The Campaign Against Medicare

Many of the same arguments used against Medicare (a successful program) are still in use against healthcare reform legislation today.   

With Reagan’s 1961-62 campaign against Medicare, a symbolic line was crossed, the line separating business booster from political operative.

Beginning in 1952 the Truman Administration, through Federal Security Administrator Oscar Ewing, had begun advocating medical care for the aged—what would become Medicare. This was a retreat from Truman’s earlier calls for universal health care for all Americans. The implacable opposition of the AMA and other pressure groups made universal health care an impossible goal. By scaling back the ambition of the health care plan to encompass only aged Americans receiving Social Security, the Truman Administration hoped to mollify the conservative opposition.
In 1952 the first bill was introduced in Congress to create a Medicare program. The AMA immediately announced its opposition and worked tirelessly and successfully to prevent any such program from advancing in the Congress.
In 1958 the debate over Medicare acquired new intensity as Congressman Aime Forand (D-RI) introduced a bill in the Ways and Means Committee that was drafted by the Medicare-advocates who, in 1965, would play key roles in the eventual enactment of the legislation. The Forand bill was the most serious effort to introduce Medicare, and the AMA mobilized a massive campaign against it, quintupling its lobbying budget to fight Forand. Ultimately, Forand’s bill was bottled-up within the House Ways and Means Committee, but its popularity with both politicians and some segments of the public (labor united behind the idea of Medicare for the first time for example) gave the AMA a real scare.
By 1960 the two groups had been at loggerheads for nearly a decade and a compromise to the conflict was proposed by Senator Robert Kerr (D-OK) and Representative Wilbur Mills (D-AR). The Kerr-Mills bill—which like the Forand bill was also drafted in part by Medicare-advocate Wilbur Cohen—sought to substitute for a federal Medicare program covering aged Social Security beneficiaries, a state-based welfare program covering only the medically indigent and the aged on state welfare rolls. This scaled-back scheme was enacted into law in September 1960.
The Kerr-Mills plan had important differences from Medicare. First, it was a welfare benefit, limited in its scope to those able to demonstrate lack of financial means. Second, the programs would be state-based, rather than federal. But most importantly, the program would be entirely optional for the states. If a state chose not to construct a health care program under Kerr-Mills, they were free to ignore the law. Senator Pat McNamara (D-Mich.)—who was an opponent of Kerr-Mills—complained at the time, “The blunt truth is that it would be the miracle of the century if all of the states—or even a sizeable number—would be in a position to provide the matching funds to make the program more than just a plan on paper.”17
On its face, Kerr-Mills had the potential to be more generous in some ways than a Medicare-type program. At the time, there were 2.4 million seniors receiving state old-age assistance, and an estimated 10 million medically indigent who were not on state welfare rolls but who were unable to pay their own medical bills. Some or all of this population might be covered, depending upon the decisions of the individual states. This contrasted with the 14 million Social Security beneficiaries at the time. So in terms of scope, Kerr-Mills was likely to be a somewhat smaller program. But in terms of types of services, and the generosity of coverage, Kerr-Mills was virtually unlimited, with the federal government pledging to pay from 50% to 80% of the costs of whatever programs the various states created. But 50-80% of nothing is still nothing; so if a state failed to create a program—or created a very stingy one (as is typical for welfare benefits)—the theoretical federal support would be likely to not come to very much. Indeed, by 1963 there were still 18 states which had never implemented Kerr-Mills, three years after the legislation was enacted, and five large industrial states with only 32% of the medically-indigent were receiving nearly 90% of the federal funds expended under the program.18
Initially, even this truncated approach to social provision was bitterly resisted by the AMA. If Truman’s universal health care plan was socialism through and through; the scaled-back Medicare proposals were just socialism’s foot in the door; and even a Kerr-Mills program would just be socialism-lite. But finally, the AMA bowed to political realities and dropped its opposition to Kerr-Mills.
At this point, in 1961-62, Kerr-Mills was the AMA’s fall-back position in its continued opposition to Medicare legislation. The AMA’s argument was that Medicare was unnecessary because Kerr-Mills was a sufficient solution to the problem of medical care for the elderly. Given the limitations of Kerr-Mills, it is not surprising that the program failed to accomplish very much in the five years before it was repealed. A cynic might suspect that failure to accomplish very much was probably just what the AMA hoped for.
In the subsequent political battles over Medicare, the AMA would deploy an alternative strategy, rather than relying on support of the Kerr-Mills legislation. Following the 1964 presidential election, the AMA developed an alternative to Medicare which they labeled “Eldercare.” This scheme was essentially Kerr-Mills on steroids. It promised much more generous benefits than Medicare, but again limited to only the welfare population rather than to all aged Social Security beneficiaries.
In any case, the passage of Kerr-Mills in 1960 did not end the pressure for a Medicare program—as the conservatives and the AMA wished and hoped. After all, the non-indigent elderly were still in need of health care coverage and still unlikely to be able to purchase it in the marketplace. Studies at the time reported that the aged used medical services at a rate twice that of the non-aged; that three-fifths of the aged had less than $1,000 in liquid assets; and that nearly 54% of the aged lacked any form of health insurance. While opponents of Medicare disputed the precise statistics, it was clear to virtually everyone that the aged had medical-care problems that far exceeded those of the average American.
Following the defeat of the Forand bill, and the election of John Kennedy in November 1960, Medicare’s backers crafted a new version of the legislation, introduced by Clinton Anderson (D-NM) in the Senate and Cecil King (D-CA) in the House. The bill had the President’s backing and thus had acquired a sudden new dimension of political heft missing during the Eisenhower years. The AMA was thus understandably panicked by the appearance of the King-Anderson bill, after having tried to compromise Medicare out of existence with the Kerr-Mills strategy.
King-Anderson was, in terms of the Medicare program we know today, half-Medicare. It proposed to cover the costs of hospital and nursing home care, but not surgical costs and not out-patient physicians’ services. In this respect, it was scaled-back slightly from the Forand bill, which in addition offered coverage of surgical expenses. This scaling-back was a futile effort to lessen resistance to the idea of government-provided health insurance coverage.
So as 1961 dawned, the Kerr-Mills bill was established law, and the first King-Anderson legislation was pending in the Congress. The election of John F. Kennedy added new pressure to the push for King-Anderson and advocates for Medicare were optimistic that the 1961-62 session of Congress would see increased pressure for the enactment of Medicare in the form of the King-Anderson bill. Medicare was by no means a done-deal in 1961-62, even absent the AMA campaign against it. But the AMA campaign was a significant force of opposition striving to block Medicare during this period.
It is important to bear this history in mind when considering Operation Coffeecup, and Reagan’s subsequent positioning on Medicare, because it is this history that Reagan was to mythologize.

