Posts Tagged ‘Ronald Reagan’

Democrats embrace legacy of Ronald Reagan

August 3, 2016

… Ronald Reagan is the man whose name improbably electrified the Democratic National Convention … .

… . On Wednesday night, Barack Obama said:  Ronald Reagan called America “a shining city on a hill.”  Donald Trump calls it “a divided crime scene” that only he can fix.

On Thursday night, Hillary Clinton said:  He’s [Trump] taken the Republican Party a long way… from “Morning in America” to ”Midnight in America.”  He wants us to fear the future and fear each other.

And just in case the point wasn’t clear, a former official from the Reagan administration enchanted a crowd of screaming Democrats with this one-liner …):  Donald Trump, you are no Ronald Reagan.

Source: Corey Robin — Crooked Timber

I would say Donald Trump has more in common with Ronald Reagan than Bill and Hillary Clinton have in common with Franklin and Eleanor Roosevelt.

Bernie Sanders and Ronald Reagan agree

October 27, 2015

Hat tip for the video to my expatriate friend Jack.

This video shows how Bernie Sanderss stated views on corporate tax loopholes, Social Security and gun ownership are much the same as Ronald Reagan’s.

It is a measure of how much the spectrum of opinion has shifted over the past 30 or so years.  For Ronald Reagan, closing corporate tax loopholes, preserving Social Security and background checks for gun owners were matters of common sense that conservatives did not challenge.

The fruits of Reagan’s attacks on the poor

August 19, 2015

Ronald Reagan’s attacks on the minimum wage, families being helped by welfare, those receiving unemployment insurance when the economy failed, became racialized attacks, and not viewed as attacks on the foundation of worker survival.

So in the 1980s, the real value of minimum wage drifted to unprecedented lows, states rolled back eligibility to, and benefit levels for, unemployment insurance and the foundation was laid to attack women who needed help in raising their children to force them into low-wage work.

Without providing any gains to American workers, Reagan mastered the appearance of worker advancement by succeeding not by having wages rise with productivity, as had been the case, but by having wages rise relative to the poor who could not find jobs, or could only find minimum wage jobs.

The silence of the labor movement in the sinking fortunes of the poor meant there was political space, for the first time since the 1930s, to have the economy improve and expand while the poverty rate increased.

==From A Future for Workers: A Contribution From Black Labor(Hat tip to Bill Harvey)

Bush and Reagan on illegal immigrants, 1980

November 23, 2014

During the 1980 Republican Presidential primary campaign in Texas, George H.W. Bush said the children of unauthorized immigrants should have the right to attend public schools, and Ronald Reagan advocated an open border so that Mexicans could work temporarily in the United States.

The video above cuts off Reagan’s statement in mid-sentence.  His full statement is:

I think the time has come that the United States, and our neighbors, particularly our neighbor to the south, should have a better understanding and a better relationship than we’ve ever had.  And I think that we haven’t been sensitive enough to our size and our power.  They have a problem of 40 to 50 percent unemployment.

Now this cannot continue without the possibility arising—with regard to that other country that we talked about, of Cuba and what it is stirring up—of the possibility of trouble below the border.  And we could have a very hostile and strange neighbor on our border.

Rather than talking about putting up a fence, why don’t we work out some recognition of our mutual problems?  Make it possible for them to come here legally with a work permit, and then, while they’re working and earning here, they’d pay taxes here. And when they want to go back, they can go back.  They can cross.  Open the borders both ways.

This is the only safety valve right now they have, with that unemployment, that probably keeps the lid from blowing off down there.

Republicans have changed a lot in the past 30-some years.

As have we all.


What Reagan said about a border wall by Chris Ladd on GOPLifer.

Ronald Reagan Says ‘Open the Border Both Ways’  by Jesse Walker for Reason magazine.

The passing scene: Links & comments 11/17/14

November 17, 2014

What really happened in Beijing: Putin, Obama, Xi—and the back story the media won’t tell you by Patrick Smith for Salon.

