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Personal Reflections on the Crisis in America- Reagon and Clinton- Part2

Politics / US Politics Jun 07, 2008 - 01:47 AM GMT

By: Richard_C_Cook

Politics Best Financial Markets Analysis Article“The Reagan Revolution”
After Ronald Reagan assumed the presidency, I worked for two years at the U.S. Office of Consumer Affairs, which was an extension of the White House consumer office. The president's special assistant for consumer affairs was now Virginia Knauer, who had held the same office under President Richard Nixon, and for whom I wrote speeches and reports. We were afraid that with the Reagan cuts of the federal civilian budget our office would be abolished, but that didn't happen.


Still, there wasn't much to do any longer in the field of consumer affairs, so I spent a lot of my time at the Library of Congress reading whatever interested me. After two more years with the government, my wife Phyllis and I left town with our baby daughter to live and work on a small farm we had bought in Monroe County , West Virginia . But after running out of money, we sold the farm and returned to Washington , where I was offered a job at NASA as a resource analyst for the space shuttle program.

The Reagan presidency was a milestone in U.S. history, where the military-industrial complex, aided and abetted by figures within the Conservative Movement associated with such institutions as the Committee on the Present Danger and the Heritage Foundation, became the dominant power within the federal government. They had strong affiliations with the most conservative and outspoken elements within Israeli politics, such as the Likud Party. By now the arming of Israel had become one of the central tenets of U.S. foreign policy.

Reagan may have had his own ideas about restoring American greatness through conservative principles, but in my opinion he was a captive of forces he little understood. His willingness to acquiesce may have been facilitated by his near-assassination on March 30, 1981, by a young man named John Hinckley. It was later reported that Hinckley 's father and Vice President George H.W. Bush had a longstanding business and political relationship, though no connection between Bush and the attempted assassination has ever been proven.

Reagan had run his presidential campaign against big government but became the biggest Keynesian deficit spender in history. He looked good on camera but seemed to understand little of what went on behind the scenes in the course of his trillion-dollar military build-up, the launching of proxy wars against supposedly pro-communist forces in third world countries, the “Star Wars” weapons-in-space program, or the arms-for-hostages deal run out of the White House in connection with Iran and the Nicaraguan contras.

Showing early signs of dementia by the middle of his second term, Reagan's daily calendar was arranged according to astrological prognostications, while meanwhile the deregulation of the nation's financial industry led to the merger-acquisition-junk bond mania that lay the groundwork for the financial meltdown of the 2000s.

On January 26, 1986, space shuttle Challenger blew up a minute after it was launched. At NASA I was an eye-witness to the Challenger disaster and cover-up, and I leaked documents to The New York Times proving NASA's prior knowledge of the flaws on the solid rocket booster O-rings which failed and caused the tragedy. I was called to testify before the Rogers Commission but never returned to NASA. Instead, I transferred to the U.S. Treasury Department, where I worked for 21 years, starting with the final years of Reagan's second term.

Though the Rogers Commission had denied it, I later discovered that the Reagan White House pressured NASA to launch Challenger against engineers' recommendations so that Teacher-in-Space Christa McAuliffe would be aloft in time for his 1986 state-of-the-union speech. I also learned that NASA failed to fix the O-ring problem to avoid delaying shuttle flights that were to be launched with military payloads for the Air Force.

Reagan is lauded as the Great Communicator and is viewed by many as a virtual demi-god. The reason is not hard to see. Reagan's “supply-side” tax cuts sharply reduced income tax rates for the wealthiest taxpayers, providing them with a bonanza that has powered their social and economic dominance ever since.

And he gave the military a free ride. Though it is rarely acknowledged, the backbone of support of the Republican Party since Reagan has been the military and their contractors. Because so many military facilities are in Southern states, there has been a seamless blend with the Republican Party's “Southern strategy” dating from Nixon days. Reagan himself got a free ride from the press, as documented in Mark Hertsgaard's 1988 book, On Bended Knee: The Press and the Reagan Presidency.

By the time George H.W. Bush became president in 1989, I had settled in at the U.S. Treasury Department's Financial Management Service and was learning how the government's payment, collections, and cash management systems worked. This was the start of large-scale electronic funds transfer in the U.S. , with billions of dollars moving daily through the Federal Reserve System's automated clearinghouse. The Federal Reserve, though owned by its member banks, acted as the federal government's, “fiscal agent.”