Coffee-Klatch Politics

The Woman’s [sic] Auxiliary of the AMA was an affiliated organization composed primarily of the wives of member physicians. Its 82,000 members in 1961 undertook a variety of educational, charitable, community service, and public relations tasks on behalf of the AMA. In the Spring of 1961, the Woman’s Auxiliary was asked to launch a special high-priority initiative under the title of WHAM, Women Help American Medicine. The avowed aim of WHAM was bluntly stated as: “This campaign is aimed at the defeat of the King-Anderson bill of the 87 th Congress, a bill which would provide a system of socialized medicine for our senior citizens and seriously curtail the quality of medical care in the United States.”19
The WHAM campaign officially kicked-off with a rally in Indianapolis on December 5, 1961 before an audience of 70 state Auxiliary women and 20 doctors, who were serving as WHAM advisers in Indiana. Within a month, WHAM state-rallies had been held in Illinois, Florida, Texas and Minnesota, with others scheduled for North Dakota, Pennsylvania, Wisconsin, Tennessee and Kentucky during February.
The AMA’s campaign against the King-Anderson version of Medicare was a complex, extensive, and well-financed lobbying tour-de-force. Many aspects of the WHAM campaign were very public and visible. The AMA placed advertisements in major newspapers and funded radio and television spots, all deploying the usual red-brush of “socialism,” and even the specter of jack-booted federal bureaucrats violating “the privacy of the examination room.”
The grass-roots efforts were even more extensive. Under the banner of “Operation Hometown” the AMA enlisted local medical societies to propagandize against King-Anderson. Speeches, reprints of articles, pamphlets on the dangers of “socialized medicine,” news releases, and even a High School Debate Kit, were all provided to local physicians to assist in the campaign.
These were the public face of the campaign, the very visible components of the AMA’s overall strategy. But there was also a more-stealthy component to the campaign, one that depended for its success on its sponsorship and origins being hidden from the members of Congress who would be lobbied under its aegis. This was Operation Cofffeecup.
The idea behind Operation Coffeecup, as the name hints, was to arrange a series of coffee-klatches hosted by the members of the Woman’s Auxiliary. The Auxiliary members receiving the Operation Coffeecup materials were instructed to downplay the purpose of the get-to-gathers, depicting them as sort of spontaneous neighborhood events: “Drop a note—just say ‘Come for coffee at 10 a.m. on Wednesday. I want to play the Ronald Reagan record for you.”20
The idea of using women in this way—as the grass-roots defenders of medical care—tapped into a long tradition of what historians now typically call “maternalist” approaches to social reform. From the earliest days of the Revolutionary Period when the “mothers of the Republic” were thought to be special repositories of civic virtue, to the settlement movement and the campaign for Mothers’ Pensions during the Progressive Era, Americans have often viewed women as providing a kind of “motherly” succor that gives them a special claim to authority on matters relating to social welfare. Thus it was a clever tactic to have the members of the Woman’s Auxiliary and their friends and neighbors write the first-person grassroots letters to members of Congress, rather than having the largely male physician-members of the AMA do so.
The attendees at these coffees were trained and encouraged in writing apparently spontaneous letters to members of Congress expressing their strong opposition to the pending King-Anderson bill. It was essential, the attendees were instructed, that their letters appear to be the uncoordinated, spontaneous, expressions of a rising tide of public sentiment. If the letters were perceived as being part of an organized campaign—the organizers of the organized campaign told the attendees—they would be dismissed by members of Congress, who were routinely inundated with such mail.21
The kit of materials sent to each Auxiliary chapter contained:

• A cover letter, informing the attendees that “the chips are down, in the next months Americans will decide whether or not this nation wants socialized medicine;”
• A list of members of Congress;
• A ten-point check-list on how to write effective letters to Congress;
• A set of instructions to hosts in what Operation Coffeecup was and how it was to be carried out, including “Provide guests with stationery, pens and stamped envelopes. Don’t accept an ‘I’ll do it tomorrow’ reply—urge each woman to write her letters while she’s in your house—and in the mood!”;
• A report form listing the number of attendees, the number of times the accompanying record was played, and the number of letters written.

All of this material was packaged as inserts to an LP vinyl recording entitled “Ronald Reagan Speaks Out Against Socialized Medicine.” The 19-minute recording featured a 2,000-word, 11-minute, impassioned address by Reagan, followed by an 8-minute follow-up by an unnamed announcer. Reagan’s work on behalf of the AMA was, listeners were assured, unpaid (although there was no mention of the fact that Reagan’s father-in-law was a top official of the AMA) and was motivated only by his own strong political convictions on the issue.
The record was the focus and the central product of Operation Coffeecup. It was the motivational message from Reagan that was expected to inspire the attendees to write those spontaneous letters to Congress. The AMA pressed 3,000 copies of “Ronald Reagan Speaks Out Against Socialized Medicine” and distributed them to AMA Woman’s Auxiliary members nationwide. The resulting letters to Congress, the AMA boasted, were “legion.”22 At the June 1962 convention each state President presented the highlight accomplishments of her state during the preceding year. The convention was told that “Operation Coffeecup spurred many members-at-large to personal action,” and one state president reported that one of her auxiliary members was personally responsible for getting 250 people to write letters to Congress opposing the King-Anderson bill.23

Figure 2: Cover of AMA record album, author’s copy

In order to maintain the illusion of spontaneity, the AMA did not announce the existence of Operation Coffeecup or publicize the Reagan recording. The record was to be used, campaign organizers cautioned, only in the groups meeting under the controlled conditions of the informal coffees. Under no circumstances, recipients of the record were warned, were they to permit commercial broadcast of the recording.
Operation Coffeecup was kept deliberately low-key and internal to the AMA, its Woman’s Auxiliary, and the trusted friends and neighbors of the Auxiliary women. Reagan’s efforts against Medicare were revealed, however, in a scoop by Drew Pearson in his Washington Merry-Go-Round column of June 17th. Pearson titled his item on Reagan, “Star vs. JFK,” and he told his readers:
Ronald Reagan of Hollywood has pitted his mellifluous voice against President Kennedy in the battle for medical aid for the elderly. As a result it looks as if the old folks would lose out. He has caused such a deluge of mail to swamp Congress that Congressmen want to postpone action on the medical bill until 1962. What they don’t know, of course, is that Ron Reagan is behind the mail; also that the American Medical Association is paying for it.
Reagan is the handsome TV star for General Electric . . . Just how this background qualifies him as an expert on medical care for the elderly remains a mystery. Nevertheless, thanks to a deal with the AMA, and the acquiescence of General Electric, Ronald may be able to outinfluence the President of the United States with Congress.24
Reagan’s recorded remarks are quite extensive, and reveal a determined and in-depth attack on the principles of Medicare (and Social Security), going well beyond opposition to King-Anderson or any other particular piece of legislation.
My name is Ronald Reagan. I have been asked to talk on the several subjects that have to do with the problems of the day. . . .
Now back in 1927 an American socialist, Norman Thomas, six times candidate for president on the Socialist Party ticket, said the American people would never vote for socialism. But he said under the name of liberalism the American people would adopt every fragment of the socialist program. . . .
But at the moment I'd like to talk about another way because this threat is with us and at the moment is more imminent. One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It's very easy to disguise a medical program as a humanitarian project. . . . Now, the American people, if you put it to them about socialized medicine and gave them a chance to choose, would unhesitatingly vote against it. We have an example of this. Under the Truman administration it was proposed that we have a compulsory health insurance program for all people in the United States, and, of course, the American people unhesitatingly rejected this.25

And what was this frightful threat that Reagan perceived as “imminent”?

. . . Congressman Forand introduced the Forand Bill. This was the idea that all people of Social Security age should be brought under a program of compulsory health insurance. Now, this would not only be our senior citizens, this would be the de­pendents and those who are disabled, this would be young peo­ple if they are dependents of someone eligible for Social Security. . . .

It should be obvious that Reagan’s description of the Forand bill is a description of any Medicare-type program, not just a specific piece of legislation.26 The idea that people of “Social Security age should be brought under a program of compulsory health insurance,” just is the idea of Medicare.
So if Reagan and the AMA were so opposed to this “threat” of health insurance coverage under Social Security, what was their preferred alternative?
As a matter of fact, in the last session of Congress a bill was adopted known as the Kerr-Mills bill. Now, without even allowing this bill to be tried to see if it works, they have intro­duced this King bill which is really the Forand bill. What is the Kerr-Mills bill? It is a frank recognition of the medical need or problem of our senior citizens that I have mentioned. And it is provided from the Federal Government money to the states and the local communities that can be used at the discretion of the state to help those people who need it.

