249 of 278 thought that to ‘oppose Soviet or Cuban involvement in Africa would be futile.’ ‘The fact is,’ he added, ‘that we can no more stop change than Canute could still the waters.’ Brzezinski insisted, ‘the world is changing under the influence of forces no government can control.’ Carter himself said America’s power to influence events was ‘very limited.’ Feeling itself impotent, the Carter administration took refuge in cloudy metaphor, for which Brzezinski had a talent. Vietnam, he said, had been ‘the Waterloo of the WASP Elite’ and no such intervention could ever again be undertaken by America. ‘There are many different axes of conflict in the world,’ he noted, ‘[and] the more they intersect, the more dangerous they become.’ West Asia was ‘the arc of crisis.’ But ‘the need is not for acrobatics but for architecture.’ It was not that Carter was incapable of doing things when he exerted himself. From September 6 to 17, 1978, he hosted a summit between Egyptian and Israeli leaders at Camp David at which agreements were reached which led to a formal Egyptian-Israeli treaty in March 1979, the first and most crucial step towards bringing peace between Israel and its Arab neighbors. This was a notable achievement, but it remained unique in Carter’s record. Most of the time he appeared hyperactive but curiously supine in action. An aide protested on his behalf: ‘Look, this guy is at his desk every day by 6 A.M.,’ to which the reply came: ‘Yes, but by 8 A.M. he has already made several serious errors of judgment.’ Things might have been better, looking back on it, had Rosalynn been in charge. She was ubiquitous. The Washington Star reported that in her first fourteen months in the White House she had visited eighteen international and twenty-seven American cities, held 259 private and 50 public meetings, made fifteen major speeches, held twenty-two press conferences, given thirty-two interviews, attended eighty-three official receptions, and held twenty-five meetings with special groups in the White House, and was said to be ‘trying to take on all the problems we have.’ What it did not report, though it emerged after she and her husband left the White House, was that she occasionally attended Cabinet meetings. Behind the faltering of American power in the 1970s, and giving it a psychological overtone, was the consciousness of the relative economic decline of the United States. During the early stages of the Cold War, the US had been sustained by its consciousness of the ‘Baby Boom,’ which began in 1945 when the soldiers returned from abroad, and continued through most of the 1950s: the ‘Baby Boomers’ were to be a new and infinitely numerous generation of an extra 50 million well-fed and well-educated and trained Americans, able to take on the world. In his campaign, Truman had been able to say, with general agreement, ‘This is the greatest nation on earth, I think. The greatest nation in history of the world has done’ (Salem, Oregon, June 11, 1952). The figures could not lie. In metals, the United States produced as much as the combined output of Canada, the Soviet Union, and Chile, in fuel materials as much as Russia, Germany, Britain, Venezuela, Japan, France, Poland, Iran, the Netherlands, India, Burma, Belgium, and Luxembourg. US production of minerals was about four times larger than that of Russia, the second-largest producer. The symbol of these years was Pan-American Airways, the world-conquering airline which in June 1947 inaugurated the first round-the-world regular flight of 25,003 miles New York-New York, and eleven years later, in October 1958, brought in the first big-jet 707 regular service. America did well throughout the 1950s and into the 1960s. In 1968, the year LBJ first became painfully aware of the financial pressure on the world’s richest power, US industrial production was still more than a third (34 percent) of total world production. The American GDP, which had doubled during World War Two, doubled again by 1957, and yet again by 1969. That was why President Nixon, on December 15, 1970, was able to celebrate the registering, by the Commerce Department’s ‘GDP Clock,’ of a trillion-dollar economy,' which moved at the rate of $2,000 a second.
