A straight line runs from Reagan to the Trump dead-enders.
Republicans spent most of 2020 rejecting science in the face of a runaway pandemic; now they’re rejecting democracy in the face of a clear election loss.
What do these rejections have in common? In each case, one of America’s two major parties simply refused to accept facts it didn’t like.
I’m not sure it’s right to say Republicans “believe” that, say, wearing face masks is useless or that there was widespread voter fraud. Framing the issue as one of belief suggests that some kind of evidence might change party loyalists’ minds.
In reality, what Republicans say they believe flows from what they want to do, whether it’s ignore a deadly disease or stay in power despite the voters’ verdict.
In other words, the point isn’t that the G.O.P. believes untrue things. It is, rather, that the party has become hostile to the very idea that there’s an objective reality that might conflict with its political goals.
Notice, by the way, that I’m not including qualifiers, like saying “some” Republicans. We’re talking about most of the party here. The Texas lawsuit calling on the Supreme Court to overturn the election was both absurd and deeply un-American, but more than 60 percent of Republicans in the House signed a brief supporting it, and only a handful of elected Republicans denounced the suit.
At this point, you aren’t considered a proper Republican unless you hate facts.
But when and how did the G.O.P. get that way? If you think it started with Donald Trump and will end when he leaves the scene (if he ever does), you’re naïve.
Republicans have been heading in this direction for decades. I’m not sure whether we can pinpoint the moment when the party began its descent into malignant madness, but the trajectory that led to this moment probably became irreversible under Ronald Reagan.
Republicans have, of course, turned Reagan into an icon, portraying him as the savior of a desperate, declining nation. Mostly, however, this is just propaganda. You’d never know from the legend that economic growth under Reagan was only slightly faster than it had been under Jimmy Carter, and slower than it would be under Bill Clinton.
And rapidly rising income inequality meant that a disproportionate share of the benefits from economic growth went to a small elite, with only a bit trickling down to most of the population. Poverty, measured properly, was higher in 1989 than it had been a decade earlier.
Anyway, gross domestic product isn’t the same thing as well-being. Other measures suggest that we were already veering off course.
For example, in 1980 life expectancy in America was similar to that in other wealthy nations; but the Reagan years mark the beginning of the great mortality divergence of the United States from the rest of the advanced world. Today, Americans can, on average, expect to live almost four fewer years than their counterparts in comparable countries.
The main point, however, is that under Reagan, irrationality and hatred for facts began to take over the G.O.P.
There has always been a conspiracy-theorizing, science-hating, anti-democratic faction in America. Before Reagan, however, mainstream conservatives and the Republican establishment refused to make alliance with that faction, keeping it on the political fringe.
Reagan, by contrast, brought the crazies inside the tent.
Many people are, I think, aware that Reagan embraced a crank economic doctrine — belief in the magical power of tax cuts. I’m not sure how many remember that the Reagan administration was also remarkably hostile to science.
Reagan’s ability to act on this hostility was limited by Democratic control of the House and the fact that the Senate still contained a number of genuinely moderate Republicans. Still, Reagan and his officials spent years denying the threat from acid rain while insisting that evolution was just a theory and promoting the teaching of creationism in schools.
This rejection of science partly reflected deference to special interests that didn’t want science-based regulation. Even more important, however, was the influence of the religious right, which first became a major political force under Reagan, has become ever more central to the Republican coalition and is now a major driver of the party’s rejection of facts — and democracy.
For rejecting facts comes naturally to people who insist that they’re acting on behalf of God. So does refusing to accept election results that don’t go their way. After all, if liberals are servants of Satan trying to destroy America’s soul, they shouldn’t be allowed to exercise power even if they should happen to win more votes.
Sure enough, a few days ago the televangelist Pat Robertson — who first became politically influential under Reagan — pronounced the Texas lawsuit a “miracle,” an intervention by God that would keep Trump in office.
The point is that the G.O.P. rejection of facts that has been so conspicuous this year wasn’t an aberration. What we’re seeing is the culmination of a degradation that began a long time ago and is almost surely irreversible.
The Recovery will be K-shaped: “Bifurcated” not “V-Shaped”
Bankruptcy Are Coming, Signs All Around
I witnessed first hand the closing of two company’s. Both suffered from large debt and too little revenue. The similarities are eerily familiar. Business defaults and bankruptcies are on the rise.
- https://m.startribune.com/another-wave-of-megabankruptcies-is-coming-experts-say/571381212/
- https://curated.tncontentexchange.com/finance/how-private-equity-is-gutting-retail/video_7c9b7c5f-29bb-5574-8f04-606957338951.html
- https://www.forbes.com/sites/mayrarodriguezvalladares/2020/06/20/corporate-defaults-this-year-are-likely-to-surpass-the-mountain-of-great-recession-defaults/
- https://www.evidenceinvestor.com/how-good-an-investment-is-private-equity-honestly/
Why Mitch McConnell Wants States to Go Bankrupt
The Senate majority leader is prioritizing the Republican Party rather than the American people during this crisis.
American states are abruptly facing their worst fiscal crisis since the Great Depression. The Center on Budget and Policy Priorities estimates that more than 25 percent of state revenues have evaporated because of the pandemic. Demands on state health-care budgets, state unemployment systems, and state social-welfare benefits are surging. By the summer of 2022, the state budget gap could total half a trillion dollars. States need help. Senate Majority Leader Mitch McConnell does not want to provide it. On The Hugh Hewitt Show on April 23, McConnell proposed another idea. Instead of more federal aid, states should cut their spending by declaring bankruptcy:
I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.”
McConnell expanded on the state-bankruptcy concept later that same day in a phone interview with Fox News’s Bill Hemmer:
We’re not interested in solving their pension problems for them. We’re not interested in rescuing them from bad decisions they’ve made in the past, we’re not going to let them take advantage of this pandemic to solve a lot of problems that they created themselves [with] bad decisions in the past.