The Kerr-Mills bill, which was not “pending legislation” but an existing law, was the AMA position on behalf of which Reagan was working. Kerr-Mills was a state-level welfare program for the needy. Where Medicare proposals like King-Anderson offered health care coverage to Social Security beneficiaries, Kerr-Mills offered to help pay the medical bills of those on welfare, or those who could qualify as indigent given their medical expenses. (Kerr-Mills would be superseded in 1965 by the program currently known as Medicaid, which like Kerr-Mills, is a welfare program.) So Reagan—on behalf of the AMA—was suggesting that the nation should be content with welfare benefits under a Medicaid-type program as the only form of government-provided health care coverage.

This irony of the early debates surrounding the American welfare state—that conservatives were the pro-welfare faction and liberals the pro-work requirement faction—was a key dynamic in the Medicare debates, as Theodore Marmor has pointed out.27 (There was also the issue of federalism in play here, with Republicans tending to advocate state programs and Democrats federal ones.) The reason for this reversal of roles (which was also evident in the debates around the original Social Security Act of 1935) is not hard to discern. By restricting federal programs to the “truly needy” those programs can be kept small, involving few if any middle-class or upper-class Americans. But if the universalist approach of social insurance is adopted then government’s role in the provision of economic security will be massive. So conservatives were historically only too happy to swallow a little more welfare, if that meant swallowing a lot less government.

Just to show that “class-warfare” was not a political deployed only by Democrats, Reagan then made one last argument against a Medicare approach:

Now what reason could the other people have for backing a bill which says we insist on compulsory health insurance for senior citizens on a basis of age alone regardless of whether they are worth millions of dollars, whether they have an income, whether they're protected by their own insurance, whether they have savings. I think we could be excused for believing that, as ex‑Congressman Forand said, this was simply an excuse to bring about what they wanted all the time: socialized medicine.

This again shows the basic antipathy of Reagan and conservatives to one of the foundational principles of Social Security, that it is a universal program in which benefits are not tied to a means-test. And again, he reveals the irony of a conservative spokesman advocating a means-tested program, i.e., welfare, as superior to universal contributory social insurance.

The other issue here is the “foot in the door” argument. Reagan insisted throughout his Operation Coffeecup speech that if the nation adopted Medicare this would just be the opening gambit in a movement for government-sponsored universal health care coverage and—given the equation between this state of affairs and “socialized medicine”—that Medicare would thus be the first step on the road to socialism. What goes unexamined by Reagan in this context is the question of why Kerr-Mills should be any different. Why are we entitled to assume that government-sponsored health care coverage of the Kerr-Mills variety contains no danger of leading to socialized medicine but that health care coverage of the Medicare variety does? The answer to Reagan’s unexamined question again hinges on the populations involved. If we are talking about a program covering only the welfare population, then there is a built-in ceiling on participation. Or to put it less antiseptically: if we have a program for the non-poor aged, other populations may clamor for participation; but if we have a program limited to the poor, we can presume there will be little agitation to join that particular social group in order to obtain medical care coverage.28

Reagan then moved on in his argument to offer his take on Social Security, and how Social Security related to this idea of public health insurance:

They want to attach this bill to Social Security and they say, "Here is a great insurance program, now instituted, now work­ing." Let's take a look at Social Security itself. Again, very few of us disagree with the original premise that there should be some form of saving that would keep destitution from following un­employment by reason of death, disability, or old age. And to this end Social Security was adopted. But it was never intended to supplant private saving, private insurance, pension programs of unions and industries.
This language skillfully elides the distinction—central to the conceptual basis of Social Security—between contributory social insurance and a welfare-based safety net. While Social Security was not intended to “supplant” private provision, the suggestion that its purpose was to avoid “destitution” can be read two ways. Social insurance theorists and policymakers believed that the way to prevent “destitution” was by deploying a universal, compulsory, social insurance scheme in which there is no means-test of eligibility. The contrary view is that whatever social provision government makes available ought to be in the form of welfare—staving off destitution by rescuing the destitute in an economic safety net. The reason the difference matters is it determines the scope of the government’s involvement in providing economic security. In the social insurance vision the program is massive, involving the participation of virtually every employed adult in the nation. In the welfare vision the program is miniscule, limited by the number of truly poor in the country. Thus an anti-government ideology, like that propounded by Reagan throughout his career, prefers a welfare safety-net to a universal social insurance scheme in order to minimize the role of government in economic provision. So Reagan in his commentary on Medicare was also subtly trying to undermine the whole Social Security system. This too was part of his 1961 agenda. But as to the government’s involvement in health insurance coverage that, according to Reagan, can only lead to a totalitarian future:
The doctor begins to lose freedom. . . . First you decide that the doctor can have so many patients. They are equally divided among the various doctors by the government. But then doctors aren’t equally di­vided geographically. So a doctor decides he wants to practice in one town and the government has to say to him, you can't live in that town. They already have enough doctors. You have to go someplace else. And from here it's only a short step to dictating where he will go. . . . All of us can see what happens once you establish the precedent that the government can determine a man's working place and his working methods, determine his employment. From here it's a short step to all the rest of socialism, to determining his pay. And pretty soon your son won't decide, when he's in school, where he will go or what he will do for a living. He will wait for the government to tell him where he will go to work and what he will do.

This specter of government control of the practice of medicine was never what Medicare was about. Nor was regulation of medical practice contemplated by Harry Truman in his most extravagant dreams of universal health insurance for all Americans. Medicare, as proposed in King-Anderson and as eventually enacted into law, only involves procedures for paying health care providers—it is a system for financing the costs of medical care, it has nothing to do with the regulation of medical practices. But this threat was the reliable boogey-man of all of the AMA campaigns since 1945, and Reagan used it extensively in his AMA recording.

In fairness, it is true that the Medicare program marginally regulates aspects of health care provision by the indirect effect of its reimbursement policies. In this regard, it is no different than any private insurer. When Blue Cross/Blue Shield decides it will not pay for certain medical procedures, or will only pay for a generic drug rather than a brand-name one, this affects the practice of medicine by encouraging forms of practice consistent with these reimbursement policies. So too with Medicare. But this is a far cry from the specter of an intrusive government presence in the examining room, peering over the doctor’s shoulder. It was this more apocalyptic version of Medicare’s potential effects on the practice of medicine that Reagan used to scare his listeners.

Having raised the specter of the government telling our children what they will do for a living and where they will work, Reagan offered the way out, the letter-writing campaign which would, in fact, help defeat the King-Anderson bill:

What can we do about this? . . . We can write to our congressmen and to our senators. . . . And at the moment the key issue is: We do not want socialized medicine. . . . In Washington today 40,000 letters, less than 100 per congressman, are evi­dence of a trend in public thinking. . . . Representative Halleck of Indiana has said, “When the American people want something from Congress . . . if they make their wants known, Congress does what the people want.” So write. . . . that you demand the continuation of our traditional free enterprise system.
You and I can do this. The only way we can do it is by writing to our congressman even if we believe he’s on our side to begin with. Write to strengthen his hand. Give him the ability to stand before his colleagues in Congress and say, I heard from my constituents and this is what they want.

So this was the heart of the matter. A few thousand letters to members of Congress and the ladies of the Woman’s Auxiliary could stop the inexorable march of socialism and save the free enterprise system. Well, at least, they could certainly help kill any proposal for Medicare.