“Cash management” meant that every night the Treasury Department deposited all its cash-on-hand in the Federal Reserve, for which it received interest payments. The banking system then used the money as part of its reserves to collateralize lending. This allowed a huge increase in the funds available for banks to lend, especially when private businesses started to do what Treasury was doing with overnight deposits.

Later these funds would become a source of the huge amounts of credit that banks would use in the 2000s to fuel the housing, commercial real estate, equity, hedge fund, and derivative bubbles. While these practices may have been “legal” in producing massive profits for the banking system, their effects have been catastrophic.

In 1990 I received the Cavallo Foundation Award for Moral Courage in Business and Government for my testimony before the Rogers Commission on the Challenger disaster. It was the nation's premier recognition for whistleblowers. My supervisor at Treasury seemed embarrassed by my receiving the award but gave me the day off to attend the awards ceremony on Capitol Hill with my family.

From 1985 to 1991 the communist political system of the Soviet Union was collapsing, and the Soviet republics outside Russia were moving toward independence. In June 1991 Boris Yeltsin was elected president of the Russian Soviet Federated Socialist Republic . The Soviet Union itself dissolved after a reactionary coup failed against the democratization movement led by Soviet President Mikhail Gorbachev. The collapse of the Soviet Union took Gorbachev with it, leaving Yeltsin and Russia standing alone.

Of course those who adulated President Ronald Reagan claimed then, as they do now, that he was the one responsible for “the fall of the Soviet Union .” I'd always had a great respect for the Russian people and its ancient, highly spiritual, culture. I had viewed the Communist revolution as an atrocity against Russia , not as an action taken by it. I had deeply imbibed Russian literature and viewed Tolstoy, Dostoevsky, Pasternak, and Solzhenitsyn as among the greatest writers in world history.

In the same manner, I saw the revolt against the Soviet government as a spontaneous uprising that reaffirmed the traditional identity of Russia . It was a revolt by, for, and of the Russian people, just as the secession of the other Soviet republics was an expression of the will of those nations. For the followers of a right-wing militarist like Reagan to claim credit was to me an abomination.

Almost simultaneously with events in Russia came the first Iraq War, with that nation invading and occupying Kuwait in 1990 and President George H.W. Bush ordering U.S. ground forces into Iraq in early 1991. The war was over in a few weeks, with U.S. air power attacking and decimating retreating Iraqi soldiers.

By this time I was heartily sick of the Reagan/Bush administrations with their reliance on military force as the heart of U.S. foreign policy, the glorification of war that formed so much of presidential imagery, the collapse of our manufacturing economy during the recession of 1979-83 that was recurring during the Bush presidency, and the constant financial scandals that seemed to go hand-in-hand with Republican Party rule.

President Bill Clinton

I was not sorry when Bill Clinton won the 1992 presidential election, though he was not a progressive Democrat. Of course he might not have done so without Ross Perot's convenient third party campaign that siphoned off the votes of many erstwhile Bush supporters.

The Clinton years were a relief, because a measure of prosperity had returned, and young people, including my older sons who were finishing college, could get jobs. It was done through a strong dollar which attracted enough foreign investment to produce the dot.com boom. There were abuses, of course. In some cases, entrepreneurs started new technology companies and simply absconded with investors' cash.

I was very uneasy about the signing by Clinton of legislation for the North American Free Trade Agreement. I had seen the damage done to the U.S. manufacturing economy by the Federal Reserve interest rate policies of the 1980s. NAFTA seemed to promise more of the same. In fact it wrecked family farming in the U.S. , as well as in Canada and Mexico , by allowing the undermining of local agriculture by the large agribusiness firms. In short, NAFTA became a disaster. Its dire impact on Mexico contributed strongly to the flood of illegal immigrants heading north.

During the 1990s I had the growing feeling that the public was never told the real reasons for events and decisions and that behind the scenes meetings were held and plans formulated which undermined rather than advanced democracy. This was before the time a few years off when so many commentators would be writing day-in-and-day-out about various “conspiracy theories.”

I had also learned through my experience with the Challenger disaster that the truth could never be found by listening to what was said by government officials, both the career bureaucrats and the ones we elected to represent us. This was because, in line with the ethos of the national security state, not only was critical information withheld as “classified,” the ones who possessed that information were trained professional liars.