250 of 278 But the following year, the US proportion of world production had fallen to under 30 percent and Nixon was warning: ‘Twenty-five years ago, we were unchallenged in the world, militarily and economically. As far as competition was concerned, there was no one who could challenge us. But now that has changed.’ America’s economic leadership was ‘jeopardized.’ This was reflected in the inability of America to continue managing the world’s international monetary system, which had done since 1945. In 1971 the Nixon administration lost or abandoned control of what was happening. Two years later, in March 1973, Nixon cut the link between gold and the dollar, which lost 40 percent of its value against the Deutschmark between February and March 1973. America added to its problems of competing successfully in the world by a continuing spate of regulatory legislation passed by Congress in the 1960s and 1970s. This followed the remarkable success of Rachel Carson’s book The Silent Sprint (1962), which first drew public attention to the long-term dangers of industrial pollution and the poisoning of the environment. In 1964 came the Multiple Use Act and the Land and Water Act, in 1965 the Water Pollution Act and the Clean Air Act; in 1966 the Clean Water Restoration Act. Then came the ‘Conservation Congress’ of 1968 and a whole series of gigantic Acts which attempted to impose what was called ‘Ecotopia’ on the US: the Environmental Protection Act, the Toxic Substances Control Act, the Occupational Health and Safety Act, the Clean Air Amendments Act, and a series of Food and Drug Acts. By 1976 it was calculated that compliance with the new legislation was costing US businesses $63 billion a year plus a further $3 billion to the taxpayer for maintaining regulatory services. By 1979 total costs had risen to $100 billion annually. Much of this legislation was not only well meaning but desirable. But it had a serious effect on the productivity of US business. In the coal industry, for example, where production had been 19.9 tons per worker per day in 1969, it had slipped, by the time the full effects of the 1969 Coal-Mine Health and Safety Act had been felt in 1976, to 13.6 tons, a fall of 32 percent. In 1975, over the whole of American industry, productivity was 1.4 percent lower than it otherwise would have been as a result of meeting federal pollution and job-safety regulations. As a result, in the decade of 1967-77, productivity in American manufacturing industry grew by only 27 percent, about the same as in Britain (regarded, by this time, as the ‘Sick Man of Europe’), while the corresponding figure for West Germany was 70 percent, for France 72 percent, and for Japan 107 percent. In some years in the 1970s, American productivity actually fell. Detailed analysis of this stagnation or decline in American dynamism suggested the causes were mainly political: failure to control the money supply, excessive taxation, but chiefly government intervention and regulation. There were many other disturbing indicators. With growing competition from Europe, Japan, and other Far Eastern manufacturers, America’s share of total world production of motor vehicles fell in the decade 1972-81 from 32 to 19 percent; in steel it dropped from 20 to 12 percent; in manufacturing as a whole the US share slid to 26 percent by the mid-1970s, 24 percent by the end of the decade, and 20 percent in the early 1980s. The standard of living, measured by total output per person, gave the US an annual figure of $6,000 by 1973; but Switzerland’s figure was then $7,000, and the US was also behind Sweden, Denmark, and West Germany. By the end of the 1970s it was behind Kuwait too, and it fell behind Japan in the 1980s. The decline in America’s once-strong balance of payments position, a feature of the 1960s and 1970s, America was importing nearly half its oil and large quantities of tin, bauxite, diamonds, platinum, and cobalt, as well as a growing percentage of its manufactured goods, not only