Then, finally, the closing pitch, with Reagan the actor painting the portrait of an American sunset in a totalitarian world brought-on by the hell-hound of compulsory health care coverage under Medicare:
And if you don't do this and if I don't do it, one of these days you and I are going to spend our sunset years telling our children, and our children's children, what it once was like in America when men were free.
Following Reagan’s stagecraft peroration, the voice of an unidentified male announcer then comes on to reemphasize the political nature of the pitch, and to make certain that no wavering listeners miss the point. There can be no mistaking the aim of the AMA’s attack on “socialized medicine”—it is most assuredly an attack on the principle of Medicare and the legislation then pending to enact it.
Perhaps a little background on the subject of socialized medicine will prove helpful to you. To begin with, socialized medi­cine simply means compulsory national health insurance, med­icine controlled and administered by the federal government; financed through compulsory taxation. For many years, an at­tempt has been made to socialize the practice of medicine through the Social Security tax mechanism. . . . Last year, Representative Forand attempted to establish the principle of socialized medicine by applying it only to the el­derly—at first. He, and others like him, counted on the concern we all feel for those of the aged in need of help. The Forand Bill failed. But this year, another congressman has stepped forward to lead the forces of socialized medicine: Representative King, of California. It is his measure, H.R. 4222, or the King Bill, that now threatens the free practice of medicine.
Obviously, if socialized medicine “simply means compulsory national health insurance,” then any form of Medicare (the Forand bill, the King-Anderson bill, or the legislation finally adopted in 1965) would qualify as socialized medicine. So it is clear that it was the principle of Medicare, and not a specific bill, that was the target of Reagan and his Operation Coffeecup.
The announcer then refers again to the Kerr-Mills bill as the AMA’s favored alternative approach to the issue of health care for senior citizens:
I'm sure that we all recognize that some of our older people are in poor health and some can't afford to pay for the health care they need. That's why the doctors of America strongly supported the legislation passed during the last Con­gress: the so-called Kerr-Mills law. They felt, and have always felt, that people who need medical help should get it, but that tax dollars should not be used to pay the medical and hospital bills of those who are perfectly able to pay their own. Physicians favored the Kerr-Mills law because it would help those of the elderly who need help, help them quickly, and ef­fectively, and do so without wasting either the taxpayer's money or destroying the basic American freedoms involved in our system of medical practice.
The key virtues of Kerr-Mills, the announcer went on to say, were that it was an optional program administered at the state-level, and it helped the truly needy. What he did not clearly state was that it also meant that the government’s role in ensuring the availability of health care coverage would be minimal. And what the announcer and Reagan both carefully avoided making explicit was that the Kerr-Mills bill was a form of welfare.
In any case, the desirable Kerr-Mills approach contrasted sharply, the announcer continued, with the King-Anderson approach.
Here's how it would work. The federal government would buy a limited amount of hospitalization, nursing-home care, home-health services, and outpatient hospital diagnostic services for all eligible to receive Social Security retirement payments, regardless of their financial needs. The number of days the beneficiary could receive these services is limited. And the patient would be re­quired to pay ten dollars a day for the first nine days spent in a hospital, and twenty dollars for each complete diagnostic study made. Physicians' services in the fields of radiology, pathology, physiatry, and anesthesiology would be included, plus the ser­vices of interns and residents and those serving the outpatient clinics. There is little doubt but what the program would soon be ex­panded to include all physicians' services, as well as to cover the entire population, thus completely socializing medicine in the United States. The federal government would set up the rules and regulations under which the program would operate. And every one who pays Social Security taxes would help pay the bill . . .

Of course this rough description of how any Medicare system operates was intentionally misleading in several respects. Yes, beneficiaries would be required to meet a daily co-payment requirement, which might well be “ten dollars a day”—as opposed to paying it all without a Medicare program—paying it all at a time when the average hospital stay already cost about $50 per day. In fact, in the first four years of Medicare’s operations the average cost of a day in the hospital was $54.25, of which Medicare reimbursed on average 80% of the cost.29 And the fact that the government program would only reimburse the costs for a limited number of days of hospital care did not of course mean that care would be rationed and therefore medical care would become unavailable after a fixed period. But this distinction between regulations limiting the government’s payments for medical care, and limitations in that care itself, was one which the AMA campaigns always made sure was confused as much as possible, in order to maintain some semblance of plausibility to their claim that the government intended to regulate the practice of medicine.

In any case, however misleading it may have been, this description of the mechanism of Medicare was supposed to be self-evidently scary to the wives of AMA physicians and their neighbors and friends. But lest anyone miss the point, and lest anyone doubt that Reagan and the AMA were antithetical to the Social Security program itself, here is how the announcer continued:

I'm sure many of you are wondering why there's any objection to using the Social Security system to finance medical care for the aged. Well first of all, it is a misnomer to think of Social Security as being insurance. In the Nestor vs. Fleming case heard before the Supreme Court in 1959, the Department of justice in its brief said, "the OASI program is in no sense a federally-administered insurance program under which each worker pays premiums over the years and acquires at retirement an indefeasible right to receive a fixed monthly benefit. The contributions exacted, are a tax." Many people also have the mistaken impression that Social Security benefits are paid out of accumulated reserves, similar to private insurance programs, when in truth the program is fi­nanced almost entirely on a pay-as-you-go basis, with the benefits paid out of current income. Pay-as-you-go means that the government raises, through current taxes, just enough money to pay the cost of the benefits currently due. No one prepays his own benefits. Today's taxpayers pay for today's beneficiaries. The acceptance of the King bill would actually mean that our children and grandchildren will be asked to pay ever-increasing Social Security taxes to finance the medical-care needs of the previous generations. With growing families, young people have enough difficulty trying to make ends meet without assuming the additional obligation of paying higher taxes to pay for the medical-care needs of all over sixty-five, many of whom are in better financial shape than those paying the tax.
This description of the Social Security system is a traditional form of the conservative critique of Social Security. This critique shows that Reagan and the AMA were not reconciled to the existence of the Social Security program itself, not to mention its extension to include Medicare.
Finally, the announcer closed with the same “it’s sunset in America” passage read by Reagan:
Now this is the choice we're faced with: on the one hand, we can help those who need help while preserving the right of the self-reliant to finance their own care. Or we can legislate a compulsory national health scheme for the aged, regardless of whether they need it or not. . . . Americans are being asked to choose between a system of medicine practiced in free­dom and a system of socialized medicine for the elderly which will be expanded into socialized medicine for every man, woman, and child in the United States. Your letter will help determine the outcome of this struggle. Remember what Ronald Reagan said:
[Reagan's voice comes on again]
Write those letters now. Call your friends, and tell them to write them. If you don't, this program I promise you will pass just as surely as the sun will come up tomorrow. And behind it will come other federal programs that will invade every area of freedom as we have known it in this country, until, one day . . . we will awake to find that we have so­cialism. And if you don't do this, and if I don't do it, one of these days, you and I are going to spend our sunset years telling our children, and our children's children, what it once was like in America when men were free.

