Sunday, June 12, 2005

The True Story of Reaganomics

Note: This is a research piece and I must therefore cite my sources. Since, however, the use of footnotes or endnotes is not available to me on this blog, I am forced to use parentheticals, which are ugly.

At the end of President Jimmy Carter’s four years, the American economy (and America in general) was in crisis. Rate of change of productivity was only a quarter of what it had been under Nixon and Ford (the only Presidents of the century who have performed more poorly in this department than Carter were Clinton and Hoover) (Cato 6). Real median family income was declining steeply (Cato 5-6). Worst of all was the combination of a stagnant economy and high inflation (“stagflation”) which seemed to violate Keynesian economic principle (D’Souza 90).

Keynes’s economics was the mainstay of the failed Carter policy. It had been developed by John Maynard Keynes during the great depression and enjoyed great success during the WWII era. It was “premised on the notion that experts can control the ups and downs of the economy by manipulating government spending and money supply” (D’Souza 90). Central to Keynesian theory was the Phillips Curve, which states that there is an inverse relationship between inflation and unemployment (D’Souza 90). The simultaneous double-digit inflation and the high unemployment rates of the Carter administration was baffling to the Keynesians -- fortunately, the American public had a chance to hurl Carter out of office just in time for Reagan to come in and clean things up.

Reagan had three major economic theories to choose from. First, the tried and untrue Keynesian view. Second, Monetarism, championed by Milton Friedman. The Monetarists believed that the bad economy (specifically high inflation) was the result of having too much money in circulation (D’Souza 90). They therefore favored strict control of money supply as a means of lowering inflation.

The last school of thought was supply-side economics. Supply-siders wanted to cut tax rates, thereby increasing the incentive of workers to produce, and “invigorating the economy from the production or ‘supply’ side” (D’Souza 90). Supply-side economics encourages growth “arising from a free response (e.g. investment, hard work, etc.)” (Bartlett 3).

Supply-side economics is identified with economists Robert Mundell and Arthur Laffer. The Laffer Curve, central to supply-side theory, predicts that there are two different rates of taxation that will generate the same government revenue, and that there is a single optimal rate that generates the most revenue (D’Souza 91). For example, if the government were to tax the people at 0% or 100%, the revenue generated would be zero dollars in either case -- at 0% the government will not be collecting, at a 100% the people will have no incentive to produce (D’Souza 91). The idea therefore was to achieve increased government revenue with tax rates lower than they had been under the Carter administration. Interestingly enough, this theory had been advanced by President Coolidge in 1924 (quoted in Bartlett 211). It is also worth noting that Reagan would achieve the second-longest period of sustained economic growth in the 20th century with the second-largest tax cut. JFK had achieved the longest period of sustained economic growth in the 20th century with the largest tax cut (Cato 13).

Supply-side economics has often been unfairly caricatured as “trickle-down” economics by its opponents. They claim that Reagan’s tax policies were designed to stimulate the economy by giving all riches to the richest people, and letting the effects of their increased spending “trickle down” to the lower classes. This is not what Reagan’s tax cuts achieved -- his first and biggest tax cut was the same percentage for all income brackets. Needless to say, this resulted in a greater increase in wealth for the wealthier brackets, simply because they had been paying far greater taxes.

Reagan wanted to use a combination of monetarist and supply-side economics in a Friedman-Mundell compatibility theory that was the subject of heated debate among the leading economists of the day (Niskanen 8). The proposed economic policy had four main parts: 1) A supply-side 25% tax cut across the board; 2) Tight control of money supply as per monetarist theory; 3) A limit on domestic spending to control the budget; 4) A reduction of government regulation (Cato 2). This is Reaganomics.

Reagan predicted that his program would end the “economic woes” of the Carter administration and bring the US “lasting economic growth and prosperity” (D’Souza 85). Reagan’s plan was revolutionary -- “the most ambitious program for America since the New Deal” (D’Souza 85). Its core was tax cuts, which involved Reagan most directly and had been the main plank of his campaign platform (JEC 1).

Reagan was expected to have trouble getting his policies enacted -- tax cuts in particular. Republicans had only a slim majority in the Senate, and the Democrats controlled the House under Speaker Tip O’Neill (who turned out to be the major obstacle to Reagan’s tax plan). Reagan used the “acumen and experience of his aides, especially Chief of Staff James Baker…to win the support of moderate Republicans in the Senate and Conservative Democrats in the House,” without which he would not have had the votes he needed (D’Souza 93). In his most effective move, Reagan made a remarkable national TV address in which he requested that Americans write and call their representatives and demand passage of his tax plan. “The response was overwhelming” (D’Souza 93).

The 25% tax cuts were passed in the Economic Recovery Tax Act of 1981 (often called the Kemp-Roth Tax Cut after its sponsors in the House and Senate respectively). The tax cut was introduced gradually, with the first cut of 5% in 1981 and the last in 1983 (JEC 1). The act also included a provision to index tax rates for inflation starting in 1985, ending the phenomenon of bracket creep (when a person earns the same in real terms but moves into a higher bracket because he is paid in devalued dollars) (D’Souza 93). Getting the act passed was, in the words of Reagan critic Ronnie Dugger, a feat that “no ordinary person could have achieved” (D’Souza 89).

In the final year of the tax cuts’ implementation (1983) the United States “commenced a seven-year period of uninterrupted growth…the biggest peacetime economic boom in US history" (D’Souza 109). As Reagan biographer Dinesh D’Souza continues:

At a growth rate of 3.5%, well above the nation’s historic average, the gross domestic product expanded by nearly a third in real terms. Measured in 1990 dollars, median family income, which had declined during the 1970s, climbed from $33,409 in 1980 to $38,493 in 1989, a 15 percent increase. While European countries were facing chronically high unemployment rates, in America 5 million new businesses and 20 million new jobs were created, largely solving the nation’s unemployment problems. Interest rates fell from 20 percent in 1980 to less that 10 percent. Despite sporadic ups and downs, including the steep fall of Black Monday in October 1987, the stock market more than doubled in value. Most spectacular, these results were achieved with low inflation. The double-digit price increase of the Carter years simply vanished; inflation became an insignificant problem in the Reagan era.

