Ronald Reagan is the quintessential conservative — a president whose memory stirs passionate emotions of almost anybody that was alive during his tenure in office. And depending on who you ask, he will more than likely be described either as a wise and charismatic leader whose policies and vision led America on the path to peace and prosperity, or he was a corrupt corporate shill who took from the poor, gave to the rich, ruined America’s economic standing in the world and screwed over the American middle class. But exactly how much of this is based in fact?
The term “Reaganomics” is named for Ronald Reagan’s sweeping fiscal policies that transformed the fiscal landscape of America. His policies were firmly rooted in the belief that lower tax rates would stimulate the economy. This was supposedly substantiated by the Laffer Curve, which stated that lowering tax rates to a certain level would stimulate the economy enough to offset any deficits produced. But taking a look at the different budgets and laws passed, as well as the accumulated deficit over his presidential term, we see a rather different picture from what is often painted by his supporters.
The prevailing belief that Reagan’s tax cuts were sound fiscal policy may be true to an extent, but to which it was executed did not work out as well. The main issue is the federal deficit. Reagan cut many of the governmental programs, such as welfare, food stamps, and in some sectors like education. However, largely increased military spending offset any budgetary surpluses that could have been garnered during this time. The tax cuts during this time, while largely sweeping, benefited the rich more than anybody else, because of the belief that trickle-down economics would benefit everybody due to increased spending on the end of the wealthy and corporations. Despite the claims that it was Reagan’s greatest disappointment during his presidency, it seemed to be of little consequence to him regarding his fiscal policies. Some analyses claim that a gross misunderstanding of the Laffer curve — so central to Reagan’s fiscal policy, led to the deficits that have been a substantial plague on our public debt — instead of cutting taxes to a productive level, they were cut down too low to produce revenue.
Trickle-down economics, a close cousin of supply-side economics, was at the heart of Reagan’s penchant for cutting taxes. It was believed that the economy could benefit from giving power to the corporations by deregulating and reducing government oversight, thus giving them an incentive to produce more goods and services, and in the end boosting the lower and middle class. This really didn’t happen. Unlike any other time in recent history, wealth was drastically redistributed to the masses while wages for most average Americans stagnated thoroughly during the 1980s. It is hard to understand why people would be led to believe on a mass level that redistributing wealth to the top 1% of the population would be beneficial. It wasn’t the policies so much as it was Reagan’s personal charisma — this is often seen as one of the primary reasons for Reagan’s great successes in elections.
The belief of “less government” manifested itself in many ways. The financial deregulation that followed Reagan’s elections acted upon the philosophy that less government/lower taxes = more revenue. But in some cases, this actually caused problems, especially within the financial industry. The Savings and Loans Crisis of 1982/1983 was triggered by a collapse in the S&L market following the failure of many high-risk investments, such as junk bonds. While traditionally safe loans that reflected their value in both the assets and the person taking it out were the norm, waves of deregulations allowed people to invest in properties that were worth less than their loans. They could make high-risk, speculative bets that could be made in risky locations, such as casinos, instead of the more stable home market. Because these were subsidized with federal taxpayer dollars, this created a completely accountability-free, greed-driven atmosphere,the people who ultimately helped to cause the crash were left unharmed, yet policies did not change. The issue here lies with the excessive pro-business stance of the time — a for-profit entity will do absolutely anything to make a buck, even at the expense of everyone else. The Reagan administration failed to realize this, and taxpayers payed the price.
A common topic brought up during Reagan’s presidency is that he created 16 million jobs during his presidency. That is undeniably true…except when you take a look at other presidencies, the job levels increased by many millions themselves (See the chart for additional data — this comes from ). The belief that Reagan’s tax cuts helped to get us out of the 1982 recession is also a myth — more or less, it had to do with then-chairman Paul Volcker raising interest rates and tightening the money supply, which drastically lowered inflation to the rock-bottom level of %3.5. As a matter of fact, Reagan actually had to raise taxes during this time because his previous wave of tax cuts deprived the government of the funds it needed to function. This backtracking, while rarely mentioned, is highly indicative of the unsustainable nature of his transformative and, for the time, unique fiscal policies.
When given a full review, I find it hard to understand why people find the wave of tax cuts and deregulations to be good to our long-term health. Despite the short-term gains, the high-risk trading on Wall Street, deepening deficits, and stagnating wages have harmed us all as time wears on — and the more these policies continue implementation, the more of a negative effect they have on us. A high progressive tax rate on the top gave big business more of an incentive to share its profits with their workers. regulations kept businesses and banks from making bad investments. Even recently, the effects of these same Reagan-style policies by Bush Jr. helped to bring about the so-called “Great Recession” when uncontrolled lending practices and purchases (mainly through derivatives) that soured helped to crash and destroy many of our largest businesses on Wall Street. Businesses became more successful under the Reagan administration, which does account for much of the perceived success during his time. But it came a high cost for the middle class, and the culture of irresponsibility and greed on Wall Street and other big businesses arguably came into being during the 80s when the waves of deregulations and tax cuts came into effect — and we paid the price.
Ronald Reagan’s administration is known for having taken a hard-line, but not necessarily violent approach, to foreign policy. To sum it up in his own words, “Firm but fair.” He was also known for being highly anti-Communist in his stance — the belief that Communism was an evil, corrupt system akin to a virus upon the world was a very powerful and influential belief that formed much of the core of Reagan’s foreign policies throughout his presidency. This helped to shape some of the key events that would take place through his terms, be it bad or good.
