Like a lung cancer patient reaching for a pack of smokes, the Bush administration has greeted the latest run of gloomy economic news -- Tuesday's stock market plunge, a ballooning federal deficit, flagging consumer confidence, mounting unemployment, not to mention those pictures of Dennis Kozlowski literally wrapping himself in the flag in his yacht over Labor Day -- with a nerve-settling puff of its favorite brand of economic relief: tax cuts for the rich. And considering the imprudence of that idea, maybe they're smoking something a little stronger than Marlboros.
According to the White House, the proposals being considered include tax incentives to encourage stock market investment and capital gains tax cuts -- on top, of course, of the massive impending tax cuts for the wealthiest Americans already signed into law. Treasury Secretary Paul O'Neill defined the party line this way earlier this summer: "This is how we create economic prosperity -- not by strangling people with interference and regulation and punishing restrictions on trade and job creation, but by opening the world up."
In other words, meet the new new economy, same as the old new economy. Forget the inconvenient fact that deregulation hasn't worked -- that it's given us an airline industry on the verge of collapse, higher electric and cable bills, a savings and loan disaster, to say nothing of Enron, WorldCom, Adelphia, AOL, Xerox, Merrill Lynch, et al. -- the invisible hand is still the magical answer to all our woes.
How did the free-market ideology of the Reagan revolution come to be the political consensus of our times? How did we get suckered by the fairy tale that as long as people kept shopping, the market could keep our prosperity going as far as the eye could see? And that by voting with our credit cards, we could spread the gospel of prosperous democracy to any corner of the earth where American products were made or consumed. Like all fairy tales, it's a nice story. But it's time to acknowledge that this one didn't have a happily-ever-after ending.
Over the last 20 years, Americans have been doused with regular sermons on the supposed correlation between unregulated markets and higher standards of living. In the process, the American people were demoted from citizens to consumers, and sold a bill of goods about how the almighty market was the essential foundation of democracy. Accepted notions of public protections -- of the environment, of workers, of the poor -- were scrapped, cast out as superannuated relics. Compassion became the 8-track player of public policy.
In the course of selling us on buying, the market-worshippers shredded the modern social contract, the hard-fought consensus that had emerged since the New Deal, and which ordered our political priorities, our communal concern for the most vulnerable and our disapproval of huge inequalities. We were now supposed to believe that all that could be left up to the soulless, self-correcting calculus of supply and demand. The free market had become the People's Market and would, of course, take care of the people.
Once the province of Republican supply-siders, this all-encompassing faith was warmly embraced in the '90s by New Democrats. And some old ones, too. Even Jesse Jackson rang the opening bell at the New York Stock Exchange and created a Wall Street Project. And according to a representative of the NYSE, there is "no shortage" of celebrities willing to ring the bell, smiling and applauding even after a 300-point drop.
The media also did their part, hyping stories that made it seem like everyone was making money investing. Who can forget the Beardstown Ladies, those bestselling, stock-pickin' grannies from Illinois who were supposedly making a 23 percent return in the market? Or all those Millionaires Next Door -- like Anne Scheiber, the lowly government auditor who, by patiently investing in stocks, turned $5,000 into a $22 million fortune?
Stressed out about retirement? Your kids' college tuition? A family health emergency? Not to worry! The market would take care of all that. Even being downsized could be made fun and profitable. After AT&T laid off 40,000 workers in January 1996, hedge-fund manager Jim Cramer wrote a cover story for the New Republic titled "Let Them Eat Stocks." In it he proposed a simple solution. "Just give the laid-off employees stock options," he exulted, "let them participate in the stock appreciation that their firings caused." And why not toss in a year's worth of Turtle Wax while you're at it, Jim?
The future that Wall Street had dreamt of for decades -- free of pesky regulators, snooping politicians and profit-sapping social activists -- had finally arrived in a golden, irrationally exuberant dawn. Just as communists had promised a utopia in which the state would wither away, the free-market ideologues in control in the '90s promised us that we would reach Nirvana when all government intervention would, well, just wither away.
We would then find ourselves in a glorious Brave New World. Marxists and MSNBC stock analysts together at last, holding hands and feverishly chanting: "From each according to his culpability, to each according to his greed."
It would take a while -- and the fall of Ken Lay, Bernie Ebbers, Sam Waksal, et al. -- before the invisible hand was exposed as a pickpocket. But even after the free-market parade had to be called off on account, not of rain, but of fraud, we have begun to hear the trickle-down marching bands warming up in the distance, ready to play their familiar siren songs. It's time we resuscitated Mark Russell's definition of trickle-down as "something that benefits David Rockefeller now and Jay Rockefeller later." Or, to be a bit more current, George Herbert Walker Bush then, and George Walker Bush now.
There's another blast from the Reagan past that is a little more relevant to most Americans' current financial health than trickle-down dreams. Ask yourself, my friends, are you better off today, after all that tax cutting and deregulating, than you were four years ago?