The Reagan Myth and Medicare

Throughout his presidency, Ronald Reagan displayed a disconcerting tendency to prefer performance over reality and myth over historical fact. As Reagan recalled his own personal history in 1980, he had never been an opponent of Medicare and had never advocated making Social Security voluntary. To President Carter’s claims that he had in fact opposed both Medicare and the existing Social Security system, Reagan’s flip reply was “There you go again,” and that was pretty much the end of the issue. However, it is quite unambiguously the case that Ronald Reagan had a long-standing, deeply-held, strongly-expressed, political/philosophical antipathy to both Social Security and Medicare. Not only did Reagan advocate making Social Security voluntary in the 1964 Goldwater campaign, he continued pushing this position throughout the 1970s—even arguing in 1975 that Social Security should be privatized—despite his denials in the 1980 campaign that he had ever advocated any such thing. He also clearly opposed Medicare in any form in his efforts as part of Operation Coffeecup.
The fact is that Ronald Reagan played a visible role in delaying the creation of the Medicare program. In 1961-62 he helped block passage of the King-Anderson bill, which potentially might have given us the Medicare program four years earlier.30 We can also be fairly confident that when Medicare was enacted four years later, that Ronald Reagan was still deeply opposed to its creation and viewed it as the sun setting on America’s future.
In the first four years of its operation, the Medicare program paid for $17.9 billion of medical care for America’s senior citizens. This money paid 24.6 million hospital bills under Part A of the program, and 96.8 million doctors bills under Part B of the Medicare system. The Part A hospital insurance covered 246 million days of in-patient care in the nation’s hospitals during those first four years.31 It is impossible to say how much of this care would not have been provided in the absence of the Medicare program; but given that somewhere around 50% of seniors lacked any form of health insurance before Medicare, it is a virtual certainty that millions of Americans received medical care under Medicare that they otherwise would not have received, and that much pain and suffering was thereby reduced or avoided. The AMA’s assumption that all this care would somehow have been received—through Kerr-Mills or some other mechanism—was certainly a self-serving self-deception.
The cold fact is that probably millions of Americans could have received foregone medical care during the nearly four years between the December 1961 launching of Operation Coffeecup and the eventual enactment of Medicare in July 1965, if the AMA and Ronald Reagan had not been so successful in their efforts to block Medicare’s passage.
By 1980, this aspect of Reagan’s personal history had become a political liability that he did his best to conceal. There are only four possible interpretations of Reagan’s subsequent representations regarding his earlier positions on Medicare and Social Security.
We might credit him with changing his mind in the light of a decade-and-a-half of experience with Medicare, and with the realization that indeed the sun continued to come up each morning, and that Norman Thomas never ascended to the presidency. Yet he gave no indication that he had changed his mind on the principles of his conservative philosophy toward the American welfare state. It seems more likely that he was philosophically un-reconciled to both Medicare and Social Security, even if he had to soft-pedal his opposition in order to be a successful politician.
He might simply have been lying. As politicians are sometimes wont to do, Reagan might have been “spinning” his audiences during the 1980 campaign, trying to convince them that a politically troublesome fact of his past was not a fact at all.
We might be willing to grant that over time memory had dimmed the distinction in his mind between the Kerr-Mills and King-Anderson bills. Certainly we can grant the little slip of timing by which Reagan claimed Kerr-Mills was a pending alternative to King-Anderson at the time he recorded his AMA record for Operation Coffeecup. But it is simply not creditable for a presidential candidate—and a politician who had been speaking and writing on the subject for decades—to fail to understand the rather large distinction between a welfare program like Kerr-Mills and a social insurance program like Medicare. To imply that Kerr-Mills was somehow a better version of Medicare, and that was the reason he supported it in 1962, is simply not credible as a truthful report about Reagan’s past political positions. The AMA and Reagan supported Kerr-Mills in 1961-62 precisely in order to prevent Medicare from ever being enacted. The AMA and Reagan both knew perfectly well what they were doing, and it is difficult to believe that Reagan could somehow have forgotten the purpose of his work on behalf of the AMA campaign.
Finally we come to what is perhaps the most disconcerting possibility of all. It may well be the case that Reagan was so adroit at story-telling in place of analysis, and anecdotes in lieu of facts, that for him mythmaking and policymaking were often one and the same activity. When he wanted to emphasize his commitment to the state of Israel, he may have genuinely seen no harm in manufactured memories of his having played a role in documenting the Holocaust. When he wanted to argue that welfare was wasteful and often unnecessary, he may have genuinely believed that there was a “welfare queen” in Chicago who drove her Cadillac to the welfare office to pick up her multiple checks. And when he wanted to be seen as the friend of seniors and the defender of Social Security and Medicare, he may have honestly believed that his efforts on behalf of Operation Coffeecup had nothing to do with trying to kill Medicare, but rather with trying to improve it.
We cannot be sure which of these scenarios best capture Reagan’s efforts to falsify his own past. For myself, I fear Reagan actually believed many of the myths he spun around his personal and political history. And there is no myth quite so dangerous as one the mythmaker himself fully believes.
 

Acknowledgments

This paper has benefited from the review and comments of Professor Max J. Skidmore of the department of political science at the University of Missouri-Kansas City, and from the thoughtful insights and comments of Professor Edward D. Berkowitz of the department of history at George Washington University.

Is President Barack Obama a Socialist?

I have been considering my thoughts about the current American political scene quite a bit lately. One reason I have been contemplating all this is that I have been sent, frequently of late, sent a lot of negative e-mail and video clips about President Obama's supposedly Socialist agenda. Many of the YouTube style videos out on this have the comments either cut off or moderated pending approval. This is kind of funny when the videos are often accusatory about president Obama and/or representatives of his administration being asked and supposedly tough questions and then supposedly dodging answering them sufficiently.

I observe that most of the strongest critics are not even listening to the answers- but rather are simply enjoying seeing the "tough" questions that they are obsessed about having asked be posed. When the answers come- many of these these critics simply ignore the answers they were given and insist that their questions were either ignored or that the answers were fallacious. People often see what they want to see and hear what they want to hear. This is an innate feature of humanity it seems. Those that are observant will see many prime examples of this in the political discourse of nearly every single day right now.

Here is what I have seen transpire over recent years.

First, when former President George W. Bush wanted to implement his tax cuts for the wealthier American citizens and businesses, McCain opposed it and voted NO (neaux).
McCain said it would hurt the middle class and the less fortunate. Go check the voting records.

During Obama's campaign for the presidency he explained that he was seeking to essentially roll those same tax cuts that John McCain opposed back and instead give them to the middle class and less fortunate (ironically, like Joe the plumber). Suddenly Obama was labeled a socialist and commie according to the McCain- Palin campaign and right wing America. This, I thought to myself, was an insult to the intelligence of EVERYONE.

Secondly, there was this from the Constitution:

AMENDMENT XVI

Passed by Congress July 2, 1909. Ratified February 3, 1913.

The Congress shall have power to lay and collect taxes on incomes, from whatever sources derived, without apportionment among the several States, and without regard to any census or enumeration. The income tax is collected yearly on a percentage basis. The higher the earnings, the higher the percentage collected from them. This changes article 1 section 2.

So then, we have had a progressive income tax in America for many years. That's the way its been done for a couple of lifetimes. Considering that, this charge of socialism and the evils of wealth redistribution and revolutionary radicalism levied against now President Obama regarding his taxation plans doesn't rhave in teeth after all. Anybody that yet believes that President Obama is a total socialist/communist obviously has not really read the Communist Manifesto and does not really know what the definitions of socialism are. The best one can come up with is a few quotes by Karl Marx that seem to parallel some quotes by President Obama. I can produce quotes from any American leader in the last 200 plus years that parallel ideas by many other notorious dictators from Saddam to Stalin to Hitler. So what? Such comparisons are usually just political gamesmanship or shortcuts to actual analysis.

I have discovered in my own studies and research that President Obama is not a socialist if you ask a socialist; Greg Pason, National Secretary of the Socialist Party USA and David Schaich, Socialist Party Campaign Clearinghouse Coordinator both say he's ...definitely not. Schaich says: “The idea that Barack Obama is socialist, or quasi-socialist, or semi-socialist, or socialist-light, or anything of the sort, is far-right nonsense. Barack Obama, like John McCain, is very much a ‘politician as usual,’fully committed to the continuation of the capitalist system and the expansion of its empire.” A socialist agenda (even a reformist one) would not prop up capitalism and capitalist economies or companies when they fail, but rather sieze upon the opportunity to radically transform the economy. None of President Obama's proposals or programs offer any perceptible threat to capitalism. These quotes and many others were easily found in cursory research of the actual question of whether president Obama is a socialist- rather than a blind acceptance of the precept that he is or a search for evidence to prove a pre determined premise.

I will also say that it is kind of hollow to be complaining about socialism and/or communism or using words like "liberal", "socialist" or "communist" as perjoratives when our homes and store shelves are jampacked with goods made in COMMUNIST China and nearly every dollar we spend at places like Wal-Mart fattens up China with its terrible human rights record and its RED, NUCLEAR CAPABLE ARMY. Unless you do not buy, sell, trade, consume or own anything from China you simply cannot gripe about socialism and/or communism without being a hypocrite.