Patrick Smith explained why the real winner in the new U.S.-Russian cold war is China.

Saudi Arabia is driving down the world price of oil, now about $80 a barrel, by putting oil on the market.  The main point, Smith wrote, is that the Saudis can make a profit so long as oil is priced at more than $30 a barrel, but the Russians, whose oil is harder to get, need a price of $104 a barrel.

The Saudis oppose Russia for supporting Syria and Iran, which are obstacles to Saudi influence in the Middle East.  Other oil-producing nations suffer collateral damage.  Venezuela is currently going through a political and economic crisis due to the fall in the price of oil.

Russia had helped the United States in its negotiations with Iran, by agreeing to reprocess uranium for the Iranians, which would remove the possibility that the reprocessing might be used to make Iranian nuclear weapons.  U.S.-Iranian negotiations also are collateral damage.

All this benefits China, which gets to buy Russian oil and gas at a bargain price.  China is expanding its influence in Asia offering attractive trade deals to nations that don’t want to be drawn into U.S. conflicts.

Ronald Reagan’s secret tragedy: How 70s and 80s cynicism poisoned Democrats and America, an interview of Rick Perlstein by Thomas Frank for Salon.

Rick Perlstein, author of the newly-published The Invisible Bridge: the Fall of Nixon and the Rise of Reagan, said the roots of present-day politics go back to the 1970s, when President Richard Nixon governed based on short-term political gain, and candidate Ronald Reagan encouraged Americans to believe in the myths we tell ourselves.

Democrats meanwhile turned away from working people and New Deal liberalism and embraced an illusory non-partisanship.  This created a politics in which big-business conservatives can pose as  populists and the true representatives of working people.

Act of Faith: the Catholic priest who puts his life on the line to save Muslims in the Central African Republic by Sam Jones for The Guardian.

Father Bernard Kinvi is a true hero who lives up to the best teaching of his church.  His story is well worth knowing.

The rise of Reagan: ‘They yearned to believe’

July 31, 2014

Rick Perlstein, author of books about Barry Goldwater and Richard Nixon, has a new book entitled The Invisible Bridge: the Fall of Nixon and the Rise of Reagan

invisiblebridgeThe title is taken from a remark by Nikita Khrushchev to Richard Nixon, “If the people believe there’s an imaginary river out there, you don’t tell them there’s no river there. You build an imaginary bridge over the imaginary river.”

In the 1970s, the Vietnam War, the Watergate scandals, the CIA scandals and the Arab oil embargo confronted Americans with the fact that we are neither all-powerful nor totally righteous, but in fact are not all that different from other nations.

Ronald Reagan’s political genius was in the fact that he was able to convince Americans that we are all-powerful, not matter what happens to us, and we are totally righteous, no matter what we do.

The Reagan illusion continues to this day and neither Republican nor Democratic leaders dare question it.

Perlstein gave a good interview about his book to David Dayen for Salon.  Here are some excerpts from the interview.


Reagan was (partly) right about trees & pollution

May 21, 2014

Ronald Reagan famously said during the 1980 Presidential campaign that a lot of pollution comes from trees.  In fact, he was right, or at least partly right.

An article in the current issue of Scientific American said that some species of trees — particularly black gum, oak, poplar and willow — release high concentrations of volatile organic compounds (VOCs), similar to what comes out of smokestacks and auto tailpipes.

Sunlight turns these compounds into ozone which can cause asthma, bronchitis and other respiratory illnesses.

This is not an argument for cutting down trees or for ignoring industrial and auto emissions.  It is rather an argument for planting more birch, linden, tulip and other low-VOC species and against excessive concentrations of high-VOC trees.

Click on The Paradox of Pollution-Producing Trees: Some Greenery Can Make Smog Worse for the complete Scientific American article by Mark Fischetti.

Good sense from Ronald Reagan

September 20, 2013


Hat tip to jobsanger.

