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The Reagan Revolution • • “Conqueror of communism, sworn enemy of statism, leader of unshakable conviction and contagious optimism, Ronald Reagan became one of history's heroes long before his death. At a time when patriotism was mocked, he exposed the bankruptcy of modern liberalism and proved that true liberty is still a fighting faith…. In Ronald Reagan's two terms as president, he gave America a transfusion of his own optimism and hope. He enkindled a sense of the possible, rescuing America from defeatism and much of the world from tyranny. He restored our confidence in the presidency itself, proving that Jefferson's "splendid misery" could be simply splendid. And -- not coincidentally -- he helped create a safer, freer world. For that, his nation will be eternally grateful.” – Heritage Foundation, 2004 • “A sober review of Reagan's presidency doesn't yield the seamlessly conservative record being peddled today. Federal government expanded on his watch. The conservative desire to outlaw abortion was never seriously pursued. Reagan broke with the hardliners in his administration and compromised with the Soviets on arms control. His assault on entitlements never materialized; instead he saved Social Security in 1983. And he repeatedly ignored the fundamental conservative dogma that taxes should never be raised.” – Washington Monthly, 2003 The Reagan Revolution • 1) realignment of US to the Right (cultural shift away from New Deal/Great Society) + restructuring of Republican Party • 2) Restored American patriotism + confidence (Morning in America) • 3) Reagonomics: supply-side economics, free-market fundamentalism (Greenspan) • 4) Washington Consensus: exporting free market capitalism (IMF structural adjustments) • 5) End of containment consensus and defeat of Evil Empire I. Reagan Reordering • “In this present crisis, government is not the solution to our problem; government is the problem. From time to time we've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of governing himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden.” – 1st Inaugural • “There is a threat posed to human freedom by the enormous power of the modern state. History teaches the dangers of government that overreaches-political control taking precedence over free economic growth, secret police, mindless bureaucracy all combining to stifle individual excellence and personal freedom. Now, I'm aware that among us here and throughout Europe there is legitimate disagreement over the extent to which the public sector should play a role in a nation's economy and life. I know you're not all as freedom-loving as me and Margaret Thatcher--but on one point all of us are united: our abhorrence of dictatorship in all its forms.” – Speech to British Parliament, 1982 HIGHLIGHTS OF REAGAN’S PRESIDENTIAL APPROVAL 1981-1989 Start of Reagan Administration 4/81 Approve 67% Disapprove 18% Don't Know/NA 15% Lowest approval 1/83 Approve 41% Disapprove 47% Don't Know/NA 12% 1984 Election 10/84 Approve 58% Disapprove 35% Don't Know/NA 7% Start of second term 1/85 Approve 62% Disapprove 29% Don't Know/NA 9% • Highest mid-term approval 6/86 Approve 67% Disapprove 23% Don't Know/NA 10% Highest mid-term approval 10/86 Approve 67% Disapprove 25% Don't Know/NA 8% Initial Iran-Contra disclosures 11/86 Approve 46% Disapprove 45% Don't Know/NA 9% 1988 Election 10/88 Approve 61% Disapprove 33% Don't Know/NA 7% End of Reagan Administration 1/89 Approve 68% Disapprove 26% Don't Know/NA 6% Lee Atwater (strategist for Reagan + Bush I; mentor to Karl Rove) • “Atwater: You start out in 1954 by saying, 'Nigger, nigger, nigger.' By 1968 you can't say 'nigger' - that hurts you. Backfires. So you say stuff like forced busing, states' rights and all that stuff. You're getting so abstract now [that] you're talking about cutting taxes, and all these things you're talking about are totally economic things and a byproduct of them is [that] blacks get hurt worse than whites. And subconsciously maybe that is part of it. I'm not saying that. But I'm saying that if it is getting that abstract, and that coded, that we are doing away with the racial problem one way or the other. You follow me because obviously sitting around saying, 'We want to cut this,' is much more abstract than even the busing thing, and a hell of a lot more abstract than 'Nigger, nigger.' “ Man vs. Message • Majority disapproved of policies but supported the man • Lost Senate (never held House) • Unable change basic direction of government (at best reduced rate of growth of gov't) • Saved Social Security (1983) and left Medicare alone • Republicans increasingly religious party and regional party (South and Mountain West) • Reagan ranked as mediocre president (mid-20s until ’99)Grover Norquist “Ronald Reagan Legacy Project” let’s put him on Rushmore (right next to W!) and the $50! – What did U.S. Grant ever do for Americans? • Other than win the war, effectively emancipate the slaves during Reconstruction, build up America’s industry, improve policy toward Indians… • II. Sunny Optimism • Morning in America Top Grossing Films 1980s • Pre-Reagan • Reagan • Stripes (1981) • An Officer and a • Empire Strikes Back Gentleman (1982) (1980) • Rambo II (1985) • 9 to 5 (1980) • Top Gun (1986) • Good Morning, Vietnam (1987) • BUT: Platoon (1986), Wargames (1983) Fear of Japan • Many saw decline US business acumen and rise of Japan (see: Die Hard; Rising Sun) and Germany • Meager rise productivity • “Masters of the Universe”: increasing reliance financial sector for growth (S+L scandal, mergers + acquisitions; see: American Psycho) III. Ending the Great Inflation • 1981 Economic Recovery Tax Act • 25% cut across the board • Benefited the wealthy most (top marginal rates 70%50%) • 1982: $200 B deficit – One Flew Over the Cuckoo’s Nest homeless (1/3) • 1986 Tax Reform – Top rates: 50%28% Gross Domestic Product: Measure of national wealth Post-WWII GDP Growth by Administration • #1: Kennedy-Johnson (49 percent over eight years) • #2: Clinton (34 percent) • #3: Reagan (32 percent) • #4: Nixon-Ford (24 percent) • #5: Eisenhower (21 percent) P Avg% GDP growth by year (3) Truman 3.9 (9) Ford 2.55 (7) Ike 2.97 (6) Carter 3.3 (2) JFK 4.65 (5) Reagan 3.41 (1) LBJ 5.05 (11)GH WB 2.125 (8) RMN 2.883 (4) Clinton 3.725 (10) GWB 2.51 Deficits: Keynesian Pumppriming The Federal Reserve • Paul Volcker (Carter appointee) • Fall 1979: raise interest rates to fight inflation recession 1982 • Summer 1982: lower interest rates to speed up economy recovery (excess capacity) • 1984: tighten up to prolong slow growth – Greenspan Bubbles (Reagan appointee) The Laffer Curve (Voodoo Economics) Real Income Growth, 1979-89 Reagan's Pragmatic Tax Increases • 1982: Oops! Deficits Undoes 1/3 1981 (one of largest tax increases in US history) • 1983: Social Security Reform Act: increase payroll tax • 1983 + 84: gasoline tax • 1986: Tax reform—cut income but raised corporate taxes • Deregulation is always good S+L collapse (1600+ banks failed 1980-1994; $160 B+ losses) – Worse than the Teapot Dome (Harding) or Credit Mobilier (Grant) scandals in terms of harm to the country 5. “No one wins. One side just loses more slowly” --Prez