The military buildup was unprecedented for the time — with military spending expanding almost 50% from their pre-1981 levels. All sectors of the military, as well as several projects (among the most (in)famous being the anti-nuclear Star Wars program) received expansions and upgrades. These were put to task many times during Reagan’s presidency…most notably in trying to actively destroy Soviet influence where it existed outside of the USSR itself. This would sometimes lead to constitutionally questionable, even criminal, actions: the illegal and covert sales of arms to Iran in return for hostages and the sale of arms to Contra rebels, known as the Iran-Contra affair, became one of the biggest scandals in Reagan’s administration when it leaked out in late 1986.
The general public’s opinion is split as to whether they feel Reagan’s stance on world affairs and Communism was beneficial or detrimental. This can be seen either way depending on which aspects you examine. In some ways, the toughened militaristic stance aided in helping solidify America’s image in the world, thus giving us additional influence in world affairs. Others may see such actions as nothing more than political grandstanding intending to bully the rest of the world into submitting to our will and ideals. To an extent, these are both true. America has historically been one of the world’s leading superpowers, and despite our great stature in the world our military had been steadily declining for a long period of time up to the 1980s — keeping it up in shape is an excellent way to ensure that our need for national security can be met should the need arise. But on the other hand, Reagan’s administration was known for forcing its anti-Communist will on other nations with military force. This type of behavior resulted in a loss of approval ratings in Bush’s tenure, and while attitudes have changed somewhat since the 1980s, much of the hatred of America abroad had it’s roots in the use of militaristic force in foreign affairs — the Iraq invasion (and even Afghanistan) is a frequently cited event.
But in an arguable, tenuous way, the anti-Communistic, pro-military stance espoused during the 1980s helped to bring an end to the Cold War. Ronald Reagan’s commitment to opposing Communism was his impetus for signing the Intermediate-Range Nuclear Forces Treaty after engaging in cooperative talks with Mikhail Gorbachev after decades of isolationism from the United States in hopes of bringing about the end of the USSR. But something that is less mentioned is Mikhail’s more liberal and open viewpoint. In a remarkable break from preceding leaders, he was more interested in bringing about the end to the suffering and oppression from the old regime following protests and requests from the general population. The end of the nation was wrought when the USSR collapsed, but the cooperation on both ends can be seen as having aided the eventual transition between a Communist state and a democracy.
As a conservative, Ronald Reagan pursued many ideas and beliefs that form the basis of much of today’s conservative doctrine, and many of these laws have helped to shape the landscape of America today. Not everybody feels that his decisions were for the benefit of America, and some, especially the moral-situated ones like the War on Drugs (which Reagan did not formally start but he did escalate) are often seen to having ultimately been detrimental to us in a variety of ways, primarily in the exploding incarceration rate in American prisons.
Among Reagan’s best-known domestic policies are his irresponsible fiscal policies. But his social policies aren’t often discussed, yet many of them continue to pervade American law and society. One of the most influential could arguably be considered a War on Drugs — an effort much-emphasized in accordance with social conservatism. While it was an altruistic effort, more or less it was a failure — and the next two presidents did nothing to change it either. Not only are over half our prisoners drug users, but drug use has not declined since the crackdowns. This helped to drastically increase the cost of our prisons in taking care of and maintaining prisons for choices that the individuals make.
I can’t say that Reagan really split in any major way with the conservative doctrine — he is essentially the model for much of American conservatism today despite some breaks that occurred in his presidency, such as that in taxes. He was pro-life, he was for smaller government (despite government payrolls actually increasing during his presidency), and appointed several conservative judges to help advance his views. His support among minority groups floundered because of his budget cuts to essential programs like welfare and education (e.g government programs), though the tenuous success of the economy helped him to stay popular enough to remain in office for two terms.
Ronald Reagan was also a religious man. His view on many of his social beliefs, such as abortion, drugs, unions, and even the spread of AIDS had influence in his own personal convictions. Unfortunately, his socially conservative views did not match his supposed belief in fiscal conservatism. Despite promises to cut spending and reduce government, he ended up bloating the military budget and the federal deficit. The issue lies with the championing of the military-industrial complex that Eisenhower warned against in his presidency. While government in some sectors decreased, military influence greatly increased, aided by his more force-based views on foreign policy. This is seen as a good thing, but the fact is, military spending was far excessive: much of the arming we have today is left over from the 1980s.
While a common stated goal by Republicans is to reduce spending and government, even their biggest inspiration failed to so on an epic scale — even today, I fail to see why Reagan is seen as an economic boon to America despite his leadership, charisma, and oratory skills. I often see remarks of going back to “true” conservatism especially since the failure of Bush Jr — Reagan is almost always invoked as a “true” conservative figure. But when analyzing his different policies and the effects of them, the picture they so frequently paint lies in direct contrast to their actual outcomes. Many myths seem to surround his “successes” — such as him single-handedly ending the Cold War, liberating the Iranian hostages (they did it out of spite due to Carter’s failure to get them released), and creating the greatest economic expansion in recent US history. But more or less, it seems to be an enumeration of his legacy, for though he acted like a conservative, even his policies often failed to achieve the desired effects — what could arguably have been seen as “successful” was his excessive buildup of the military and his ability to rally people to his cause as a leader of the people.
Previously published November 15, 2009.