Business, not public, driving nation rightward

September 15, 2011

 The political realignment of the Reagan years was a realignment of business interests and not of voter sentiment.  So argued Thomas Ferguson and Joel Rogers, in their 1986 book, Right Turn: the Decline of the Democrats and the Future of American Politics, a book as enlightening now as it was when it was published 25 years ago, because the situation they describe has not changed.

Public opinion polls in the 1980s showed that a majority of voters favored Social Security and Medicare, gave full employment a higher priority than balanced budgets or lower taxes, believed workers have a right to join labor unions, and had no enthusiasm for getting bogged down in foreign wars—as they still do.

How, then, did Ferguson and Rogers explain Ronald Reagan’s landslide victories in 1980 and 1984?  They said this was a reflection of the unpopularity of the Democrats than allegiance to the Republicans.  Jimmy Carter was rejected because he was unable to deal with stagflation and rising oil prices, and because he supported the tight-money program of Federal Reserve chair Paul Volcker, which brought inflation under control by measure Volcker knew would casue a recession.  Walter Mondale was rejected because his only substantive campaign promise was to raise taxes.

If voter sentiment did not change, what caused the Reagan revolution?  Ferguson and Rogers said business interests realigned as a result of rising oil prices and increased international economic competition in the 1970s.

One consequence was a conflict of interest between the oil industry and manufacturing industry, leading to a majority of oil men shifting their allegiance from the Democratic to the Republican party.  Another was a slowing of U.S. economic growth, resulting in a hardening of corporate attitudes toward taxes, labor unions, environmental and health regulation.  In an era when U.S. economic supremacy was unquestioned, these costs could be passed on to consumers; in an era of intensified global competition, this was not possible.  The result of the Reagan revolution and the pro-corporate movement that followed was that the corporate elite received almost all the benefits of what economic growth there was.

Ferguson and Rogers dismiss the idea that the Reagan administration reflected a change in economic philosophy.  If you examine the Reagan policies in detail, they wrote, they consist of payoffs to constituencies, not implementation of a philosophy.  The Star Wars defense plan was a payoff to the aerospace and computer-electionics industries.

The Democrats were unable to challenge this because their party was (as it still is) beholden to Wall Street.  Bankers and financiers fear inflation above all else, because it reduces the value of their assets, and so favor balanced budgets and spending restraint.  This is why Carter supported Volcker and Mondale advocated a tax increase to balance the federal budget, and why Clinton and Obama gave priority to fiscal probity, and why Democrats have a better overall record than Republicans as budget balancers.


Ronald Reagan on Labor Day 1980

September 5, 2011

In 1980, Presidential candidate Ronald Reagan spoke in favor of the right of workers to form labor unions and bargain collectively.

That is, he upheld the right of workers in Poland to form unions and bargain collectively.

Ronald Reagan and the debt ceiling

July 20, 2011

The federal debt ceiling has long been a political football.  The political party in power favors increasing the debt ceiling, many members of the party out of power oppose increasing the debt ceiling, but, until now, the debt ceiling always has been raised.

Democrats are running the following broadcast by Ronald Reagan in 1987, appealing for an increase in the federal debt ceiling.

Republicans might well run a clip of Senator Barack Obama, opposing an increase in the debt ceiling under President George W. Bush.

Click on Then and Now: The changing rhetoric in the debt-limit debate for a review of changing positions on the debt ceiling by prominent political figures.

Click on The GOP turns its back on Reagan for a comment on the Republican stance on the debt ceiling.  (Hat tip to Bill Elwell for the link.)

Click on Democrats invoke Reagan in support of debt-ceiling increase for a comment on the Democratic stance on the debt ceiling.

Truly, where you stand (in this case) depends on where you sit.  The Republican congressional leaders some time back argued that the recovery has been retarded by business uncertainty about future government policy.  If they really believed that, they would not be engaging in brinksmanship now.

