This is part three of a four part series that ties our current economic crisis to the thirty year buildup of defense spending since the Reagan Presidency. The earlier parts can be found here, here and here.
The neoconservative narrative on the Ronald Reagan Presidency is that he raised our military spending and sent the Soviet Union into an arms race they could not afford. On their knees economically, they were forced to give up their empire. Thus the Berlin Wall came down.
But who really brought down the Berlin Wall? I say it was not Ronald Reagan and his $800 billion military buildup, but rather a courageous Pope named John Paul II who in 1979 journeyed to his native Poland, embraced the embattled trade union leader Lech Walensa and declared,
The future of Poland will depend on how many people are mature enough to be non-conformist…There is no need to be afraid. The frontiers must be opened. There is no imperialism in the Church, only service.
Within weeks a million people were in the streets in support of Solidarity. He had given the Polish people the will and courage to be non-conformist, even at the risk of imprisonment. Long before Reagan was even in office, the Pope had created the conditions for freedom.
It is of course one of the defining articles of faith of the conservative movement that Reagan militarily spent the Soviets into bankruptcy. But it is a Big Lie. Today, the Russian central bank and the Central Bank of China, our other cold war foe, now control over 20% of the U.S. Treasury debt, and we control none of theirs. Exactly who spent who into bankruptcy? As if in some epic match of “rope a dope”, our rivals, freed of the military burdens of imperialism, have allowed us to spend our selves deep into debt. Worse than just government and military profligacy, the consumer also went on a binge in the Reagan Era. The easy regulatory environment of the Republicans allowed banks to market credit cards with formerly illegal usury interest rates to almost anyone. The consumer who had maintained debt levels at near 12% of assets since the 60′s suddenly went into hock. This of course meant a declining personal savings rate (below zero for the last two years), which in turn meant the U.S. Government had to call on the more than ample savings of the rest of the world to fund its debt for military expenditures. It wasn’t that there weren’t people making money during the Republican reign in the 80′s. It was just a certain class of people–the richest 0.01% (chart below).
I remember having a meeting at Drexel Burnham Lambert in 1986, soon after it had been revealed that Mike Milken’s take home pay for the year was $550 million. I was working for Merrill Lynch’s media mergers and acquisition group and Milken demanded we show up at 5:15 AM in their Beverly Hills office in a glassed walled conference room right off the trading floor. Milken has spread another $150 million around to his colleagues on the trading desk, so the sense of bonhomie and entitlement was pretty thick. They “owned” the junk bond market, but as Bob Dylan once said, “to live outside the law, you must be honest.” Milken went to jail and had to pay a huge fine, but he’s out now, still with billions in the bank.
It is not the purpose of this relatively brief summation to review the elaborate rationalizations for Reagan’s defense build-up–to critique the work of Cap Weinberger, Richard Perle or Paul Wolfowitz. Suffice to say, when Perle advocated unilaterally abrogating the 1972 ABM treaty so that we could begin building what was to become the Star Wars anti-ballistic missile system, he said he felt no reason to keep treaties with a barbaric people like the Soviets. As James Carroll writes in his classic , House of War,
Perle blithely declared that the Soviet Union would willingly sacrifice twenty million of its own citizens in a nuclear war with the United States, a prediction the President had often made in after-dinner speeches as a private citizen.
Historians have since proven that many of the claims of the Reagan administration about Soviet power were constructs of the imagination with no basis in fact. But men like Perle and Wolfowitz had been schooled in the political philosophy of Leo Strauss, the spiritual father of neo-conservatism. Deception was part of their job description.
Not only did Strauss have few qualms about using deception in politics, he saw it as a necessity. While professing deep respect for American democracy, Strauss believed that societies should be hierarchical – divided between an elite who should lead, and the masses who should follow. But unlike fellow elitists like Plato, he was less concerned with the moral character of these leaders. According to Shadia Drury, who teaches politics at the University of Calgary, Strauss believed that “those who are fit to rule are those who realize there is no morality and that there is only one natural right – the right of the superior to rule over the inferior.”
