Southern Republicans play their trump card – against Reaganomics

Former President Ronald Reagan
Former President Ronald Reagan AP

Donald Trump has swept the South, winning primaries in every state of the old Confederacy except Texas. And The Donald owes it all to The Ronald.

Ronald Reagan’s legacy – Reaganomics – has defined U.S. economic policy for 35 years. Its four corner stones are cutting taxes, cutting regulations, busting unions and globalizing trade. What has this done for Southern voters?

Cutting taxes for billionaires and cutting regulations on the banks and industries they own have boosted their profits and wealth, while busting unions and approving dubious trade deals have strangled wages and jobs. These moves were sold as ways to make life better for working families. But many of those families – once called “Reagan Democrats” – are now in revolt against the Republican establishment and have voted for Donald Trump.

In the 35 years before Reaganomics, an average worker’s income almost doubled after accounting for inflation. In the 35 years since, wages have been little better than flat for most employees. But the share of wages going to the top 1 percent still managed to double, as have American productivity and profits. But those vast profits haven’t been shared with the workers who helped create them.

While the average working families’ wages were flat, CEO pay increased over 900 percent. Shares in the stock market doubled in value. Over time these benefits add up: In a nation of 320 million, the property and wealth of the richest 32,000 now equal that of the poorest 290 million Americans.

But as with Reaganomics-inspired profits, the suffering has also been lopsided. The only real increases the Southern white working class has seen since 1980 are counted in student debt, bankruptcies due to medical bills, veterans coming home with PTSD and deaths from overdosing on pain meds. This has created the kind of financial stress that leaves many voters looking for easy answers about immigrants and Muslims, rather than the true story about jobs and wages.

Some economists disagree about the impact of Reaganomics. So let’s take their opinions out of it. Instead, let’s ask a question that a fifth-grader with a smart phone could answer. What do the Great Depression of 1929 and the Great Recession of 2007 have in common? Answer: They were each preceded by a two-term Republican president abetted by a solid Republican Congress focused on free trade, union busting, tax cuts for the wealthy and cutting regulations on big business.

It isn’t news that the billionaire class has grown under Ronald Reagan’s economic policies while the middle class has shrunk. But the latter is not a global phenomenon. Middle class income in Canada is now higher than in America (when both are measured in American dollars). And in England, their middle class now forms a larger share of the population than does ours.

Conservative parties have been in power in both countries. But as in other industrial democracies, conservative parties are often to the left of our Democratic party. In Canada and England, for instance, their conservative parties support single-payer health care, infrastructure spending, bank regulation and other policies we would associate with the Democrats. Yet their middle classes are surpassing ours. Perhaps the Canadians should be the ones building a wall (but could they get us to pay for it?)

Reaganomics has worked wonderfully well for those whose tax refunds let them write big checks to Republican candidates. Research shows that the bulk of that money comes from just a few hundred wealthy families. But for those who’ve been supplying millions of votes to those same candidates, Reaganomics has been a disaster. The resulting economic distress of the white working class, especially in the South, is the rising tide that has lifted Donald Trump’s yacht.

Southerners aren’t fools, but have we been played for fools? If Reaganomics hasn’t improved our lot in that time, how much longer shall we wait? Of course the billionaires still support Reaganomics. It has put money in their pockets. But do they live in the struggling rural counties that have supplied the votes for these policies? No. They live in urban counties ruled by Democrats who invest in education and infrastructure; where jobs, wages and quality of life are improving. Yes, you can still see the billionaires in rural counties. If you look up as they fly over in their private jets.

Wages are flat, and the middle class has shrunk while Reaganomics has ruled our economy. The Southern white working class realizes something is wrong. Yet who got our votes? A Republican billionaire.

Frank Hyman of Durham serves as policy analyst for Southern Working Class Consulting.