But the inconsistencies of the two sides are not the main point.  The main point is that the debt ceiling needs to be raised (or better still, abolished) before the crisis point is reached.  Senator Obama was wrong.  President Obama is right.  The Tea Party is wrong.  President Reagan was right.


Reagan the father of bad memes

February 25, 2011

Ronald Reagan as President accomplished good things – negotiating peace, curbing inflation, deregulating oil prices.  Unfortunately these things are not his legacy.  Nor is his legacy the bad things done under his administration – the Iran-Contra conspiracy, the downward shift of the tax burden.

More than his good and bad actions, his legacy is the bad memes he left to his followers – powerful assumptions and patterns of thought that influence his followers to this day.  Here are examples of memes that Reagan fathered or fostered.

Reagan as actor

The secret of prosperity is to reduce the top marginal income tax rate, no matter what that rate happens to be.

If you cut taxes, spending will take care of itself.

Energy conservation is unmanly.

Common sense is a better guide to policy than science.

A missile defense system is essential to national security.

Budget considerations don’t matter where national security is concerned.

Nothing you do to stop bad guys can be morally wrong.

Left-wingers are bad guys.

Taxation is tyranny.

Poor people are poor because they are lazy and stupid.

Government action to help poor people is theft from the middle class.

Government employees are parasites.

The United States of America is the greatest country that ever existed.

The United States was founded on capitalism.

Criticism of capitalism is unpatriotic.

There is a free-market solution to every problem.

Giving a good performance is equivalent to doing a good job.

True, Reagan’s memes were one thing and his actual policies were another.  Click on De-mystifying the Reagan mystique for an analysis of the latter by Michael Kinsley for Politico.  While Ronald Reagan the human being is dead and gone, and the effects of Reagan’s policies fade, his zombie memes live on.


The worst thing Ronald Reagan did

February 24, 2011

The worst thing the Reagan administration did was the Iran-Contra deal – secretly arranging the sale of arms to Iran in violation of the U.S. embargo to finance the operations of the Contra terrorists in Nicaragua in violation of U.S. law.

President Richard M. Nixon is supposed to have said that if the President of the United States does something, it is not illegal.  If that had been accepted, then the Constitution would have been “inoperative.”  That’s why the Watergate investigation and impeachment were so important.  It reaffirmed the principle that nobody, not even the President, is above the law.

But the Iran-Contra affair, the acquittal of its major figures and the pardon of the rest (by President George H.W. Bush) reversed the verdict of Watergate.  It showed that a President can put himself above the law and get away with it.  Iran-Contra was a precedent for all the abuses of power that have occurred since, including authorization of torture by President George W. Bush and authorization of death warrants by President Obama.

Click on The Iran-Contra Affair 20 Years On for a detailed review of its history.

Click on Iran-Contra affair wiki for the Wikipedia article on the affair.

From Nixon to Reagan

February 23, 2011

Richard M. Nixon was the one broke up the Democratic New Deal coalition and forged a Republican majority.  But it was Ronald Reagan who forged a conservative Republican majority.

Nixon in 1968

Reagan made it respectable to be anti-union, anti-environmentalist and anti-government.  He planted memes that continue to this day – that the secret of prosperity is to cut upper bracket taxes, that it is more important to cut taxes than balance the budget, that government as such is bad and should be resisted.  He broke the air traffic controllers’ strike, ridiculed environmentalism and sought to abolish governmental regulation of prices.

This wasn’t how Nixon governed.  When postal workers engaged in wildcat strikes in 1970, the Nixon administration negotiated an agreement which recognized the right of postal employees to bargain collectively.  He supported and signed the Environmental Protection Act.  He responded to the threat of inflation by imposing wage and price controls (interestingly, I don’t recall his Constitutional right to do this being challenged.)

Reagan in 1980

Nixon’s political achievement was to convince white working men that the Democratic leadership was more concerned with the kinds of people George Wallace called “the exotics” than with everyday average citizens.  But he hesitated to touch the New Deal programs that benefited working people.

