Reagan's America: Innocents at Home

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9780140296075: Reagan's America: Innocents at Home

Look out for a new book from Garry Wills, What The Qur'an Meant, coming fall 2017.

Ronald Reagan
achieved magical accord with the American people, attuning them to his moral vision of a nation made up of optimistic individualists, tough yet God-fearing, blessed with a special destiny. In Reagan's America, Pulitzer Prize winning author and historian Garry Wills seeks to understand Reagan's appeal through understanding his audience, the Americans who found in him everything they wanted to believe about themselves. An authoritative biography and a fascinating cultural history, Reagan's America reveals how this savvy, charismatic leader restored a nation's fading sense of innocence and faith in itself.

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About the Author:

Garry Wills is a historian and the author of the New York Times bestsellers What Jesus MeantPapal SinWhy I Am a Catholic, and Why Priests?, among others. A frequent contributor to the New York Review of Books and other publications, Wills is a Pulitzer Prize winner and a professor emeritus at Northwestern University. He lives in Evanston, Illinois.

Excerpt. Reprinted by permission. All rights reserved.:

Chapter One

The Reagan Legacy

Modern conservatism in America is, for all reasonable purposes, Reaganism. That is its weakness. The aftermath of Reagan's presidency has proved, over and over, that Reaganism without Reagan is unsustainable. Even with him, it was a tottering edifice. He had inherited multiple tendencies rather than a single movement. In the 1950s, William F. Buckley Jr. made conservatism intellectually respectable, jettisoning its anti-Semitic and anti-intellectual baggage. In the 1960s, Barry Goldwater made the movement politically viable by bringing into the Republican party a South that was resisting racial integration. Nixon combined these efforts, joining a sophisticated form of anticommunism with a Southern strategy based on the backlash from civil rights. But even before Watergate, Nixon's synthesis was coming apart. His and Kissinger's opening to China, their detente and arms-control efforts, offended the fundamentalist branch of Nixon's constituency, which was apocalyptic in its hatred of all Marxist regimes.

Reagan united the fissiparous movement around his radiant personality. He comforted the comfortable and disarmed the afflicted. He was too obviously nice to mean whatever meanness appeared in his programs. He gave conservatism the elements it had signally lacked—humanity, optimism, hope. Buckley had wit, but of a chilly sort. Goldwater's followers had passion, but it was the anguish of those who feel persecuted. Nixon had intelligence, but it was cramped by paranoia. Reagan, without much wit or passion or intelligence, had a humanity that made up for anything he lacked. He was the firsttruly cheerful conservative, and America is a country that does not recognize itself unless it sees, in the mirror, a confident face looking back at it. When William F. Buckley founded National Review in 1955, he said that its task was to stand "athwart history yelling `Stop!'" Reagan was never comfortable with a purely obstructionist conservatism. He was too swoony over the wonders of science and technology. In one of his favorite stories, a student issued him this challenge: "You didn't grow up in an era of space travel, of jet travel, of cybernetics, computers figuring in seconds what it used to take men years to figure out." Reagan triumphantly produced this response: "It's true . . . we didn't grow up, my generation, with those things. We invented them." When Reagan worked for General Electric, he let the company make his home a well-advertised display of the company's latest luxury products. Many of the items showcased there went into G.E.'s Carousel of Progress, created with Walt Disney for the 1964 World's Fair in New York—which, in turn, was absorbed into Disney's Tomorrowland at the Magic Kingdom. Progress was always Reagan's favorite product.

A parable for Reagan's brand of conservatism could be fashioned from his rejection of the historic Lincoln Steffens house, lived in by former governors of California. He had a new place built with the help of financial backers, one with all the modern conveniences. That is what Reagan did, symbolically, for conservatism itself—took it from its historic home and gave it a new operating center. Some of the charm he found in the Strategic Defense Initiative, or Star Wars, was precisely its complex of barely conceived technologies. He hated nukes, partly because they were old-fashioned. He loved lasers, partly because they were so "far out" as to remind him of the ray gun in his old Brass Bancroft serials. With his repeated mantra that "Nothing is impossible," he believed that technology could make the space weapon entirely benign—so incapable of offense that we would give it, for free, to the Kremlin.

Older-style conservatives were not comfortable with Reagan's fondness for a citation from the radical Tom Paine: "We have it in our power to start the world over." Reagan also said: "I don't think we ought to focus on the past. I want to focus on the future." He said that about the Holocaust, in connection with his visit to a German cemetery with the graves of storm troopers in it, but it expressed his confident futurism. The cognitive scientist George Lakoff claims that conservatives think of themselves as punitive parents, while liberals think of themselves as caring parents. But President Reagan was benign and grandfatherly in style, not harsh and retaliatory—in this regard, more a Democrat like Franklin Roosevelt than a dour Calvin Coolidge. And his resemblance to Roosevelt was not merely a matter of sunniness. Reagan had to disarm his followers as well as his foes when he made surprising departures from conservative doctrine.


