Chapter 4
REAGANOMICS AS A SACRIFICIAL RITUAL
"Cut, Slash, Chop"

TABLE OF CONTENTS
REAGAN'S AMERICA
by LLOYD DEMAUSE

REAGANOMICS AS A SACRIFICIAL RITUAL

"Cut, Slash, Chop"

The scene is a familiar one for most psychotherapists. The patient tells the therapist in his initial interview what he believes is his main problem: "I seem to be unlucky with women. I've been married three times, and each of my wives left me for another man. And now my girlfriend has just left me too. How can I stop women from being unfaithful to me?"

Therapists hear similar complaints daily. "All my boyfriends treat me like dirt." "I keep running into bosses who do nothing but fight with me." "Every career I've tried is boring." "None of the women I meet want to get close." Faced with such repetitive life patterns, one of the hardest tasks of the therapist is to point out to the patient that their ma-jor complaint is also their major wish-that they unconsciously choose unfaithful wives, uncaring boyfriends or hostile bosses in order to avoid the anxiety aroused in themselves if they were to enjoy their families, love lives or work too much.

Imagine, then, how difficult it becomes to analyze a nation's psyche. Imagine Uncle Sam on a couch, describing what he believes to be his main problem: "I seem unable to enjoy a really sustained success at anything. I keep getting into periods of depression during which I lose much of what I've worked so hard to gain. Why, in this century alone, I've gone through twelve major cycles of boom and bust, and I seem con-demned to repeat the pattern endlessly. And to top it all off, just as things seem to be looking up, I get involved in a war that puts me even more behind, so that I'm now over a trillion dollars in debt. How can I stop my bad luck?"

If this were the complaint of an individual, the therapist would not hesitate to diagnose a "success neurosis, a manic-depressive pattern"

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which the patient unconsciously brings about in order to limit the anxiety aroused by success through periodic self-destructive acts. Yet it seems to go against conventional wisdom to entertain the notion that our collec-tive life might be an extension of our individual lives, with repetitive patterns brought about by unconscious wishes. Despite the astonishing regularity of business cycles (every eight years on the average for developed countries)(1) and of wars (every twenty years on the average for most nations),(2) they have never been considered as wishes, ways of limiting the anxiety caused by the enjoyment of our lives through periodic self-destructive scenerios which we ourselves carefully stage. Like the patient who sees his problems as the result of "mistakes" in his life, conventional wisdom sees economic and political crises as the result of collective ''mistakes,'' whether they be ''mistakes of overinvestment," "mistakes in fiscal policy," "mistakes in the money supply" or "the mistakes of Munich." Business cycles and war cycles are rarely seen as being motivated.

The reason social problems so often seem to be a result of mistakes is that most social analysis has been based on a model of "economic man," who is seen as acting in his or her own self-interest, maximizing pleasures, working rationally, spending wisely and saving prudently. This assumption requires that one overlooks the embarrassing fact that those whom one knows personally resemble the model of "economic man" very poorly if at all. One's neighbors seem often to spend unwisely, save little, have work difficulties or drink excessively, or are too depressed or too timid or too rigid or too bored or too angry either to fully use their talents or to really enjoy their family lives. In reality, people are every bit as irrationally human as current novels report them to be, and are more likely to fit a model which shows them as limiting their pleasures and abilities than as maximizing them. Even those who do manage to experience success at work often seem to end up either disliking what they do or sacrificing their family lives or love lives or health "to their jobs." People who are psychologically healthy enough to succeed and enjoy their work and their possessions and their families and their sex lives turn out to be rare indeed in the real world.

But if most individuals limit their satisfactions and sacrifice their talents, earnings and pleasures so as not to provoke too much guilt from excessive enjoyment of living, so too must nations made up of these same individuals do so. A sound theory of psychoeconomics must therefore include an investigation of the various strategies by which nations engage in surplus destruction as well as surplus creation-strategies which include periodic booms, busts and wars.

Contemporary economists occasionally stumble upon the possibility of self-destructive motivations, but since their model only allows "economic man" to be rational, they dismiss the notion as obviously too

TO CLEAN THEIR PSYCHES 53

crazy to entertain seriously. Often one reads authors who, after attempt-ing to explain business cycles according to rational models, find them so insufficient that they throw up their hands and say, as does Paul Samuelson, that it almost seems as if people "wantonly pursue a manic-depressive pattern and thereby create the business cycle,"(3) or, as does Robert E. Lucas, Jr., that one is tempted "to suggest that people like depressions."(4) But the authors quickly back away from their momentary psychological insights and return to their basic model of rational "economic man" and his unmotivated "mistakes."

