153 of 200 people found the following review helpful
Kleinknecht opens by telling us that the Reagan legacy has been devastating for America - especially ordinary Americans. Boom-and-bust cycles, obscene CEO salaries, emergence of "Lockdown America", drug-company scandals, collapsing bridges, huge government deficits, ethical absences, plummeting/stagnating wages for working people, the flight of U.S. manufacturing abroad are all products of Reagan's free-market zealotry and gutting the public sector. Reagan also pioneered the use of wedge issues like race ("welfare queens," "war on drugs").
Kleinknecht also says the book was borne of bewilderment over the myth that continues to surround the presidency of Ronald Reagan, who he characterizes as an empty suit who believed in flying saucers and allowed an astrologer to guide his presidential scheduling. We just finished a presidential campaign season marked by unseeming competition among Republican aspirants to wrap themselves in the Reagan mantle.
Some portions of "The Man Who Sold the World" are missing credible documentation; others blame Reagan for actions that only began during his leadership and were extended by Bush I and II, and Clinton. His 1987 appointment of Alan Greenspan (Mr. Bubbles) to head the Federal Reserve may have been Reagan's worst, given Greenspan's key role in the dot.com and housing bubbles, but we cannot forget he was reappointed again and again by other presidents until 2006. Deregulation of airlines and trucking are also attacked, though undertaken by Carter. And finally, Kleinknecht misses some important additional Reagan actions - eg. undermining Carter's fuel economy and alternative energy initiatives, and the whole Iran-Contra fiasco. Nonetheless, the book still is an important contribution.
Reagan was well known for stories not quite rooted in fact, and his statistics were similarly also sometimes loose. This included his war on regulation and Murray Weidenbaum's (became Reagan's Chairman of Economic Advisers) conclusion that federal regulations cost the economy $103 billion/year in 1978, including $666/car. The Bureau of Labor Statistics later repudiated some of Weidenbaum's methodology and a subsequent year-long Wall St. Journal sponsored study of the 48 largest firms vs. the six most active regulatory agencies found the regulatory impact only 1.1% ($2.6 billion). Worse yet, Weidenbaum's analysis omitted any benefits from these regulations, and Japanese firms spent more for compliance and still cost less. Unfortunately, Weidenbaum's study came first, got all the press, and inspired the administration's weakening of regulations through reducing enforcement funds and installing leaders who didn't believe in regulation and would interpret regulations in a more 'business-friendly' manner.
Between 1962 and 1983 the average household net worth of those in the bottom 40% rose from $800 to $4,700 in 1998 dollars. When Reagan left office in 1989 it was a negataive $4,100, reaching only $1,100 by 1998. Between 1983 and 1989 the net worth of the middle 20% increased from $55,500 to $58,800 (6%), vs. 27% for the top 1% and 9% for the top 2-10%. By 1983 federal tax receipts from corporate income taxes hit 6.1%, down from 32% in 1952 and 12.5% in 1980.
Regan, Sec. of Treasury, worked to eliminate all controls on the types of loans provided by banks and other institutions - leading to the S&L crisis. Restrictions binding them to a specific area were lifted, as well as interest rate ceilings on deposits; FSLIC insurance was increased from $40K to $100K and large institutional investors could then split funds into parcels fully insured around the nation. Changes in accounting practices were approved that let failing S&Ls (about 800) inflate their worth and stay in business; eliminated the requirement for 400 stockholders and allowed developers to own S&Ls and loan money to themselves with no money down. The scandal broke open in 1989, wasn't even mentioned in the 1988 campaign. He also initiated repeal of Glass-Steagall - work finished in 1999. While Congress deregulated more industries during Carter and Clinton years than Reagan-Bush years, Reagan achieved deregulation by odering the bureaucracy to stop enforcing existing regulations and reducing their funding. He also gave a potent political voice to the backlash against regulations.
The finance industry particularly benefited. By the beginning of the 1980s, an estimated two-thirds of the nation's thrifts were losing money, and thousands virtually insolvent. Regulatory relief including increasing FDIC coverage from $40,000 to $100,000, allowing developers to own thrifts and borrow from them, loosening accounting practices to boost net worth, and freeing them from investment restrictions. The result - the 1989 S&L debacle that required $150 billion in taxpayer bailouts.