Former CEA chairman Murray Wiedenbaum made some interesting comparisons between the Carter and Reagan administrations in an op-ed for The Christian Science Monitor: “Real GDP declined by one-half of 1 percent in 1980, President Carter’s last year, and rose 3.9 percent in 1988, President Reagan’s last year…the unemployment rate declined from 7.0% in 1980 to 5.4% in 1988...real national wealth rose from $11.9 trillion in 1980 to $14.2 trillion in 1988” (Wiedenbaum 1).

The productivity rate during the Reagan administration increased two and a half times faster than it had during the Carter administration (Cato 5-6). The “Reagan Recovery” lasted 92 months -- the “second longest uninterrupted economic expansion of the century” (Cato 20). Furthermore, the supply-side theory of greater revenues from lower tax rates, along with lowered burden on the lower brackets, was vindicated. The wealthiest 1% of all Americans had paid 18% of all Federal income taxes in 1981, but by 1990, with their taxes substantially reduced, they paid 25% of all Federal income taxes (Cato 20). Similarly, the wealthiest 5% of Americans, who paid 25% of all Federal income taxes in 1981, paid 44% of all Federal income taxes in 1990 (Cato 17).

There are three chief criticisms of Reaganomics. The first is that the Reagan expansion was the result of Keynesian, not Supply-Side economics (“Reagan’s economic program actually amounted to the longest and most successful Keynesian recovery the world has yet seen” ran an erroneous editorial in Newsday) (quoted in Cato 12).

The most obvious argument against this claim is in the fact that, if this were a Keynesian recovery, the Keynesian economists would have predicted it. As D’Souza writes, most Keynesian economists “had warned instead that Reagan’s policies would lead to higher rates of inflation. Not only did this prove to be false, but the very economic facts of the recovery had once again falsified the Phillips curve” (D’Souza 110). Furthermore, since Keynesian economics operates under the belief that the economy is demand-driven, demand should have grown rapidly during the 1980s; in reality, the rate of demand growth fell (Cato 12).

The second main criticism of Reaganomics is that “the poor got poorer and the very rich grew fabulously richer, while middle-class incomes largely stagnated” (as my 11th grade history text, The American Pageant, falsely claims).

JFK once said that “a rising tide lifts all boats” and the Reagan recovery has shown this to be true. During the Reagan years, real family income increased in all five income brackets (Cato 15). During the Carter years, real family income decreased for the two poorest quintiles, stayed the same (“largely stagnated”) for the middle quintile, and increased only for the two richest quintiles (Cato 15). In other words, what the so-called textbook The American Pageant claims to have happened as a result of Reagan’s policies was actually going on during the Carter administration. The change in real family income of the poorest quintile was -5% during the Carter years and +6% during the Reagan years (Cato 16). 85.8% of those in the lowest quintile in 1979 were in a higher quintile by 1988 (Cato 16). In addition, a man who had been in the poorest quintile in 1979 was more likely to have moved to the highest quintile by 1988 than he was to still be in the lowest (Cato 15). Articles such as “The Disappearance of the Middle Class” (which appeared in the New York Times magazine) claimed that, since the middle class was getting smaller, the country must be getting poorer (D’Souza 111). This complaint ignores the fact that, while there was a fall in the percent of Americans in the middle class, there was a corresponding rise in the number of Americans in the upper class -- in other words, “a substantial number of middle-class Americans became rich” (D’Souza 113).

The last major criticism of Reaganomics is the claim that the tax cuts caused a huge increase in the budget deficit. This is untrue -- the main reason for the deficit was the increase in defense spending. The increase of $799 billion in the deficit during the Reagan years was actually smaller than the increase in defense spending of $806 billion (Cato 9). This increase in defense spending, however, was more than paid for by the Cold War victory that it helped to bring about. As D’Souza writes: “[Economist Lawrence Lindsey] calculates that the country’s defense savings since the collapse of the Soviet Union have more than compensated for the investment that Reagan made in the 1980s…In purely economic terms, the buildup was a ‘fantastic payoff -- the best money we ever spent’” (D’Souza 99).

One must also remember that it is incorrect to say simply that “deficits are bad.” All things being equal, we would rather not have a deficit. But all things are not equal: A deficit is better than a weak economy; it is better than having a communist superpower, and it is also better than having a surplus. (Remember that a surplus is actually government theft -- taking more money from the taxpayer than it needs to run the country). A deficit is also a indicator of a country that is economically strong -- it shows that people everywhere (our own citizens and foreign nations) are willing to invest in the United States. (Assuming that, as during the Reagan administration, the Treasury can keep interest rates low).

Reaganomics was tremendously successful. The “Reagan recession,” which was actually the tail-end of Carter’s great recession, ended when the tax cuts took effect, and America’s economy experienced an extraordinarily powerful recovery that lasted well into the 1990s (D’Souza 109,128). The “seemingly insoluble” problem of stagflation was solved (D’Souza 127). Reagan’s astonishingly simple solution turned out to be the best -- all we had to do was “give it back to the taxpayers” (D’Souza 67).


Bibliography:

Bartlett, Bruce R. Reaganomics: Supply Side Economics in Action. Westport: Arlington House, 1981.

D'Souza, Dinesh. Ronald Reagan. New York: The Free P, 1997.

Moore, Stephan, and William A. Niskanen. "Supply Tax Cuts and the Truth About the Reagan Economic Record." The Cato Institute (1996).
http://www.cato.org/pubs/pas/pa-261.html.

Niskanen, William A. Reaganomics: An Insider's Account of the Policies and the People. New York: Oxford UP, 1988.

