AN AMERICAN VIEW

Welcome to the voodoo future

The economy of the 1980s was an elaborate pyramid scheme, and the list of suckers includes just about everyone

FRED BRUNING November 19 1990
AN AMERICAN VIEW

Welcome to the voodoo future

The economy of the 1980s was an elaborate pyramid scheme, and the list of suckers includes just about everyone

FRED BRUNING November 19 1990

Welcome to the voodoo future

AN AMERICAN VIEW

The economy of the 1980s was an elaborate pyramid scheme, and the list of suckers includes just about everyone

FRED BRUNING

Word just in: Looks like a recession! Economists say that America faces just the sort of fiscal meltdown thought impossible when Republicans were blabbing about setting the country straight and Democrats were apologizing for the failed righteousness of poor old Jimmy Carter. Wasn't that a time? Home prices in orbit. Stock markets on speed. All those fine young cannibals making a killing in gold, or limited partnerships, or junk bonds. Now who can remember what the term "yuppie" means? Gone is the arrogance that comes with overnight wealth and its various attendant glories. No more million-dollar apartments, no more cottages in the Hamp tons, no more ski trips to the Andes, no more touring cars, no more surge of adrenaline upon turning to the morning financial tables. Some one slammed the door on Wonderland. Sayo nara, Yups, and so long.

If only life were that simple. The economy of the 1980s was nothing more than an elaborate pyramid scheme and the list of suckers includes just about everyone—welfare mothers, suburban householders, corporate execs, the guy who runs the local diner, the 25-year-old twerp who can’t make his BMW payments. Here, revealed at last, is the Reagan Revolution. Here, we observe the ultimate achievement of what even George Bush once described as “voodoo economics.” Here lies the future, such as it is.

Left to their own dizzy devices, Reagan and his monetary witch doctors cut taxes for affluent Americans while indulging every defence department fantasy from Stealth bomber to Star Wars. Our beaming Gipper, affable but untouched by the realities of elementary mathematics, promised the good times would roll on and on. No doubt, he believed it too: you favor the rich and the rich spend their money, and before long that kid on the street corner gets a job, and the young couple buys a house, and the

Fred Bruning is a writer with Newsday in New York.

senior citizen finds a decent apartment, and the sick stop worrying about health care and, naturally, crack cocaine disappears because everybody’s happy. Makes perfect sense—or it did to the Gip.

Then, in a wink, he was gone, packed off to retirement in southern California, leaving us only with his best wishes, stupendous debt and George Bush as President. Though years ago he questioned Ronald Reagan’s fiscal doctrine, Bush now is dragged only with the greatest reluctance and the mightiest of protestations towards corrective policies. “Read my lips,” he taunted during the 1988 election campaign. These days, many Americans can’t bother assessing the President’s lips. They are too busy studying foreclosure notices, repossession forms, pink slips, unpaid bills and bankruptcy applications.

How quickly things changed. It seems like only yesterday that buyers were bidding the price of homes into the stratosphere. Now the suburbs have sprouted forests of “For Sale” signs while, in cities, frazzled residents tell their horror stories. “Looking at the classified ads is like walking into a dark basement,” said one New Yorker who has given up trying to sell the West Side co-op apartment he bought

during the boom. “Slowly, I check the listings for my neighborhood, and then I get a little braver and look for places like mine and then— aaaaargh!—I see an ad for something similar selling at $20,000 less than I was asking. I’ll own this place into the next century.”

Moving property, finding a job, running a business—suddenly, everything is tough. “There is great, great concern, more concern than I’ve seen since I started in 1958,” said a suburban real estate developer. “I’d call it a depression, a free fall.” People talk about being unable to fill their gas tanks because of postKuwait price hikes. A retiree says that he hasn’t enough money for the dentist or routine physicals. In the slumping Northeast, folks talk about moving away—maybe out West—on the chance things will be better. Out West, of course, people wonder if maybe they ought to head east, or south, or somewhere.

While some experts still express hope that the recessionary tide will stay below our levees, the signs are ominous. Dark skies, river rising. More than 125 commercial banks failed so far this year and one business columnist says that number could triple in 1991. The New York Times reported that many American companies already are laying off employees in anticipation of deteriorating conditions. Dismissals have reached the levels of the 19811982 recession, according to the Times, and while early layoffs are intended to forestall disaster, several economists say that the manoeuvre actually could hasten catastrophe.

Worst-case scenario? That recent tax increases will not be sufficient to cauterize our wounds, that the Persian Gulf crisis will continue to sap our resources, that we fail to make a necessary transition from a Cold War to a truly peacetime economy, that inflation gains speed, that unemployment rages ahead—that, in other words, we enter a prolonged period of national dysfunction and despair at precisely the moment we are trying to understand what role we are to play in a profoundly rearranged world order.

But let’s say that we luck out. Let’s say the economy wobbles for another year or so and, somehow, stabilizes. Let’s say inflation stays put and joblessness ebbs and that we come to our senses in the Middle East by allowing the United Nations to take responsibility as cop on the beat. Let’s say we get another shot at reaching the 21st century without the sort of grief sure to make us yearn for the good old days of 1990 when it still was possible to find enough scratch for a Sunday meal at McDonald’s.

In that happy event, we really must make a pact with ourselves. We must promise to look very carefully at the next rosy-cheeked politician who comes along preaching that wealth is the surest cure for poverty. We must pledge not to let greed trample good sense, nor to ignore the early warning signs of screwiness. Overvalued homes for some, cardboard cartons near heating vents for others—that sort of thing. Once and for all, we must scatter the high priests of economic voodoo so the clucks never again boil their bat wings and lizard toes on the premises of the White House.