THE PRESIDENCY OF RONALD REAGAN

Admirers and detractors of Ronald Reagan both agree that he was a true master of politics (Bill Clinton studied the techniques Reagan used to achieve political success). Reagan used his previously honed skills as an actor to set the right tone and present the right messages at meetings and speeches throughout his presidency. Reagan also used his staff well; on many occasions he would set the general policy and allow staff people to set up the details.

Upon becoming president Reagan instituted traditional conservative economic practices. In 1981 federal taxes were cut by 5 percent, and then cut by another 10 percent in 1982 and 1983. Reagan and his economic staff believed in “supply-side economics.” which stated that if by cutting taxes you put more money in the hands of wealthy Americans, they would invest it in the economy, thus creating more jobs and additional growth (and eventually additional tax revenue). Capital gains taxes were reduced, also with the intent of encouraging investment.

Political battle lines were drawn early in the Reagan administration. As a result of the tax cuts, the government was taking in less money, causing many domestic programs to be cut, including aid to education, to urban housing programs, and to the arts and the humanities. Liberals were outraged over the fact that at the same time social programs were being cut, Reagan increased the defense budget by nearly $13 billion, Reagan also pushed for funding for a Strategic Defense Initiative (SDI; nicknamed “Star Wars”) program. As envisioned, this system could shoot down enemy missiles from outer space. Reagan also pushed to give more power back to the states at the expense of the federal government. Reagan called this plan the New Federalism. Under this program, how federal money was spent by states was determined by the states and not by the federal government.

During the Reagan administration the policy of deregulation was intensified; industries such as the energy industry and the transportation industry were freed from “cumbersome” regulations imposed by previous administrations (supporters of these regulations would maintain that they were in the interest of the consumers). In addition, funding for the Environmental Protection Agency was greatly reduced during the Reagan presidency. Many perceived the Reagan administration to be anti-union as well; in 1981 the government actively destroyed the union for the air traffic controllers, and striking controllers were fired.

In response to the perceived foreign policy weakness of America in the Carter years, Reagan worked hard to build up America’s image in the world. On a small scale, the American army successfully invaded the island of Grenada in 1983. On a much larger scale, Reagan ended the friendlier relations between the United States and the Soviet Union of the détente era. He put new cruise missiles in Europe and referred to the Soviet Union as the “evil empire.” Reagan’s harsh rhetoric won him much support in the United States. Reagan’s popularity also had gone up after the attempt on his life by John Hinckley in 1981.

Reagan ran for reelection in 1984 against Walter Mondale (Mondale’s running mate was Geraldine Ferraro, a congresswoman from New York). Mondale criticized Reagan on economic issues; the supply-side approach had not produced as much growth, and as much income from taxes, as its proponents had said it would. However, Reagan’s tough Cold War rhetoric and support of conservative social issues allowed him to continue to break up the Democratic New Deal coalition; Reagan got nearly 60 percent of the popular vote in 1984, Critics who said that the major beneficiaries of Reagan’s economic policies were the very rich were still very much in the minority.

Reagan continued to practice conservative policies during his second term. The Tax Reform Act of 1986 dramatically reduced federal tax rates; the tax the wealthiest Americans had to pay on their income, for example, was reduced from 50 percent to 28 percent. In 1986 and 1987 both unemployment and inflation declined. Under Reagan the Supreme Court also became more conservative, as William Rehnquist became Chief justice and Antonin Scalia was one of the new justices on the court. Reagan also nominated Sandra Day O’Connor to be the first woman to serve on the Supreme Court. Most women’s groups, however, strongly disapproved of the Reagan administration, citing actions such as efforts during Reagan’s second term to cut food stamps and the federal school lunch program.

During Reagan’s second term, serious economic problems also developed. On October 19, 1987, known as “Back Monday” the average price for a share of stock fell nearly 20 percent. During Reagan’s second term, federal government deficits grew drastically; this occurred because less income was coming into the government because of the previously- enacted tax cuts and because of a large increase in defense spending. In addition, for the first time since World War I the United States began to import more than it exported.

Nevertheless, Reagan’s foreign policy remained incredibly popular. In April of 1986 the United States bombed Libyan air bases after Muammar al-Qadhafi, the leader of Libya, ordered Libyan gunboats to challenge American ships sailing dose to Libya. Reagan and the new leader of the Soviet Union, Mikhail Gorbachev, established a close personal relationship and held meaningful negotiations on the reduction of nuclear weapons. Reagan also supported anticommunist forces fighting in Nicaragua and El Salvador.

Many critics of Reagan had claimed since 1980 that he was unaware of what was being done by others working for him. This view seemed to be validated by the Iran-Contra Affair of 1986 and 1987. Apparently without the knowledge of the president, National Security Advisor John Poindexter, Lieutenant Colonel Oliver North, and several others devised a “arms for hostages plan.” By this plan the United States sold arms to Iran, hoping that they could use their influence to help free American hostages held in Lebanon. The problem with this plan was that at this point America had an official trade embargo with Iran and had gotten several European countries to support this. The money for this sale was to be used to fund anticommunist fighters in Nicaragua, called the “contras.” Again, a problem existed: Congress had passed legislation carefully regulating how much funding could go to the contras. Congressional and legal hearings were held on the Iran-Contra Affair, as a result, nearly a dozen officials of the Reagan administration being forced to resign.

Many Americans felt (and continue to feel) that the political hero of the modern era was Ronald Reagan. Many supporters felt he restored pride to America, stood up to our enemies abroad, restored the economy of America, and reasserted “traditional” American values. Critics of Reagan maintain that the economic policies of the Reagan administration only benefited the wealthiest Americans; they point out that the gap between the richest Americans and the poorest Americans dramatically increased under Reagan, with the real income of middle- and lower-class Americans actually receding. Critics stated that Iran-Contra proved the fact that Reagan was dangerously out of touch on many policy decisions. Nevertheless, Reagan’s vice president, George Bush, would certainly have a tough act to follow as he ran for president on his own in 1988.