251 of 278 consumer durables but machine-tools. The relative economic decline continued uninterruptedly during the 1970s. Johnson, Paul (2009). A History of the American People (pp. 912-916). HarperCollins e-books. Kindle Edition. Ronald Reagan, born in 1911, came from Tampico, Illinois, and was the son of a hard-drinking, wisecracking, intermittently unemployed shoe-salesman. He graduated from Eureka College in 1932, worked briefly as a sports broadcaster, then moved to California, where he prospered in the movies as ’Mister Norm., He was a true B-movie star, right at the top of the second grade, a ‘quick study,’ always punctual on set, easygoing, obedient to the director, friendly to fellow-actors, a bankable name. But after the war (during which he worked in government movies) a near-fatal bout of pneumonia, a painful divorce from the actress Jane Wyman, a growing disgust with some aspects of the movie industry, formed during his service in a union representing actors, combined to persuade him to start a new career, a spokesman for General Electric. This in turn led him into politics and changed his mind on the subject of politics and changed his mind on the subject of what politics is about. He was a natural Democrat who had voted four times for FDR and in some metaphysical ways he remained a New Dealer. But ‘by 1960,’ as he wrote, ‘I realized the real enemy wasn’t’ Big Business, it was Big Government.' In 1966 he was elected Republican governor of California, the number-one US state with the world’s seventh-largest economy, was triumphantly reelected, and established himself as a reliable, cautious, and effective administrator. Despite this, and his proven record as a vote-winner, Reagan was ignored by the Republican establishment in the post-Nixon era, notwithstanding their poverty of talent. He had to fight his way every inch to the Republican nomination in 1980.. The East coast media did not hate him, as they had hated Nixon (and Johnson), they simply despised and dismissed him as a ‘maverick,’ and ‘outsider,’ a ‘California nut-case,’ an ‘extremist,’ ‘another Goldwater,’ and so on. As late as August 1980 most Washington pundits agreed that Carter, as incumbent, would have no difficulty in disposing of the challenger. In fact Carter became the first elected President to be defeated since Hoover in 1932. Reagan beat Carter by a huge margin, 43,904,153 to 35,483,883, and this was all the more remarkable as John B. Anderson, an Illinois congressman who had opposed Reagan for the Republican nomination, ran as an independent and received 5,720,000 popular votes. Reagan carried the electoral college by 489 votes to Carters 49. The fact is, Reagan was one of the great vote-getters of American history, a man who could win over the majority among both sexes, all age groups, virtually all occupation and income groups, and in all parts of the Union. The only categories where he failed to make majority scores were blacks and Jews. In 1984, against Carter’s Vice-President, Walter Mondale, who was running with a woman vice-presidential candidate, for the first time–Representative Geraldine Ferraro of New York–Reagan scored an even more remarkable victory. He carried all states, except Mondale’s home-state, Minnesota (and the District of Columbia), winning an overwhelming popular plurality, 54,455,074 votes to Mondale’s 37,577,185. Reagan looked, spoke, and usually behaved as if he had stepped out of a Norman Rockwell Saturday Evening Post cover from the 1950s. More important, he actually thought like a Rockwell archetype. He had very strong, rooted, and unshakeable views about a few central issues of political and national life,
252 of 278 which he expressed in simple and homely language. He saw America as the Pilgrim Fathers had, as a ‘City on the Hill,’ as the Founding Fathers had, as the ideal republic, as Lincoln had, as ‘the last, best hope for mankind,’ and as Theodore Roosevelt had, as a land where adventure was still possible and any determined and brave man could aspire to anything. He also saw America as (in his view) FDR had, where those who had much gave to those who had less, but he saw it too as Andrew Jackson had, as a federation of states where Washington was (as it were) merely the first among equals. Reagan had been inspired, in his 1980 campaign, by the success of Margaret Thatcher in Britain, who had set about reducing the size and role of the state by her campaign of curbing expenditure and taxation and regulation, and by her privatization of the state sector. Like Thatcher, Reagan saw himself as a radical from the right, a conservative revolutionary who had captured the citadel of the state but, like Thatcher, still treated it as an enemy town. Both these remarkable figures of the 1980s replaced the doubts and indecisions of the 1970s with ‘conviction politics,’ homely ideologies based on the Judeo-Christian ethics of the Ten Commandments and the Sermon on the Mount, reinforced by the secular tracts as Adam Smith’s The Wealth of Nations, the writings of Jefferson and John Stuart Mill, and the arguments of 20th-century conservatives like Milton Friedman, Friedrich A. Hayek, and Karl Popper. But whereas