Why was Reagan able to do what Nixon didn’t?  Partly it was that Reagan was more of an idealist while Nixon was more of a pragmatist.  Partly it was because corporate business was more politically assertive in 1980 than it had been in 1968.

But I think the key factor was the Jimmy Carter administration coming as a transition between the two.  President Carter, like President Obama, was a moderate conservative who was perceived as a liberal.  Carter anticipated the Reagan agenda – cutting taxes on capital gains, setting in motion the deregulation of the trucking and airline industry – and so undercut the ability of Democrats to object to Reagan doing the same things.  At the same time most people thought of Carter as a liberal, and his perceived failures discredited liberalism and validated conservatism.

Carter and Reagan on energy

February 22, 2011

Energy policy represented one of President Ronald Reagan’s best accomplishments and worst legacies.

Ronald Reagan

Under his administration, an unworkable price control and gasoline allocation system was abolished, and oil prices were left to the working of the free market.  The free market worked the way it was supposed to work.  Prices went up, demand went down, producers looked for new sources of oil, and the price went down and stayed down (in inflation-adjusted terms) for the next 20 or 25 years.

President Jimmy Carter inherited gasoline price controls from the Nixon administration, and began a long-range phaseout.  During the oil price shock of 1979, however, he clamped down on prices and instead imposed a gasoline allocation system based on previous use.  This didn’t work.  Restrictions on availability of gasoline changed the patterns of use.  Too much gasoline was allocated to tourist destinations, for example, and too little elsewhere.  There actually were gasoline riots.

Reagan’s insight was that a market system of supply and demand works better than central planning would.  Unfortunately he carried that insight to a counterproductive extreme – that once you unleash the free market to increase production, energy policy can safely be ignored.

The Carter administration was the first to make a serious effort for energy conservation and energy independence (sometimes acting under authority of laws enacted during the Ford and Nixon administrations).  Fuel efficiency standards for automobiles were increased.  Incentives were provided for insulating buildings.  An ambitious research program on solar and other alternative energy sources was launched.  Large industrial companies such as Kodak and Xerox voluntarily launched their own energy conservation programs parallel to what the government was doing.

We benefit from the accomplishments of the Carter era to this day.  We would benefit even more if governmental policy had continued on the same trajectory.  But Ronald Reagan planted the meme that conservation is unmanly, alternative energy is a fad and the supply of oil will take care of itself.  That’s a meme we’re going to have to get rid of.

Reagan, Carter and the Great Inflation

February 21, 2011

I grew up in the 1940s and came of age in the 1950s.  My economic behavior and attitudes were shaped by my parents’ memories of the Great Depression of the 1930s.

My guess is that the behavior and attitudes of most Americans younger than 50s is the Great Inflation of the 1970s, when the Consumer Price Index rose more than 10 percent almost every year, peaking out at 15 percent in 1980.

Inflation turned all the rules of rational behavior upside down.  People who saved their money saw the value of their savings dwindle down to nearly nothing (the stock market was virtually flat during that decade) while those who borrowed money and spent it were the prudent ones.

Paul Volcker

President Nixon stopped inflation temporarily by imposing wage and price controls, but this did not get at the root of the problem.  President Gerald Ford tried an ineffective voluntary program called WIN – Whip Inflation Now.  President Jimmy Carter appointed Paul Volcker at chair of the Federal Reserve Board, and Volcker acted to stop inflation in the only way he knew how – by choking off the growth of the U.S. money supply.  Volcker’s action choked off the availability of credit.  Many small businesses, which depend on credit, went broke.

A recession began in which unemployment went into double digits. President Carter supported Volcker.  He did not try to reverse the Federal Reserve’s policies, nor did he distance himself, even though this cost him whatever chance he may have had to be re-elected.  President Reagan did the same, even though the recession put his re-election at risk.

On this question both Carter and Reagan were patriots who did what they thought was necessary for the public good even when it was to their political disadvantage.

