Ronald Reagan's "Teflon" Presidency

Michael Streich

In the political climate leading to the 2012 presidential election, conservative Republicans are quick to identify with Ronald Reagan. Former Alaska Governor Sarah Palin, who has been actively courted by her many supporters to declare her candidacy for the presidential election, includes a Reagan quote in many of her speeches and writings. Ronald Reagan remains popular with conservatives because he advocated many of the same positions articulated today: less government spending, deregulation, and tax cuts. Whether the Reagan presidency was successful, however, often depends on what data is used and how it is interpreted. Ultimately, what has been called the Reagan “Great Divide” must be assessed in terms of how everyday Americans fared then and into the subsequent decades.

 

The Reagan Budget Hurt Ordinary Americans

 

John Oliver Wilson, a Senior Vice President and economist for Bank of America in 1982, noted during a speech delivered in Los Angeles that, “The defense establishment and the elderly will receive every single dollar of proposed budget increases for the next six years. There will be no increases for research and development…no increases for education…none for energy, public transportation, natural resources, and housing.” Wilson should have included health care.

 

The most significant national health threat during the Reagan presidency was the AIDS crisis. It was a disease the Reagan administration ignored. Lack of funding both on the local and federal levels contributed to the many deaths that took place in the 1980’s. Writer Randy Shilts, for example, stated that, “By the time President Reagan had delivered his first speech on the epidemic of Acquired Immune Deficiency Syndrome, 36,058 Americans had been diagnosed with the disease, 20,849 had died.” That was in 1987.  

 

“Reaganomics” was also equated with the growing gap between rich and poor in America. Corporate taxes, for example, were lowered to 8.77 percent from the Carter administration’s 12.53 percent. According to Richard Caputo, writing in the Journal of Sociology and Social Welfare, the Reagan years resulted in a higher percentage of both individual and family poverty. Forty percent of the nation’s personal net worth was possessed by 2.4 million people out of a population of 240 million.

 

Conflicting Assessments of the Reagan Years

 

Despite negative assessments, Peter Ferrara, who served in the Reagan administration, wrote in May 2011 that, “…the Reagan Recovery took off once the tax rate cuts were fully phased in.” This conflicts with Economist Benjamin Freidman’s 1989 statement that, “The economic expansion that began in 1983, and continues today, is the first in fifty years in which the average working American’s wage has gone not up but down compared to inflation.” This was particularly true for minorities. According to 1986 census figures, for example, nearly thirty percent of all black families lived below the poverty level. Although more women were entering the workforce, almost half earned less than $10,000; only 17.2 percent of working women made over $20,000.

 

Wilson argues that Reagan’s initial policies were based, in part, on the assumption that American “business investment would provide the main source of renewed growth.” That never happened, largely because of globalization and increased foreign competition. Much like the arguments of critics in 2011, corporations were seeking ways to trim expenses and increase profits, “hoarding” cash rather than investing in job creation. Hence the births of movements like Occupy Wall Street in 2011.

 

Balancing the Federal Budget

 

Balancing the federal budget was also part of the lofty Reagan goals. Huge defense expenditures, however, contributed to a debt of $2.1 trillion when Ronald Reagan left the White House. The preceding Carter administration ended with a national debt of $240 million. Contemporary observers draw a parallel to Reagan’s inordinate defense spending and the massive war expenditures, estimated by independent sources at $4 trillion, by the GW Bush administration. Reagan supporters are quick to point out, however, that Ronald Reagan “won” the Cold War.

 

In the process of winning the Cold War, the United States shed 11.5 million manufacturing jobs during the first Reagan administration. The trend has never been reversed. In the age group mostly likely to purchase a first home, 25-39 years of age, the Reagan years witnessed a 7 percent decline.

 

Roots of Ronald Reagan’s Popularity

 

To a large extent, Ronald Reagan’s popularity in the presidential elections of 1980 and 1984 stemmed from a concerted effort on the part of evangelical conservatives to highlight social issues. Additionally, Reagan was perceived as a strong leader who directly confronted the USSR and its minions throughout the world. Whether Reaganomics worked or not, there were many Americans that saw in Reagan the savior of the western world and the principles of free enterprise. Supporters, for example, point to successful military ventures such as in Grenada. In 2011, Reagan devotees are determined to see his vision for America realized.

 

Reagan’s influence still dominates the views of contemporary conservatives. This includes tax cuts, deregulation, a realistic plan to balance the budget, and, as Reagan frequently said, get big government off the backs of the American people. To do so, however, will require across the board balance without resurrecting the Reagan administration, such as spending cuts outlined in the Bowles-Simpson report.

 

References:

 

Richard K. Caputo, “Presidents, Profit, Productivity and Poverty: a Great Divide between the Pre and Post Reagan U.S. Economy?” Journal of Sociology and Social Welfare, September 1, 2004

Paul Craig, “Reaganomics: Myth and Reality,” Perspectives on Political Science, Spring 1990, Volume 19, Issue 2

Peter Ferrara, “Reaganomics Vs. Obamanomics,” The Wall Street Journal, February 11, 2009; “Reaganomics Vs. Obamanomics: Facts And Figures,” Forbes, May 5, 2011

Michael Schaller, Ronald Reagan (Oxford University Press, 2010)

Randy Shilts, And The Band Played On (St. Martin’s Press, 1987) [Shilts demonstrates the Reagan Administration’s refusal to adequately fund early AIDS research and treatment options]

Joseph Sobran, “Reaganomics Without Reagan, “ National Review, September 5, 1982

United States Census website

John Oliver Wilson, “Can Reaganomics Be Salvaged?” September 16, 1982 (Town Hall speech, Los Angeles, California)

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