Thatcher had read the last three in the original, Reagan had absorbed them in filtered-down versions, via Reader’s Digest and other popular publications. He was in fact a great and constant reader, though not in the sense academics recognize. Reagan was sometimes confused in his thinking. But then he knew he was confused and wisecracked about it, saying: ’Sometimes our right hand doesn’t know what our far-right hand is doing.' That was where he differed from Thatcher. Like Lincoln, he possessed the secret weapon of the homely politician: humor. Quite incapable of the majesty Lincoln brought to public papers and speeches, Reagan nonetheless had a way with words which was far from negligible in terms of the political dividends it earned. One writer on the presidency has noted: ’Style is the President’s habitual way of performing his three political roles, rhetoric, personal relations, and homework.' In this sense, Reagan had a consistent and coherent style, that of light comedy, a comedy which reassured all and threatened none, which was quotidian, ubiquitous, and all-purpose. As one observer put it, he was ‘the Johnny Carson of politics, the Joker-in-Chief of the United States.’ And whereas, in Lincoln’s case, presidential jokes were resented by many as coarse, unbecoming, and vulgar, with Reagan they seemed natural. His childhood had been unhappy and insecure; the family had moved ten times, Their refuge was joking. Reagan got his one-liners from his father, his ability to get them across with masterful timing from his mother, a frustrated actress. He drew a lot and thought in visual terms. He had ambitions, at one time, to be a cartoonist. His omnivorous reading in homely quarters, and his excellent memory, allowed him to build up an extraordinary stock of jokes, metaphors, funny facts, proverbs, and sayings, added to assiduously during his Hollywood and PR years, and polished and categorized for service on all occasions. He liked to have on his desk a jar of jelly-beans which he could delve into and pop into his mouth to calm himself down, and he likewise delved into his formidable joke-arsenal, which never failed him. It is no accident that his two favorite authors were Mark Twain and Damon Runyon, both of whom used humor to make acceptable the agonies of life. Reagan worked not through logic and statistics but through metaphor, analogy, and jokes, and he was good not just at listening but at interpreting body language. Reagan was never afraid of seeking the presidency or enjoying it. He knew he had been a successful governor of a huge state when everyone said he would fail and that he had won the presidency when most people
253 of 278 thought it impossible. He was a very secure person, and that (as with Lincoln) enabled him to joke about serious things. Observers first became aware of the power of Reagan’s humor when, during the election, he had a debate with Carter in New York. This was and is heartland territory for a Democratic candidate but Reagan nonetheless won the encounter hands down. He destroyed Carter in the TV debates with a simple aside to the viewers: ‘There he goes again.’ His 1980 proposed budget plan was the work of the outstanding economist Alan Greenspan, later chairman of the Federal Reserve, but it was Reagan who gave it the formulation which aroused the public: ‘A recession is when your neighbor loses his job. A depression is when you lose yours. And recovery is when Jimmy Carter loses his.’ Once in the White House, Reagan used to make both himself and everyone else feel at home. Like Lincoln, he used jokes to narrow the daunting psychological gap between the President and the rest. He knew he had been blessed with common sense and he felt his being in politics was in pursuit of a serious purpose–so let them laugh. He laughed with them. When a reporter asked him to autograph an old studio picture showing him with the chimpanzee Bonzo, Reagan did so and wrote, ’I’m the one with the watch.' He regularly joked about not only his age and stupidity but his memory lapses, his second-rate movies, his mad ideologies, and supposed domination by his much cleverer wife–all the areas of vulnerability. He joked about his laziness: ’It’s true hard work never killed anyone but I figure, why take the chance?' He was not exactly lazy, in fact, but he was careful of himself and conserved his energy: he spent 345 days of his presidency at his 688-acre property, the Rancho del Cielo, which he had owned in the Santa Ynez Mountains, northwest of Los Angeles, since 1974. That was one year out of eight in total. He made many of his most