“Ronald Reagan’s tax-cutting and deregulatory policy restored America’s economic greatness after the decline of the 1970s”
Donald Trump frequently claims that he will create a new era of dynamic economic growth by emulating Reagan’s strategy of tax cuts. In fact, the 1980s were not the golden age of prosperity that many Republicans imagine. Economic growth rates in this decade did not match those of 1947–53 and 1961–69 (both periods when, as it happened, Democrats were president).
The greatest economic achievement of Reagan’s presidency was the conquest of inflation, which was running at 13 per cent a year in 1980, but this was largely achieved through the Federal Reserve pursuing a monetarist strategy that restored price stability at cost of the deepest recession since the 1930s.
Reagan’s tax record was a complex one that featured the largest tax cuts in American history in 1981 (for both individuals and business); the largest-ever peacetime tax increase in 1982 (numerous business tax loopholes were closed to reduce a burgeoning budget deficit); and the most significant tax reform in US history in 1986 (which paid for personal tax cuts with higher corporate taxes). Neither Reagan nor his later conservative supporters admitted his deviations from low-tax philosophy, which became embedded as part of his conservative legacy and a sacrosanct element of American conservatism’s political beliefs. Nor did the president acknowledge a massive failure in his deregulation of the Savings & Loans home-finance industry, which resulted in the greatest financial-sector crisis between the Wall Street Crash of 1929 and the banking crisis of 2007–08 – one that ultimately had to be resolved through a massive government bailout funded by taxpayers in 1991. Reagan’s legacy therefore offered a foretaste of how the free market relies on government to compensate for its failings.
“Ronald Reagan led America to Cold War victory through making defence of freedom the core ideal of his foreign policy”
Reagan did bring the Cold War close to conclusion by the time he left office, but he needed a willing Soviet collaborator, Mikhail Gorbachev, who wanted to end the confrontation in order to focus on internal reforms. Accordingly, one element of Reagan’s foreign-policy legacy was to demonstrate that individual leaders who trusted each other could resolve longstanding confrontations between nation-states. His shift from first-term hawk to second-term negotiator horrified many American conservatives, who tried to block Senate ratification of the US-Soviet Intermediate Nuclear Forces Treaty of 1987.
Only the Soviet Union’s demise in 1991 prompted a change of heart. Conservatives now praised Reagan for having undermined the Soviet political and economic system through massive defence spending that the Soviets could not match and rhetorical assaults on the ‘evil empire.’ In reality, Reagan had only wanted to reduce Cold War tensions because of his growing concern about nuclear conflict, to get Kremlin agreement to let the Soviet satellites decide their own form of government and to restrain Soviet interventionism in the third world. The disintegration of the Soviet Union was not on his agenda.
Nevertheless, Reagan merits historical remembrance as one of the trio of presidential emancipators (alongside Abraham Lincoln and Franklin D Roosevelt) for having helped to free eastern Europe from the Soviet empire. His role as a liberator had very clear limits, however. When freedom was struggling for birth against the oppression of authoritarian regimes in Latin America, Africa and Asia, Reagan preferred to support governments with awful records on human rights for fear that democracy movements in these regions would fall prey to Marxist takeover.
“Ronald Reagan kept Middle Eastern terrorism in check”
Reagan did his best to be even-handed in the Middle East. Though a fervent supporter of Israel, he took a tough line on its 1982 invasion of Lebanon to drive out the Palestine Liberation Organization, eventually compelling the Israeli government to stop the bombardment of West Beirut because of the civilian casualty toll. He then proposed a general Middle East peace deal whereby Israel agreed to withdraw from territory captured in 1967 in return for Arab agreement to its right to exist – the first ever American endorsement of Palestinian West Bank autonomy. When this found little favour with the warring parties, Reagan promoted an ill-fated international peacekeeping mission in Lebanon.
However, Syrian-supported Lebanese Muslim groups become suspicious that the US contingent was in reality supporting the pro-Israeli Maronite Christian government in Beirut. In October 1983, the newly formed Hezbollah, backed by Syria and Iran, carried out a suicide-bombing mission that killed 241 American service personnel. Unable to retaliate effectively and wishing to avoid further loss of life, the US government and its international partners withdrew their peacekeeping forces in February 1984. Despite suffering a setback far greater than Jimmy Carter in the long-running Iranian hostage crisis of 1979–81, Reagan did not pay a political price at home for this failure. However, America’s withdrawal served to encourage Middle Eastern terrorist groups by indicating that its regional commitments had blood-cost limits. Reagan’s later willingness to sell arms to Iran in the hope of securing the release of US hostages held in Lebanon by Hezbollah groups only reaffirmed such a conviction.
