To be perfectly honest, just as the economic boom of the 1990's can't be attributed solely to the Clinton administration, all of the misery of the 1980's can't be laid at Ronald Reagan's doorstep. He inherited a lot of problems and nothing is as simple as ideologues on either end of the political spectrum would like to admit. Much of a President's legacy is determined by the events taking place in our society when the President happens to occupy the office.
Those on the right often claim that Carter brought us stagflation and double digit interest rates, as if the Nixon / Ford administrations had never existed. Most of the economic hard times in the 70's and 80's were actually the result of our extended quagmire and attendant deficit spending in Vietnam.
I remember the early 80's. Where I live, it looked more like an economic depression than a recession. I grew up in a world in which there were no Wal-Marts. Mr. Cohen owned the men's clothing store downtown and the Liveoaks ran the shoe store / repair shop. I could go on, but I hope you get the picture.
While the primary employers in our town consisted of several large manufacturing plants owned and operated by large corporations, these factories were serviced by small businesses that were locally owned. There were neighborhood grocers within walking distance of most homes and service stations (not gas stations -- service stations) were locally owned and operated as well.
By 1981, almost all of these privately owned businesses were closed. My hometown was beginning to look like a ghost town. People blamed the Union for closing the huge rayon fiber production facility in the previous decade. They were holding out for a $0.02 raise when the company decided to shutter the plant. But the real villain was steel belted radial tires. Much better tires, in my opinion, but there was no longer a market for the rayon fibers that thousands of people in our town had been producing since 1945. A steel wire plant did open in the area to replace the rayon fiber facility, but it employed less than 100 people. Of course these employees were non-union.
Economic activity did finally see an uptick in our area. New stores opened where the old ones had closed. But it was not the same. The small grocers and service stations were replaced by something called "convenience stores". Zippy Mart, 7-11 and so forth. Nice little stores. They really were convenient. But they were no longer locally owned. They were chain stores owned by some unknown corporation somewhere. They no longer offered credit account tabs to their neighbors -- they wouldn't even take personal checks. They did offer minimum wage jobs to store managers, but the profits earned from the store didn't stay in the community.
The same was true for the Mom & Pop clothing and hardware stores. They were replaced by K-Marts, TG&Y's and eventually, Wal-Marts. These businesses enjoyed the efficiency of scale and provided the community with low pricing and extended store hours. We didn't have a television or shoe repair shop any longer, but shoes and TV's were so inexpensive that you could simply toss them when they wore out and buy new replacements.
I could have waxed nostalgic for the "good old days" all I wanted, but the fact was, our society had changed and it wasn't going to go back to the old ways. All of these changes had taken place prior to the wave of international trade agreements and globalization that followed.
That is when the rest of the local factories either closed or downsized and moved off-shore. The paper mill that had employed 2500 and supported local pulp-wooders and machine shops has now sold most of it's old paper machines to China. Of the remaining machines, automation has reduced the labor force to a great extent. It had previously taken 16 employees to operate one machine. Now 4 operators can run them all from a central control room. They have a newsprint recycling facility now, so they no longer buy wood to process.
There is another difference that I haven't yet mentioned. When these large corporations built plants in our area in the 1940's, they paid taxes. Imagine that! They paid taxes to the State and local governments. And they didn't really complain very much about it. They made huge profits and considered the community to be an asset worthy of investment. In addition, they voluntarily contributed to local public schools and built parks in the community. They gave scholarships to local kids and offered summer work programs for students.
My, how times have changed. Now, when we get a new manufacturing facility in our area, it is because our local governments have collaborated to offer them the sweetest package. It typically includes free public land and installation of utilities, as well as tax free status. At least we can collect taxes from the employees that are offered jobs there. Gone is the support of local public schools and parks.
And yet, there is an upside to all of this. The old factories were notoriously filthy polluters. Our air and water is cleaner than it once was, and in many cases we were near the breaking point regarding our rivers and groundwater. Those problems have now moved to China, Mexico and any of the other places that these corporations have moved their facilities to in order to take advantage of low wages and regulation-free operation. While the income of the working class in our area has fallen far short of keeping pace with inflation, they get great prices at the local Wal-Mart.
And so we march forward into a Brave New World.