United States. Joint Economic Committee. The Reagan Tax Cuts: Lessons for Tax Reform. Apr. 1996.
http://www.house.gov/jec/fiscal/tx-grwth/reagtxct/reagtxct.htm.

Wiedenbaum , Murray. "Reaganomics - Its Remarkable Results'." The Christian Science Monitor. 18 Dec. 1997.
http://search.csmonitor.com/durable/1997/12/18/opin/opin.2.html.

43 Comments:

At 6:42 PM, Blogger SinaMoravej said...

Well you are ignoring the recession of 1987, the collapse of the junk bonds, caused by Reagan.

 
At 12:00 AM, Blogger Alec Brandon said...

You are terribly wrong on one issue, which is the only reason that during the 1980s we had all of those fabulous economic statistics that you so thoroughly quoted, and incorrectly attributed to Reagan.

Monetarism had nothing to do with Reagan, at all. In fact, Reagan had no power to do anything that monetarists were calling for. What power does the President have to affect inflation? Well almost none, except in appointing the Chairman of the Federal Reserve. Now the Chairman of the Federal Reserve who fearlessly raised interest rates in order to quell inflation was Paul Volcker, appointed by Jimmy Carter in 1979. He was the monetarism in "Reaganomics," except he had nothing to do with Reagan. Sorry about that Dan. But seriously, without Volcker Reagan's economy would have been just as terrible as Carter's. This is at least what REAL economists like Milton Friedman (as opposed to fake ones like Laffer or D'Souza) would say about the issue.

Hoover did not cause the Great Depression, it was terrible monetary policy by the Federal Reserve that exacerbated a depression, sending it into a down spiral that Hoover could not over come. Was Hoover a terrible cheerleader for the economy? Yes, but he did not "cause" the Great Depression, nor did some sort of general societal malaise, which is what we are taught in High School, it was just plain terrible monetary policy.

So then why did Carter's economy suck so much, most classical economic historians agree that it was Arthur F. Burns giving Richard Nixon an election year boost in short term income for the country that ended up causing the massive inflation and subsequent "stagflation" that haunted the US in the late 1970s.

So then onto the so called nonexistent doctrine of Supply-Side economics, because it doesn't exist. All it is a political bastardization of Kensyianism. In fact this is what Classical and Monetary Economists like Robert Lucas and Milton Friedman claimed "Reaganomics" was. It is a dead doctrine mostly because Laffer was wrong. Well not entirely wrong, he was right that there is a curve in which at a 100% tax rate you will collect very little taxes and vice-versa. But he was wrong about where we were on the curve, because the Reagan tax cuts did not cause a boost in tax collections. The deficit increased, and not just because spending increased substantially. Laffer and Supply-Siders were terribly wrong; this is why no economist at any reputable institution of higher learning would claim to be a supply-sider.

But more on why Supply-Side is Keynsianism. You talk alot about Keynes' model of economic growth, and yes it was wrong about inflation, but Supply-Side economics has nothing to do with correcting Keynes' model, it just uses it on the other curve (the supply curve instead of demand). In fact the bastion of Keynes' policy was not how money is spent by the goverment (whether in a tax cut or New Deal like spending) just that it is spent, and that such spending can rescue an economy in trouble. With this understanding, Reagan is just a Keynesian, but more importantly, Bush is a 100% bonafide Keynesian, his call for a short term tax stimulus to relieve the 2001 recession is something Keynes' would have had no problem with. So feel free to deride Keynes all you want, but you are just proving why Bush's economic policy is terribly misguided.

Supply-Side economics is just politics, there are many so called economists who go to the dark-side and just look to justify their political perception of the world, they typically are people like Dinesh D'Souza who have no economic training, and merely search for worthless statistics like median family income (which is a terrible baseline by which to measure economic growth, GDP, or gross income, is the best, no one disagrees on this issue).

So then why does this undermine your perception of the world, well because economics is not a matter of class struggle, or conservatism triumphing over Jimmy Carter's weak foreign policy? It is about stuff like inflation, interest rates, long term growth, and human capital, all of which are really boring, and not that politically appealing. Reagan's economy can hardly be attributed to Reagan, or some notion of Reaganomics, because economies work on a much higher plane than politics, and thank god for that!

But more importantly this shows why people championing a particular President's economic policy is stupid, all the President can really do is be a cheerleader, Carter was not a great cheerleader, or a great cheerleader of conservative values. Hoover suffered from the same problem (though of moderate values). Both FDR and Reagan were great cheerleaders, and damn charismatic people. So if you want to congratulate Reagan, tell us how nice and charismatic he was, or how lucky he got in his defense spending, but don't waste our time on "Reaganomics" without ever taking an economics course.

-Mr. Alec

 
At 12:52 PM, Blogger Commander Mike said...

Bah, Alec, you dont know what youre talking about. FOLLOWING the long-ago apocalypse of World War I, the world seemed like a shellshocked battle-casualty remolded by surgeons into something new and terrible. For generations afterward, into the Second World War and out the other side, most people were afraid to look; nearly everyone was scared to act. Ronald Reagan was one of the few who looked straight at this pitiful wreck, grasped the big picture, and refused to accept it. He was no genius like Churchill, no all-conquering statesman-politico like Roosevelt, but his depth of vision and sheer courage were comparable to theirs, and he belongs with Roosevelt and Churchill among the world-changers. He was even attacked in the same ways they were: He was supposedly a charming lightweight bubble-brain like FDR and a fanatic warmongering ideologue like Churchill. Today we have another president who aspires to look the world in the eye and change it, and all we can say is God help him and may he prove to be as big a man as Ronald Reagan.