The most obvious place to observe these self-destructive acts in opera-tion is in primitive groups, which spend much of their time destroying their surplus in sacrifices to their gods. In fact, the reason that contemporary primitives have remained at a low technological level is precisely because they have continued for millennia to sacrifice their surpluses, while more advanced groups long ago began to allow their surpluses to accumulate and produce economic progress.(5) The consciences (superegos) of primitives are so severe-due to their poor childrearing practices(6) - that they rarely allow themselves to own anything as in-dividuals. What they produce, they do so mainly for the group as a whole. Reciprocal gift-giving rather than individual ownership and trade is the main basis of their economic systems. What surplus they manage to accumulate during the year they destroy in yearly sacrificial rituals "to the gods" (to their severe consciences), burning, consuming or otherwise destroying surplus food and goods to prevent their guilt from building up. The annual sacrifice of these goods becomes a ritual of revitalization of group life, a way to clean their psyches of the accumulated guilt produced by the surplus-building efforts of the previous year.(7)

For example, the Northwest Coast Kwakiutl Indians accumulate a rich supply of animal and fish all year long. By the end of the year they feel so guilty about their surplus that they halt all economic activity for several months while holding complex Winter Ceremonials in which their stated aim is to compete to see who can give away and destroy the most food and goods. The individuals who destroy the most surplus receive the most prestige, because they contribute most to "taming the Man Eater," the god who wants to "swallow wealth."(8) At the Winter Ceremonial, a dancer portrays the Man Eater, and the central myth that is enacted in the ritual is the feeding of food, goods and even corpses to the voracious, devouring mouth of the god.

Kwakiutl Indians bring up their children very severely, tying up (swaddling) their babies for three years to "control their appetites," harshly weaning them and teaching them every minute of their lives that their desires are bad and that if they dare to enjoy anything they risk turning into cannibal-children. It is not surprising that when these children grow up they become adults who are afraid of their every impulse, and instead put their repressed desires into the outside world, which is then seen as

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being "filled with mouths. . . a world filled with omnipresent man-made images whose mouths betray their greed."(9) It is this world of hungry mouths, of monstrous appetites - ultimately, of their own hunger for love - which must be "tamed" at their annual cannibalistic rituals.


Primitive cannibalistic rituals were seen as necessary to "tame the Man Eater," our own appetites.
So, too, in other primitive groups, the guilt which is built up during the year is cleansed through the annual destruction of the group's surplus, through a "feeding of the gods," a "taming" of each individual's own devouring wishes, whiletheir goods, they also destroying the surplus which produced the guilt in the first place.

Different groups accomplish this periodic sacrifice in different ways. The African Ankole "feed" cattle, milk, grain, beer and even humans to their Royal Drum, which is the container into which they inject all their poisonous devouring wishes.(10) The Ashanti have a "Golden Stool" which acts as a similar poison container. The Baganda have a "King's Placenta" which accomplishes their cleansing ceremonies. In Dahomey, the king sat on a giant platform, and the entire country would cleanse the evil spirits in their midst by "feeding the king" with cattle, food and cowne-money, gifts which they believed physically carried the poisonous pollution (their own feelings), which only the king could cleanse.(11)

When primitive groups meet more advanced people and dramatically increase invariably increase their sacrificial efforts to destroy their new surplus and avoid the guilt brought about by their unaccustomed wealth. Thus, early in the twentieth century, when the Kwakiutl met the white man and increased their prosperity a hundred-fold. through trade, they simultaneously increased their Winter Ceremonials, transforming what originally was a modest sacrifice of goods into a massive ritual where thousands of blankets and other valuable objects were given away, burnt or thrown into the river in order to "tame" their newly-provoked desires.(12) In addition, when surplus increases, sacrificial warfare also increases. By the time a group reaches the level of a kingdom, what was at an earlier level only small raiding parties evolves into the organized warfare of early states, involving virtually continuous warfare with tens of thousands of professional soldiers.

