What can we say about Ronald Reagan? What should we say? We can be fairly sure that the mainstream (liberal) press will be respectful, but will cleave to the conventional (liberal) wisdom that consistently has portrayed Reagan as an amiable dolt whose presidency was little more than a case of “sleepwalking through history.” To liberal sophisticates, Reagan was a real-life Forrest Gump. His successes were the result of dumb luck, and his popularity was due to the shallowness of the American people.
According to the conventional (liberal) wisdom, the Reagan presidency unleashed domestically the “decade of greed” during which the rich got richer and the poor got poorer. Not only did his tax cuts favor the well-to-do, they also led to deficits without end, saddling the country with massive debt.
Meanwhile, in the international arena, his saber rattling derailed relations with the Soviet Union, leading to unnecessary increases in defense spending. Only the “liberal,” open-minded Mikhail Gorbachev was able to undo the damage wrought by President Reagan and end the Cold War.
Fortunately for the historical record, there is a serious reevaluation of the Reagan presidency underway. Not too long ago, a survey of presidential historians from across the political spectrum ranked Mr. Reagan eighth among American presidents, firmly within the category of “near great” executives, a group that included Thomas Jefferson, Theodore Roosevelt, Harry Truman, and Dwight Eisenhower. As more Cold War history is de-classified, it is likely that he will move up in the rankings. For he may prove to be the most important president of the Cold War era–the one who changed the terms of the debate, both domestically and internationally.
In 1980, the United States was in trouble. Malaise was in the air. President Carter could not govern, despite having a Democratic majority in both houses of Congress. The U.S. economy was stagnant and beset by a variety of other problems, including soaring inflation and high unemployment, something conventional Keynesian macro-economic policy and the Phillips Curve said was not supposed to happen. Because inflation was well into double digits, interest rates were sky-high as well. Having dishonorably abandoned South Vietnam only five years earlier, U.S. influence abroad was at its nadir while Soviet adventurism was on the rise. The “correlation of forces” certainly seemed to favor the Soviet Union.
The key to Mr. Reagan’s success in ending American malaise and thereby changing the course of the world can be found in a famous 1953 essay by the British philosopher, Sir Isaiah Berlin. In that essay, “The Hedgehog and the Fox,” Berlin categorized writers, thinkers, and human beings according to the dictum of the Greek poet Archilochus: “The fox knows many things, but the hedgehog knows one big thing.”
Ronald Reagan was a hedgehog. The one big thing that Mr. Reagan knew was that the United States was a fundamentally decent regime that constituted the only hope for freedom and prosperity in the modern world. He knew that the “idea” of America was undermined at home by a shift away from individual effort and liberty to a reliance on government and that it was undermined abroad by the ideology of Communism. The focus of his presidency was to unfetter America. The preeminence of the United States today is a tribute to his success.
The domestic component of President Reagan’s one big idea was to unleash the U.S. economy. The international component was to break the back of the Soviet economy. The first entailed deregulation and reduction of marginal tax rates. The second meant going beyond containment to active support of freedom within the Soviet sphere of influence, a policy that had once been called “rollback.”
The steps he took in both arenas were heresy to the liberal elites who dominated the political debate. Hence the charges catalogued above. But President Reagan was right and his critics were wrong.
Following a recession that ended in 1983 (the cost of cutting the rate of inflation), the American economy began a steady growth that continued, with a minor blip in 1992, for 17 years. In the first seven years of the Reagan boom, the economy grew by one-third, adding the equivalent of West Germany’s economy to our own. The performance of the U.S. economy greatly surpassed that of Japan and Europe, widely expected by “experts” such as Lester Thurow to set the standard of economic growth. It took Clinton-era re-regulation and a massive terrorist attack on the homeland to slow the economy, and even those factors have not been able to degrade American economic performance to its pre-Reagan level.
But what about the inequities of the Reagan tax cuts and the resulting “deficits as far as the eye could see?” And what about President Reagan’s reputation as a cowboy who endangered world peace by provoking the Soviet Union?
The Reagan tax cut originally did cost the treasury money. But Larry Lindsey, a former member of the Federal Reserve Board and until recently the chairman of the Council of Economic Advisors, has pointed out that an analysis of IRS data shows that only 24 percent of the deficits of the ’80s and ’90s was attributable to the tax cuts. The remaining 76 percent of the deficits were the result of increases in federal spending, most of which went to domestic programs.
As for fairness, the reductions in the marginal tax rates arising from the Reagan tax cut actually increased the burden for wealthier taxpayers. From 1980 to 1990, the real tax revenue collected from the top one percent of earners rose by 51 percent; of the top five percent, by 36 percent; and of the top 10 percent, by 29 percent. Those making over $200,000 were paying seven percent of the total income-tax bill in 1981. By 1986, they were paying 14 percent.
If his domestic goal was to free up the American economy, his international goal was to put pressure on the weak Soviet economy. Indeed, the great accomplishment of the Reagan administration was to target the Soviet economy as the “strategic center of gravity” upon which to focus an asymmetric and cost-incurring U.S. strategy. This strategy exploited the mismatch between the large and growing American economy and the much smaller Soviet economy.
We know now that a national-security decision document (NSDD-75) was issued in 1983 that outlined a broad political, economic, and military strategy designed to demoralize the Soviet leadership. The objective of this strategy was to demonstrate that Soviet attempts to achieve military supremacy had failed and that any attempt to compete militarily with the U.S. would bankrupt the USSR. Either the Soviet elite would recognize that the political structure of the USSR must be liberalized or it would go down to sure and certain defeat. Gorbachev’s role in ending the Cold War was to recognize the strength of Ronald Reagan’s strategic hand. Accordingly, as Reagan predicted in 1982, the Soviet Union ended up on the “ash heap of history.”
It is important to understand that in his approach to the Soviet Union, Ronald Reagan rejected the pessimism of much of mainstream conservative opinion, which from the time of Whittaker Chambers seemed to accept the Marxist view that history favored Communism and the Soviet Union–that the best the United States could do was to fight a rearguard action. While many conservatives today are willing to claim a share of the credit for the Cold War victory, the fact is that many of them at the time believed that democracies lacked the will and commitment to prevail against the USSR. To recall a characterization that was popular at the time, they acted on the basis of the idea that the role of the conservative was to stand athwart history, shouting “Stop.”
But time has vindicated Reagan’s rejection of conservative pessimism every bit as much as his rejection of liberal malaise. In this regard, George W. Bush is truly Reagan’s heir.
Along with Abraham Lincoln, Harry Truman, and Dwight Eisenhower, Mr. Reagan had the good fortune to be consistently underestimated by his adversaries. But even his advisers could miss the mark. Robert McFarlane, who served as one of President Reagan’s national-security advisers, once said of him, “He knows so little and accomplishes so much.”
Like President Reagan’s detractors, Mr. McFarlane did not understand the difference between the hedgehog and the fox. Jimmy Carter and Bill Clinton were quintessentially fox-like. They knew many things but accomplished little. By knowing one big thing and acting accordingly, Ronald Reagan changed the terms of the debate so completely that today we take for granted the vast transformation that he wrought. Indeed, so all-embracing has this transformation been that Bill Clinton, that most fox-like of men, was most successful as president when he governed as a steward of the Reagan revolution. Now that’s a legacy.
–Mackubin Thomas Owens, an NRO contributing editor, is professor of strategy and force planning at the Naval War College in Newport, R.I.