The Australian lies about the Reagan years
Gerard Jackson
First published in The New Australian 17 March 1997
To suggest that Peter Wilson (Clinton’s man on The Australian) had a hatred of Reagan bordering on the pathological would not, I think, be an overstatement. Once again he used his position to denigrate the Reagan presidency. Once again he lied. Sneeringly referring to Reagan as the “smiling cowboy,” Wilson then accused Gingrich (another Wilson hate-symbol) of “exaggerating the Reagan legacy”. What seems to have provoked Wilson’s anti-Reagan bile is that Reagan supporters took offence at a survey that ranked Reagan in the “low-average” category, putting him one place behind Clinton. The same supporters, equally angered by the 300 page Ranking the Presidents that gave Reagan a lousy ranking of 39, accused the surveys authors of left-wing bias.
The Heritage Foundation, a free-market think tank, was a particularly strong critic. Left without a sound counter-argument, Wilson dismissed its criticism on the usual left-wing grounds that the foundation is “right-wing”. This beats having to tell The Australian’s readers that the foundaton's charges of left-wing bias were well-founded.
The survey was conducted by Arthur J. Schlesinger Jnr (self-appointed keeper of the Kennedy flame) who deliberately built a bias into the survey by overwhelmingly selecting authors noted for their anti-Republican sentiments such as Alan Brinkley, Doris Goodwin, Eric Foner and Robert Dallek. Republicans were, as expected, virtually excluded. For the survey to have any credibility it would have to include the likes of Kissinger, Kirkpatrick, Buckley, Kristol and Shultze. One can easily imagine the scorn and contempt that Wilson and his ilk would have poured on a Republican survey that ranked Roosevelt or Truman as average.
In response to Schlesinger’s rigged findings Policy Review: The Journal of American Citizenship asked prominent experts on the presidency what they thought of the survey. Kissinger called Reagan a near-great president who “hastened victory in the Cold War”. Kirkpatrick accused Schlesinger’s experts of prejudice and praised Reagan for “demonstrating the superiority of free markets and free societies over socialism”. Former executive editor of the New York Times, A. M. Rosenthal, declared that: “There was a communist empire and it was evil. . . historians will judge him [Reagan] as near great for his contribution to the downfall of the evil empire.”
No wonder these, and others like them, were excluded from the survey. Yet Wilson would have his readers believe that Schlesinger’s rigged results were based on honest assessments that only right-wingers would question. As for Ranking the Presidents, it too has no credibility given the overriding left-wing prejudice of most of the contributors.
In his malevolent pursuit of Reagan, Wilson tried to downplay Reagan’s role in the down fall of communism by using the cheap rhetorical trick of overstating his role. Reagan’s supporters rightly claim that he hastened the end of the Cold War, not that he alone won it. If Wilson was an honest journalist instead of a left-wing political bigot he would have reminded his readers of the amount of vile criticism that Reagan had to endure from the Left, especially in the media, in implementing his successful anti-Soviet policies. (If Wilson had only a small fraction of Reagan’s fortitude and determination he might even become half a man instead of what he is).
Of course, Wilson had to raise spectre of scandals suggesting that Reagan's administration was the most corrupt in modern history. This is coming from a journalist who treats the sleaze and scandal oozing from the Clinton administration as mere peccadilloes. The truth, and he knows it, is that if Clinton had been a Republican he would have been impeached by now. The role that the American media has played, including Wilson, in ignoring or downplaying the Clinton scandals has been outrageous. (For example, what happened to the Iranian arms sales to Bosnia scandal?) However, the stench from the White House is becoming so overpowering that only someone as insensitive to Clinton’s turpitude as Wilson could ignore it.
Finally, Wilson had to let loose on Reagan's economic record. He claimed that the reason for growth under Reagan was that he tripled the national debt and slashed taxes without first assuring that Congress would cut taxes. These statements are outrageous lies. During the Reagan presidency the debt increased in dollar terms by about 150 per cent — a far cry from Wilson's tripling of debt; as a percentage of the level of debt in 1982 the increase was about 50 per cent. But as a proportion of GDP, usually regarded as the best measure of indebtedness, the increase in debt was only 20 per cent of GDP. Furthermore, the deficit steadily declined under Reagan, falling from 6.2 per cent of GDP in 1983 to 2.9 per cent in 1989, a 53 per cent drop.