This included senators, congressmen, and even presidents, not just spooks from the security agencies like the CIA, NSA, and Defense Intelligence Agency. An example of such lies was the fiction, maintained by Israeli and U.S. officials alike, that Israel was not a nuclear power, even though by the 1990s everyone knew that nation ranked behind only the U.S. and the Soviet Union/Russia in its nuclear arsenal.

Clinton started out looking like he had good intentions, though after his wife Hillary's health care initiative failed and Republican Newt Gingrich took control of the House of Representatives from the Democrats in the 1994 off-year elections, he became much more tentative. The exception was a few social reforms such as extension of the Earned Income Credit for lower income taxpayers.

Later in his presidency Clinton resisted the efforts of the neocons associated with the Project for a New American Century, successors to the Conservative Movement under Reagan, to launch another war against Iraq , which may have been the factor that led to his impeachment. But he fully cooperated with the imperialists within the U.S. military-industrial complex and NATO in attacking Serbia .

Nothing could have been more confusing than the “Bosnian-Croatian-Serbian War” of 1991-95. The important fact to remember is that it was the policy of the West to prevent any reappearance of the former nation of Yugoslavia by demonizing the Slavic Serbs, thereby weakening Russian influence in the Balkans. The U.S. also tried to exert its influence in the nations that had broken away from the Soviet Union as part of a general policy of encirclement with respect to Russia .

There was also an interesting series of events during Clinton 's presidency that may have been linked with hidden purposes. The first was the 1992 assault on survivalist Randy Weaver and his family at Ruby Ridge , Idaho , by U.S. marshals and FBI agents. Weaver's wife Vicki and one of their sons were shot and killed over dubious weapons charges.

The second took place in February-April, 1993, when 76 members of the Branch Davidian religious group, including their leader David Koresh, died in a fire when assaulted by federal officials at their compound near Waco , Texas .

Two years later, on April 19, 1995, a bomb in a Ryder truck blew up the Murrah Federal Office Building in Oklahoma City , claiming 168 lives. In the words of Wikipedia:

“ Within days after the bombing, Timothy McVeigh and Terry Nichols were both in custody for their roles in the bombing. Investigators determined that McVeigh and Nichols were sympathizers of an anti-government militia movement and that their motive was to avenge the government's handling of the Waco and Ruby Ridge incidents.”

Later McVeigh was executed for his role. During the Waco and Oklahoma City events, Janet Reno was serving as attorney-general of the U.S. The net result of the three incidents was to discredit and render moribund much of the survivalist and armed citizen militia movements.

Clinton was a pro-business Democrat associated with the “centrist” Democratic Leadership Council. During his presidency millions more U.S. manufacturing jobs were outsourced to other nations. Clinton was supported by Wall Street and did nothing to stem the slide toward financier control and dominance of the U.S. economy.

At the end of his presidency the stock market had begun to crash, the dot.com mania was exposed as a bubble, and over $7 trillion in middle-class wealth evaporated. Clinton restructured federal financial reporting which helped him achieve a balanced budget during the last three years of his presidency, along with taxes on stock market capital gains. But by his last days in office, consumer purchasing power was collapsing.

The judgment of writers of history on Clinton has yet to be made, though his image was badly tarnished by the personal circumstances involving Monica Lewinsky that led to his impeachment and trial by the Senate, ending in acquittal. He sought to promote his own cause by publishing his voluminous memoirs, entitled My Life .

I spent the 1990s working hard at my job which was to write regulations, analyze Treasury financial and administrative systems, and set up automated training centers. By now my older sons were attending college—Nat at Dartmouth and Tim at Kenyon. I spent time at home with my younger children and become a neighborhood soccer coach and referee.

By Richard C. Cook
http:// www.richardccook.com

Copyright 2008 by Richard C. Cook

Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department. His articles on economics, politics, and space policy have appeared on numerous websites. His book on monetary reform entitled We Hold These Truths: The Hope of Monetary Reform will be published soon by Tendril Press. He is also the author of Challenger Revealed: An Insider's Account of How the Reagan Administration Caused the Greatest Tragedy of the Space Age , called by one reviewer, “the most important spaceflight book of the last twenty years . ” His Challenger website is at www.richardccook.com . A new economics website at www.RealSustainableLiving.com is upcoming with partner/author Susan Boskey. To get on his mailing list, for questions and comments, or to pre-purchase copies of his new book, please write EconomicSanity@gmail.com .

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