The recession came to an end, and the CPI has been low ever since.  This was a good achievement, but as in other Reagan administration policies, it generated bad memes.  One meme is that you can act in the interests of bankers against workers and small-business owners and not pay a political price.  Another is that fighting inflation, even when inflation is as low as it is now, is the overriding goal to which economic growth, employment and everything else must be subordinated.  Legislation is now pending before the House of Representatives to change the charter of the Federal Reserve from the dual mission of promoting low inflation and economic growth to low inflation only.

Click on Stagflation wiki for the Wikipedia article on 1970s inflation and how economists explain it.Click on The Inflation of the 1970s for a 1995 presentation by Brad DeLong, an economist of the faculty of the University of California at Berkeley. DeLong thought one possible cause of the Great Inflation was simply that decision-makers were slow to give priority to inflation-fighting. Another was the failure of the Johnson and Nixon administrations to raise taxes to pay for the Vietnam war. A third explanation is the oil price shocks of 1973 and 1979 combined with similar less-publicized price shocks for other commodities.Political writer Kevin P. Phillips pointed out in 2008 that the formula for calculating the Consumer Price Index was changed under the administrations of Presidents Kennedy, Johnson, Nixon, Reagan, George H.W. Bush and Clinton. All the changes made the rate of inflation seem lower. This diminishes Reagan's achievement, but he was no worse than many of his predecessors and successors, and nobody who remembers that era doubts the important victory over inflation.Click on Numbers racket for Phillips' 2008 article in Harpers about manipulation of economic statistics.

The above charts on changing methods of calculating inflation are based on information from a consulting economist named John Willliams.  Click on Shadow Government Statistics for his web site.

Click on Carter, Reagan and the Misery Index for more about the Great Inflation.

Click on The Reagan Years for a menu of links to statistical information compiled by Steve Kangas on the Reagan era’s economic policies.  [Added 2/25/11]

Reaganomics and the Democrats

February 17, 2011

Bruce Bartlett, a former senior policy analyst in the Reagan White House, posted this chart on his web log in order to make the point that Ronald Reagan as President was a pragmatist who was able to compromise without losing sight of his main goal.

He is right about that, but I want to use the chart as a point of departure to make two further points.

(1)  Under the Reagan administration, the tax burden was shifted downward.  The average blue-collar worker may have paid more in taxes in 1989 than in 1981.

(2)  Ronald Reagan did not govern the country all by himself.  The so-called Reaganomics program could not have been enacted without the cooperation of the Democrats in Congress.

Take the Economic Recovery Tax Act of 1981.  This included not only President Reagan’s proposal to lower the top tax rate from 70 to 50 percent, but a Christmas tree of tax breaks and loopholes, mainly for the benefit of big corporations, that were added by the Democratic majority in Congress.  President Reagan signed the whole mess into law rather than renounce his original plan.

Under the Tax Reform Act of 1986, most of those tax breaks and loopholes were rescinded.  The top tax rate was further reduced from 50 to 28 percent, while the tax rate for the lowest bracket was increased from 11 to 15 percent.  The net result was a further small reduction in taxes overall, but that net figure masks the downward shift in the tax burden.

Then there were the Social Security Amendments of 1983.  These amendments raised Social Security payroll taxes in gradual annual increments and gradually raised the age for full Social Security benefits from age 65 to 67.  A majority of both Republicans and Democrats, in both houses of Congress, supported these amendments.

The amendments achieved their purpose.  They kept the Social Security Trust Fund solvent to this day and for decades into the future.  But they also increased the tax burden on blue collar workers.  Congress didn’t have to do that.  If instead a bill had been passed raising the amount of income subject to Social Security taxes, the same goal could have been achieved by shifting the tax burden upward instead of downward.


The starving beast and the Laffer curve

February 16, 2011

David Stockman, who was Ronald Reagan’s budget director, told a reporter that the real purpose of the Reagan administration’s tax reductions was to choke off revenue for the welfare state. Or, in the words of Grover Norquist, the president of Americans for Tax Reform, to “starve the beast.”

