. We were able to kill a sufficient number of people and are once again "standing tall," towering over the upstarts who had sought to overcome us but who succumbed to the cool courage and "the strength of the Cowboy" -- the words of British journalist Paul Johnson, while swooning over the manliness of his idol Ronald Reagan, who had in reality shown the courage of a Mafia don who sends a goon squad to break the bones of children in a Kindergarten. With these achievements, Reagan overcame our "sickly inhibitions against the use of military force," Norman Podhoretz intoned.
Actually, all of this is sham. Frightened little men may strut about in awe of their cowboy hero, but the general public seems more opposed to the resort to violence than ever before and -- I hope, though I do not know -- more committed to acting to block it.
Sponsorship of state-guided international terrorism and economic management designed for short-term gain for the wealthy are the most notable features of the Reagan era, but there are others. In this brief review, I have not even mentioned what may be the most dangerous legacy of Reagan, Thatcher, and the rest. Coming generations are going to face problems that are quite different in scale and complexity from any that have come before. The possible destruction of a physical environment that can sustain human life in anything like its present mode is one of the most dramatic of these, along with the proliferating threat of weapons of mass destruction and continuing conflicts among adversaries with increasing capacity to cause terrible damage. That these problems have a solution is not so obvious. That exaltation of greed to the highest human value is not the answer is quite obvious. Tales about private vices yielding public benefits could be tolerated in a world living less close to the margin, but surely can no longer. By celebrating the ugliest elements of human nature and social life, the Reaganites have set back, by some uncertain measure, the prospects for coming to terms with grave dilemmas and possible catastrophes.
Coming generations will pay the costs. That is the legacy of these years even if we permit ourselves not to see the misery and torture of our victims throughout much of the world.
1 Hertzberg, TNR, Feb. 6, 1989; McGrory, Boston Globe, Feb. 6, 1989.
2 Frederick Z. Brown, Indochina Issues, Nov. 1988. For further reflections on the suffering imposed upon us by the Vietnamese, see Manufacturing Consent, pp. 238f.; Necessary Illusions, 33ff.
3 Wrong, review of Fallows, More Like Us, NYT Book Review, March 26, 1989.
4 LeMoyne, NYT Magazine, April 6, 1986; Szulc, NYT Magazine, May 25, 1980.
5 Kinzer, NYT Magazine, March 26, 1989.
6 French, NYT, May 8, 1990. See Turning the Tide, 150f.
7 NYT, July 19, 1990. See Manufacturing Consent for many similar cases, and details on Cambodia.
8 Friedman, Inventors of the Promised Land (Knopf, 1975), chapter 2; New Republic, Aug. 10, 1987.
9 Kempton, NYRB, April 15, 1982; Annan, letters, NYRB, June 10, 1982.
10 On the effects of the institution of royalty on British culture, see Tom Nairn, The Enchanted Glass (Hutchison, 1988).
11 BG, Feb. 17, 1989, reporting an ABC/Washington Post poll. See references of chapter 12, note 39, on fact versus fraud concerning Reagan's popularity.
12 AP, Dec. 15; Barricada Internacional (Managua, San Francisco), Dec. 22, 1988. Since the reports were on the wires, the suppression was conscious. On the sharp escalation of supply flights from October 1987 and media complicity in suppressing the facts, see my articles in Z Magazine, Jan., March, 1988; and for a review, Necessary Illusions.
13 Weinraub, NYT, March 25; editorial, March 28, 1989; Mark Uhlig, NYT, same day.
14 For details, see Necessary Illusions, and on the February 1989 agreements, the Managua Jesuit journal Env¡o, March 1989 (published at Loyola University, New Orleans).
15 See Necessary Illusions for further details. Needless to say, this prediction in March 1989 proved accurate.
16 James Perry, WSJ, Jan. 5; Modigliani and Solow (both Nobel laureates in economics), letter, NYT, March 12, 1989. Germany, Amsden, "East Asia's Challenge."
17 Andrew Pollack, "America's Answer to Japan's MITI," NYT, business section, March 5; David Hale, "Just Say No: The GOP Abandons Free Markets," International Economy, Jan./Feb. 1989 and "Picking up Reagan's Tab," Foreign Policy, Spring 1989.
19 Robert Cowen, "R&D Spending Under Reagan," Christian Science Monitor, Jan. 20, 1989; Benjamin Friedman, "The Campaign's Hidden Issue," New York Review of Books, Oct. 13, 1988; John Berry, "The Legacy of Reaganomics," Washington Post Weekly; Dec. 19, 1988. Arthur MacEwan, Dollars & Sense, Jan./Feb. 1989; Thurow, "Winners and Losers," BG, March 7, 1989; Economist, March 25, 1989; Modigliani and Solow, op. cit.
20 Robert Pear, "Reagan Leaving Many Costly Domestic Problems, G.A.O. Tells Bush," NYT, Nov. 22, 1988.
21 On earlier phases, see Towards a New Cold War, especially chapters 2, 11. With the Middle East crisis of mid-1990, the problems finally began to receive public attention.
22 "Research News, Science, Aug. 3, 1990.
23 Geoffrey Lean, "UN setback for global warming action plan," Observer, May 20, 1990. See also Craig Whitney, "Scientists Warn of Danger in a Warming Earth," NYT, May 26, 1990, noting U.S. isolation, attributed to "the uncertainties in scientific research on climate change" that have "exasperated" policymakers, according to President Bush. It was reported at the same time that the U.S. was the only country at an international conference on rain forest destruction to oppose setting a year 2000 goal for protection of the world's tropical forests. In April, the U.S. was the only country at a Geneva conference to oppose a fund to help developing countries stop using ozone-depleting chemicals. Participants in an April White House-sponsored conference on global warming allege that the government manipulated the agenda to prevent consideration of mandatory restrictions in greenhouse gases. Jeff Nesmith, NYT news service, May 23, 1990.
24 Martin Tolchin, NYT, March 23; Alexander Reid, BG, March 2, 1989.
25 Jackson, BG, Dec. 24, 1989.
26 BG, Feb. 18, 1990.
27 Editorial, WSJ, Jan. 19, 1989; Johnson, Sunday Telegraph, June 1, 1986. Johnson and Podhoretz are exulting over Libya and Grenada, respectively. A notorious apologist for terrorism and atrocities, Johnson also applauded Israel for "having the moral and physical courage to violate a so-called sovereign frontier" by invading Lebanon in 1982 to excise "the terrorist cancer" -- with an estimated 20,000 or more killed, mostly Lebanese and Palestinian civilians (quoted by Wolf Blitzer, Jerusalem Post, June 29, 1984). In the real world, the invasion had nothing whatsoever to do with "the terrorist cancer," except insofar as Israel hoped that the attack might return the PLO to the terrorist policies Israel preferred by undermining its self-restraint in the face of repeated and murderous Israeli cross-border attacks, and terminating PLO efforts to move towards a peaceful political settlement, intolerable to both major Israeli political coalitions. There was ample evidence on these matters from Israeli sources at the time Johnson produced these typically inane comments. See Fateful Triangle, Pirates & Emperors, and Necessary Illusions.