Since 1918, the state of the world has been so fundamentally simple, many people can't grasp it. It has survived in this condition during the German era of 1918-1945, the Soviet or Cold War era of '45 through '89, and the Radical Arab and Islamist era that followed and is still going strong. It is a three-party world consisting (not only but mainly) of pacifist-appeasers, terrorist-totalitarians, and a third group I will call "mystic nationalists." Throughout these years, the United States has been

beset on two sides. We picture Reagan standing up to the Soviets; we sometimes forget that he was engaged on two fronts. He stood up to the pacifists also. And meanwhile the world needed him not only as a fighter but as a celebrant, a high priest. His greatness as a world leader lies in his three-part achievement: staring down the Soviets and the pacifists, and leading the Freedom and Democracy choir in his incomparably polished, inspiring way. (At a time when prominent American pacifists of the '80s are generously praising the man, at least sort of, it is ungenerous to point out that they were among his biggest headaches. Ungenerous but true.) Such statesmen as Harry Truman and Margaret Thatcher were brave fighters, but never approached Reagan as a lyrical celebrant of democracy, patriotism, and freedom. John F. Kennedy at his best was an equally lyrical high priest of Americanism, but never approached Reagan's stature as a freedom fighter.

Who are these three great groups whose existence Reagan sensed so sharply and clearly? After the First World War, Britain was (on the whole) appalled at what had happened, blamed herself (unreasonably) for imposing a harsh peace on beaten Germany and for not having prevented war in the first place. And so Britain gave the world modern pacifism. Pacifism is an ancient doctrine firmly rooted in the New Testament. But the modern variety has these characteristics: It is based on guilt ("we are just as bad as our enemies, maybe worse"), tied to defeatism, and propounds a concrete foreign policy of disarmament and appeasement.

In the 1980s, Reagan was confronted with these same elements--Western guilt, defeatism, and the drive to disarm and appease--as he struggled to rebuild America's moribund military, meet the Soviet nuclear challenge in Europe, and develop an antimissile system (the Strategic Defense Initiative, or SDI) that could prevent world war by protecting America instead of threatening to demolish Russia. When he traveled to Europe in 1982 he faced massive protests in France, Britain, Italy, and especially Germany. Historians and philosophers of history will be faced one day (when they wake up) with a puzzle. Compare Reagan's trip to Europe in '82 with JFK's two decades earlier. Both arrived bearing the same message: America will stand by Europe. America and Europe will face down the Soviet threat together. But Europe loved Kennedy to pieces and did not love Reagan at all. Why? The answer must lie, at least partly, in a sign waved at Reagan by a European peace-marcher in 1982: "I am afraid." As Europe steadily disarmed and her enemies did not, she grew (not surprisingly) steadily less bold and more scared. '63, '82, '03; the deterioration is sad and clear.

REAGAN FACED DOWN the pacifists and appeasers. And he faced down the totalitarians. Hitler was the biggest terrorist-totalitarian threat of the 1930s; radical Arabs are the biggest today. But in the '80s Reagan confronted the Soviets, who were the most dangerous of all to America and the world at large. The Nazis never had the means to destroy the United States, and

Arab radicals don't today; the Soviets did. In Reagan's War, Peter Schweizer describes a fascinating incident during the all-out Soviet war games of the early 1980s. The Russians (just for the hell of it) blipped the orbiting Challenger space shuttle with a high-power laser. Only minor damage resulted, but the message was clear. We are feeling our oats, and we have you in our sights. We can hit where and when we please.

Terrorists and totalitarians have always been two sides of one coin; a totalitarian out of office is a terrorist. The Nazis were terrorists until they took over Germany; in fact they never stopped being terrorists. In the '80s, the Soviets supported Marxist and anarchist terrorists all over the world. In recent years, warm fraternal ties between Saddam Hussein and Arab terrorists, or the totalitarian Taliban and al Qaeda, follow the same pattern.

Reagan faced down the most dangerous totalitarians. With a mighty shove (or a kick in the pants), he sent the Soviets reeling towards the ash heap of history (Trotsky's phrase). But he was acutely aware at the same time that they were doomed anyway, in the long run. Many big-shot thinkers disagreed. They were positive that the Soviets were holding their own or were beating the West. Professor Seweryn Bialer of Columbia University, 1982:

The Soviet Union is not now nor will it be during the next decade in the throes of a true system crisis, for it boasts enormous unused reserves of political and social stability that suffice to endure the deepest difficulties.

Professor John Kenneth Galbraith of Harvard, 1984:

The Russian system succeeds because, in contrast to the Western industrial economies, it makes full use of its manpower.

Etc. The point is not to ridicule these mistaken profs; rather to underline that, while liberals today like to argue that "Reagan made no difference, the Soviet Union was on the way out anyway," they did not see it that way at the time--but Reagan did.

Nor did Reagan leave the Soviet collapse to chance. His arms buildup and especially his Strategic Defense Initiative were feats the Soviets could not duplicate even if they died trying. For Gorbachev, last ruler of the Soviet Empire, the launching of the SDI project "was the most effective single act to bring that old apparatchik to his senses," according to Professor Genrikh Trofimenko, adviser to the Soviet Foreign Ministry (quoted by Derek Leebaert in The Fifty-Year Wound). I have heard liberals argue that Reagan could not possibly have planned to beat Soviet communism this way, by unleashing the U.S. economy; but how do they think we won World War II? Of course by heroic fighting and--by unleashing the U.S. economy. U.S. economic might crushed the Nazis and Japanese as it crushed the Soviets.

Insufficiently appreciated: Reagan did not merely launch military projects with ambitious technological components; he believed in technology, and in Silicon Valley entrepreneurship. (After all, he was a good Californian.) He believed that technology would help unleash the American economy, which would charge off yelping and yapping into the future and leave the Soviets far behind. When Reagan left office, technology was a Republican issue. It is puzzling and sad that George W. Bush has made so little effort to regain the issue for Republicans.

