Reagan’s True Legacy: Terminating the American Dream

From The Huffington Post:

Jane White
Author, “America, Welcome to the Poorhouse”

Posted: February 4, 2011

As Ronald Reagan supporters celebrate his 100th birthday on Feb. 6, it’s astounding how not only the right wing has inflated and distorted his legacy, but most of the so-called liberal media as well.

The inconvenient truth about how Reagan won his first term had nothing to do with his superior game plan but the fact that you had to be crazy to re-elect Jimmy Carter. Carter’s reaction to the repressive Iranian regime that took Americans hostage for 444 days was simultaneously wimpy and self-righteous, implying that our gas-guzzling greed had led to the crisis along with finger-wagging us to turn down our thermostats and drive smaller cars.

On the other hand, while Reagan intolerance for repression apparently scared Iran’s leadership enough to release the hostages shortly after he was elected, his subsequent deregulatory legacy has left our country in economic ruin.

You can thank The Gipper for the birth of the current mortgage crisis. As William Kleinknecht, author of The Man Who Sold the World, put it, Reagan pushed for the elimination of all ceilings on interest rates and restrictions on loans, with his goal to “allow all depository institutions to make the same type of loans in whatever amount they see fit.” The subsequent Garn-St. Germain Depository Institutions Act of 1982 enabled lenders to issue adjustable rate and interest-only mortgages, the drivers of the current mortgage meltdown.

As I pointed out in my book, America, Welcome to the Poorhouse, the blame for runaway home prices also falls on Reagan since he slashed subsidies for low-income housing, making home ownership the only option for low-income families. In 1988 Reagan cut the housing budget to less than $8 billion compared to $32 billion under Carter, resulting in a 90% decrease in construction of new units in one year alone.

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