Why the "Reagan Revolution" Scheme to Gut America's Middle Class is Coming to an End

The signal was in Biden's speech, but entirely missed by the press

Alex McCarthy at Unsplash

As we stand on the edge of the end of the Reagan Revolution, an end signaled by one particular phrase in President Biden‘s speech in early March (which I’ll get to in a minute), its really important that Americans understand the backstory.

Reagan and his conservative buddies intentionally gutted the American middle class, but they did so not just out of greed but also with what they thought was a good and noble justification.

As I lay out in more granular detail in my new book The Hidden History of American Oligarchy, back in the early 1950s conservative thinker Russell Kirk proposed a startling hypothesis that would fundamentally change our nation and the world.

The American middle-class at that time was growing more rapidly than any middle-class had ever grown in the history of the world, in terms of the number of people in the middle class, the income of those people, and the overall wealth that those people were accumulating. The middle-class was growing in wealth and income back then, in fact, faster than were the top 1%.

Kirk postulated in 1951 that if the middle-class got too wealthy, we would see an absolute collapse of our nation’s social order, producing chaos, riots and possibly even the end of the republic.

The first chapter of his 1951 book, The Conservative Mind, is devoted to Edmund Burke, the British conservative who Thomas Paine visited for two weeks in 1787 on his way to get arrested in the French revolution. Paine was so outraged by Burke’s arguments that he wrote an entire book rebutting them titled The Rights Of Man.

Burke was defending, among other things, Britain’s restrictions on who could vote or participate in politics based on wealth and land ownership, as well as the British maximum wage.

That’s right, maximum wage.

Burke and his contemporaries in the late 1700s believed that if working-class people made too much money, they would challenge the social order and collapse the British form of government. So Parliament passed a law making it illegal for employers to pay people over a certain amount, so as to keep wage-earners right at the edge of poverty throughout their lives. (For the outcome of this policy, read pretty much any Dickens novel.)

Picking up on this, Kirk’s followers argued that if the American middle-class got too rich there would be similarly dire consequences. Young people would cease to respect their elders, women would stop respecting (and depending on) their husbands, and minorities would begin making outrageous demands and set the country on fire.

When Kirk laid this out in 1951, only a few conservative intellectuals took him seriously. People like William F. Buckley and Barry Goldwater were electrified by his writings and line of thinking, but Republicans like then-President Dwight Eisenhower said, of people like Kirk and his rich buddies, “Their numbers are negligible and they are stupid.“

And then came the 1960s.

In 1961, the birth control pill was legalized and by 1964 was in widespread use; this helped kick off the modern-day Women’s Liberation Movement, as women, now in control of their reproductive capacity, demanded equality in politics and the workplace. Bra burning became a thing, at least in pop culture lore.

By 1967, young people on college campuses we’re also in revolt; the object of their scorn was an illegal war in Vietnam that President Johnson had lied us into. Along with national protest, draft card burning was also a thing.

And throughout that decade African Americans were increasingly demanding an end to police violence and an expansion of Civil Rights. In response to several brutal and well-publicized instances of police violence against Black people in the late 1960s, riots broke out and several of our cities were on fire.

These three movements all hitting America at the same time got the attention of conservatives and Republicans who had previously ignored or even ridiculed Kirk back in the 1950s. Suddenly, he seemed like a prophet.

The Republican/Conservative “solution” to the “crisis” these three movements represented was put into place in 1981: the explicit goal of the so-called Reagan Revolution was to take the middle class down a peg and end the protests and social instability. 

Their plan was to declare war on labor unions so wages could slide back down again, end free college all across the nation so students would be in fear rather than willing to protest, and increase the penalties Nixon had already put on drugs so they could use those laws against hippy antiwar protesters and Black people.

As Nixon‘s right hand man, John Ehrlichman, told reporter Dan Baum: “You want to know what this was really all about? The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: the antiwar left and Black people. Do you understand what I’m saying? We knew we couldn’t make it illegal to be either against the war or Black, but by getting the public to associate the hippies with marijuana and Blacks with heroin and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.“

While it looks from the outside like the singular mission of the Reagan Revolution was simply to help rich people and giant corporations get richer and bigger, the ideologues driving the movement actually believed they were helping to restore safety and stability to the United States, both politically and economically.

The middle class was out of control, they believed, and something had to be done. Looking back at the “solutions” England used around the time of the American Revolution and advocated by Edmund Burke and other conservative thinkers throughout history, they saw a solution to the crisis...that also had the pleasant side effect of helping their biggest donors and thus boosting their political fortunes.

Reagan massively cut taxes on rich people, and raised taxes on working-class people 11 times.