Finally, Reagan furnished his own camp with inspiring leadership. In one of his favorite, best-remembered phrases, he told the world that America was and must always be the "shining city upon a hill." "The phrase comes from John Winthrop," he explained, "who wrote it to describe the America he imagined." Winthrop wrote those words aboard the Arbella bound for Massachusetts Bay in 1630: "We shall find that the God of Israel is among us," he wrote. "For we must consider that we shall be as a city upon a hill, the eyes of all people are upon us." The phrase comes from Matthew 5:14 ("Ye are the light of the world. A city that is set on an hill cannot be hid"), and indirectly from the prophet Isaiah ("In the end of days it shall come to pass that the mountain of the Lord's house shall be established as the top of the mountains, and shall be exalted above the hills; and many nations shall flow unto it"). Reagan's use of these words connected late-20th century America to the humane Christian vision, the Puritan vision, that created this nation.

TO GRASP Reagan's achievement, we must understand the striking continuum of pacifism from the 1930s through the 1980s through today--and remember, simultaneously, that Churchill had help changing Britain's mind (namely Hitler's war); Bush had help changing America's mind and his own--9/11. But in 1980 the world was (approximately) at peace. The Soviet war in Afghanistan was the only large-scale exception. Reagan therefore confronted pacifist America and the pacifist world with no leverage, no mechanical advantage. To accomplish his objectives he had to shoulder the whole weight of world pacifism and throw it over. And he did.

Nowadays Swedish demonstrators wave signs reading "USA-murderers" and "War is terrorism." In 1982, Italian demonstrators brandished signs reading "Reagan brings war to Italy" and "Reagan executioner." During the First World War, the British economist John Maynard Keynes wrote, "I work for a government I despise for ends I think criminal"; in the mid-1930s, British prime minister Stanley Baldwin was reported to be "for peace at any price," and in 1938, the politician Thomas Jones (Baldwin's close friend) wrote that "we have to convince the world that for peace we are prepared to go to absurd lengths." Same theme from World War I through this afternoon: The United States (and Britain) are guilty; war is evil no matter what; peace must be preserved whatever the cost.

Reagan knew it all to be a simple-minded lie, and said so memorably at Pointe du Hoc. "The men of Normandy had faith that what they were doing was right, faith that they fought for all humanity, faith that a just God would grant them mercy on this beachhead or on the next. It was the deep knowledge--and pray God we have not lost it--that there is a profound moral difference between the use of force for liberation and the use of force for conquest."

A Finnish anti-Iraq-war protester told an interviewer not long ago, "All my life I've been of the opinion that you can't achieve anything with violence and war except evil." In 1982, 59 members of the German Bundestag signed a petition attacking Reagan's "massive arms buildup with mass-destruction weapons such as the ones that your defense minister has enforced." (The defense minister was Caspar Weinberger; with his deceptively Jewish-sounding name, Weinberger was Europe's Wolfowitz during the 1980s.) In the 1920s "we converted ourselves to military impotence," said Sir Warren Fisher, Treasury permanent secretary, describing Britain's disarmament policy. Same theme from 1920 through today: Never mind the enemy, weapons are evil. Weapons are the enemy. Reagan said "to hell with that," and made it stick.

In 2003, a German pacifist planning a trip to Iraq announced, "I hope to ask Saddam Hussein to cooperate with the weapons inspectors and generally work for peace." In 1982, the German Social Democrat Herbert Wehner (who was on the payroll of the East German secret police) explained that the Soviet military was "defensive rather than aggressive." "Germany does not want war," wrote the prominent British statesman Lord Lothian in the Times after a cordial visit to Hitler, "and is prepared to renounce it absolutely as a method of settling her disputes with her neighbors."

Same theme from the 1930s till now--don't be an alarmist warmonger, the enemy's not so bad! A "human shield" who went to Iraq in 2003 to protect Iraqis from Americans wrote afterwards, "I was shocked when I first met a pro-war Iraqi in Baghdad--a taxi driver taking me back to my hotel late at night. I explained that I was American and said, as we shields always did, 'Bush bad, war bad, Iraq good.' He looked at me with an expression of incredulity." ("By the time I left Baghdad five weeks later," he reports, "my views had changed drastically.") MIT economist Lester Thurow, in the early 1980s: "It is a vulgar mistake to think that most people in Eastern Europe are miserable." In 1938 the British pundit and politician Sir Evelyn Wrench was shocked by the Kristallnacht pogrom, but "after a few days I regained my confidence in Germany's good intentions," and after all Hitler "will not go to war unless pushed into it by others," according to the former Labour party leader George Lansbury. Saddam was not so bad, Soviet rule was not so bad, Hitler was not so bad--and left-wing intellectuals call Bush and Reagan simple-minded!

"Simplistic"--France's foreign minister on George W. Bush's foreign policy, 2002. "Simplistic"--New York Times columnist Anthony Lewis on Ronald Reagan, 1983.

At an anti-Iraq war demonstration in March 2004, the actor Woody Harrelson read a poem: "I recognize your face, I recognize your name. Your daddy killed for oil, and you did the same." During Reagan's presidency, America was still reeling from an antiwar movement that had accused American soldiers of grotesque, routine atrocities in Vietnam. In the late 1930s, the British essayist A.L. Rowse, dining at Oxford, "heard a member of the government urging the usual Ribbentrop arguments upon the assembly. In a pause Robert Byron leaned across the table and said loudly, 'Are you paid to make propaganda for your country's enemies?'"

Ronald Reagan, on the other hand, thought patriotism was good in itself. He thought America was beautiful.

Anyway it's impossible, can't be done: Bush opponents all over the world say so with respect to a free, democratic Iraq. Reagan's opponents said exactly the same about bringing down the Soviets: It's impossible, not to mention stupid. During the 1930s, all sorts of Hitler-appeasers pointed out that Hitler was for peace--and the West could never beat him anyhow.

Reagan said "I can; watch me."

