Reagan accomplished a few major economic items. The first was the cutting of marginal tax rates, particularly at the top, which had been punishingly high previously (though with lots and lots of loopholes), causing many wealthy people to withhold their labor (in particular, the wives of the wealthy). The 1986 Tax Reform Act was a crucial piece of legislation as it simultaneously slashed marginal rates and eliminated a huge amount of loopholes, greatly simplifying the tax code. (Sadly, most of that good work has been undone and the tax code is now about as complicated as it was before 1986.) It’s important to note that we’re currently arguing in this country whether we should return to Clinton’s 39% top bracket or keep Bush’s 35% top bracket. Almost nobody is suggesting we go back to the 70% rate that prevailed before Reagan. (This is also true in most other countries, e.g. Britain post-Thatcher.) So Reagan won that debate pretty decisively. His other major accomplishment was wringing inflation out of the economy. The lion’s share of the credit for this ought to go to Carter appointee Paul Volcker at the Fed. However, Reagan suffered a great deal of political damage due to Volcker’s high interest rates in the first few years of Reagan’s presidency. It is important to give Reagan credit not for what he did, but for what he did not do. He never exerted any political pressure on Volcker and told the Treasury to leave Volcker alone and swallow their medicine.

The economic hit which must be given to Reagan was a vast increase in the national debt. However, I think this is ultimately not that big a deal. For one thing, part of that is illusion. Because inflation was tamed under Reagan, we were in the position of no longer inflating our debt away. Previously, we’d run up a deficit, inflate the currency, and pay off the deficit with lots and lots of new inflated dollars. After Reagan, this was no longer possible. However, a great deal of it is real and was caused by the military buildup under Reagan. (This is how Clinton was able to balance the budget. The fall of the Soviet Union allowed him to cut military spending substantially. Domestic spending and tax policy didn’t have a whole lot of effect on the deficit, since neither tax revenues, rather than rates, nor domestic spending changed much under the two.) There is no question in my mind that I’ll accept Reagan’s debts in exchange for a kinder, gentler Russia and the removal of the spectre of global nuclear war. The current debt in the United States is not nearly as high as people think. It’s quite a bit smaller as a percentage of GDP than most European countries (except Britain) and enormously smaller than it has been at other points in our history (e.g. after World War II). There’s a strong argument to be made for paying the debt down now, but that argument only became strong after Reagan left office and the Soviet Union collapsed.

By the by, there is a view on the left that the Soviet Union would have collapsed without Ronald Reagan, and therefore he should get no credit for it. While this is a plausible view, I note that it is only made in retrospect. When Reagan said that he believed Marxism-Leninism was going to be consigned to the ash-can of history, the left laughed at him and called him an idiot. I can give many, many quotes from the late ’70s and early ’80s which will demonstrate that nobody thought Communism was heading for a collapse (except Reagan) and, indeed, almost everybody thought the Russians were kicking our butts (mostly because we believed their lying economic statistics). Nixon went to China because he was afraid of China, quite frankly, and thought he had to head off a confrontation with them, a confrontation he thought the U.S. would certainly lose. Reagan was probably not the most important figure in defeating Communism. Pope John Paul II and Margaret Thatcher deserve a lot of credit as well. (And if we go back in history, Democratic Presidents Harry Truman and John F. Kennedy were also important leaders in developing the U.S.’s strategy of containment.) However, Reagan did play a crucial role. By running up military spending, he forced the Russians to make a disastrous choice between guns and butter. This was hugely significant for a country which did all its negotiating at the point of a gun. When Gorbachev ultimately selected butter over guns and withdrew the Red Army from Eastern Europe, Eastern Europe fell like dominos. (We should also give credit to Gorbachev and Bush Senior for ensuring that the Cold War ended not with a bang, but a whimper.)