Now, communism or capitalism are both worldly systems flawed by fallible humanity and self interests and vested interests of the wealthy and/or powerful. Neither system is really, intrinsically more or less evil than the other. I have seen no convincing evidence that God is a capitalist. In fact, as As C.S. Lewis pointed out in "Mere Christianity", a great deal of what is condemned nowadays as leftist or subversive is found in the teachings of Christ as in the Sermon on the Mount and also in the New Testament as written by Paul- like sharing, concern for fellow man, love of enemies, the peaceable as opposed to militaristic nature, the humility and meekness as opposed to crassness, the aversion to worry and fear, etc. The "religious right" which is participant in much of this cant and fear mongering and worry about the evils of socialism would do well to remember some of that. Now get this straight, I am neither capitalist or communist- both systems are worldly and ultimately doomed to failure by human factors- not to mention the natural cycles of history and/or God's intervention and plan for human history, if one believes in that sort of thing (I do).

With all of this hullabaloo about wealth redistribution, many "conservatives" seem to have forgotten what Sarah Palin did in Alaska:

Palin’s criticisms of President Obama’s “spread the wealth” remarks are ironic to put it nicely and plain old campaign Bull in the street vernacular. She recently characterized Alaska’s tax code in a very similar way. Just last month, in an interview with Philip Gourevitch of the New Yorker, Palin explained the windfall profits tax that she imposed on the oil industry in Alaska as a mechanism for ensuring that Alaskans “share in the wealth” generated by oil companies:

And Alaska—we’re set up, unlike other states in the union, where it’s collectively Alaskans own the resources. So we share in the wealth when the development of these resources occurs. … It’s to maximize benefits for Alaskans, not an individual company, not some multinational somewhere, but for Alaskans.

In fact, Alaska’s Clear and Equitable Share (ACES) program, which manages the redistribution of oil wealth in Alaska, brings in so much money that the state needs no income or sales tax. In addition, this year ACES will provide every Alaskan with a check for an estimated $3,200.

Perhaps there is some meaningful distinction between spreading the wealth and sharing it?

Perhaps the McCain- Palin supporters or "conservatives" see some important distinction between what Obama is talking about and what Palin has done to redistribute wealth in Alaska that I am missing it and I need a far greater intellect to tell the difference? I submit, though, that it is at least possible, if not very likely, that just as McCain and Palin were trying to win a campaign, many "conservatives" and/or "conservative" politicians are now simply trying to cost the current President some political capital so as to increase their chances at regaining seats of power and they are in fact self contradictory and just don't know it or don't care. I submit that ascertaining that really only only requires the analytic skills of say... a sincere fifth grader with a speck of curiosity, objectivity or self critical analysis.

It seems to me that the American system has long been a sort of hybrid of capitalism and so called socialist ideas, what with things like Social Security, Medicare, corporate subsidies and bailouts, welfare, and all sorts of other programs designed to make our system work more smoothly and not implode upon itself due to imbalances in it. "Liberals" certainly seem to idealize and overestimate the amount of actual good and prosperity can be achieved by way of good intentions and throwing money at problems. Conversely, "liberals" tend to underestimate how much the flaws of human nature can be suppressed using these same means. In the end, both "conservatives" and "liberals" both seem to have Utopian ideas about the perfectibility of human nature and how good things could be if they could just convert or eliminate each other or the "others" they fancy as "them". I myself am an idealist- but not as much of one as those who proudly wear the labels of "conservative" or "liberal.... I do try to stay grounded in a reality based world view.

Busting The Reaganomics Myth

What we have nowadays, rather than a “government”, is actually more of a dualistic system of adversarial fat cats whose primary activities, it would seem, are the acquisition of power, the maintaining of it, exchanging insults and being nasty to one another…

This article, about a former Reagan admin. insider, will challenge all the conventional wisdom about "conservative" vs. "liberal" politics:

"Trickle Down" economics was a "Trojan Horse"

David Stockman

In the 1980’s Ronald Reagan ushered in a new era in American economics as he cut the top tax bracket from 70% down to 50% and then down again to 28%. In order to get support for doing this from the people, and also from politicians, a very crafty set of lies were produced. As David Stockman, then Reagan’s budget director, put it: giving small tax cuts across the board to all brackets was simply a “Trojan Horse” that was used to get approval for the huge top tax bracket cuts. “Trickle-Down” was a term used by Republicans that meant giving tax cuts to the rich. Stockman explains that:

"It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."

"Yes, Stockman conceded, when one stripped away the new rhetoric emphasizing across-the-board cuts, the supply-side theory was really new clothes for the unpopular doctrine of the old Republican orthodoxy."

"…the Reagan coalition prevailed again in the House and Congress passed the tax-cut legislation with a final frenzy of trading and bargaining. Again, Stockman was not exhilarated by the victory. On the contrary, it seemed to leave a bad taste in his mouth, as though the democratic process had finally succeeded in shocking him by its intensity and its greed. Once again, Stockman participated in the trading -- special tax concessions for oil -- lease holders and real-estate tax shelters, and generous loopholes that virtually eliminated the corporate income tax. Stockman sat in the room and saw it happen."

"'Do you realize the greed that came to the forefront?' Stockman asked with wonder. 'The hogs were really feeding. The greed level, the level of opportunism, just got out of control.'"

The Education of David Stockman 1981:

http://www. theatlantic. com/politics/budget/stockman.htm

Reagan's policies did more than simply cut income taxes. A large number of tax loopholes were written into the tax code that catered to special corporate interests. In fact many of the current scandals involving companies such as Enron are rooted in laws that were passed during the Reagan administration that gave these companies more legal legroom to work with and less oversight.

In addition, the small “income-tax cuts” that were given to the middle and lower income tax brackets were countered with new taxes that were directed at middle and low income individuals, as former House Speaker Jim Wright said:

Reagan's tax increases fell mainly on consumers, low- and middle-income people. Sales and excise levies. Reagan didn't call these taxes. They were, in his euphemistic lexicon, "user fees" and "revenue-enhancers."

The most important issue though is that even if you take the Reagan “Trickle-Down” policy at face value it’s still horribly flawed as a policy that will provide economic growth that benefits all Americans.

There is no realistic way for "Trickle-Down" economics to work to increase the income of the working classes of America. In fact I am certain that the developers of the theory of "Trickle-Down" economics were fully aware of this and that "Trickle-Down" has in fact worked as intended. This means that the intent behind implementing "Trickle-Down" was to benefit the wealthiest Americans at the expense of working class Americans. "Trickle-Down" hasn't failed, as many modern economists have suggested, it has succeeded in its goals, which is the increase of economic inequality and the shift of a greater portion of America's wealth into the hands of the wealthiest Americans.

I'll show you exactly why "Trickle-Down" can never really trickle down, and I'll expose the logic that was used to trick Americans into supporting the idea that freeing up money for the wealthy could somehow benefit the poor and middle class.

I'm going to use a very simplistic example to demonstrate the principles of "Trickle-Down" economics. No, this is not a 100% accurate model of our economic system, and it assumes that "all other aspects of the economy are equal," but the major principles are represented. I will give "Trickle-Down" the benefit of the doubt and assume that it actually does create jobs in my example.

We have a room with 5 people in it. The total value of all the money in the room is $10. 00. The money is apportioned as in the table below.