1

Roosevelt campaigned on a promise to cut spending and balance the budget. Instead, his first term increased spending—significantly, but not on Reagan's scale. Reagan nearly tripled the deficit in his eight years, and never made a realistic proposal for cutting it. As the biographer Lou Cannon noted, it was unfair for critics to say that Reagan was trying to balance the budget on the backs of the poor, since "he never seriously attempted to balance the budget at all." Even Reagan's ideological ally and defender, George Will, made no effort to defend him on this. The six budgets Reagan had most control over "produced deficits totaling $1.1 trillion," Will wrote. "The budgets Reagan sent to Congress proposed thirteen-fourteenths of that total. Congress added a piddling $90 billion a year."

It is claimed that Reagan brought down the Soviet Union by forcing it to spend so much on defense that it collapsed. Perhaps. But in the process he made America spend so much on its military that interest payments on the national debt more than doubled (according to Will, "a regressive transfer of wealth to buyers of government bonds"), savings dropped, and cutbacks caused severe neglect of the national infrastructure. Even when the cold war was over, few in America seemed to be celebrating. It is not given to many presidents to spend two world empires toward decline.

How on earth did a Republican, an enemy of "big government," give us the greatest government debt ever? No single cause can explain such a mystery. But the elements of disaster arranged themselves around a campaign ploy the Reagan team rejected in 1976 as too kooky but eagerly adopted in the 1980 race—the "supply side" claim that tax cuts pay for themselves in increased productivity. This notion was given a visual aid (always helpful with Reagan) when the idea- merchant Arthur Laffer drew his famous curve on a napkin.

Reagan entertained the exhilarating Laffer heresy without giving up Republican orthodoxy on the balanced budget, smaller government, and no inflation. Supply- side purists could accept on principle any short-term deficits while tax cuts had time to generate greater productivity. But that was asking too much of Reagan, whose life had been spent preaching (though not practicing, even as governor) frugality. Jude Wanniski, the supply-side guru, was able to satisfy this orthodox Reagan with a second doctrine, that of an inflation-busting stable money supply. (Actually, what Wanniski wanted was a return to the gold standard.)

David Stockman, the man asked by Reagan to sell the supply-side tax cuts to Congress, later complained that he was given, in effect, two napkins to reconcile—the Laffer Curve napkin and the gold-standard napkin—and the two were irreconcilable. To make things worse, Stockman had to accommodate another part of Reagan's constituency—the neoconservative Committee on the Present Danger, which claimed that Jimmy Carter had engaged in unilateral disarmament. The only way to cure that was by major leaps upward in defense spending. Stock- man was being lobbied by his friend George Will, whom he called "adamant" on the need for huge defense expenditures. Caspar Weinberger, Reagan's defense secretary—his reputation as "Cap the Knife" notwithstanding—was determined to flex financial muscle even before he knew what the new money would be buying. During the campaign, Reagan had called for a 5 percent increase in the Pentagon budget, but in the aftermath of Carter's attempt to rescue hostages in Iran ("Desert One"), the outgoing Administration had itself upped defense costs by 5 percent in its 1981 budget. Sitting in Weinberger's office with his pocket calculator, Stockman suggested a 7 percent increase. Weinberger said, "In light of the disgraceful mess we're inheriting, 7 percent will be a pretty lean ration." Stockman sweetened the deal by figuring the annual raises from the projected Reagan defense budget of 1982, not the lean Carter budget of 1980. Stockman had been doing this, in other areas, to construct rosy scenarios, counting on income down the line from supply-side magic. That produced lower projected costs elsewhere, but it had the opposite effect for defense—a fact that Stockman discovered, with chagrin, after the Reagan military budget worked out to a 10 percent increase in real growth over six years, ending up with 160 percent higher outlay by 1989. It was too late to cancel the announced rates— the last thing Reagan would do is back off on defense. Stockman says he groaned when he saw that "they were squealing with delight throughout the military- industrial complex."

Stockman became a sorcerer's apprentice as each problem "solved" created another one. For instance, cutbacks that slowed inflation led to revenue losses not at first counted on, since inflation had, through "bracket creep," raised the annual tax intake. It was hard to make the numbers work with that income, too, going down. Stockman gave up, at one point confessing to the journalist William Greider, "None of us really understands what's going on with all of these numbers." His own forecasts were "absolutely doctored," he said.