The other lie is that Reagan’s tax cuts damaged the economy. Let us first look not at tax cuts but at tax revenue. In 1980 the federal government collected $517 billion in taxes; by 1990 tax receipts had risen to $1.031 trillion. From 1974-81 real federal revenues grew by 24.4 per cent, fuelled by fiscal drag caused by severe inflation. Yet federal revenues grew by 24 per cent following Reagan's tax cuts. Furthermore, revenue only grew by about 19 per cent from 1990-97, even though Bush and Clinton had raised taxes to increase revenue; and if revenues had increased during this period at the rate as they did after the Reagan tax cuts the deficit would now be down by nearly $50 billion dollars.
What is particularly interesting is the structure of Reagan's tax revenues. In 1980 the lowest 20 per cent paid 19.5 per cent of taxes; this had fallen to 7 per cent by 1988. The $20,000 — $50,000 group saw their tax contribution fall from 49.4 per cent 1980 to 30.4 per cent in 1988. The contribution of those on $50,000 &$151 $200,000 rose significantly from 23.6 per cent to 38.3 per cent while people earning 200,000 plus saw their contribution soar from 7.5 per cent to 24.3 per cent.
The surge in tax revenue that followed Reagan's tax cuts does not surprise those of us with some knowledge of economic history as well as sound economic theory. The phenomenon also occurred with Mellon’s 1921, 1924, and 1926 tax cuts. Mellon succeeded in slashing the top rate from 73 percent to 25 percent; subsequently personal income tax revenue jumped from $719 million in 1921 to $1,160 million in 1928, a rise of more than 61 percent. Furthermore, the total tax burden carried by the rich ($50,000 plus) leapt dramatically from 44 per cent in 1921 to 78.4 per cent in 1928. Precisely the same thing happened with the Kennedy cuts that saw tax revenues rise by 62 percent between 1961 and 1968. So much for Wilson’s sneering criticism of Reagan's “tax cutting mania”.
All of which brings us to spending. Critics of the Reagan years make a point of completely ignoring the role that the Democrat-controlled Congress played expanding the deficit. Congress has the power and the right to revise and even ignore presidential budget requests — which it frequently did during the Reagan years while simultaneously gutting Reagan’s rescissions. Any examination of the period will show that deficit spending would have been much lower if Congress had only confined itself to Reagan’s budget requests. In fact, average annual budget deficits would have been $30 billion less if Congressional Democrats had not increased spending.
It is perfectly clear that Congress (read Democrats) added substantially to White House spending requests during the Reagan administration. However, this irresponsible pattern of fiscal misbehaviour was typical of a Congress that outspent every president from Gerald Ford to George Bush. In short, the deficit was caused by a Democratic-controlled Congress raising spending and not by Reagan’s tax cuts.
Only when the Republican captured the House was fiscal responsibility reimposed, which brings us to Clinton. He is the first president in over 20 years to try and outspend Congress. From 1993-1997 his total of new spending requests came to $370 billion. Of course, Clinton’s media mates, like Wilson, made sure that he was accorded the credit for the economic results of the Republican controlled House' more responsible fiscal behaviour.
Finally we are left with Wilson’s charges that the annual trade deficit under Reagan zoomed from $16 billion to $116 billion. My figures, however, show that the trade deficit increased by a factor of 4 from 1982-1987, not an annual factor of 10. So what? Trade deficits are never bad in themselves nor can they ever harm a country. Only economic illiterates think otherwise. Jacques Rueff, an eminent French economist, even suggested that foreign trade statistics be abolished, arguing that: “The duty of governments is to remain blind to trade statistics. . . .” The extent of Wilson’s economic ignorance is brought home by his claim that the whole process was due to cutting taxes without cutting spending anyway. This alone shows that he does not even have a basic grasp of vulgar Keynesianism.
When it comes to facts an honest reporter won’t bend ‘em, twist ‘em or omit ‘em, unlike Wilson. If The Australian has any respect for the truth, let alone its readers, it will sack Wilson. Of course it won't.
Note: Wilson was promoted on his return from America.
BrookesNews.Com
Monday 3 March 2007