The Aztecs, for example, sacrificed to a sun-god as their "Man Eater," and since their childrearing allowed them to build up more surplus than their earlier forebears, their sun-god had to contain an enormous amount of their greedy desires. Their "Man Eater" was seen as so

CONTRIBUTIONS OF BLOOD 55

voracious that it had to be fed real blood to satisfy its appetite, and every man, woman and child would regularly draw blood from their thighs, arms and genitals to "feed" to the sun (their own severe consciences) to prevent it from becoming angry and plunging the world into darkness.(13)


The Aztecs sacrificed humans to feed the sun and quench its appetite.
Yet even regular contributions of blood by the people did not satisfy the sun-god's appetite, so ritual human sacrifice on a huge scale was practiced by the Aztecs, in which the still-beating hearts of captives were torn from their chests and fed into the sacrificial fire to "renew the vitality" of the group. Huge piles of skulls were arranged on a rack near the temples to show the gods how many victims the group had sacrificed lately, and the priests and others would emulate the sun's appetite for human flesh by eating portions of the people who had been sacrificed.(14) War, too, served the blood thirst of the gods. Young men, pledged since birth to die and give their blood to the sun, vied for the honor of sacrificing themselves on the battlefield.(15) 'If the usual wars with neighbors did not suffice to feed the gods enough blood, the priests would complain to the army, and volunteers would march out to a nearby battlefield, divide up into equal groups and slaughter each other until the gods were finally satisfied.(16)

Despite all this sacrificial activity during the year, the wealth of the Aztecs continued to increase, and so did their guilt. Every 52 years,(17) therefore, their sun-god would become so polluted with the people's poisonous guilt feelings that the end of the world would threaten. Time would stop, the sun would die and a new sun would have to be born to prevent the gods from descending and eating up every last Aztec on earth. The New Fire Ceremony which accomplished this periodic major guilt-cleansing was the Aztec's most sacred ritual. All economic activity would slow to a halt during this dangerous time, and the priests would mount a hill, carrying a distinguished warrior for sacrifice. Just as the night grew darkest, as the sun sank deepest, perhaps never to return, the priests would rip out the heart of the victim and offer it to the fire-god. In the victim's chest cavity where his heart (the old sun) had been, the priests would place a sacred fireboard. A new fire would be lit in the chest cavity, symbolizing the birth of the new sun. This fire would then be used to re-light all the sacred bonfires in the kingdom, and people who saw them would rejoice because they knew the sun had died and been reborn, cleansed of pollution through human sacrifice.

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It is only by using a model of society based on the shared fantasy of a dying sun and of the periodic sacrifice of the few in order to cleanse the feelings of the many that the policies of Reagan's America can be understood.


Reagan pictured as head priest to a Voicker-god who demands human sacrifices.


The Federal Reserve was seen as needing the blood of all Americans.

In this model, the role of the chief sacrificial priest was taken by Ronald Reagan, and that of the sun-god, the blood-thirsty idol of the temple - the Man Eater, complete with sacrificial fire and bones of victims - by Paul Volcker, Chairman of the Federal Reserve Bank. The "economic crisis which Reaganomics was designed to cure was, like that of the Aztecs, seen as a condition of moral pollution, as a shortage of blood (investment capital) and as a time when everything was "out of control." Only a "Time of Sacrifice" was believed to be able to tame the appetite of the gods (our own feelings) and allow us to be reborn and cleansed of our guilt for the surplus of recent years.

It was the major task of Reaganomics to provide America with this Time of Sacrifice. This would be accomplished by slow-ing down the economy through bleeding our life-blood (our money supply), by frightening the people (with high interest rates and huge deficits), by vastly exaggerating dangers (of inflation, of debt, of the strength of enemies) and by welfare cuts and planned unemployment which sacrificed symbols of our desires (women, children, the poor, the unemployed.) if our Time of Sacrifice was successful, the guilt-producing surplus of recent

THE INTERNAL SACRIFICE 57
years could be drained away (the polluted blood cleans-ed), the upsetting social changes of recent years could be reversed (our sin-ful excesses expiated) and we could allow a rebirth of our economic sun by releas-ing once again the supply of money and credit, rejoicing that the spectre of too much pleasure had been averted and the body politic had been purged of its impurities. This cleansing function of Reaganomics was in fact so paramount that it included the building up of a huge new war capacity, anticipating that if the internal sacrifice of victims of the recession did not suffice to make us feel better, we, like the Aztecs, could move to an external sacrifice, a military encounter, which could provide us with additional sacrificial victims.

It must not be imagined that phrases such as "the victims of Reaganomics" are purely metaphorical. An effective sacrifice requires a real Man Eater and real deaths. lt is not too dif-ficult to determine the approximate number of additional deaths brought about during Reagan's Time of Sacrifice. A careful statistical analysis has been made by the Congressional Joint Economic Committee of the average increase in mortality rates during recessions for suicide, homicide, cardiovascular deaths and other indices of mortality affected by economic activity. Extended to the present period, these rates show that approximately 150,000 additional deaths can be attributed to the effects of Reaganomics.(18) To this figure must be added the deaths attributable to Reagan's budget-cutting efforts - mainly those aimed at the tens of millions of women and children helped by government programs-such as the deaths


Reaganomics had to plunge the economic sun below the horizon for a Time of Sacrifice.