We understand the totalitarian's lust for power. We are less familiar with the pacifist's lust for impotence. But if we care to understand the modern world, the "Will to Powerlessness" is just as important as Nietzsche's famous Wille zur Macht.

TO UNDERSTAND modern Conservatives versus modern Liberals, think of Reagan and the president he defeated and replaced, Jimmy Carter. Carter left office with a tight-lipped bitterness that the whole world understood: We watched him lose his Liberal virginity on international TV. The Soviets grabbed for Afghanistan, one more buffer state to shore up the fringes of empire--and Carter was shocked. The Communists were not good guys after all! Inflicting liberalism on the economy was not such a great idea either; Carter left office in 1981 to the grating clatter of economic disintegration. Twelve percent inflation and 21 percent interest rates had Americans well and truly scared. Hence the grim, drawn faces of a Carter, a Kerry, a Gore: They are faithful to the liberalism of their youth, but feel it crumbling beneath their feet. Today's proud leaders of liberalism are stone statues on the portals of medieval churches: rigid, immovable, and somberly decaying.

Reagan (on the other hand) was no mere optimist. He was an optimist who dealt in reality and looked at the world head on. He was a modern Conservative in the great tradition of Benjamin Disraeli, the "Tory Democrat." Conservatives and liberals (in this worldview) are equally progressive, equally interested in the future. They are different insofar as liberals are detached from the past and look to the international community for advice and approval. Conservatives are detached from the international community and look to the past for advice and approval: to their ancestors, their national history, their religious traditions, their cultural patrimony. "What inspired all the men of the armies that met here?" Reagan asked at Pointe du Hoc. "It was faith, and belief; it was loyalty and love."

Reagan was a realist, but a "mystic nationalist" also. He did in fact call himself a "mystic," according to Peter Schweizer; and he was certainly a patriot and a nationalist. But mystic nationalism is more than the sum of parts. It is a religion--but one that translucently overlays (without obscuring or superceding) Judaism or Christianity.

Mystic nationalism is a tradition nobly represented in the 20th century by such statesmen as Winston Churchill and David Ben-Gurion. Reagan would have recognized himself in a passage by the poet Rupert Brooke, killed at age 28 in the First World War. "He was immensely surprised," Brooke wrote in 1914 about an unnamed friend, "to perceive that the actual earth of England held for him...a quality which, if he'd ever been sentimental enough to use the word, he'd have called 'holiness.' His astonishment grew as the full flood of 'England' swept him on from thought to thought. He felt the triumphant helplessness of a lover."

"There are a few favorite windows I have up there that I like to stand and look out of early in the morning," Reagan said in his farewell speech, referring to the White House. "The view is over the grounds here to the Washington Monument, and then the Mall and the Jefferson Memorial. But on mornings when the humidity is low, you can see past the Jefferson to the river, the Potomac, and the Virginia shore. Someone said that's the view Lincoln had when he saw the smoke rising from the Battle of Bull Run. I see more prosaic things: the grass on the banks, the morning traffic as people make their way to work, now and then a sailboat on the river."

Abraham Lincoln spoke for mystic nationalism. "The mystic chords of memory," Lincoln wrote, "stretching from every battlefield and patriot grave to every living heart and hearth-stone all over this broad land, will yet swell the chorus of the Union when again touched, as surely they will be, by the better angels of our nature." That was Reagan's faith also.

One of the most persistent anti-Reagan accusations is that he failed in detail; he operated at the "executive summary" level. But in Reagan this was a strength. No personality can encompass everything. Most detail specialists approach life bottom-up and never do grasp the big picture. A rabbinic anecdote explains why Moses was a great leader: Moses proclaimed (Exodus 15:1) "I will sing to the Lord for He is greatly exalted," and the people responded, referring to the Egyptian army's convenient disappearance: "Horse and rider He has hurled into the sea." The people saw only details: Egypt's army had lost a battle. Moses saw the big picture--the greatness of God. Reagan was no Moses, but he too was a big picture man; and he did usher a significant portion of mankind from bondage into freedom.

 
At 8:43 PM, Blogger SinaMoravej said...

jesus christ you write a lot commander mike

 
At 8:57 PM, Blogger SinaMoravej said...

"Reagan's stature as a freedom fighter." wow you really seem to think hes a supporter of freedom. lets take a look

1. He trained the guerrilas in Afghanistan (Al-Queda today) although it was to kill soviets Reagan made no attempt to contain or control them in the aftermath

2. Supported Iraq in Iran-Iraq war, even though Iraq was only fighting for Saddam to increase his power. War strenghtened the position of Aytollah Khomeini, which in th3e long run weakened the power of the people and worsened the religious fanatascism there

3. Illegaly trained and funded Contra's to attack the democratic government of Nicaragua. The funds came from selling weapons to Iran, who we were supposedly fighting against

these three go against the ideas of democracy and "fighting for freedom"

Also

"Reagan confronted the Soviets, who were the most dangerous of all to America and the world at large."

The Soviets were already losing the cold war. We had turned most of the world anti-communist. Years of pressure by US presidents greatly weakened the Soviets

Reagan didn't singelhandedly win the cold war.

 
At 4:23 AM, Blogger allen said...

Actually, commander mike is displaying his disdain on the cheap by doing a c-and-p.

In this case it's of a David Gelerntner article which, I'm sure, is of the greatest significance but since I don't own a sigmoidascope I can't appreciate commander mike's point of view or divine his intention.

So...

1) of course Reagan supported the Afgani's. The Soviet Union was dedicated to the destruction of freedom and had the means to do it. If you could hurt the soviets by showing a bunch of raggedy-assed hillbillies how to shoot straight and gave them something more potent to shoot then rifles wouldn't you do it?

2) and which side would you have picked? It's not like standing by and watching things happen was a viable option now was it?

3) it was illegal because Congressional Democrats passed law they had no business bassing.

 
At 2:14 PM, Blogger SinaMoravej said...

