Reagan His Place In History

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Because of his optimism, he never adopted the defensive power-sharing strategy of longtime anti-Communists like Richard Nixon and Henry Kissinger. He thought Communism was bad, and he thought it was doomed. When he became President, he confidently declared that freedom and the West would “transcend” Communism, that it would end “on the ash-heap of history,” that the Berlin Wall should be torn down.

The steps he took to bring this about included rolling back Communist gains at the margins, invading Grenada, supporting a counterrevolution in Nicaragua, and sending Stinger missiles to the Afghan resistance. (As in all wars, there were unintended consequences, as the Taliban and Osama bin Laden demonstrate.) He announced that he would take advantage of America’s lead in high tech by producing a missile defense system. Critics derided the Strategic Defense Initiative as a fantasy from Star Wars; Reagan embraced the pop-culture reference. He never deployed the system, and tests of its effectiveness continue to this day, as do arguments over the results. But the threat worried the Soviets; Gorbachev’s foreign minister, Aleksandr Bessmertnykh, told a 1993 conference of Cold Warriors at the Woodrow Wilson School of Public and International Affairs that SDI caused a tug of war inside the Soviet bureaucracy that was reflected in the divided purposes of the Gorbachev regime. Former Defense Secretary Frank Carlucci said at the same press conference that he “never believed” in SDI, and his skepticism may prove to be justified. On the other hand, the Cold War postmortem at which Bessmertnykh and Carlucci spoke was hosted by the victors, in Princeton, New Jersey, not Leningrad.

No one thing wins a war by itself. But Reagan’s appearance at the end of the Cold War was crucial. When he came into office, the Soviet Union was an aggressive hard-line state; when he left, it was a reforming, improvising one partly in response to his pressures. Less than a year after he retired, the Berlin Wall was torn down; two years after that, the Soviet Union was no more. It is hard to think of a comparably rapid collapse of a major power without major bloodletting. Woodrow Wilson helped beat the Central Powers in World War I, and Franklin Roosevelt played a far larger role in beating the Axis in World War II. World War III—the Cold War—was less cataclysmic but longer, and the role of the United States was even more central. Ronald Reagan helped guarantee an American victory, without fighting a Second Battle of the Marne or a D-Day.

When Reagan came into office, the American economy seemed as weak as the Yeltsin-era Russian army. The oil shock of the early seventies had hit it hard, and a combination of high inflation and high unemployment known as “stagflation”—which the reigning economists’ paradigm of the Phillips curve declared to be impossible—seemed impervious to the best efforts of Presidents Nixon, Ford, and Carter to massage it.

Politicians often preside over transformations they deplore.

Reagan’s remedy was as theological as the passage on the baby’s ear. A school of economists, called “supply-siders,” had studied the economic impact of tax rates (Robert Mundell, the school’s founder, was awarded the Nobel Prize in economics in 1999). They too had a curve, shaped like a croquet wicket and named after one of their number, Arthur Laffer, which they said showed the diminishing returns of revenue that resulted from ever-higher rates. If you cut tax rates, they argued, the economy would be stimulated, and the federal government would collect more money in tax revenues. Making use of a post-shooting wave of good feeling, Reagan was able to persuade Congress to implement something like their program.

In the event, the Laffer curve, like the Phillips curve, had some kinks in it. The great tax-rate cut was followed by two short, sharp recessions, one at the beginning of Reagan’s first term, the other at the end of George H. W. Bush’s only one. Both Bush and then Bill Clinton repudiated supply-side doctrine, though they did not in fact raise tax rates that much. The deficit, contrary to predictions, rose alarmingly, until the late nineties, when politicians began talking of surplus.

Still, the eighties and nineties were economically vastly different from the seventies. Americans worried less about OPEC or the potency of Asian models of capitalism and profited from their own. Success has many fathers. The Federal Reserve, which always goes its own way, deserves credit. So, more recently, does the computer economy, which was a spinoff of high-tech military spending. But Reagan was on the bridge when the twenty-year boom began.