For those of you reading this commentary and have lived through the 1980s, I would like to refresh your memories of what transpired through the Ronald Reagan term regarding our volatile economy.
During Jimmy Carter's tenure as president, we faced historic inflation mainly because the price of fuel doubling in a span of about a year. It goes without saying that if something had to be hauled, the prices of goods would follow suit. The result would be layoffs in the workforce until prices stabilized.
With Reagan's election, we had the implementation of a new term, trickle down economics, which basically means the millionaires and billionaires would be given huge tax breaks, with the assumption that these tax breaks would bolster the economy and create jobs. What it actually created was more millionaires. This was the beginning of corporations using their newfound wealth to invest in countries with wages less than half our guaranteed minimum, no workplace safety regulations, child labor and overtime laws with no union representation. It started with the clothing industry and gradually grew into an all out exodus of manufacturing of big ticket items, such as washers, cars, etc.
There's those with selective memories that want to blame Bill Clinton's NAFTA for all of this. I'll be the first to admit that this did not help, but Reagan was the original architect of this trend. His trickle-down policy resulted in the stock market crash 30 years ago last month.
After his two terms expired, his former vice president and President-elect George H. W. Bush had this thrown in his lap. If the Democrats had ran any other candidate besides Michael Dukakis, they could have won. Bush, being more pragmatic than his former boss, realized that in order to succeed he had to conform more the the moderates. Which, along with his "Read my lips, no more taxes" speech, cost him the following election.
Fast forward eight years later, George W. Bush didn't listen to his dad concerning trickle down. He too emphasized huge tax breaks for the rich, along with a highly questionable war in Iraq, which resulted in a devastating recession. If it hadn't been for Social Security and unemployment benefits, it would have been a full-blown depression.
Now we're faced with a three-peat of the Reagan legacy. The Republican-controlled Congress is gearing up for a third run at this failed policy. Just ask Reagan's former budget director David Stockman and former Federal Reserve Chairman Allen Greenspan who served under both Democratic and Republican Presidents. Both admitted years later that this was a mistake.
The third time isn't always a charm.