1. "The Soviet Union was dedicated to the destruction of freedom and had the means to do it."

1.the soviets were already weakened we were already winning the cold war
2. If we danger democracy, then we aren't much different from the soviets then
3.I know he needed to atop them, but he made no effort to contain them, and now they are the powerful terrorist group we fight with today

2. Well the consequences of supporting Iraq meant strengthening the insane Khomeini. And its not like he picked a side, he later gave weapons to the Iranians

3) Supporting ruthless murderers to attack a democratic government is unacceptable, whether its legal or not

 
At 10:12 AM, Blogger allen said...

1.1 So what? A wounded bear is still dangerous.

1.2 Read some Solzynitsin if you're unclear on the difference.

1.3 Containment was the policy up until Reagan. He understood that the essential inefficiency of socialism made them vulnerable if they were sufficiently challenged. He made them a challenge they couldn't ignore and couldn't win.

2. Khomeini wasn't insane. He was quite functional. He was a religious absolutist. The Iran-Iraq war was a situation wecouldn't ignore and offered no really good choices.

With the advantage of the hindsight of history, what would you done?

3. What democratic government? I was a communist-distatorship-in-training and even before they crushed all domestic resistance they were on their way to destabilizing neighboring countries.

And even that's beside the point. Congress, controlled by the Democratic party, rammed through legislation that made aid to the Contras illegal. They had no business doing that, the Constitution explicitly makes foreign relations the province of the executive branch. But they did it anyway knowing that by the time the law was invalidated by the Supreme Court it would have been a moot point: the Communists would have liquidated the opposition and there wouldn't have been anyone to aid.

 
At 6:31 PM, Blogger SinaMoravej said...

1. A wounded bear is still dangerous yes... but it wasn't worth going against all our principles of democracy and overspending the military budget. You guys make it seem like reagan singlehandedly won the cold war. We were already winning

2. Are you kidding me? Khomeini not insane? You dont know shit about what he did to Iran. When he supported Iraq, that was bad, but i guess it was reasonable. However, he gave weapons to the Iranains, extending the war. Thats not taking a side. By the way, you reliaze the Iranian regime would have been overthrown by now had the war not strenghtened Khomeini's position

3. No it was a democratically elected government. They weren't even purely communist. They were democratically elected, and if they want them then they have them. It wasn't a dictatorship in training, here are some of their ideas

* Nationalisation of property owned by the Somozas and their collaborators.
* Land reform.
* Improved rural and urban working conditions.
* Free unionisation for all workers, both urban and rural.
* Control of living costs, especially basic necessities (food, clothing, and medicine).
* Improved public services, housing conditions, education (mandatory, free through high school; schools available to the whole national population; national literacy campaign).
* Nationalisation and protection of natural resources, including mines.
* Abolition of torture, political assassination and the death penalty.
* Protection of democratic liberties (freedom of expression, political organisation and association, and religion; return of political exiles).
* Equality for women.
* Free, non-aligned foreign policy and relations.
* Formation of a new, democratic, and popular army under the leadership of the FSLN.
* Pesticide controls
* Rain forest conservation
* Wildlife conservation
* Alternative energy programs

Plus the democrats have no business telling people not to overthrow a democracy?

 
At 8:15 PM, Blogger Commander Mike said...

This comment has been removed by a blog administrator.

 
At 8:53 PM, Blogger Commander Mike said...

Are you insane, or just stupid?

Several points:

1) The Sandanistas were elected to power. When they were elected out of office, they left. Peacefully. Not charachteristic of a "dictatorship-in-training".

2) I love your comment about how the Democrats passed legislation "they had no business passing." I see, so when the President decides something needs to be done, no silly legislature should stop him.

Oh wait, that's how things work in dictatorships, where one leader or a small group of leaders gets to dictate unequivocally what everyone does. (Look up the definition.) In a real democracy, we have checks and balances, that prevent foolish Presidents from negotiating with terrorists--by selling them arms, no less!--and using those arms sales to give MORE arms to MORE terrorists in another country. (Unless you don't think holding civilian hostages is terrorsim.)

 
At 9:16 PM, Blogger Alec Brandon said...

I love how the debate on this post has moved completely away from economics of any sort and purely on to how great of a guy Reagan was. Which is precisely what Dan or any Republican would want, this is because Reaganomics as an economic doctrine is nonexistant. However, as a way to get votes and sell a personality that encompassed tax cuts, aggressive foreign policy, and unabashed faith, the notion of "Reaganomics" was brilliant.

Republican Dan makes it seem like fiscal policy is a matter of personality. It is not, I have met many economists, they have no personality. So if he wants the debate to be about how amazing REAGAN's economic policy was, he loses, flat out. If you disagree, read my post, or look at Dan's lack of ONE SINGLE ECONOMIST in his bibliography. He never once cites an economist, he mentions three, all of which were done incorrectly.

But if you want to make this an arguement about Reagan's personality, his brash foreign policy, and his love for Jelly Bean then its a debate on whether he rubbed you the right way. It is obviously one Sina, Dan, and Allen all fervently disagree on.

-Mr. Alec

 
At 8:46 AM, Blogger Commander Mike said...

I think everyone who's going to get the point about Reaganomics has already gotten it.

 
At 10:25 AM, Blogger allen said...

sinamorajev wrote:

1. We didn't go against all our principles of democracy and we didn't overspend the military budget. Oh, and for all practical purposes Reagan did win the cold war singlehandedly. God knows he didn't get any help from the Democrats and precious little help from many of his fellow Republicans.

2. I'm assuming that you're not a mental health professional so your diagnosis of Khomeini is more an attempt to be insulting then to be accurate, right? You failed.

3. Oh they weren't purely communist? Sorry but that distinction is lost on me. In the case of communists close enough is good enough.