I should point out that none of the credit I am giving to Reagan is particularly partisan (though it may be ideological), if one’s view of history is broad enough. JFK too believed in cutting taxes from extortionary levels (90% top marginal rate before JFK cut it) and beating the Communists. A good deal of the Democratic Party, however, made a wrong turn about 1968 due to Vietnam. Vietnam was a pretty stupid war, but the Democrats learned the wrong lessons from it. This is why they essentially ceded the Presidency to the Republicans (other than the Carter aberration, due to Nixon’s criminality) because the voters didn’t trust the Democrats on foreign policy (and Carter didn’t help their case). Once the Cold War was over, voters felt they could afford to elect a Democrat. I think there is a great danger of the Democrats’ doing the same thing in the wake of Bush’s blunders in Iraq, but I hope this doesn’t end up being the case.

As for Vietnam veterans, the homeless increase in the ’70s was due to the deinstitutionalization of the mentally ill. While no doubt some of these people served in Vietnam, most of them didn’t. The legend of the insane drug-addicted Vietnam vet comes from anecdotal experiences and/or social science research in which the claims of the mentally ill and the drug addicted were not properly vetted and confirmed. A very great many such men claimed to have either served when they hadn’t or seen combat when they didn’t. Perhaps some people here remember a great many scandals of perfectly able-minded men claiming to have served in Vietnam or exaggerating their experience there on their resumes. The proportion of the mentally ill and drug-addicted who do this is much larger. Dan Rather in 1988 did a highly acclaimed news special in which he had five Vietnam vets tell gruesome stories about Vietnam and their experiences after the War with drug addiction and insanity. All of these stories turned out to be false. Three of the “vets” hadn’t even served in Vietnam and the other two told stories which were entirely inconsistent with their service records.

You’re certainly correct about gas prices though. I have no doubt that it played a large role in the economy of the ’70s.

As for external causes, the gas crises cannot be understated in their importance. The ‘73 crisis saw prices effectively more than double (and never recover), and again in ‘79. And I’d never, ever argue that all Vietnam vets were worthless lunatics; quite the contrary, that far too many were treated as such upon their return and ostracized. But how did this affect American culture and, hence, the economy? Consumer confidence is everything (witness the single $11 jump in the price of oil upon Israel’s remark about an “unavoidable” attack on Iran) and it doesn’t take much more than the sight of one homeless junkie bumming for change on 5th Avenue for people to start muttering that the country’s gone to seed. Despite being fictional, I don’t think even Reagan would argue that Travis Bickle wasn’t symptomatic of a certain slow-motion collapse happening in America.

Sadly, there IS a lot of precedence for the “no libertarians in a depression” theory. This brings me no comfort, and I can only hope that, when/if the time comes, I’ll be proven wrong.

My comment on skepticism had less to do with kneejerk ideology than a disbelief that anyone who pontificates on American politics is a disinterested observer. Put another way: there can be no separation of the art from the artist. The motivations, biases, and political history of any speaker provide context for their words, and so should be considered. Though my initial reaction to Lord’s essay may seem violent, I’d only arrived at such a conclusion after two read-throughs & a quick Googling of Lord’s cirriculum vitae. (I’m always curious to hear people argue in favour of Reaganism, to test my own convictions – because, honestly, I think the world is far better off without Ronnie around.) The first response to any political statement needn’t be bull-headed reflexive contrarianism (e.g. the Kaine-Pawlenty “debate”); far better if it weren’t. But once a well-informed and carefully-measured conclusion has been reached, may it be unleashed with all the violence it can muster.

As for the external forces, the only one I find all that plausible is the gas squeeze. The idea that Vietnam veterans were all worthless lunatics after returning from the war is outrageously false, though a lot of people do seem to believe it. And it is almost certainly Mr. Lord’s thesis that the global economic slowdown was caused by LBJ style programs all over the world. You can disagree with that if you like, but that’s essentially his entire argument. LBJ did all this stuff, bad economic things happened, we got rid of some of them in response.

As for “no libertarians in a depression,” that was certainly the case with the Great Depression, so your thesis has much to recommend it. Convinced that capitalism had completely failed, almost everybody either became a fascist or a communist. Only in America was there much support at all left for liberalism (and I do think FDR deserves some credit for that, though it was World War II which really cemented FDR’s reputation as a great President). I think that Americans are probably too sensible to abandon liberalism, even if faced with a Great Depression, but I wouldn’t care to bet on it.