Women and children were seen as good sacrificial victims.

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caused by the reduction in child nutrition programs, in Aid to Families With Dependent Children, in nutrition programs for low-income pregnant women, in the Federal School Lunch Program, in funds for handicapped children, in disability benefits and so on. The direct cutting of such aid easily pushes the death toll for Reaganomics far over the150,000 figure.(19) Finally, this figure does not include the indirect deaths produced by such effects as the reduction in environmental protection enforcement, cuts in aid to philanthropic organizations, including UNICEF, the loss of health insurance by millions of unemployed workers, the deaths in underdeveloped countries affected by the Reagan recession and many other similarly lethal actions.


Three million children were cut from the school lunch program.
That the Congress which passed the Reagan program so willingly during his early months knew full well that these 150,000 dead men, women and children were being sacrificed on the economic altar is clear. As Rep. Phil Gramm, co-sponsor of Reagan's budget bill, put it at the time of its passage, "We are shooting real bullets."(20) That we, too, knew at some level the lethal effects of Reaganomics is also clear. We laughed at the comedian David Frye when he impersonated Reagan by saying that he had "found a way to reduce our over-population without abortion - by increasing our suicide rate" because in our hearts we knew that we ourselves had hired the priests who would preside over the Time of Sacrifice. When 1981 polls showed 70 percent of Americans felt that Reagan's economic program was "fair and equitable," we were saying we approved of this sacrifice of over 150,000 men, women and children.

Although it is difficult to believe, many of those sacrificed to Reaganomics approved of the sacrifice. The following Washington Post survey of the victims of Reaganomics, taken in 1983, summarizes the feelings of those out of work, those whose families were ill and could not be treated because of lack of medical insurance, those whose lives were ruined by the Reagan recession:

We don't blame you [Reagan] for the recession. We'd gotten too fat, too comfortable, too uncompetitive. Our standards aren't as high as they used to be and there's plenty of blame to go around. . . Besides, we still believe in those Puritan values you talk about. Perhaps we had to suffer to purge ourselves of our excesses.(21)

THE TIME OF SACRIFICE 59

All modern nations go through a similar Time of Sacrifice every eight years or so, in as inexorable a drama as the periodic sacrificial rite of the Aztecs. The phases of the business cycle are quite thoroughly understood by economists. Only the motivations have remained unexplored. There are three major phases in each cycle, depending upon the changing attitudes of people toward work and pleasure. These are The Time of Work, The Time of Mistakes and The Time of Sacrifice.

The Time of Work begins when, after the purging of guilt of the previous recession, people feel for a time that they now are allowed to innovate, invest, work, spend and even enjoy the fruits of their labors. The new innovative activity is led by a minority within the nation, a new, more optimistic "psychoclass," people who have been brought up somewhat more lovingly and less afraid of their impulses than the rest of the nation.(22) This new psychoclass is able to expand the nation's produc-tion through new products and new processes undreamed of by the older, more repressed psychoclasses. The Time of Work-whether it be the New Era Prosperity of the 1920s or the New Frontier and Great Society of the 1960s-uses the full resources of the nation, expanding production without producing inflation and spreading prosperity to more of those at the bottom of the economic ladder.

Within a few years, the growing guilt of the majority of the nation (especially the older psychoclasses) about this wide-based prosperity soon produces a Time of Mistakes, when nothing seems to go right. This phase begins a two-stage manic-depressive cycle, as nations-exactly like individuals who are manic-depressive-first try to ward off their guilt about too much success by "manic" activity. The "mistakes" include overspending, unwise investments, inflationary wage demands and pricing policies, overextensions of the money supply and credit structures, overstocking of inventories, real estate manias, foolish loans abroad and a whole range of ways of getting rid of the guilt-tainted surplus. Economic historians who study this phase of the business cycle are puzzled as to why so many mistakes are suddenly made by so many sec-tions of the economy. In some nations, where most of the people have been brought up very strictly-such as in Weimar Germany - the manic printing of money can produce a hyperinflation so severe that all money becomes worthless. The economy then grinds to a halt, removing the guilt, and the government can then "rectify its mistakes" and stop the thousands of printing presses from working overtime.(23)

The third phase of the business cycle, the Time of Sacrifice, is usually seen as a reversal of the manic, or inflationary, phase, but it actually is a continuation of its guilt-reducing process, only now all economic activity is "depressed" rather than wildly sped up. A fantasy is shared during this phase that things had gotten "out of control." The nation is imagined to be a giant body with two parts: a top, which must be fed, and a