And thanks for posting that long list of the many virtuous accomplishments and intentions of the Sandanistas. I've certainly never read of a communist government lying about their intentions so the list must be accurate and factual. After all, they almost uniformly name themselves the Democratic People's Republic of whatever so, hey, that's good enough for me. And Pam Anderson's tits are real.

Commander Mike wrote:

Are you insane, or just stupid?

Both. Is your interest professional or are you just unusually inventive in your insults?

1) Normally I'd stand four-square for a legally elected government to impose a totalitarian dictatorship, secret police, pursue the extermination of political opponents, expropriation of private property to enrich the political elites but these guys were on the same hemisphere as me. You have to draw a line somewhere.

2) I'm glad you loved it. Now go find out who's supposed to be in charge of foreign relations and see how much you love that. You know, seperation of powers and all that.

That's how democracies work or at least, that's how this democracy is supposed to work. But, with the memory of the destruction of South Vietnam still fairly strong, the congressional Democrats weren't about let anything as unimportant as the Constitution get in their way. Not when there's another "People's Republic" aborning.

Mr. Alec wrote:

Oh, who cares.

 
At 7:07 AM, Blogger SinaMoravej said...

1. Are you kidding me? Reagan did not win it singlehandedly win it. Every U.S. president since WWII had been fighting against them. and we did a good job containing them. Reagan just finished the job

2. Perhaps you've never been to Iran or any middle easter country. You have no idea what happened there. By the way you changed the subject, my point was that he supported both sides, extending the war

3. When i meant not purely communist, i meant more socialist. Which is fine because they were democratically elected. If the systems so bad, then they wont get relected. thats none of our business if they want it. When you pay Terrorists to attack a democratic government that does go against the principles of democracy.

 
At 7:57 PM, Blogger Commander Mike said...

"Brewing People's Republic." That's great. Tell that to all the Californian men and women hooked on Oliver North's crack cocaine. Tell that to the thousands killed in Iran and Nicaragua--oh wait, you can't, beacuse they're dead, killed mostly by U.S. weapons.

So the Sandanistas were a threat to democracy? That's great. That's why they held elections in 1990, right? And honored the results? Ohoho! These guys were such a HUUUGE threat to democracy! The commies are going to destroy the free world by holding elections!

You can prattle on about "threats to democracy" and "new Peoples' Republics", but that will not cause them to have existed.

 
At 8:52 AM, Blogger allen said...

1. "Containing" isn't beating. It isn't destroying. The only occasions we didn't just contain was where the communists made it impossible.

Reagan took a different tack. There's no meeting of minds between criminals and the law-abiding, between murderers and their victims.

Having had an opportunity to see close-up how communists work, Reagan identified them as the monsters they were and understood there was no possibility of a stable, peaceful relationship with them.

The presence of freedom - that's us - is an intolerable goad to totalitarians - that's the communists - which means all episodes of peace are transitory. Reagan understood that and based his policy toward the communists on that understanding.

He also understood that all colors of communism from delicate pink to blood red are inherently inefficient. Given enough time they'll collapse from internal rot but why wait? A good shove and down they come like the house of cards they are. Reagan shoved with Star Wars knowing that communists couldn't afford to take a chance it wouldn't work and also knowing they couldn't afford to compete. He was right, they collapsed.

2. Gee, you mean we had to pick one side or the other and stick with them through thick and thin, good times and bad, sickness and in health?

Get real. This is international relations and a choice between one monstorous regime and the other is based on determining which side better serves our interests at any given moment.

3. I'm glad you can see those delicate gradations. Once they start making communist moves they're toast as far as I'm concerned and I'm glad Reagan felt the same way. By the way, that legally elected regime didn't do so well once the election was overseen by folks who didn't have a interest in the outcome, now did they?

And finally, look who's foregone the big, pointless c-and-p, the redoubtable Commander Mike.

Now that you're posting your own words your stupid cut-and-pastes are starting to look pretty good by comparison.

Tell that to all the Californian men and women hooked on Oliver North's crack cocaine.

You line 'em up, I'll tell 'em. Uh, got directions to your imagination?

So the Sandanistas were a threat to democracy? That's great. That's why they held elections in 1990, right? And honored the results?

Yeah, they're such a law-abiding bunch...when they aren't the law.

They honored the results because there wasn't anything else they could do otherwise they wouldn't have.

Crack a book sometime and find out what always happens when a dictatorship of the proletariat comes into existance. It's not like they're particularly creative.

Round up your enemies and kill them. Build a huge political prison system and fill it with people you're not too sure about, people who might be problem someday, people who aren't smart enough to keep their mouths shut and the unlucky. Create a massive secret police system so there's no possibilty of a popular uprising. Keep the populace in a state of terror and poverty. Cut them off from any outside influences and don't let the rest of the world see what you're doing to your own people. Build as big a military as you can and use it to control, frighten and conquer your neighbors.

That's not the entire list but it covers the high points.

You know there're still a couple of pristine People's Republics around. You might want to give some thought to broadening your horizons by traveling a bit. It'd be good for you. You'd learn alot.

Give it some thought.

 
At 11:17 AM, Blogger SinaMoravej said...

wow
im not even wasting my time anymore on this subject

 
At 11:28 AM, Blogger Commander Mike said...

You could have read a few Contra-apologist articles from 1996 bleating about the whole cocaine thing.

Or you might even know what the phrase "Oliver North's crack cocaine" means. Whether it's literal, or a euphemism for something, or a sarcastic reference, or an unequivocal statement, or what.

Well, I inserted a reference to the whole 'dark alliance' scandal in there on purpose, to see what your reaction would be.

You could have denied it, citing counter-evidence, and I would have respected that. There's plenty of things to contest there. It would have meant that you did your homework. No--don't try that now! It's too late for that! I'm through giving any respect to your opinion. I can find better, more informed, and more articulate regurgiations of it with a simple Google search.

Don't expect any further comments from yours truly.

 
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