important decisions there and felt, probably correctly, that it was in the national interest to use the ranch as much as he did. Many of his jokes were learned by heart or even written for him. But some of his best one-liners were spontaneous. Of a mob of peaceprotestors: ’Their signs say make love not war, but they didn’t look as if they could do either.' To a bearded man who shouted, ‘We are the future,’ Reagan replied, ’I’ll sell my bonds.' When he was shot and nearly died in 1981, he let out a string of one-liners. Thus, to his wife Nancy, ‘Honey, I forgot to duck,’ a recycling of Jack Dempsey’s famous 1926 joke about his defeat by Gene Tunney. Just before being wheeled into the operating theater, he said to the doctors, ’Please tell me you’re all Republicans,' and when he was in the recovery room he said to the nurses, paraphrasing W.C. Fields during the wagon-train fight against the Sioux: ’All in all, I’d rather be in Philadelphia.' He had a euphemism for his frequent naps: ‘Personal staff time’ of ‘Staff time with Bonzo.’ His jokes often expressed his fundamental ideas and helped to pass off his ignorance in areas solemn people thought vital, such as economics. But most of his anti-economist, anti-lawyer, and anti-clerical jokes were addressed directly to economists, lawyers, and clergy. He liked cheering up as well as put-'em-at-their-ease jokes. ‘How many are dead in Arlington Cemetery?,’ a question which evoked bafflement and was answered by ‘They all are.’ He told the 1984 Gridiron Dinner, ’I’m not worried about the deficit–it’s big enough to take care of itself.' One of his great strengths was that he was not ashamed to ask simple questions. Thus: ‘What makes the Blue Mountains blue?’ (A lot of people want to ask this but fear to reveal their ignorance.) He asked Paul Volcker, chairman of the Fed, ‘Why do we need the Federal Reserve at all?’ Volcker, six feet seven-and-a-half–half a foot taller than Reagan–sagged in his chair and was ‘speechless for a minute.’ But that was exactly the kind of question Andrew Jackson asked. Reagan used questions to disarm or sidetrack issues he felt overwhelming. Thus, asked about the ’Butter
254 of 278 Mountain,' he replied: ‘478 million pounds of butter? Does anyone know where we can find 478 million pounds of popcorn?’ Sometimes Reagan forgot names or misremembered them or became confused. He called the Liberian leader, Samuel K. Doe, ‘Chairman Mao.’ He thought the former British Defense Minister, Denis Healey, was an ambassador. He announced, at the White House, ‘It gives me great pleasure to welcome Prime Minister Lee and Mrs. Lee to Singapore.’ The first time the author met him he said, ‘Good to see you again, Paul.’ He relied a lot on his cue cards. But he was humble and cooperative with his staff, as he had been as an actor. He regarded the events in his daily diary schedule as stage directions he must obey. He often took more trouble with ordinary citizens than he did with important people. One of his staff, Anne Higgins, selected letters for him to read from his huge mail. Like Jefferson, he replied to as many as he could. He responded to hard-luck stories with advice and sometimes a small personal check. Some of his letters to humble people are wonderfully well phrased, and treasured. He also made frequent phone calls to the relatives of victims, wounded members of the forces, or policemen and the like. He was the ‘Great Comforter.’ Reagan was accessible to people who never met hi, and they felt it. On the other hand, the closer people got to him, the less they knew him. He was an affable monarch, but still a monarch. Seen really close, he was as unresponsive and remote as Louis XIV. Some infighting did take place in his court, but usually well outside his earshot. No one was anxious to disturb his placidity. His best biographer sums up: ‘He was a happy president, pleased with his script, his cue cards and his supporting cast.’ The new President’s self-confidence, and confidence in America, soon communicated itself. It was not long before the American public began to sense that the dark days of the 1970s were over, and that the country was being led again. There were limits to what Reagan could do to get the country back on the rails. The Democrats controlled half of Congress and would not cut welfare spending. During his first term, spending still increased annually by 3-7 percent. But at least it was less than the 5 percent annual increase under Carter. At the same time, Reagan made good his promise to cut taxes. The Economic Recovery Act of 1981, the work of Congressman Jack Kemp and Senator William Roth, with Reagan’s full backing, reduced the highest tax rate to 50 percent and included across-the-board tax reductions of 25 percent. There were other reductions in taxes on capital gains, estates, and gifts. It was followed by the Tax Reform Act of 1986, which greatly simplified the entire tax structure. This success, together with a massive program of deregulation, acted as a potent stimulant to business. Reagan took over in January 1981 and by the beginning of 1983 the nation was in full recovery. The growth continued throughout Reagan’s second term, then into his successor’s and well into the 1990s, the longest continual expansion in American history. Inflation, which had been 12.5 percent under Carter, fell to 4.4 percent in 1988. Unemployment fell to 5.5 percent as 18 million new jobs were created. Interest rates were down too. Nevertheless, there has been some confusion about the economic recovery of the Reagan years and it is worthwhile to go into a little detail to sort it out. We have already noted the rapid, indeed alarming growth of social security spending. The sinister aspect of this growth was that it was largely unfunded, and had been from the start. That was FDR’s doing. The first social security check was issued to Ida Fuller of Brattleboro, Vermont in 1940. It was for $22.54. At the time she got this check she had paid in only $22.00 in social security taxes. By the time she drew her last check in 1974, she had received $20,944, all except $22.00 unfunded. No wonder Reagan called it ‘an inter-generational Ponzi game.’ It was a kind of
255 of 278 pyramid fraud, played on youth. Congress knowingly promoted the fraud. Between 1950 and 1972 Congress, often over presidential protests, raised social security benefits or extended eligibility eleven times, six of them in election years. The most irresponsible change came in 1972, when Wilbur Mills, the great House Democratic financial panjandrum and big spender, raised it 20 percent and indexed all benefits to the Consumer Price Index. By 1982 the average pensioner was collecting (in real terms) five times in benefits what he/she had paid in taxes. By the time Reagan became president, social security was 21 percent of the total budget and continued to rise at 3.5 percent a year. Reagan knew this in general terms and hired a budget wizard, David Stockman, to cut social security. But Stockholm was incapable of explaining the problem to Reagan in ways he could grasp, through simple graphics and headline numbers. The consequences were disastrous. Reagan turned down Stockman’s cutting scheme partly out of old-fashioned New Deal emotionalism but mainly because he could not under it. It was the one big instance in which his inherent weaknesses really mattered. As a result ‘Reaganomics’ showed a yawning gap between theory and practice. It was supposed to produce a $28 billion budget surplus by 1986. In fact it produced an accumulated $1,193 billion deficit over the five-year period. Under Reagan the deficit, which essentially dated back to the year 1968 and had got out of hand during the collapse of executive authority in 1975, began to hit the numbers with a vengeance. He left it running at the rate of $137.3 billion a year. Meanwhile the public debt had risen to $2,684 trillion. In the last year of Carter, when Reagan took over, interest payments on the debt took up the first 10 percent of the budget receipts. By the first year of Reagan’s successor, the percentage had risen to 15. That was the Reagan downside. But we now know it was made to look worse than it actually was. Despite the prolonged expansion of the economy during the 1980s and into the 1990s, figures for US national wealth appeared to show it growing more slowly than its main competitors, indicating that the country was still in relative decline. Other figures suggested that wage rates in the US were failing to keep pace with rates (in real terms) in other leading economies. It was calculated that real average hourly earnings in America were actually falling. A mid-1990s study showed they had declined by 9 percent between 1975 and 1996. Another study indicated that real average family incomes rose by only 2 percent between 1978 and 1995. The fall in real wage rates was attributed to assumptions that the 18 million new jobs created under Reagan (plus 7 million more under President Bush) were mostly poorly paid, unskilled jobs mainly in service industries. The poor figures for median family incomes were quoted as evidence of the continuing, even deepening, problem of poverty in the