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bottom, which must be punished. The role of the top part of the body is taken by the rich, and the fantasy is the familiar "trickle-down theory"-that if the rich are fed, the poor might somehow benefit. It is the same fantasy expressed by the primitive Anyi of Africa, when they used to say as they brought gifts to their king and his court in time of trouble, "When the king's breasts are full of milk, it is his people who drink."(24) All "supply-side economics is based on this magical fantasy, whether carried out by David Stockman in the 1980s or Andrew Mellon in the 192Os. What we wanted was to "let the hogs feed," as Stockman phrased it,(25) to make the rich fatter, under the delusion that we were all infants dependent upon their maternal breasts for our sustenance.

That the "supply side" argument for feeding the rich-supposedly as a way to increase investment-was thoroughly irrational was revealed by studies made by the Federal Reserve Bank, Business Week and others(26) which showed that America's investment rate was actually at its highest in decades, that there existed "a record $80 billion pile of ready cash" available for investing whenever the demand existed and that money shifted to the wealthier part of the nation at the expense of everyone else would only dry up demand further and produce lower, not higher, in-vestment. Few were surprised, then, when, as the Reagan plan took effect, investment plunged rather than rose. "Supply side" tax cuts for business and the wealthy had only felt right; few claimed it could be demonstrated as right. As Senator Howard Baker admitted when he passed the program, "What we're doing is really a river boat gamble. we're gambling that this new economics will work."(27)

The other task of the Time of Sacrifice, that of "punishing the bot-tom," involved a similarly delusional fantasy shared by most of the nation - that we were bad in enjoying so much prosperity and that part of us must suffer for our badness. Just as when we were children it was our bottoms which had to be punished, so too the bottom half of the body politic-the poor, the unemployed, women and children on welfare-would have to be punished for the indulgences of the rest of us. The first thing which was necessary was to strangle our economic bloodstream, our money supply. We suddenly "discovered" monetarism and reversed the growth of our monetary supply, "bleeding" our economic system of its life - giving blood, precisely as doctors used to bleed their patients to remove the "polluted" blood which they imagined had been produced by "overindulgences in food and sex."(28) It was, of course, not just a "mistake" for the Federal Reserve Bank to allow too much money in the Seventies and then suddenly to squeeze the money supply so hard that interest rates went to 20 percent and no one could buy cars or houses. It was, rather, the purpose of the Fed to produce these erratic swings in money supply, in accordance with the manic-depressive cycle. If they hadn't done so, we would never have had a Time

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of Sacrifice, and within a few decades our steady growth in productivity would soon have produced so much surplus that everyone in America would be living comfortable, and we would have no poor whom we could make suffer for our guilt.

In a similar vein, it is only when the sacrificial, "purging" nature of Reaganomics is taken into account that what seemed to be its conflicting parts can be viewed as a coherent whole. It has often been demonstrated that the two parts of Reaganomics-monetarism and "supply side" tax cuts - don't make sense hitched together. Economist James Tobin states the case clearly:

The idea that money and prices can be detached and delegated to central bankers while Congress and the executive independently take care of budget, taxes, employment and output is the kind of fallacy that makes exam questions for freshman economics, a fallacy now elevated to presidential doctrine. If Amtrak hitches engines at both ends of a train of cars. . . one engine heading west to New York, the other east to Boston, and advertises that the train is going simultaneously to both destinations, most people would be skeptical. Reagan is hitching a Voicker engine at one end and a Stockman-Kemp locomotive to the other and telling us the economic train will carry us to full employment and disinflation at the same time.(29)

What Tobin overlooks is that providing a train with two engines going in different directions is a plan designed to produce a train wreck, i.e., purposely set up to reduce surplus, sacrifice productive capacity and provide victims of the crash. The "supply side" tax cuts of Stockman were the "feed the rich" fantasy and the monetarism of Volcker was the punish the poor" fantasy. Reagan implemented both at the same time as a way of insuring the sacrifice of the minority to relieve the conscience of the majority. The only question which remained was, as Stockman told one reporter, "How much pain was the new President willing to impose? "(30)

When Stockman put his budget figures into the computer and found that even with the most optimistic assumptions Reagan's actions would produce deficits in excess of $100 billion, he told the Atlantic Monthly reporter that he found the figures "frightening - 'absolutely shocking,' he confided - yet he seemed oddly exhilerated by the bad news."(31) Why exhilarated by the bad news"? Because he knew we had hired him to produce bad news, to produce a Time of Sacrifice, to produce 150,000 victims.

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