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Chapter 7: Firing Guard Dogs and Hiring Foxes
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7 Firing Guard Dogs and Hiring Foxes Introduction: Cutting the Federal Budget and “the Dead Hand of Regulation” Among the thousands of small contractor shops where workers sew clothing —in New York, Los Angeles, New Jersey, and around the United States—six out of every ten persistently break the labor laws by failing to pay minimum wages or overtime.1 Over the last three decades, though, the government has gradually undertaken unilateral disarmament in the ‹ght against labor lawbreakers. Understanding how and why this has happened is part of the solution to the puzzle of the rise of the new sweatshops . The story is part of a larger one: a shrinking federal government, deregulation, and privatization. When Ronald Reagan campaigned for the presidency in 1980 he did so against a swollen federal bureaucracy, and in the midst of the in›ation of the late 1970s he speci‹cally targeted the favorite bogeyman of the American conservative movement of his era: the federal de‹cit. In his ‹rst State of the Union Address, on February 18, 1981, President Reagan grieved, “Can we who man the ship of state deny it is somewhat out of control? Our national debt is approaching $1 trillion. A few weeks ago I called such a ‹gure—a trillion dollars—incomprehensible.” In this speech he unveiled his “plan . . . aimed at reducing the growth in Government 147 spending and taxing, reforming and eliminating regulations which are unnecessary and unproductive, or counterproductive.” Five years later in his 1986 State of the Union Address, he looked back on “Government growing beyond our consent [that] had become a lumbering giant, slamming shut the gates of opportunity, threatening to crush the very roots of our freedom.” Ronald Reagan also orchestrated the most vigorous expansion in the U.S. military budget since World War II. The defense budget increase from Reagan’s inauguration to its apogee in 1989 was $146 billion (from $157.5 billion to $303.6 billion). This compares to the Vietnam War increase from $50 billion in 1961 to $83 billion in 1969 (Council of Economic Advisers 2002, 415).2 In the eight years of Ronald Reagan’s and then the four years of George H. W. Bush’s presidencies, the nation witnessed a moderately successful Democratic Party defense of some social spending, wildly effective Republican tax cutting, and a more than doubling of military spending. The result was a tripling of the federal budget de‹cit in six years (1981–86)—from $79 billion to $221 billion (Council of Economic Advisers 2002, 413, 415). The national debt soared from the $1 trillion ($994 billion ) that so grieved Ronald Reagan to a tripled $2.9 trillion. The national debt as a fraction of the GDP zoomed from 33 percent to 54 percent (Council of Economic Advisers 1997, B-76). Reagan, as the slayer of the national debt, was a failure. Yet, in that failure his two terms created the crucible of twenty years of worried budget cutting. Every federal budget for the next twenty years had then to cope with the Reagan legacy. As Ronald Brownstein (1998, 30) noted in a U.S. News and World Report column, there had been a “two-decade-long period in which the de‹cit has largely de‹ned the competition between the two parties. For years, conservatives have used public support for a balanced budget as a vise to squeeze government spending.” Throughout the Reagan, George H. W. Bush, and Clinton administrations, cutting discretionary (mainly domestic) spending to bring the de‹cit under control became one of the centerpieces of presidential performance. In this regard, Reagan’s obvious failure at budget balancing led to long-term success in his role as the dragon slayer of big government. Slaves to Fashion 148 [34.204.52.16] Project MUSE (2024-03-28 11:27 GMT) In the wake of Reagan’s political success, Presidents Bush and Clinton (mainly Clinton) set about cutting the budget—and the number of federal employees. The federal government cut 359,000 jobs between 1989 and 1999.3 In 1981 the 2.9 million federal civilian employees were 2.9 percent of U.S. employees; by 2000 federal employees were 2.1 percent of the employed (calculated from Council of Economic Advisers 2002, 375–76). The conservative movement’s campaign against “the size of government ” and “the dead hand of bureaucracy” was not as popular as its mobilization of resentment against idleness. Playing upon the stereotype of welfare recipients as “welfare...