This didn’t happen.  Bill Clinton, a tax raiser, did a better job of holding down spending than tax cutters such as Ronald Reagan and George W. Bush.  It’s not hard to see why.  When are you and I most likely to be careful about what we spend – when we’re putting our expenses on a credit card or when we’re paying out of pocket.

Whatever the intent of the intent of the Reagan tax program, its result was to enable Republicans to replace Democrats in the role of Santa Claus.  In earlier eras, Democrats proposed popular spending programs while Republicans grumbled about whether they were affordable.  Since Reagan, Republicans have been proposing tax cuts and leaving the Democrats to grumble about whether they were affordable.

Click on What people forget about Reagan for an CNN Money article about the Reagan administration’s record on taxing and spending, which is the source for the above graph.


The flawed logic of supply-side economics

February 15, 2011

From about 1945 to about 1975, U.S. economic policy was influenced by the ideas of the British economist John Maynard Keynes.  He said the key to economic prosperity was consumer demand for goods and services.  As long as people are willing and able to buy things, it was thought, business owners and managers supposedly would find a way to provide them.  In recessions, the job of government was to keep things on an even keel by providing unemployment compensation, engaging in public works, easing interest rates and whatever else it took to keep money in circulation.

President Reagan

The Reagan administration based its policy on a new and opposing theory which was a radical departure from Keynesianism.  The new theory was that savings and investment, not demand, were the key to prosperity.  The new theory was that it is the “supply side,” not the “demand side,” that matters.  And the key to the demand side is to lower the marginal tax rate – the additional tax you will pay if you increase your income another dollar.

Suppose you are someone who is in the 95 percent tax bracket during the 1950s.  Would you want to risk investing your money, knowing that all you would get back is 5 cents on the dollar?  Would you strive to earn extra income, knowing all you could keep is 5 cents on the dollar?  Or would you just want to sit back, enjoy yourself and spend your money on luxurious living?

Along comes the Kennedy administration, and cuts the top bracket to 70 percent.  The government loses very little in revenue, but it increases your return on investment, or on extra work, sixfold. So you, as a rich person, have six times more incentive to work and invest than you did before.

In 1978, during the Carter administration, the top capital gains tax rate was cut from 70 percent to 28 percent.  In 1981 and 1986, during the Reagan administration, the top personal income tax rate was cut in two steps from 7o percent to 28 percent.  The upper-bracket earner got to keep 72 cents on the extra dollar rather than just 30 cents.  This meant that the person could invest in something only half as profitable or twice as risky as before and still come out ahead.  The logic of the theory said this should result in a surge in investment, and prosperity for all.

This seemed plausible to a lot of people at the time.  I myself thought it was worth a try.  But in fact U.S. economic performance was no better when the top tax rate ranged from 28 to 39 percent than when it ranged from 70 to 95 percent.  But when you stop and think about it, this should not have been surprising.


Ronald Reagan the peacemaker

February 14, 2011

Ronald Reagan’s crowning achievement as President was his masterly negotiation with Mikhail Gorbachev to bring about an end to the Cold War.

He avoided pitfalls which most people in his place would have fallen into.  When negotiations began, Reagan demanded proof of Gorbachev’s sincerity; he did not simply accept Gorbachev’s proposals because the Soviet leader came to him with an olive branch.  But once Gorbachev showed that he really wanted peace, Reagan was willing to grant it.  He defied criticism from the militaristic wing of his own party.

Moreover, in his negotiations with Gorbachev, Reagan somehow kept the confidence of the anti-Communists of eastern Europe.  Nobody doubted that Reagan still thought of the Soviet Union as an evil empire (which it was). The Solidarity movement in Poland never thought Reagan abandoned them.  Nor had he.

This took considerable skill.  I’m not sure anybody else could have done it.