Total Value $10. 00
Jim	$4. 00	40%
Susan	$3. 00	30%
Tom	$2. 00	20%
Amy	$1. 00	10%
Bill	$0. 00	0%

Sam enters the room and says that he has $10. 00 that he wants to give to Jim. This makes everyone else unhappy of course and everyone says that they will beat Jim up if he takes the money. Sam then proposes a solution. He says that if everyone allows him to give Jim $6. 00 he will give $1. 00 to everyone else in the room. This sounds pretty good to everyone so they agree to let Jim receive the money. So, after Jim gets the money and everyone gets a dollar this is what the monetary breakdown of the room looks like:

Total Value $20. 00
Jim	$10. 00	50%
Susan	$4. 00	20%
Tom	$3. 00	15%
Amy	$2. 00	10%
Bill	$1. 00	5%

As you can see, due to inflation most of the other people in the room either lost value or saw no real gain. As you can also see the size of the "economy" did in fact grow as the theory of "Trickle-Down" proposes, but the growth only benefited one person, Jim, and arguably Bill. Even though the economy grew overall most of the people in the room saw a loss of value. This is because the value of money is relative. It's relative to many factors, but one is how much money is in the system. If you have 1 dollar out of 10 then its worth more than 1 dollar out of 1,000. How wealthy you are in terms of dollars is not measured by the number of dollars you have, it is measured by the share of dollars that you have out of the total number of dollars in the system.

Now, your opinion of Sam and Jim can be one of only two options.

1) Jim and Sam were naive and actually thought that they were going to be helping everyone with their actions; the fact that the actions had a negative effect on everyone else was an accident.

2) Jim and Sam knew that taking the $10. 00, keeping $6. 00 of it, and giving $1. 00 to everyone else wasn't going to help anyone but Jim, and they tricked everyone for the purpose of self gain using the $1. 00 "gift" to the under-classes as a "Trojan Horse" to support the action.

As in the example above there are three basic possibilities for economic growth (and many variations in between): Either the growth of the economy can be spread equally among everyone, the growth of the economy can be shifted towards the bottom of the population in which case the poor see a rise in relative value, becoming "less poor," or the growth can be shifted toward the top in which case the rich see a rise in relative value, becoming "more rich. "

The general economic policy of "Trickle-Down" that was put in place by Reagan has gone fundamentally unchanged since it was adopted by the country in the 1980s. The claim of Reagan was that "all boats would rise" by giving huge tax cuts for the wealthy. This did not happen. The majority of boats stayed the same or sank, while only between 5% and 1% of the boats actually rose.

The effects of "Trickle-Down" policy are evident. As would be expected from the policy, the largest beneficiaries of the "Trickle-Down" system have been the wealthy.

Individual earnings inequality as reported by the U. S. Census Bureau was falling or stable from the 1960s through the 1970s, however, beginning in the 1980s, along with the economic reforms of "Trickle-Down" policy, income inequality began to rise and has continued to rise dramatically ever since, as shown in the figure below.

(Data for the graphs below comes from the US Census Bureau)

http://www. census. gov/hhes/income/histinc/histinctb.html

Although there was a huge increase in real income for average Americans between World War II and the 1970s the income of the average American male has gone essentially unchanged since 1970 as the figure below indicates. Income for females though has continued to rise. What is significant about this graph is that between 1980 and present (2003) the incomes of the top 2% of American wage earners has gone up dramatically despite the stagnation of the income of average Americans.

This graph shows both average hourly earnings and the minimum wage together in 2001 dollars. As you can see both the minimum wage and average hourly earnings reached their peak in the 1960s and 1970s. This graph does not go back any farther than 1960, but for all practical purposes the peak shown here in 1973 is the historical peak for hourly earnings in America. See the source data in the link below for details on hourly earnings.

http://w3. access. gpo. gov/usbudget/fy2000/sheets/b047. xls

As we can see below, the percentage of people in poverty who are also working full time has gone up steadily since the 1970s, and it also underscores an important point, as all of these graphs do, which is that the fundamental economic policy of the Reagan administration has gone essentially unchanged, even by President Clinton.

http://www. census. gov/hhes/poverty/histpov/hstpov18.html

Today we are still operating under a Supply Side economic model. In fact, even though the average income tax rate paid in America today is roughly the same as it was in 1979, the average income tax rate for the top 1% is less than it was in 1979. The graph below shows the actual percentage of income paid to all (Income, Social Security, Corporate, Capital gains, and Excise) Federal taxes per the various groups. During the Regan era, you can see that total Federal taxes on the lowest income groups actually went up. Clinton continued to maintain the Supply Side model that was established under Reagan. By 2000 the Top 1% still maintained significantly lower taxes compared to the pre-Reagan era, but taxes on "upper middle class" earners had increased and taxes on the middle class have stayed about the same as they were just prior to Reagan's entry into office, which is higher than they ever were prior to the 1970s.

http://www. cbo. gov/showdoc. cfm?index=4514&sequence=3&from=0

As the figures below indicate, the degree of increase in income for the wealthiest Americans has far outpaced the majority of the population, a trend that also started with the Reagan Presidency. A large factor in this increase for the top 2% has been capital gains.

http://www. cbo. gov/showdoc. cfm?index=3089&sequence=11

The two graphs above show similar data, but there are some important differences. Obviously the first graph shows a wider range of data in terms of the years that it covers, but the first graph also shows the data for total household incomes, which have increased among the bottom quintiles in large part because of the increase in two or three worker households, but the bottom graph shows the data adjusted for household size. In addition the bottom graph obviously also shows data for the top 1%, whereas the top graph does not, and, perhaps most significantly, the bottom graph shows after tax income, so it is showing what was taken home after all federal taxes were paid.

This next graph shows an even longer range view. This shows after tax income in 2000 dollars going back to 1913 for the top 1% and the average for the remaining bottom 99%.

http://www. aflcio. org/corporateamerica/paywatch/

After World War II significant efforts were made to ensure prosperity for all Americans. These efforts dramatically reduced poverty rates and helped to build the strong middle-class that America has become famous for. However, as the graph below shows, significant changes began with the Reagan presidency.

Between 1965 and 2001 the number of multi-worker households has increased dramatically. In fact the slight increase in income that is shown for the 1^st through 4^th quintiles in the graph titled Average Household Income by Quintile (a quintile represents 1/5^th of the population) is primarily attributed to an increase in the number of households with two or more workers supporting the household. Individual male income for the 1^st through 4^th quintiles has actually gone down or stayed the same since the 1980s when adjusted for inflation.

In 1965 27% of the full time workforce was female, by 2001 that number had risen to 41%. What has allowed the average American household to continue to maintain a good standard of living is an increase in multi-worker households and a decrease in the number of children that families have, as well as a large increase in the trade deficit, with increasing numbers of American goods being made in third world countries.

The issue is that the economic policies of the Reagan administration were designed to primarily benefit wealthy Americans. At the time a lot of smoke and mirrors were used to convince average Americans that these policies would help them as well. A similar set of lies has been used by those, like Steve Forbes, who promote a flat tax system.

What the "Trickle-Down"/Supply Side policies of the Reagan administration were designed to do was to increase the amount of money available to wealthy Americans for investing and developing businesses. This was intended to create an increase in production of products and services and hence and increase in new jobs. The reason that the policy is called Supply Side, is because the supply of goods increases before there is a demand for goods. So, in that case, the supply of goods is intended to then spark demand, resulting in economic growth.

This use of Supply Side policy led to a huge increase in consumerism and the use of credit. An environment of consumerism was created in American society through the media via advertisements, movies, and television shows, etc. that promoted consumerism. Consumers though, did not have the money to fulfill the desires created by society so debt was used to participate in the economy. Restrictions on credit were loosened under the Reagan administration making it easier for individuals to gain credit lines because the use of credit was essential to growing the economy because real wages were not going up for the average American, yet it was essential that the average American increase spending in order to fuel the economy. This situation fueled female entry into the workforce as more households require two workers to maintain their standard of living.