For example, he put a tax on Social Security income and unemployment income, and put in a mechanism to track and tax tips income all of which had previously been tax-free but were exclusively needed and used by middle-class people.

He ended the deductability of credit-card, car-loan and student-debt interest, overwhelmingly claimed by working-class people. At the same time, he cut the top tax bracket for millionaires and multimillionaires from 74% to 25%. (There were no billionaires in America then, in large part because of previous tax policies; the explosion of billionaires followed Reagan’s, Bush’s and Trump’s massive tax cuts on the rich.)

He declared war on labor unions, crushed PATCO in less than a week, and over the next decade the result of his war on labor was that union membership went from about a third of the American workforce when he came into office to around 10% at the end of the Reagan/Bush presidencies. It’s at 6% of the private workforce now.

He and Bush also husbanded the moribund 1947 General Agreement on Tariffs and Trades (GATT, which let Clinton help create the WTO) and NAFTA, which Clinton signed and thus opened a floodgate for American companies to move manufacturing overseas, leaving American workers underemployed while radically cutting corporate labor costs and union membership.

And, sure enough, Reagan’s doubling-down on the War on Drugs was successful in shattering Black communities.

His War on Labor cut average inflation-adjusted minimum and median wages by more over a couple of decades than anybody had seen since the Republican Great Depression of the 1920s and ’30s.

And his War on Colleges jacked up the cost of education so high that an entire generation is today so saddled with more than $1.5 trillion in student debt that many aren’t willing to jeopardize it all by “acting up” on campuses.

The key to selling all this to the American people was the idea that the US shouldn’t protect the rights of workers, subsidize education, or enforce Civil Rights laws because, “conservatives” said, government itself is a remote, dangerous and incompetent power that can legally use guns to enforce its will.

As Reagan told us in his first inaugural, government was not the solution to our problems, but instead was the problem itself.

He ridiculed the formerly-noble idea of service to one’s country and joked that there were really no good people left in government because if they were smart or competent they’d be working in the private sector for a lot more money.

He told us that the nine most frightening words in the English language were, “I’m from the government, and I’m here to help.”

Throughout the 1970s and 1980s, billionaires associated with the Republicans built a massive infrastructure of think tanks and media outlets to promote and amplify this message.

It so completely swept America that by the 1990s even President Bill Clinton was saying things like, “The era of big government is over,” and “This is the end of welfare as we know it.” Limbaugh, Hannity and other right-wing radio talkers were getting millions a year in subsidies from groups like the Heritage Foundation. Fox News today carries on the tradition.

Which brings us to President Joe Biden’s speech.

Probably the most important thing he said in that speech was almost completely ignored by the mainstream American press. It certainly didn’t make a single headline, anywhere.

Yet President Biden said something that Presidents Clinton and Obama were absolutely unwilling to say, so deeply ingrained was the Reagan orthodoxy about the dangers of “big government” during their presidencies.

President Biden said, “We need to remember the government isn’t some foreign force in a distant capital. No, it’s us. All of us. We, the people.“

This was an all-out declaration of war on the underlying premise of the Reagan Revolution. And a full-throated embrace of the first three words of the Constitution, “We, the people.”

In March, 1933, President Franklin Roosevelt talked about the “mysterious cycle in human events.” He correctly identified the end of the Republican orthodoxy cycle of the 1920s, embodied in the presidencies of Harding, Coolidge and Hoover, of deregulation, privatization and tax cuts. 

(Warren Harding in 1920 successfully ran for president on two slogans. The first was “A return to normalcy,” which meant dropping Democratic President Woodrow Wilson’s 90% tax bracket down to 25%, something Harding did in his first few years in office. The second was, “Less government in business, more business in government.” In other words, deregulate and privatize. These actions, of course, brought us the Great Crash of 1929 and what was known for a generation as the Republican Great Depression.)

Americans are now watching, for the third time in just 30 years, a Democratic president clean up the economic and social debris of a prior Republican presidency.

They’re starting to figure out that crushing the middle-class didn’t produce prosperity and stability, but instead destroyed tens of millions of people’s lives and dreams.

And they’re seeing the hollowness of the Republican’s promises as we all watch, aghast, as the GOP scrambles to mobilize the last remnants of its white racist base, at the same time waging an all-out war on the ability of Black, young and working-class people to vote. 

President Biden’s speech was the beginning of the end for the Republicans, although it appears only a few of them realize it.

Let’s hope the damage the GOP has done over the last 40 years isn’t so severe that America can’t be brought back from the brink of chaos and desperation.

Hopefully, it’s a new day in America.