Reagan’s present-day admirers say he brought the Soviet Union to its knees through his commitment to the unworkable Star Wars missile defense program.  Supposedly Gorbachev realized that the Soviet Union could never afford to pay for a counter program, and so gave up.  Gorbachev himself has denied this was ever a factor in his calculations; this seems believable, because the Star Wars threat was bluff.

The Reagan policy that did most to undermine Soviet Communism was very different.  It was the U.S. government’s arming of the mujahideen fighers with advanced weapons, including Stinger anti-aircraft missiles.  Gorbachev’s image in the West is that of a benign liberal democrat, but he unleashed the Red Army to wage war against the population of Afghanistan on scale and with a brutality unequaled by anything U.S. forces did in Vietnam, Iraq or Afghanistan.  The story is told in George Crile’s Charley Wilson’s War, which I recently read.

The Soviet defeat was more crippling and demoralizing than the U.S. defeat in Vietnam, and Gorbachev, whose goal after all was to make the Communist system work, might not have sued for peace when he did if the Red Army had been victorious.  Crile’s book shows that the impetus for arming the mujahideen came more from an odd coalition of liberal Democrats and conservative Republicans in Congress than from the Reagan administration, but Reagan sanctioned it, and so gets credit for the victory.


Soul brothers: Carter, Clinton, Obama

September 15, 2010

Presidents Jimmy Carter and Bill Clinton were white men who were Governors of Southern states.  President Barack Obama is a black man who was a Senator from a Midwestern state.  Yet in their politics and policies, they are more alike than they are different.

All three ran for office as outsiders.  They had little or no experience on the national scene, but they turned that liability into an asset.  They said they would break with politics as usual in Washington, and bring about a new era.  Once in office, they claimed to transcend partisanship, and to have got beyond traditional liberal vs. conservative thinking.

In fact, none of them represented a break with the past.  They filled their Cabinets from the ranks of the Washington establishment.  They weren’t exactly failures.  They all had certain accomplishments.  But neither Carter nor Clinton was a transformative President in the way that Presidents Ronald Reagan and George W. Bush were, and I expect the same will be true of Obama.

Presidents Carter, Clinton and Obama have been outstanding in their intellectual mastery of the details of policy and government – much more so than Presidents Reagan and George W. Bush.  But Reagan and Bush knew something more important.  They knew their own minds.  They had guiding philosophies which informed their judgments and the judgments of their superiors.

Carter and Clinton were pragmatists, as is Obama. They rejected “ideology.”  Their aim, like Obama’s, was to support whatever produced the best results.  But in practice, they seemed to flounder.  In contrast to the Reagan and Bush administrations, their administrations lacked direction.  Pragmatism was un-pragmatic.  It didn’t work.

Reagan and Bush met the “elevator speech” test; you could state their principles to somebody on an elevator before the person got off at the next floor.  Their basic principle was that government was evil and its activities should be minimized, except in regard to national security and preserving order, in which case its powers should be absolute.  I don’t agree with this philosophy, but it is understandable.  I could not give an elevator speech explaining Carter’s philosophy, nor Clinton’s, nor Obama’s.


Why not Martin Luther King on the $50 bill?

April 28, 2010

A congressman from North Carolina has introduced a bill to replace the face of Ulysses S. Grant with Ronald Reagan on the $50 bill.  The bill has 17 co-sponsors.  The bill probably won’t get anywhere, but the proposal keeps coming up.

U.S. Grant deserves to be honored. He not only led the Union army to victory in the Civil War but was second only to Abraham Lincoln and maybe Lyndon Johnson as a presidential supporter of human rights. Under his administration, federal troops guaranteed the right of black people in the South to vote, to own property and to enjoy other civil rights. This ended when he left office, and civil rights were not restored until the Kennedy-Johnson era.

But if you want to put a 20th century figure on the $50 bill, why not Martin Luther King Jr.? We celebrate Martin Luther King Jr.’s birthday as a national holiday, along with Washington’s and Lincoln’s.  Few Americans are more revered than Dr. King, either by their fellow citizens or by the world at large.