By the time I was 30, I had earned a Ph.D. without incurring a cent of debt, had worked for four years as an assistant professor, had married and divorced, had a baby, had bought and sold one home, and was about to buy a house, as a single woman, in Pacific Palisades. This could not happen today. We have allowed our country to change drastically from what it was in our youth, and our children and grandchildren should not forgive us.
In the 1960s I attended a top rated university (UCLA) that had very low tuition and fees, because the state fully funded it, realizing that an educated populace was an asset. Between scholarships, grants, fellowships, and summer jobs, I did not have to take out loans. Jobs were plentiful, and the minimum wage was not bad, because unions set a floor for wages. Banking and mortgage lending were highly regulated and kept separate. Savings and Loans had only savings accounts and they lent out money only for mortgages, at a certain rate above the savings account interest rate. Banks were not allowed to sell mortgages. Unregulated loans did not drive up the cost of homes, so I was able to afford to buy a house, as a single, beginning assistant professor. The difference in wealth between the middle class and the rich was not huge, which was another factor that helped me buy a house. By age 30, I had more wealth than my parents and lived in a much better part of town.
As we all know, things began to change with Reagan, who was the smiling, affable front man for the ruling class. As governor of California, he began to cut funding to the state universities, and as president, he continued to undercut all public education. Now the state universities are only “state supported”, not “state funded”, and tuition and fees constantly go up. Without wealthy parents, it is nearly impossible to graduate from college now without a mountain of debt. This effectively makes graduates indentured servants for the years it takes to pay off their student loans.
Reagan began the deregulation of the financial sector, which resulted in all the staid old savings and loans being absorbed by the big banks, which then began marketing and selling all sorts of things, including unaffordable mortgages, which they then bundled and re-packaged to hide the unsustainable loans and sold to our pension funds. If anyone could qualify for a big loan, whether they could afford it or not, then there was a lot of money chasing a few houses, and home prices sky rocketed. Now a single, beginning assistant professor cannot afford a house in Pacific Palisades or almost anywhere desirable in Los Angeles county (unless, of course, she had wealthy parents). The housing bubble that was created burst, and with so many faulty loans, the big banks almost failed, until bailed out by the taxpayers, so bankers can still afford a house in Pacific Palisades.
Another thing Reagan did was cut taxes for the wealthy, on the theory that if rich people had even more money, they would start businesses and hire people and wealth would “trickle down.” This did not happen. The rich did not feel like doing the work that starting businesses would require and preferred to gamble with their extra wealth by playing the stock market, investing in big banks, and the like. Again, a lot of money chasing few stocks drove up the price of stocks, and it looked like everyone was getting rich, until the market crashed, and the Great Recession began. In the meantime, a few people were getting even richer in this environment, and the wealth gap between the middle class and the rich grew humongous.
Cutting taxes (and we are now the third lowest taxed country among developed nations) means less money for the government, which then issues bonds to pay for the things governments must do. These bonds are mostly bought by the rich, who have lots of extra money because of the tax cuts, and who then get even richer on the interest on the bonds that the taxpayers must pay. It is another way to transfer wealth from the lower and middle classes to the very wealthy.
The recession is officially over, but most people do not FEEL like it is. That’s because they have not accepted the fact that their standard of living has been permanently reduced. It has to be, for the 1% to hold so much wealth. Our children will do less well than we did, something that should make us very uncomfortable.
Reagan also began the dismantling of unions and the deregulation of the communications industry. Television commercials used to be regulated, and I can remember when there were just 90 second of commercials every 10 to 15 minutes. Now there are so many that people are turning away from TV. One truly negative result of deregulation has been the demise of real news in the mass media, and the rise of infotainment and right wing talk radio and TV and the general dumbing down of our sources of information.
How did this happen? Some people think it was deliberately planned to do away with the middle class. But why do people constantly vote against their own self interests? And they had to do so, to get to this outcome. Cutting education may be part of the plan, because uninformed people are more easily manipulated. The neocons use fear, wedge issues like abortion, manipulation and misrepresentation, and outright lies to get people to vote against their own self interests. Read some Thom Hartmann for the full details.