Kleinknecht believes the rapid rise of M&A activity under Reagan's relaxed anti-trust enforcement became a prime cause of our manufacturing decline. CEOs lived in fear of 90%-leveraged LBOs using the firm's own assets as collateral, instead of focusing on customers and the Japanese. The M&A/LBO debts incurred ($33+ billion in 1981, plus at least another $70 billion tied up in merger-related loan commitments) hampered firms from investing in new equipment and made them more vulnerable to downturns. Between 1980-86, M&A went from 1,565 ($33 billion) to $4,323 ($204 billion).
Business tax cuts, instead of spurring new investment in equipment, were largely used for M&A as well. Kleinknecht cites the example of G.E. - paid no income tax the first three years of Reagan, received $283 million in rebates (despite pretax profits exceeding $6.5 billion), while shedding 50,000 jobs through layoffs, attrition, and selling subsidiaries. Meanwhile, it acquired RCA and NBC, among others.
A number of credible studies document long-term stock losses by the majority of merged companies. A Wall St. Journal study in 2002 found the stocks of the 50 biggest corporate acquirers fell 3X the DJIA.
Kleinknecht's data on "Lockdown America" is quite limited, consisting of data from New Jersey. In 1980 it had 76 prison inmates per 100,000 population, and 331 in 2002; meanwhile, violent crime increased.
Overall, "The Man Who Sold the World" is important reading.
17 of 22 people found the following review helpful
on June 8, 2011
The corporate takeover of America, disasters stemming from the deregulaion of business, repercusions from the collapse of Enron, the subprime mortgage scandal, the near collapse of the financial system, widening income inequality, the obscene inflation of CEO compensation, the end of locally owned media, market crashes reminisecnt of 1929, blackouts, drug company scandals, rampant greed and materialism., These, says William Kleinknecht, are the bitter legacy of Reaganism. Why are absolutely none of these unmistakeable harbingers of American decline laid where they belong - at the door of Ronald Reagan? Kleinknecht believes it is because the so-called liberal media (or any other media for that matter) never critizes the saintly Reagan. This disconnect between the Reagan of Myth and the Reagan of Reality has been palpable in the media for many years. The only story that is ever allowed to get out is the one put out by the ideological fanatics and free market zealots of the Reagan propaganda machine. This book is an attempt to right that wrong.
Once upon a time, in the middle decades of the last century, the United States had a government that was, more or less, "of the people, by the people and for the people," insofar as that ideal can be achieved. The combined sweep of Populism, Progressivism and the New Deal opened the way for a remarkably affluent and egalitarian society. A broad and prosperous middle class emerged because of the greatest redistribution of income downwards in our nation's history. A truly Golden Age had arrived. Unfortunately, it was not to last.
Ronald Reagan stood against everything that had been achieved in this remarkable age of reform. His constant attacks on the inefficiency of government, when he was doing everything he could to make it inefficient, became a self-fulfilling prophecy. The more money that was taken away from government programs, and he starved government as much as he could, the more ineffective they became. The more he made fun of government, the more ridiculous government bureaucrats came to be seen in the public eye. Gradually government, and the broader realm of public service has come to seem disreputable, disdained by the best and brightest college students planning their careers. Government was always the problem, never the solution.
The greatest tragedy of Ronald Reagan was his betrayal of the working people of America. The two periods of economic expansion that followed his election did little or nothing for Americans in the middle and lower income brackets., A study by the Economic Policy Institute in January, 2001 painted a picture of rising inequality. Expressed in constant 1998 dollars, households whose wealth placed them in the bottom 40 percent of the country had seen none of the benefits of two decades of economic growth. Between 1962 and 1983 the average household net worth of that group had grown from $800 to $4,700. But by the time Reagan was out of office in 1989 that group had a negative net worth of $4,100; that is they were in debt for that amount. Even during the unbridled prosperity of the 1990s that group has floundered, its household worth reaching only $1,000 in 1998. Such were the "blessings" of "trickle-down economics."