It did not end there. Another Reagan belief that mired Stockman in deficits was the deregulation mania. Stockman considered it a blessing that his cuts would force agencies to cut back their regulatory tasks, staff, and inspections. One of the areas where this had most impact was the Federal Home Loan Bank Board, where Reagan's appointee, Richard Pratt, abolished a regulation requiring savings-and-loan associations (S.&L.'s) to have at least 400 stockholders. This allowed single operators—like James McDougal, of later Whitewater infamy—to turn such institutions into "a huge casino" (as U.S. News and World Report described them).

The savings-and-loan crisis had been set up by Democrats in Congress, who lowered restrictions on the associations while raising the limits on Federal Deposit Insurance (from $40,000 per account to $100,000). The trouble this created was aggravated by Pratt's hands-off attitude toward the banks, and by a new law that let the S.&L.'s move out from their original home loans to virtually any kind of investment. The prospect of billions of dollars shelled out by the government to make good on these bad investments was literally unthinkable to Stockman. He said this would make wallpaper of his rosy scenarios about the tax cut's good effect. He did not even want to consider S.&L.'s, as William Seidman, the head of the Federal Deposit Insurance Corporation, discovered: "No matter how many requests were made to him to focus on the troubles of the S.&L.'s, he passed the problem down the chain of command and, as far as I know, never took any interest in it."

No wonder the deficit began to scare people so. The stage was set for Ross Perot's entrance into the 1992 Presidential race. The government was not working, and we were paying exorbitant sums for it not to work. In effect, Reagan had made his case for governmental fecklessness and oppressiveness by making it practice what he preached against. Senator Daniel Patrick Moynihan, a mentor to Stockman, wondered whether supply-side economics was not just an indirect way of dismantling the government, by creating a debt that dried up its resources. Stockman denied that was the plan's intent (while admitting that it was its effect), but others always saw supply-side as more a political tool than an economic theory.

In Neoconservatism, Irving Kristol, the influential Republican thinker, confessed as much. "I was not certain of its economic merits," he wrote, "but quickly saw its political possibilities." His ignorance of supply-side realities did not hinder him from berating Stockman for being a mere accountant concerned only with cutting spiraling costs. Kristol kept on seeing light at the end of the deficit. If debts mounted, the Fed could just print more money. Kristols's son, William, faced up to the reality of the deficit, but still liked the Reagan program for its political, not its economic, effect. He reversed his father's analysis to reach the same approval of supply side: "The balanced budget hurts the Democratic Party for the next decade. It will force a number of budget-cuts- versus-tax-increase fights and that's good for us." So government at home was to be defeated (like the Soviet Union) by big government spending.

Despite the supply siders' claim that their tax cuts would increase savings and investment, both of them went down in the 1980s. Reagan had cut taxes on the very income that was supposed to give a jolt to growth—the top rate fell from 70 percent to 28 percent over seven years. But the lost growth of the 1981-82 recession was not made up (despite a sharp rise from that trough, which is what Reagan fans remember). Lou Cannon, taking stock of the Reagan years, wrote: "The nation's private wealth, adjusted for inflation, grew only 8 percent in the last five Reagan years compared to 31 percent in the period between 1975 and 1980, years that Reagan had derided as inflation-prone and unproductive." Yet, while income growth for the many was slow, it was rocket-fast for the rich. When income for the bottom 10 percent of the population fell by 10.5 percent from 1977 to 1987, that for the top 10 percent went up 24.4 percent—and that for the top 1 percent went up 74.2 percent.

And the Reagan trends continued. By 1996, the ratio between the earnings of chief executives and those of the average workers in their companies exploded from 41 to 1 in the '70s to 225 to 1 in the '90s. The share of national wealth owned by the top 1 percent of families jumped from 22 percent in 1976 to 42 percent in 1992. Stockman had confessed to Greider that supply side was simply a disguised form of "trickle down" theory—the view that the only way to get money to the poor is to give it to the rich, from whom in dribbles it will descend. But this was not even trickle down, disguised or undisguised. It was trickle up. While the government was spending more and more, the mass of the people were not profiting by this expenditure. The profiteers were.

Reagan's strategy-by-accident for trimming the government tied President Clinton's hands when he took office. There was simply no money for the kinds of programs he advocated in his campaign—New Deal measures like public works to restore the nation's infrastructure, or public service to create jobs. Bob Woodward traced in his 1994 book, The Agenda, how public fear of the deficit, striking Democrats in Congress, made Clinton create a tax package to close the budget gap.

Republicans later said that they "converted" Clinton to the...

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