The result of this is that American household debt has been constantly hitting new highs since the 1980s as can be seen in the graph below provided by Michael Hodges.

http://mwhodges. home. att. net/nat-debt/debt-nat-a.htm

The truth is that "Trickle-Down" was never intended to help middle income and poor Americans; it was intended to help the wealthy and Corporate America.

The economic policies of the Reagan era increased the trade deficit and provided easier ways for companies to "hide" money.

1980 the top 1% of tax filers received 8. 45% of American AGI (Adjusted Gross Income) and in 2000 that figure had risen to 20. 81% of the national AGI. Today the over 50% of the national income goes to the wealthiest 20% of Americans. This is the first time since 1935 that such a large portion of the national income has gone to such a small portion of the population. In 1967 the wealthiest 20% only accounted for 43% of the nation's income. The trend began in 1982. Between 1967 and 1982 middle-income households were gaining a larger share of the economy. What this means is that between 1982 and 2001 the bottom 80% of Americans have lost share in the nation's economy. This was the inevitable result of Reaganomics. It was an intended result. Political control and economic control go hand in hand. If the control of the economy is not in the hands of the majority of Americans then neither is political control.

For more on taxation and income in America see:

In Depth Analysis of American Income and Taxation

Lawrence O'donnell Calls Cheney Speech Sleazy And An Abomination

Am I Conservative?

I have not been writing actively since about the time of the U.S. presidential elections. After the last several years of the very heated geopolitical climate, the milieu of the Church and all the passion I had invested in the things I have written about- it was time for a break and a re-alignment of my own spirit. After attending the funeral of my beloved 92 year old Cherokee grandmother and an energizing visit with my aunt and uncle and other relatives- I have decided it is time to wield my voice again- hopefully in a way thast reflects the progression of my spirit as guided by the Holy Spirit. I am hoping to bring out less of me and more of my Master.

Let's start with this. This, from my e-mail archives, was merely an attempt to explain to my friends and family where I was coming from around the time of the elections. I think it is an important point in trying to explain my perspective, which is hopefully representative of God's perspective.

Subject: Am I conservative?
Date: Thu, 23 Oct 2008 18:18:44 -0500

I received a message earlier that asked a few good questions and raised a few good points. Since I have been torturing you with e-mail rants between another person and I- this may give a "frame of reference" to some things that have been said:

To SS:

Who is Mr. Rowley? (I had an exchange with him that was public and very harsh from his side)

I receive a lot of emails from acquaintances that I've made over the years. 100% of the political related email that I receive is a bunch of right wing spin with one exception. You are the exception. Your emails appear to be left wing spin compared to everything that I receive. I enjoy and value your emails as I do you my friend.

I know that you declare yourself independent as I have seen you state numerous times. Be aware, however, that SOLELY BASED ON YOUR EMAILS I would label you a full blown liberal before considering you to be libertarian as I believe that you would probably prefer. Anyway, it's all perception and opinion that is founded by one's own frame of reference. That's my honest perception be it good, bad, right, or wrong.

I listen to NPR a lot recently because I detest commercials. Yesterday there was a very interesting segment with an author that chronicled the philosphies of the early Quakers. They were very disciplined and were driven to create education institutions for the pure sake of knowledge. It was important to them that there leaders were EXPERTS on the United States constitutions and all concepts and philosophies of it's basis. This was a critical point for their choosing a president considering that person is the foremost defender of the constitution. I have not heard this concept uttered a single time this election. Have any of the candidates achieved a sufficient level of expertise of the United States constitution to be true defenders of it?

Answer from SS:

That is the father of some good friends I made in Dallas. He gets credit for launching my career as an armchair pundit. I was in his back yard by the pool one day in 1998 with Chuck and his sons sharing some cold beverages. One of the sons casually mentioned that I was not going to be supporting then Texas governor George W. Bush for his quest for the office of president. Right then and there without asking a single question of me and without nuance he lit into me with a tirade not unlike the ones he's written this week. I barely got a word in.

Afterwards, I thought to myself, if this mean spirited fellow is a representation of what conservatism has become, then as now counting myself as a conservative at heart, then this whole "conservative" thing is waaaayyyy off the intended track. This inspired me to start writing and as soon as I could I started doing just that and hitting his e-mail box with challenges to his twisted world view. Needless to say it has not played well with him.

I agree that the perceptions of these terms have much to do with contrasts and frames of reference. I am sure I am a flaming liberal up next to Mr. Rowley and most other inobjective, party line toting ideologues. It is a relative term. I can tell you that in Native circles I would be considered very much conservative and traditionalist. I was thinking about this very concept today and came to the conclusion that where the disconnect and misunderstanding lies in this is that I am operating from a spiritual, biblical, Christian conservatism that takes seriously Christ's injunctions against intolerance and the overly militaristic reliance on the myth of redemptive violence and worldly power structures and folks like Mr. Rowley are operating from a very contaminated- by-the- world version of Christianity that for the most part is not authentic spirituality but worldliness and American nationalist, political ideology with a quasi Christian veneer slapped over it.

I may be the only one operating with definitions like this that you know- but I stand on what I say. I have said before that these terms conservative and liberal have lost their meaning and what we actually have here in the US political arena is authoritarian and worldly and more authoritarian and worldly.

Another thing... Mr. Rowley does not really know me because as you can imagine he is nearly impossible to talk to in person and has little more than his own 'frame of reference" and the e-mails to go on concerning what I think.

Lastly, not that I am a constitutional expert, no, none of these candidates both know and honor what the constitution actually says- which I can plainly see even with my own limited knowledge of the document.

Thanks for the good word.

Now, this is a comment I got back from an old Bible teacher of mine that I first met during my stay in Waco, TX. on the subject of my claims of conservatism in the above message:

Interesting.

I tell people I’m a conservative, and that those who try to pass themselves off as “conservatives” these days are really liberals. I can demonstrate this philosophically. In short, the “liberal” position in the Enlightenment (out of which our nation sprang, NB), was “anti-conservative.” The “Conservative” position were those who believed in conserving tradition (in this case the Christian tradition) because of its inherent value (longer explanation belongs here). The Enlightenment philosophers rejected this conservatism because they came to believe that one both could and should “think for oneself.” That is liberalism. Your friend is a liberal.

IN our country, as some contemporary philosophers have pointed out, we are all liberals. To be sure, there are “right leaning” liberals like Bush/Cheney, and left leaning liberals like Clinton/Gore, but we’re all liberals. Period.

Now, if the idea of “thinking for yourself” is nothing but an Enlightenment myth/lie, then all liberalism is based on a false premise (that “thinking for yourself” is indeed possible) and doomed to failure. That is why the Enlightenment died. And good riddance. May true conservatism live on.

If you want to explore this more, see the various works of Alasdair MacIntyre, especially After Virtue. He has some followup books that are also incredibly insightful, but that’s the place to start.

As for me (and probably you), I believe we are attempting to conserve the Christian tradition of social justice that begins in the Law of Moses, continues in the OT Prophets, and is revived by Jesus. Romans 8:18-24 demonstrates that God intends eventually to bring all his creation under his kingdom/rule/reign. What that polity would look like is probably best described by the Sermon on the Mount (i.e., what would it look like if people really lived as if God really is in charge?). To conserve that tradition is indeed true conservatism. It is NOT “thinking for oneself,” and in fact many things in this sermon don’t make sense on a purely rational basis, but ONLY make sense if one really calls Jesus “Lord” and believes he is king and is in charge and cares about his subjects and his creation. Only on that basis can one have the courage to love one’s enemies and be cheated out of what he/she has lent to someone, etc.

Stanley Hauerwas is another author to whom I’m greatly indebted. And one of his mentors was John Howard Yoder, a NT scholar.

So, call your friend a stinking commie liberal. J With Christian love, of course.