How has the middle class fared as a result of this Reagan Revolution? Between 1983 and 1989 the household net worth the the middle 20 percent grew modestly from $55,000 to $58,000 and then began declining reaching $49,100 by 1995. Only in the second half of the 1990s (when Clinton was resident) did the middle 20 percent begin to see the benefits of prosperity with its household worth climbng to $61,000 in 1998. Still, after the two longest spurts of economic growth in American history, the middle 20 percent of American households was, on average, only $5,500 richer.
And the winners of this economic growth derby? - the rich and the super rich. The top 1 percent of households saw its average net worth grow from $7.2 million to $9.1 million between 1983 and 1989 a 26.9 percent increase that far surpassed the 6 percent growth for the middle 20 percent. The next 9 percent at the top of the ladder saw its worth grow from $814,200 to $897,000, a more than ten percent increase. In the ensuing years the rich and super rich continued to pull ahead of the pack. The top 1 percent had a net worth of $10.2 million in 1998 - a 42.2 percent increase from 1983 - and the next 9 percent had an average worth of $1 million, a 24.4 percent increase from 1983. The middle 20 percent of households saw their net worth increase by only 9.9 percent in that decade and a half.
Ronald Reagan disenfranchised the average citizen by inventing the soft-money machine that made large corporations the real power in Washington. He weakened the enforcement of labor laws and inspired union busters across the country by firing more than eleven thousand air traffic controllers and breaking their union in 1981. He empowered corporate executives to abandon the concept of loyalty to employees, shareholders and communities. He presided over the slow creep of crass commercial values into virtually every sphere of American life: the non-profit sector, law, health care, politics, public schools, public radio and public television. Instead of public policy's influencing the corporation to fit the needs of society, society is shaped to fit the needs of the corporation.
Something went horribly wrong on election day in 1980, the day our country was turned over to mean-spirited religious zealots, thinly veiled racists, law and order extremists, warmongers, and a class of people shamefully willing to act as handmaidens of the wealthy at the expense of the ordinary citizen. It has proven untrue that deeply slashing income taxes promotes investment and creates an increase in tax revenues; it has proven disastrously untrue that deregulating the financial sector benefits the consumer. What you've got when you have monstrously big business and a government "small enough to be drowned in the bath tub," is a plutocracy "of the rich, by the rich and for the rich." What you've got when you have a government that does not regulate financial crooks and scoundrels is a kleptocracy of thieves.
This book chronicles America's sad decline from its Golden Age and the primary reason for that decline - Ronald Reagan
48 of 69 people found the following review helpful
on August 27, 2009
This book was particularily painful to me, because I remember the President's announcement that we would have a one world economy and watched my home town slide from a bastion of business and industry to a place of poverty where Feed Our Children sends tractor trailers full of food. Yet the subject of Kleinknecht's no-holds barred expose is one of our two best loved modern presidents.
I have given this book 4 rather than 5 stars because it is currently being ignored and will soon be forgotten, even though it is a title that should be a part of all U.S. history collections.
Here follows a minor insight into the content of the title:
"The contagion of free-market purisim has infected almost every sector of American life (p xii)." He cites a rising inequality whith those on top reaping the benefits and claims the obvious that trickle economics is a fallacy. "With Reaganism has come an abandonment of all faith in reason and progress." There is the decline of heavy industry (p.7) and the factory farm policies which have all but destroyed family farms (p. 11). The destruction of unions was an obvious plus for the haves and a bitter pill to swallow for the nots.
But, to get back to the title of this essay: "...the ignomy of social Darwinism which had nourished a view of the lower classes as predestined by genetics and breeding to live in squalor (pp.24-25)." Perhaps the term anti-social Darwinism would have been more to the point.
Corporate income tax drops created a sea of red ink helping to justify the cutting of beneficial social programs (p. 29). As a pioneer of the use of soft money for campaigning this administration walked point for the election styles of the present (p.59).
The business of this presidency, said the author was business (p. 70). This included the evisceration of regulations a more sensible generation had put into place which led to financial disasters (p. 72) that taxpayers just just begun to fund. The destruction of the 1927 McFadden Act which restricted the ability of financial institutions to operate in more than one state was a disaster still not entirely realized and Proxmire's prediction of doom was laughed at (p.109). The author said that the move was to "Privatize the wealth and socialize the risk (p.119.)" The list goes on and on.