My comment above was, of course, mostly a joke. After stating that everybody in the world has a kneejerk ideology (correct me if I’m mischaracterizing your position), I thought you were going about demonstrating both A) that it’s certainly true of you and B) that you believed it was certainly true of Mr. Lord as well. I actually never thought that you didn’t believe what you wrote in every case, both on this thread or on others. (In general, I am inclined to believe that people believe what they say, unless I have very good evidence that it is not the case.)

Micah:
I understand the point Lord was trying to make about the backlash to the Great Society lifting Reagan to the presidency. But I retain a couple of objections. First, calling either the New Deal or Great Society programs “socialism” is, at the very least, hyperbolic and a disservice to the textbook definition of “socialism.” (Talk to some real leftists: they’d call FDR a corporate apologist pansy to his face.) Secondly, drawing a direct link between the Great Society and America’s swing to the right in ‘80 is a misleading oversimplification, as it omits not only two sitting Republican presidents but also all external influences (economic and otherwise), as I mentioned before.

As for the keystone point – “gov’t control simply does not work” – well, here the terrain gets foggy. That depends entirely on what we (the people) are working for – and what the gov’t is working for. I’ll put the brakes on the debate for now, because it’s on the precipice of an ideological impasse – an athiest V. Chrisitian kind of ideological gap. But much like that old chestnut about “there are no athiests in foxholes” (though I personally don’t believe that), I wonder: if the most dire predictions about the American economy come to pass, there’ll be no libertarians in a depression.

…Which, of course, is in no way to disparage the strength of your beliefs. That’s not a personal attack, but a general prediction. Let’s hope we don’t have to find out if I’m right or not.

. . . and has the gall to point to the period following said dismantling as proof that they didn’t work).

-Seb

His argument seems more broad than simply appealing to what happened during or after the Reagan administration. In fact, he seems to argue it was FDR/LBJ socialism that lead to voters turning to Reagan:

It is not without irony that the power to transform the liberal agenda into the list LBJ cited so proudly in his memoirs eventually backfired and backfired badly, fueling the Reagan Revolution. Lyndon Johnson took FDR’s New Deal and ran the string out to its logical conclusion in the American system — and Americans, appalled at the cost, the bureaucracy, the extravagance and the incompetence, finally rebelled.

-Lord

And many people who do not now nor ever have worked for the Reagan administration (e.g., me) believe and would argue the following:

The Obama policies — which are in fact the LBJ policies as presented by a better orator — will in fact fail. The principle behind them — government control — simply does not work.

-Lord

And my connection to America is more intimate than some abstract, academic interest. I lived there for nine years and have visited all lower 48. Half my family is American. My wife’s American. Most of my dearest friends are from there, or live there still. Not to mention that my homeland is right next door, lest we forget Pierre Trudeau’s indelible words.

As for the article itself, not only do I find it reductive to dismiss the considerable differences (economic, social, domestic, and global) between the era of the Great Society and today, but we should be incredibly suspicious to accept criticism of “liberal” federal social programs from someone who played a key role in dismantling them (and has the gall to point to the period following said dismantling as proof that they didn’t work).

Finally, RE: my comment on skepticism… Andrew, I certainly wouldn’t make an argument I didn’t feel was true & applicable.

It does seem from Seb’s language that he is of British extraction, so the intensity of his reaction is significantly more confusing otherwise.

*checks*

Nope, it seems Seb is Canadian. I’m related by marriage to Canadians. Which is nice.

Though, now that I’ve thought about it a bit, I would like to know why Seb cares so much about what’s happened in America. Usually such anger is a sign of feeling threatened (see here and here).

Perhaps it’s simply the brotherhood of man, and Seb feels for us Americans. Which is cool. We Americans and Canadians are proverbial cousins after all, even if not all of us are related by marriage.