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Along with tax cuts, Reagan insisted on deregulation (a program actually begun by Jimmy Carter in airlines, trucking and banking). He regarded that as "getting the Government off people's backs," and it involved not just a reduction in official regulations but also a relaxation in law enforcement ranging from antitrust to safety regulations. That may have been beneficial, but it enabled lots of sharp characters to make lots of money in lots of sharp ways. The most extreme example is the savings and loan scandal, which features fraud, bribery, favoritism and freewheeling incompetence. Some 800 of the 2,600 remaining S&Ls are now insolvent or nearly so, and the bailout will ultimately cost the taxpayers at least $150 billion to $200 billion and possibly a good deal more.
The atmosphere of the 1980s, along with actual crimes, spread a general sense that anything goes. Get rich, borrow, spend, enjoy. Not only Gordon Gekko said greed is good; so did Ivan Boesky, the dapper king of arbitrage, before he ended up going to prison (Gekko presumably landed there too). And the close of the decade was symbolized by Boesky not just going to prison but also emerging on leave in a long white beard that made him look like some reincarnation of the Ancient Mariner or King Lear.
There does seem to be a spreading sense that too many rules have been bent and too many watchdogs asleep. And too many debts left unpaid. "What epitomized the 1980s was, Spend now, pay later," says David Colander, economics professor at Middlebury College. "What will epitomize the 1990s is, Pay now." This involves not just all the credit-card loans or the interest on the leveraged buyouts but also a lot of ignored problems. "Domestically, we have bulldozed so many things into the future," says Robert Hormats, vice chairman of Goldman Sachs International, "that now we are going to have to deal with them." For example:
-- The entire U.S. infrastructure is becoming dilapidated. It will cost an estimated $315 billion in the 1990s to put American highways in the condition that existed in 1983. Bridge repairs could run to another $72 billion. The air-traffic-control system needs $25 billion.
-- The environment needs intensive care. The bill for nuclear-waste disposal stands at $50 billion; for clean water, $24 billion; for hazardous wastes, $15 billion.
-- Social Security reserves are being drained. The Government has been making up for the budget deficit by selling notes to the Social Security Trust Fund ($56 billion this year alone), i.e., borrowing money that is supposed to be accumulating for the years when the baby-boom generation wants to retire.