This book deserves to be read slowly and seriously.
12 of 17 people found the following review helpful
on April 9, 2010
Since a lot of conservatives like to claim Reagan did so much to help small towns' Main Street, and since Reagan himself pitched myths about that, Kleinknecht starts the book off with a brilliant conceit.
He actually visits Reagan's small-town birthplace of Dixon, Ill., and talks to people there about how it has changed since 1980. That includes people who say they'll only talk to him if not asked to comment negatively on Reagan - which is, itself, an indirect negative comment on Reagan!
Kleinknecht then supplements that with data from the Department of Labor, Department of Commerce, etc., showing just what Reagan did do to, and NOT "for," Dixon and by extension, other small towns.
Kleinknecht also spares little on showing just how disengaged Reagan was, and how rich tycoons used this to their advantage. At the same time, along the lines of Paul Kennedy in "The Rise and Fall of the Great Powers," Kleinknecht notes that, even before Reagan's election, these tycoons were already more corporate raiders, looking to make money off various forms of cooking or tricking out company books, than they were corporate builders reinvesting in their companies.
Kleinknecht then goes beyond that, showing that many conservatives, including economist Hayek (Hey, Milton Friedman, you didn't study him well enough!) warned about the perils of such unbridled "capitalism."
At a time when "conservatives" today bash lower-middle-class people for paying little to know income tax, while failing to point out massive companies like Reagan sponsor GM do the same on the corporate side, this reminder that conservativism is more than, and different from, what some talking heads today claim, is important.
That said, Kleinknecht cuts Jimmy Carter a bit too much slack and Bill Clinton a lot too much. I'm reminded of one of Clinton's first lies, IMO, where he said, with mock surprise, (not exact quote), "You mean my economic program is hostage to the bond market?" Yes, he was cleaning up parts of the Reagan deficit mess old man Bush hadn't fully tidied. But, he was too close to Jackson Stephens to really be surprised. Ditto for Congressional Democratic leadership, beyond the increasingly frail Tip O'Neill, in the Reagan era. (This means you, Jim Wright.)
This really is, though, at least a 4/5 star book. Ignore the 1-star reviews.
14 of 20 people found the following review helpful
on August 30, 2010
If only half of what is documented in this well written book on Ronald Reagan and his version of conservatism, he set our country back by half a century. No wonder he was recently voted the most overrated of any president. His war of drugs has been a massive failure and had the unintended consequence of turning out hardened criminals and spreading gangs across all 50 states. His governance while in office was appalling and rampant with corruption. He corruption record was greater than Nixon, Harding, and Grant combined. He is the perfect example of why we should not elect anyone to office who professes to not like government. He said "government is the problem" and during his eight years it was the problem. Worse yet he inculcated his brand of conservatism to presidents who followed him and turned the United States into a semi-fascist state that had no problem in incarcertating minor drug offenders for years in prison and costing the country billions of dollars. His economic policies were equally terrible and resulted in some of the biggest business scandals of the 20th century. And and the end of the book, a case is made that he so damaged our view of government that it has impaired our ability to lead in the world. He was a small mind that had even more small minds working for him. His only saving grace is he didn't invade an innocent country and cost the lives of thousands of people. This is a very depressing book and is not for anyone who has an idealistic view of Ronald Reagan. His story is a cautionary tale for those who are enamored of Sarah Palin and Glenn Beck. They would do similar damage to country if elected to higher office.
20 of 29 people found the following review helpful
on May 12, 2010
I never understood this fascination with Ronald Reagan. Didn't much manufacturing move overseas in the 80's? Deregulation which drove up prices and put the airline industry in a tailspin? And corporate raiders looted pension funds and left millions of Americans w/o retirement money? And the savings and loan scandal? The Iran-Contra scandal? Reagan was a disaster on the international front, supplying weapons to Iran in direct violation of Congress, when Hezbollah blew up our Marine barracks in Lebanon, and tortured to death William Casey, the head of the CIA station there, what did Reagan do? He withdrew US forces! He didn't strike back, he cowered and ran. Actions like these encouraged the terrorism and Islamic extremism that we see today. Or how about when Israel was ready to crush the PLO once and for all? No, Reagan arranged for Arafat and his thugs to go safely to Tunisia!!! Reagan was a disaster, of course manufacturing started moving overseas before him, deregulation started before him, failure to deal with Islamists started before him, but he did a lot of damage to the US both domestically and internationally, he was the guy who really propelled he big business agenda which is at direct odds with citizens.