McConnell’s words instantly attracted attention, criticism, even some derision. New York Governor Andrew Cuomo blasted the idea as “dumb,” “irresponsible,” and “petty”:
How do you think this is going to work? And then to suggest we’re concerned about the economy, states should declare bankruptcy. That’s how you’re going to bring this national economy back? By states declaring bankruptcy? You want to see that market fall through the cellar? … I mean, if there’s ever a time for humanity and decency, now is the time.
Cuomo’s fervent rebuttal grabbed the cameras. It did not settle the issue. State bankruptcy is not some passing fancy. Republicans have been advancing the idea for more than a decade. Back in 2011, Jeb Bush and Newt Gingrich published a jointly bylined op-ed advocating state bankruptcy as a solution for the state of California. The Tea Party Congress elected in 2010 explored the idea of state bankruptcy in House hearings and Senate debates. Newt Gingrich promoted it in his run for the 2012 Republican presidential nomination.
To understand why Republicans want state bankruptcy, it’s necessary to understand what bankruptcy is—and what it is not. A bankruptcy is not a default. States have defaulted on their debts before; that is not new. Arkansas defaulted in the depression year of 1933. Eight states defaulted on canal and railway debt within a single year, 1841. The Fourteenth Amendment required former Confederate states to repudiate their Civil War debts
A default is a sovereign act. A defaulting sovereign can decide for itself which—if any—debts to pay in full, which to repay in part, which debts to not pay at all.
Bankruptcy, by contrast, is a legal process in which a judge decides which debts will be paid, in what order, and in what amount. Under the Constitution, bankruptcy is a power entirely reserved to the federal government. An American bankruptcy is overseen in federal court, by a federal judge, according to federal law. That’s why federal law can allow U.S. cities to go bankrupt, as many have done over the years. That’s why the financial restructuring of Puerto Rico can be overseen by a federal control board. Cities and territories are not sovereigns. Under the U.S. Constitution, U.S. states are.
Understand that, and you begin to understand the appeal of state bankruptcy to Republican legislators in the post-2010 era.
Since 2010, American fiscal federalism has been defined by three overwhelming facts.
First, the country’s wealthiest and most productive states are overwhelmingly blue. Of the 15 states least reliant on federal transfers, 11 are led by Democratic governors. Of the 15 states most reliant on federal transfers, 11 have Republican governors.
Second, Congress is dominated by Republicans. Republicans controlled the House for eight of the last 10 years; the Senate for six. Because of the Republican hold on the Senate, the federal judiciary has likewise shifted in conservative and Republican directions.
A state bankruptcy process would thus enable a Republican Party based in the poorer states to use its federal ascendancy to impose its priorities upon the budgets of the richer states.
When Cuomo protested McConnell’s bankruptcy idea, the New York governor raised the risk of chaos in financial markets. But McConnell does not advocate state bankruptcy in order to subject state bondholders to hardship. Obviously not! When McConnell spoke to Hewitt about fiscally troubled states, he did not address their bond debt. He addressed their pension debt. State bankruptcy is a project to shift hardship onto pensioners while protecting bondholders—and, even more than bondholders, taxpayers.
Republican plans for state bankruptcy sedulously protect state taxpayers. The Bush-Gingrich op-ed of 2011 was explicit on this point. A federal law of state bankruptcy “must explicitly forbid any federal judge from mandating a tax hike,” they wrote. You might wonder: Why? If a Republican Senate majority leader from Kentucky is willing to squeeze Illinois state pensioners, why would he care about shielding Illinois state taxpayers? The answer is found in the third of the three facts of American fiscal federalism.
United States senators from smaller, poorer red states do not only represent their states. Often, they do not even primarily represent their states. They represent, more often, the richest people in bigger, richer blue States who find it more economical to invest in less expensive small-state races. The biggest contributor to Mitch McConnell’s 2020 campaign and leadership committee is a
- PAC headquartered in Englewood, New Jersey. The second is a
- conduit for funds from real-estate investors. The third is the
- tobacco company Altria. The fourth is the
- parcel delivery service UPS. The fifth is the
- Eli Lilly pharmaceutical corporation. The sixth is
- the home health-care company, LHC Group. The seventh is the
- Blackstone hedge fund. And so on and on.
A federal bankruptcy process for state finances could thus enable wealthy individuals and interest groups in rich states to leverage their clout in the anti-majoritarian federal system to reverse political defeats in the more majoritarian political systems of big, rich states like California, New York, and Illinois.
No question, many states face serious problems with their unfunded liabilities to state retirees. Illinois’s liability nears $140 billion, and its municipalities are liable for additional billions. California’s state and local unfunded liabilities amount to $1.5 trillion.
Those liabilities are often described as “pension” liabilities, but they are driven above all by faster-than-expected increases in retiree health-care costs. They need to be addressed, and addressing them will be a tough policy challenge. It will be a tough legal challenge, too, since those liabilities are often—as in Illinois—inscribed into the state’s constitution.
Difficult and important as these problems are, they are not urgent problems. They existed 24 months ago; they will remain 24 months from now. From a strictly economic point of view, McConnell’s schemes for state bankruptcy are utterly irrelevant to the present crisis. Reducing future pension liabilities will not replenish lost revenues or reduce suddenly crushing social-welfare burdens.
But McConnell seems to be following the rule “Never let a good crisis go to waste.” He’s realistic enough to recognize that the pandemic probably means the end not only of the Trump presidency, but of his own majority leadership. He’s got until January to refashion the federal government in ways that will constrain his successors. That’s what the state-bankruptcy plan is all about.
McConnell gets it. Now you do, too.