After drifting from the open rebellion of the Sixties and early Seventies, into the “malaise” in the late Seventies, America was ready for a new day. The election of 1980 swept Ronald Reagan into the White house with a landslide of 10-1 in the Electoral College over incumbent Jimmy Carter. This reawakening of Conservatism, and renewed faith in the government became known as the Reagan Revolution. Reagan re-energized people, and re-ignited hope. The Great Communicator, Reagan used the “Bully Pulpit” better than any President since FDR. Taking office during a prolonged period of economic stagnation, Reagan proposed going to a “Supply-side” economic model, popularly known as “Reaganomics” (or VooDoonomics depending on which side you believe). In the theory, by lowering tax-rates, on individuals, corporations and on capital gains, tax revenue to the Treasury would increase, and lower prices for consumers would result. Explaining it as “Trickle-Down” policy, by saying “A rising tide lifts all boats.” Believing that lower taxes on the wealthy and corporations would improve the overall economy, thus benefiting everyone participating in the economy. Increased economic activity would replace the revenue lost to the Treasury by the lower rates. At Reagan’s firm requests, congress passed the Economic Recovery Act of 1981 which in three steps lowered the top tax rates from from 70% to 50%, Capital gains rates from 28% to 20% and the lowest rates from 14% to 11%. The policy also called for reduced government spending and less governmental control over the economy. Reagan also later promoted heavily, with bi-partisan support, the Tax Reform Act of 1986, which further lowered the top tax rate and Capital Gains Tax to 28%, but eliminated many tax loop-holes and tax-avoidance tricks. This cemented Reagan’s legacy as a tax cutter, and smaller government advocate. However, the act also raised the lower rate from 11% to 15% ( yes,higher than it was before.) After losing control of the Senate during his first mid-term, the Democratically controlled congress passed, and Reagan signed, a tax increase every year from 1981 to 1987. In particular the Tax Reform and Equity Act of 1982 was the largest peace-time tax increase ( as a percentage of GDP) in the history of the country. The congress had promised ( stop me if you’ve heard this before) $3 of spending cuts for every $1 of increased taxes. Of course the spending cuts never happened, in fact, government spending increased heavily, in part due to the largest military build up during peacetime in history. This led to huge increases of the deficit, despite massive spending cuts in domestic programs. The puzzling question becomes, in the improvement of the economy, the Federal revenues grew at an annual rate of 8%, spending grew at a rate of 7% annually, but deficits grew, and US Debt grew from $937 Billion to $2.87 Trillion.
Although still suffering from a recessionary economy for his first two years, things improved dramatically afterward. Reagan ended the remaining price controls on oil, and eliminated the Windfall Profit Tax, enacted under Carter. Oil prices dropped, supply increased, and for the first time in over a decade, Americans had plenty of gasoline. With an improved economy,and plenty of gas, the election of 1984 saw Reagan reelected in the biggest landslide in American history, only losing Minnesota by 3,761 votes to Native Son (and Jimmy Carter’s VP) Walter Mondale. His Electoral College Majority of 525 is still the largest election margin in history. He came within 3800 votes of carrying all 50 states, no one before or since has even come close to that total. Suffice it to say, with a renewed spirit in themselves,and their country, Reagan was popular. Though his presidency would see some scandals, most notably the Iran-Contra Affair, and the Savings and Loan Crisis, and the Barracks Bombing in Lebanon, and ensuing withdrawal. He saw many more successes, such as the invasion of Grenada, The bombing of Libya, and the End of the Cold War, through his commitment to the SDI, (Star Wars) program. He also oversaw several programs that would be payed for a generation later, such as the War on Drugs, and the heavy arms shipments and training to the Mujaheddin in Afghanistan, to fight off the Soviet invasion that occurred during Carter’s term.
It was during Reagan’s time in office, called a realignment election, that most conservatives moved to the Republican Party, and most Liberals moved to the Democrats. This perception still exists today, real or imagined. I will argue in a later column, directly addressing the next election that Conservatism is dead, Bush Jr. killed it and dumped it on the side of the road to rot. Read the link, and tell me where I’m mistaken. I wish I could be proven wrong, I really do.
Despite eight years in office that saw tremendous partisan fights between the White House and Congress, Reagan left office with an approval rating around 65%. This popularity allowed his VP George H. W. Bush to win a particularly nasty election in 1988 and continue the Reagan Revolution. Bush Sr’s Presidency would mostly be just holding the reins of what Reagan had set in motion, but also for giving us Dan Quayle, who I use often for Witless Wednesday.
That promise, when Bush broke it cost him any chance of reelection, despite very successful foreign policy victories around the World. After the first Gulf War, despite critics saying we should finish the job and take Baghdad, Bush’s popularity was around 89%, looking as he would cruise to reelection. But Congressional Democrats convinced him that the only way to control the deficits was to increase taxes. Republicans argued that cuts in spending was the way to control the growing deficits. When Bush signed the tax increases, he lost all his credibility with Conservatives and the Independents. The economy had turned by the late eighties, some say because of his tax policies. Along with advocating the Free-trade agreement known as NAFTA , Bush was seen as untrustworthy by Independent and Conservative voters by the Election of 1992. The NAFTA agreement, and exploding deficits, also caused a third party run by Ross Perot, a populist Billionaire, to run on a fiscal responsibility platform. Perot went on to capture almost 20% of the popular vote, making him the most successful third party candidate since Teddy Roosevelt in 1912. At one point Perot even led the polling against both major party candidates. This split allowed Bill Clinton to take the presidency with a large majority in Congress. Tune in tomorrow as we discuss the polarization of the Clinton years, I promise (maybe) No New Sex Jokes!
Please Note; This is a brief, (very brief) overview of the story of American Politics. It’s hard to boil it all down into five minute sections, but I have tried to make an honest attempt at it. The true devil is in the details. I strongly encourage you to look deeper by exploring the links I have provided. The more you know, the more of an informed decision you can make. Get informed and get involved.
Start at the Beginning; Same Old Story, Same Old Song And Dance
And just leave you laughing today;