This book deals with the Reagan disaster on the home front, just keep in mind while reading it that he didn't start a lot of this, but he was the man who really propelled the agenda.
14 of 20 people found the following review helpful
on September 8, 2009
This book just validates what I have been explaining to my conservative friends who think Mr Reagan was some sort of God, a pitchman yes, a God not.
41 of 61 people found the following review helpful
on February 20, 2009
Within a couple of days of each other, this volume and Will Bunch's "Tear Down This Myth" were released. The Reagan theologians were on the warpath and criticized both authors for being, essentially, blasphemers. But both texts have been long awaited.
This book has so much in it--in my case that means I nearly drained a highlighter--that it's difficult to summarize. There is a chronological element to it, but the text is more thematic in its approach. The introduction gives us a taste of what we'll find throughout the book, e.g., that before Reagan there were regulations governing advertising in children's television programming. No longer during and post-Reagan. There were questions of value later discussed in greater detail, e.g., the ethic of consumption having reached dogmatic proportions during Reagan, rather than responsibility to one's community.
The book then starts with Reagan's roots in Dixon, IL. It's fascinating in that it covers Reagan's upbringing, his father's alcoholism and its influence on Reagan's behavior, but doesn't get over-burdened in psychobabble. And among the highlights of the chapter is that Reaganomics was a disaster for Dixon! That chapter also summarizes many of Reagan's political roots, especially where his support came from among the moneyed interests. And it summarizes some of Reagan's changes, from a liberal union leader (SAG) to an anti-tax reactionary and snitch for the FBI.
The author discussed Reagan's relationship with Tip O'Neill, speaker of the house at the time. I was in grad school then and I recall O'Neill as challenging a president who called upon religious values yet didn't even attend church on Sunday.
There was enough history in the text to understand what had been happening before the Reagan "values" came home to roost. The author covers a number of laws which ensured the safety of the public, most of which were thrown out once Reagan was in office. The McFadden Act, passed before the Depression, aimed to help out community banking by restricting the ability of financial institutions to operate in more than one state, and the Glass-Steagall Act (1933) broke up unethical collusion between banks and brokerage houses. They were designed to protect the consumer--you and me--yet, Reagan, or his handlers, effectively dismantled them. And among the consequences were the $150 billion savings and loan bailout in the 1980s and the disaster in which we find ourselves today--for both of which we taxpayers are paying dearly.
The author reminds us several times throughout the book that the US economy was doing best historically when we were watching out for each other, rather than appointing corporate chieftains to regulate--or not--themselves. He also makes connections between those "values" that were dominant during the Reagan years and what dilemmas we're facing today.
Among the more important elements of the book was how Reagan's regime changed the values of Washington. The Republicans running for president in 2008, for example, all declared their following in Ronnie's footsteps--as if that was a good thing!
An important chapter of the book addressed issues of corporate mergers which became the trend while Reagan was in office. They were a consequence of Reagan's disregard for anti-trust policy. Kleinnecht, by the way, refers to Reagan's complete disregard for many a law, when Reagan told corporate leaders that he won't enforce the regulations!
In "Wrecking Crew," Thomas Frank refers to statements made in the early 20th century by acclaimed "conservatives" that to dismantle government, be sure to place unqualified people to run regulatory agencies. One of the inadvertently "amusing" portions of the book refers to characters who were responsible for Reagan's Dept. of Housing and Urban Development (HUD). Whether it makes you laugh or cry, that's up to you, but the evidence is solid that the Reagan administration learned from those whom Frank had quoted.
And those who're not Reagan fans will remember that Ed Meese, Reagan's attorney general, said that those accused of crime must be guilty. In a chapter entitled "The Man with the Badge," some of those of the Reaganut idiosyncrasies were exposed. Think: an attorney general with such disregard for the constitution. That may be a fair summary of the whole book!
