America in the Reagan Years

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America in the Reagan Years
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The Reagan Revolution The Claims

1. Optimism and national self-confidence The Reagan
   Vision
2. Reversing economic decline Reaganomics
3. Battling the Evil Empire Foreign policy

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• The Reagan Vision

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• In my mind it was a tall proud city built on
  rocks stronger than oceans, wind-swept,
  God-blessed, and teeming with people of all kinds
  living in harmony and peace, a city with free
  ports that hummed with commerce and creativity,
  and if there had to be city walls, the walls had
  doors and the doors were open to anyone with the
  will and the heart to get here. That's how I saw
  it and see it still.
• Ronald Reagans Farewell Address, 1989

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• Are you better off now than you were four years
  ago? (1980)
• Its morning again in America (1984)

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The 1984 Reagan Landslide
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• Reaganomics

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Supply-side economic theory

• Productivity growth and more investment would
  create growth more effectively than (Keynsian)
  concentration on demand
• Individual economic actors behaved rationally and
  predictably
• lower taxes and increased incentives for
  individuals (and firms) to work, save and invest
  would raise real output

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Milton Friedman

• Nobody spends somebody else's money as carefully
  as he spends his own. Nobody uses somebody else's
  resources as carefully as he uses his own. So if
  you want efficiency and effectiveness, if you
  want knowledge to be properly utilized, you have
  to do it through the means of private property.

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Milton Friedman

• Governments never learn. Only people learn.

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The Laffer Curve
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• 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?
• First Inaugural, 1981

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Federal Tax and Spending Trends 1974-1996
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Reaganomics and the Ballooning Deficits
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The Politics of Deficits

• Growth much lower than expected Laffer curve
  didnt work full-scale war on Welfare State
  avoided huge defense build-up ? FY1986 deficit
  was BN200 and national debt was TN2.7
• Reagans revenge? forced limits on spending

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• Mitch Snyder

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• Unemployment 10 by 1983

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• Economic Nationalism

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Share of national income (excluding capital
gains) going to richest ten percent of
population, 1917-1997
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Income inequality

• Individualist ethos
• Reaganomics cuts in welfare tax cuts for rich
• Decline in union membership
• Immigration
• Technological change (increased demand for
  high-skilled labour)
• Globalisation cheap imports (decreased demand
  for low-skill labour)

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Reaganomics Assessed

• Defeated inflation (by supporting Fed Reserves
  tight monetary policy and with good fortune of
  low oil prices)
• Inaugurated longest continuous period of
  expansion in American history 1983-present (with
  brief interruption in 1990-91)
• Halted expansion of fed govt spending
• Halted rise in tax burden (19 of GDP in 1988
  19.4 in 1980)

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Reaganomics Assessed

• Changed terms of debate Monetarists won battle
  over the way to deal with inflation, the efficacy
  of state intervention in the economy, and the
  importance of the supply side of the economy

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Reaganomics Assessed

• Depression of 1981-82 high interest rates and
  10 unemployment
• Lower average growth (2.5) than in 1970s (2.8)
• Debt burden budget deficits and national debt
  ballooned
• Huge increase in inequality and rise in poverty

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• Foreign Policy

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Post WWII military spending (in constant 2006
dollars)
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• Evil Empire rhetoric
• 1983 turn in Cold War policy?
• Summits, faith in personal chemistry
• Abhorrence at the thought of nuclear war

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The Reagan Revolution

• And how stands the city on this winter night?
  She still stands strong and true on the granite
  ridge, and her glow has held steady no matter
  what the storm My friends, we did it We made a
  difference. We made the city stronger. We made
  the city freer, and we left her in good hands.
  All in all, not bad, not bad at all. And so,
  good-bye.

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Contradictions Reaganism and the consolidation
of the counterculture

• 80s the decade of greed decisive shift away
  from traditional bourgeois values of thrift, hard
  work, delayed gratification, self-discipline
• Huge rise in crime, especially violent crime
• Moral levelling assault on traditional social
  institutions family, heterosexual mating rituals

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Contradictions Reaganism and the consolidation
of the counterculture

• Multiculturalism, political correctness,
  relativism v metanarrative, universalism
• Focused on individual not usefulness to society
• Triumph of counterculture? Institutions became
  bastions of this cultural version of liberalism

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The Reagan Revolution

• Huge gap between public adoration and
  intellectuals scepticism (until recent
  re-evaluations)
• Reagan a reconstructive president changed
  the terms of political and economic debate,
  altered the way in which Americans thought about
  themselves, shifted political mainstream to the
  right even as American culture made the final
  break with traditional moral values

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Pragmatic IdeologueGreat CommunicatorReconstr
uctive President