Economic Stockholm Syndrome? Do Americans Still Worship "Job Creators”?

The billionaires robbed us blind for 44 years — and we thanked them for it... Will it still work for the GOP?

We’re about to embark on what will be one of the most interesting political, sociological, and media experiments of our lifetimes. It’ll answer the question: “Can Republicans still get away with lying to their own voters?”

Forty-four years ago, the Reagan administration — after winning the White House because they cut a criminal, treasonous deal with Iran’s Supreme Leader Ayatollah Ruhollah Khomeini to hold the American hostages until after the 1980 election — decided to take a second massive chance at deceiving the American voters.

Today’s rightwing media machine didn’t exist at the time; there was no Fox “News,” no 1,500 rightwing radio stations, no rightwing bloggers and podcasters getting millions from Russia and neofascist foundations, no rightwing billionaire owners of social media and the nation’s biggest newspapers and TV networks, so the risk of simply and blatantly lying to the public was far greater than today.

But in 1981 Reagan and the GOP decided — after 48 continuous years of Americans embracing both the New Deal’s programs and it’s top 90%-74% income tax bracket for the morbidly rich — that the risk was worth it. After all, if their bet paid off the rewards (that would come as future campaign donations) would be in the hundreds of billions.

So, they rolled out one of the most audacious lies, the biggest defiance of simple math and common sense, in the lifetime of most Americans: “Tax cuts pay for themselves and, as a bonus, increase prosperity for average working people.”

At the time, everybody knew it was BS.

— America had been paying down the debt we ran up fighting fascists in World War II so effectively that our national debt was less than one trillion dollars in 1980.

— CEOs only took a maximum of about 30 times what their workers did (to avoid that top tax bracket), meaning there was plenty left over in the company to pay workers well, provide generous benefits and retirements, and invest in new factories and products. (The Stock Buyback Scam wasn’t legalized by Reagan until 1982.)

— Most thoughtful working people understood that their paychecks were based on “after-tax” income; when taxes went up, so did pay (as they’d seen), and when taxes went down employers would freeze or even cut worker’s pay because the tax cut worked as if it were a pay raise. (This is why wages have been stagnant all these years, reflecting repeated tax cuts.)

— Americans also understood that when the government went into debt, it issued IOUs called Bonds or Treasuries that paid interest to the mostly wealthy people who held them, and that the average American family was then on the hook for $872 a year to fund those then-13% interest payments. (Today, the average American household owes $7,812.50 a year to fund the interest on our national debt.)

— The experience with Republican tax cuts in the “Roaring 20s” that exploded wealth at the top and then led straight to the Republican Great Depression starting in 1929 taught people back then about the danger of cutting taxes on the wealthy.

Nonetheless, Reagan’s team and the GOP thought they could get away with it if they could just come up with an appealing “story” to explain how tax cuts for billionaires would actually benefit the average working family. So, they went to work and came up with a project worthy of Hans Christian Andersen (author of The Emperor’s New Clothes).

— Rich people aren’t just rich people, they told America; they’re also members of a noble class among us called “job creators.”

— Ignoring the fact that the most vibrant part of the American economy at the time was small, family-owned businesses (now mostly put out of business because Reagan stopped enforcing our anti-trust laws in 1983), they promoted the slogan, “No poor person ever gave me a job.” It was endlessly echoed by conservative commentators on weekend TV shows and in newspapers.

— Republicans claimed that if these morbidly rich “job creators” were just given a few hundred million additional dollars every year via massive tax breaks, dropping the top income tax bracket from the then-74% down to 28%, those “job creators” would dutifully use that cash to build new factories and pay their workers even better.

— They brought in a handful of hack economists who knew how to do good TV to argue that there was a magical “curve” showing that as taxes went down, government revenue would go up. Cutting taxes could end the nation’s deficit! The media gobbled it up.

— They lionized Chrysler’s Lee Iacocca for only taking $1 in salary in 1980, as if every CEO in America was willing to sacrifice for the good of their company and their employees. (In fact, Iacocca had almost a million dollars in “non-paycheck income” from Chrysler that year that put him on the Forbes list of the 100 highest paid CEOs in America.)

— Finally, the GOP promoted, via Reagan’s Budget Director David Stockman, a “new” theory they termed “trickle down” that claimed that when rich people got billions in tax giveaways they’d nobly refuse to invest that money in the market or stash it in their money bins, but instead would “revive the economy” by “buying more stuff,” thus creating more jobs in manufacturing, distribution, and retail. (Stockman later said, in a moment of candor on my radio program, “Supply-side economics was always a Trojan horse to bring down the top rate.”)

Back in the 1980s, this sextet of deceit worked; most Americans went along with Reagan’s mind-boggling tax cuts. Amazingly, the lie still worked in the early 2000s when George W. Bush repeated Reagan’s magic trick and again blessed his wealthy peers with trillions more in tax gifts while insisting the cuts would reinvigorate the economy via the shamanic “job creators.”

But this year, things got weird: Republicans and their rightwing media machine aren’t even trying to promote their lies from the ’80s. At least not seriously.

— When White House Press Secretary Karoline Leavitt said, “This bill does not add to the deficit. In fact, according to the Council of Economic Advisors, this bill will save $1.6 trillion,” nobody took her seriously and her lie wasn’t even extensively quoted in the media. (Politifact labeled it totally false.)

— When “Christian” House Speaker Mike Johnson argued that kicking millions of mostly children and elderly people off Medicaid, gutting SNAP food benefits, and taking a $500 billion cut out of Medicare while gifting America’s billionaires with over $4 trillion of borrowed money would provide “rocket fuel” for the US economy, nobody even bothered to echo his sentiment.

Republicans, instead of promoting Reagan’s old schtick, are basically just telling the American people, “Screw you; get over it. This is what we do.”

It has pundits across the political spectrum scratching their heads. Why aren’t Republicans even trying to sell their tax cuts?

— Is the billionaire-owned rightwing media machine now so powerful that Republicans can today simply ignore voters, not even bothering to offer a rationalization for their tax cuts, and America will continue to elect them?

— Has Reaganomics so gutted the American middle class (taking us from 65% of us in the middle class with a single income in 1980 to only 47% of us with two people working full time) that people no longer have the free time to pay attention to the news?

— Since Clinton deregulated newspaper, radio, and TV station ownership in 1996 by largely ending the ownership cap and local control limits, has the destruction of the nation’s newspapers made us so poorly informed that most people really have no idea what’s going on? (Over 200 U.S. counties now have no local newspaper, and nearly 1,500 counties have only one local news outlet; more than two-thirds of local daily newspapers are now owned by out-of-state operations, many of them politically conservative hedge funds.)

— Have Republicans and their rightwing media actually succeeded in getting Americans to identify with the rich, presumably in the hopes that they’ll one day win the lottery?

— Or has the lie been told so often that Republican voters still believe it, a sort of Economic Stockholm Syndrome, so GOP politicians don’t even need to repeat it? (Even the famously-conservative Financial Times is skeptical of that one, as you can see from this headline: “Trump’s tax bill triumph could be a poisoned chalice for Republicans.”)

The fate of this bill in the Senate — and the midterm elections next year — will tell us a lot about whether the old reliable Republican bullshit still works.

Stay tuned; this is getting fascinating.

What do you think? Comment below:

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