A portion I almost forgot to include is a summary of Peggy Noonan's book "When Character was King" and a Meese memoir of the Reagan administration: 1) There really was no evidence of any "character" in the Noonan book and (2) Meese warmly recollected Reagan's activities as if ANYONE else you worked with wouldn't have done the same thing!
Again, there is so much in this fine book that I cannot do it justice by reviewing it here. The author relies on credible sources--despite what the Reagan theologians would like to admit. There were references in the text to the crimes for which an unprecedented number of Reagan's lieutenants were indicted and/or convicted. I wish the author had covered more on the Iran-Contra scandal for which the administration was afraid of Reagan's impeachment. Yes, those issues have been covered by other books, particularly Draper's "A Very Thin Line." But, since that was among the most conspicuous--and damning--of the Reagan criminality, I wish it had been covered a little more.
Most important, I guess, is to read this and recollect that we need a sense of collective values, the antithesis of that for which Reagan ostensibly stood--if we're all to survive the present day disaster which is a by-product of the Reagan years.
3 of 4 people found the following review helpful
on July 14, 2014
Reagan....salesman and magician, he could sell you something that stunk and you would buy it, he had that gee, shucks kind of delivery, that everyman, that you know me, I'm like you element, but he never was us, he was tricky and he was WRONG, WRONG, WRONG about so much. We got taken, and we still haven't figured it out.
56 of 84 people found the following review helpful
on March 8, 2009
While someone named an airport after Ronald Reagan, the only institution that should have ever born Reagan's name was the prison in which he belonged for his Iran-Contra scheme crimes, sharing a cell with Freeway Ricky Ross. Yet the damage the Reagan administration caused was so great that journalist William Kleinknecht's book THE MAN WHO SOLD THE WORLD: RONALD REAGAN AND THE BETRAYAL OF MAIN STREET AMERICA deals only with its domestic wrongdoing, such as the H.U.D. scandals, and easily fills 269 pages.
I remember episodes of television's ALL IN THE FAMILY where Archie Bunker mentioned wanting Ronald Reagan to be president. This was after Reagan's unsuccessful 1976 attempt to win the Republican nomination, which went to incumbent Gerald Ford. I've wondered if the ALL IN THE FAMILY writers inserted those remarks as jokes, considering Reagan's laughing stock image at that time, or if they anticipated Reagan's moment coming, as it finally did in 1980. The dim-witted, blue-collar Archie Bunker personified the voter who put Reagan over the top, swayed by straw man arguments and red herrings, failing to see how the candidate's anti-working class policies would rob the poor and middle class blind to give still more to the affluent. THE MAN WHO SOLD THE WORLD quotes a 1980 Reagan campaign speech passage void of substance that appealed to the Bunker voters: "I've found a longing among our people for hope, a longing for a belief in ourselves and the vision that gave birth to this nation. For the values of family, work, neighborhood, peace, and freedom." As you stand to salute the flag, check your watch and wallet.
THE MAN WHO SOLD THE WORLD explains Ronald Reagan's appeal as a combination of divide-and-conquer campaigning and the rise of America's Orwellian society, where helping the poor means hurting them by cutting welfare and food stamps while giving tax breaks to the wealthy; protecting freedom means violating the Bill of Rights; and promoting peace means preparing for war. While George Orwell may have named his book NINETEEN EIGHTY-FOUR by transposing the last two numbers of 1948, the year he published it, having someone such as Reagan in the White House in the year 1984 seems more than a coincidence.
William Kleinknecht says he wrote THE MAN WHO SOLD THE WORLD to remind us of the facts that contradict the fiction the moneyed interests in charge of the corporate media would have us believe about Ronald Reagan. Citing the 2008 failure of John McCain and Sarah Palin to win the White House despite using the same sales pitches as Reagan, he implies the public is finally seeing the rain outside its door despite the claims of sunshine by the power brokers and their flacks. I won't be happy until they remove Reagan's name from that airport, but if the author is correct, than the rejection of McCain and Palin is a start.
Read THE MAN WHO SOLD THE WORLD.