“Ronald Reagan proved the popular appeal of conservative Republicanism”
For today’s right-wingers, it is something of a mantra that the Republican Party’s deviations from the conservative course charted by Reagan are responsible for its failure to become the new American majority. To their mind, none of the party’s post-Reagan presidential candidates has truly been a Reagan Republican. Such conviction ignores the reality that Reagan was a pragmatic conservative rather than an ideological purist. He focused on core objectives of reducing taxation on individuals, strengthening America’s security through massive expansion of defence spending, and halting the growth of big government – an agenda that he was successful in achieving.
Reagan was not interested in a kamikaze assault on the entitlement state that benefited the middle class – he reached agreement with the Democrats to guarantee the long-term solvency of the Social Security pension programme and did not threaten healthcare programmes. To the dismay of some moral conservatives, especially the Christian right, he was unwilling to invest political capital in promoting constitutional amendments to outlaw abortion and permit school prayer.
Reagan would have been uncomfortable in today’s polarized political environment. He needed some Democratic support to attain his objectives because the opposition party retained control of the House of Representatives throughout his presidency. Willingness to compromise and engage in horse-trading was essential for doing so. Reagan’s reliance on a coterie of habitual Democratic voters to elect him president in 1980 and re-elect him in a landslide in 1984 also militated against extreme partisanship. Yet whatever his own popularity with cross-party voters, he could not get them to back Republicans in congressional elections. In essence, his legacy was to make some conservative ideas, notably on low taxes, more appealing to voters without turning America into a conservative or indeed a Republican nation.
“Ronald Reagan saved the presidency from irrelevance”
Reagan followed a succession of failed presidents – Lyndon Johnson was driven from office by Vietnam; Richard Nixon resigned to avoid impeachment over Watergate; and Gerald Ford and Jimmy Carter inherited what many pundits called an imperilled presidency because its authority was much weakened compared to its mid-20th-century heyday. By 1980 some analysts doubted whether the job of president was too great for one man to undertake, but their concerns were soon silenced.
Reagan restored the presidency as the driving force of American politics and fulfilled popular yearning for strong leadership. In doing so, he sometimes overstepped the limits of his authority by pursuing national security initiatives in violation of existing law. The outcome was the revival of the imperial presidency that Vietnam and Watergate had appeared to kill off. Reagan’s direct involvement in the intersecting illegal operations known as Iran-Contra brought about the greatest crisis of his tenure, but he escaped Nixon’s Watergate fate by cooperating with the various investigations of the scandal. The presidency that Reagan bequeathed to his successors was therefore a stronger office than he inherited but had also become more dangerous to the constitutional order.
As this review suggests, Reagan overall legacy was far more complicated than portrayed by many of his conservative admirers (and indeed his liberal critics). His presidency marked the end of the Democratic ascendancy in American politics that had endured since the early 1930s, with only occasional Republican presidential election success and hardly any at congressional level. It ushered in a still-ongoing era not of Republican ascendancy but of Republican parity in US politics. Accordingly, Reagan can be adjudged the most successful conservative president in American history, but this was as much a reflection of his pragmatism as of his conviction.
Coming into government relatively late in life – being almost 56 when elected California governor – he rose rapidly because of his political talent: he was a great communicator, pursued well-focused and achievable agendas, and had intuitive understanding of how far he could press conservative ideas without offending voters. Despite a sunny personality, an unquenchable optimism about his country’s future and his mastery of image and presentational skills, Reagan was far from being America’s most popular president. His Gallup poll approval-rating average over eight years was just 53 per cent.
Nevertheless, Reagan is the most consequential president since the Second World War, a leader who changed America’s politics and foreign policy during his time in the White House and continued to influence his country’s future long after he left office. The Republicans have been searching for a leader of his ilk for more than a quarter-century, but none of their post-Reagan presidential candidates has matched up to his unique combination of vision, pragmatism and communication skill.
It’s become a cliché to say that Donald Trump isn’t another Ronald Reagan, but this begs the question of whether anyone can really aspire to being so.
Iwan Morgan is professor of US Studies and Commonwealth Fund Professor of American History at University College London. He is the author of Reagan: American Icon (I. B. Tauris, 2016).
This article was first published by History Extra in November 2016