The Reagan administration also cut taxes. In Reagan's first five years, the taxes on America's highest income earners was slashed by 60 percent (Gerstle, p. 122). In addition to benefiting the rich, the tax cuts also starved federal government programs, except, of course, national defense. Like a vacuum, money was sucked from programs benefiting the middle class, the working class, and the poor, and redistributed as tax cuts to corporations, CEOs, bankers, and Wall Street. That redistribution initiated the unprecedented and ultimately unsustainable wealth gap mentioned earlier.
By starving the federal government and requiring workers to feed Wall Street by funding their own retirements, neoliberals also inaugurated the "self-reinforcing power of neoliberalism. As government became a less dependable source of economic security, people were made to feel that they were on their own, thus internalizing an individualist rather than collectivist view of citizen and society" (Kuttner, p. 12).
Reagan also put conservatives on the courts and killed the Fairness Doctrine that had required TV and radio stations to strive for balance by giving equal time to opposing points of view.
Without such opposing points of view, right-wingers with money, like Rupert Murdock, could air the ugly, hate-filled, lies by obnoxious talking heads at Fox News, while the radio waves spewed slime, lies, and venom by the likes of Rush Limbaugh. These serial liars pandered to Whites, especially resentful lower class Whites not possessing a college degree, who were told that civil rights legislation and affirmative action were to blame for the loss of their previously superior social, political, and economic status. These self-admitted "losers" found such claims to be more palatable than the hard truth that the leveling of the playing field actually allowed talented Blacks, other minorities, and women to advance by outperforming them.
In the wake of the Great Recession many of these aggrieved Whites would become the shiftless white underclass that neoliberal social scientist Charles Murray tore apart in his 2012 book titled, Coming Apart. Many would eventually become victims of the opioid epidemic. Others would become members of the hate-filled Tea Party and then eventually support the thoroughly evil con-artist who both seduced and entertained them with his openly expressed racism, resentment, and victimization, Donald Trump.
But, before neoliberalism could transition from a political movement spearheaded by President Reagan, into a dominant political order that would wreck the lives of so many Americans, it required the endorsement of Democrats. It received that endorsement from "Bubba" or "slick Willy" Bill Clinton, a southern Democrat who was all too willing to embrace neoliberalism. As Professor Gerstle observes, "From 1994 forward, he became the Democratic Eisenhower, America's neoliberal president par excellence" (Gerstle, p. 156).
Clinton signed NAFTA, endorsed the neoliberal World Trade Organization (WTO), deregulated the telecommunications industry and the electrical generation industry. According to Gerstle, the Telecommunications Act of 1996 "did more than any other piece of legislation in the 1990s to free the most dynamic sector of the economy [Silicon Valley] from regulation and dramatically accelerate the building of a new economy based on neoliberal principles" (Ibid., p.164).
But, according to Robert Kuttner, Professor Gerstle pays insufficient attention to how globalization, as "codified in the World Trade Organization (WTO), made capitalism more impervious to regulation and to national democratic accountability" (Kuttner, p. 14).
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