What should be noted is that this philosophy of deception did not end when the Berlin Wall fell. During the Bush I Gulf War both the Pentagon and Raytheon claimed that their Patriot Missle had knocked down dozens of Iraqi Scud Missiles. This of course was not true and the Patriot was so hapless the Israelis refused to take them, even when offered at no cost. Media scholars of the Gulf War claim it was but a commercial for U.S. smart bombs and of course large contractors like Raytheon were happy to sell their wares to any country. But the tradition born of Woodrow Wilson’s Committee on Public Information, honed by the early propaganda work of Walter Lippman was alive and well. Lippmann assumed a public that “is slow to be aroused and quickly diverted . . . and is interested only when events have been melodramatized as a conflict.” Even Bill Clinton in his campaign against George Bush for President was not above using “melodramatized evil” in his campaign advertising. “Saddam Hussein still has his job. Do You?”, intoned one ad with ominous background music.
To study a new Democratic President arriving in office in 1992, at a time of peace is to reach into the core of our story. For if ever there was a time when our military commitments could have been cut back to give us a “peace dividend”, it would have been in 1993. The sad story of Clinton’s colossal failure to reign in the military is best encapsulated in an incident reported in House of War. Shortly after he had unveiled his “don’t ask, don’t tell” order on homosexuals in the military, Clinton visited the aircraft carrier USS Theodore Roosevelt.
As he was piped aboard, he passed a young sailor at the head of the gangplank. The sailor pointedly declined to salute his commander in chief. Instead of rebuking such disrespect to the office of the presidency on the spot, or afterward, Clinton let the slight pass, as if it did not matter. The President’s refusal to enforce due deference to authority was a graver offense against the military ethos than the sailor’s contemptuous act, and every member of the armed forces took note.
Whether intimidated by his own draft dodging past, or merely incapable of standing up to the generals, Clinton’s regime can be seen as an abject failure when it came to taming the military industrial complex. He took office in a recession and almost immediately had to deal with intense pressure from Congress and the military industrial complex to expand NATO. Both Reagan and Bush had made commitments to the Russians not to let the former Warsaw pact countries into NATO. As Carroll notes,
But the Pentagon had never accepted that. Getting former Warsaw Pact members into NATO, beginning with Poland, Hungary and the Czech Republic, was less a security question, now that Russia was in decline, than an economic one, for Moscow’s former satellite nations, needing an arms buildup from scratch, represented a major new market for the Pentagon’s industrial partners. That was an argument Clinton could understand, and as a politician he saw a benefit of pleasing U.S. voters with ties to Eastern Europe.
Needless to say defense contractors showered money on new Democratic committee chairmen and their allies, spending almost $50 million in one year to lobby for NATO expansion. The benefits of not crossing the military industrial complex could be shared by both political parties. And in the area of nuclear disarmament, Clinton ended up with a far worse record than either Reagan or Bush 1, under whom the nuclear arsenal had been cut in half. Under Clinton, partially because of his embrace of NATO expansion almost no cuts in nukes were made.
As our story moves towards the present, we must acknowledge one insight of the Clinton administration into the problems that will confront the Bush administration after the turn of the Millennium. Treasury Secretary Rubin was well aware that running a $3 billion per day current account deficit was unsustainable. And by a combination of raised taxes and fees along with spending cuts, he was able to bring it to a surplus in the last year of the administration. This lesson in fiscal responsibility was of course lost on the idealogical tax cutters of the Bush-Cheney administration. As we will see in the final part of the series, Eisenhower’s early warnings that “the disastrous rise of misplaced power exists and will persist” would come true in a way that perhaps only a poet of the apocalypse could have imagined. As W.B. Yeats had written in 1920,
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned.
The best lack all conviction, while the worst
Are full of passionate intensity.