US. However, these and other figures did not seem to correspond to what most people regarded as the reality of modern America in the 1980s and 1990s; that it was an increasingly prosperous country, with almost universally and visibly rising living standards, and that even those officially defined as ‘poor’ were manifestly living better. Then at the end of 1996, a panel of experts led by the Stanford University economist Michael Boskin, and known as the Congressional Advisory Commission on the Consumer Price Index, released figures showing that the Consumer Price Index had been overestimating the inflation rate of the US economy, that it had been doing so steadily but increasingly for twenty years, and that in consequence some of the most fundamental statistics about the US economy were grievously misleading. The effect of exaggerated rises in the CPI over so long a period was to depress the value of real wages (that is, nominal dollar wages adjusted to the New York Times, the economist Leonard Nakamura conducted a revisionist exercise. He calculated that the CPI had overstated the US
256 of 278 inflation rate in the 1970s by 1.25 percentage points (compounded) annually and that the figure had slowly risen to 2.75 in 1996. By feeding a corrected CPI inflation figure into the statistics, Nakamura estimated that real average hourly aggregates, far from falling, had actually risen by 25 percent, 1975-96. Moreover, the GDP had grown by twice the received rate during the period and family incomes had shot up by 19 percent. This revelation of the frailty of official figures also cast new light on the deficit. Under the Wilbur Mills index-linking Act, the US government was obliged by law to raise social security provisions annually in accordance with the CPI. The Boskin Commission showed that these increases had been consistently added, at rates made more significant by compound interest, appreciably higher than the real increase in the cost of living. The old, benefiting in any event from an unfunded systems, were doing even better than critics had supposed. This explains why retailers and advertising agents were paying more and more attention to the elderly as sources of spending power. But it also explained why the deficit had grown so fast, because an exaggerated CPI affected government checks going to all kinds of other categories, in addition to the pensioners. (It is true that taxpayers also benefited from an overestimated inflation rate, but only marginally.) The Boskin Commission estimated that, if the CPI remained uncorrected, an extra $1 trillion would be added to the debt by 2008. On the other hand if the corrections were made, one-third of the budget deficit projected for 2005 would disappear. And, projected backwards, it could be seen that the false CPI calculations were responsible for a large percentage of the deficit under Reagan, and for which he was blamed. Moreover, the revised figures for the growth in national wealth, wage rates, and family incomes made it clear that the ‘feel-good’ atmosphere which Reagan succeeded in generating was not just a public relations exercise by the Great Communicator but was solidly based on real improvements. There had been no ‘smoke and mirrors’ after all! Leaving aside this exercise in statistical revisionism, the Reagan years brought solid achievements which were manifestly real even at the time. It was Reagan’s aim, for the start, to restore the confidence of ordinary Americans in themselves and in their country. Reagan was good at paying attention to things which to more sophisticated people seemed so obvious as to be no worth bothering about. He thought that a good deal of America’s pride had rested in the presidency. In his view, the Imperial presidency, from FDR to Nixon, had worked very well, and the diminished presidency of 1974-80 had failed. He blamed Ford and Carter. On August 10, 1974, the day after Nixon left office, Ford ordered the Marine Guard to stand down from the front of the West Wing of the White House in symbolic acknowledgment of the decline in power of the presidency. Carter, a scruffy person at the best of times, wore sweaters doing business in the Oval Office. Reagan ended all that egalitarianism immediately. He did not need to be told that the stage and democratic statesmanship have a lot in common. As his White House administrative officer he appointed a young student of the presidency, John F. W. Rogers, who was delighted to recreate its solemn grandeur. He brought back ‘Hail to the Chief’ and the Herald Trumpeters. Presidential symbolism and sumptuary were brushed up. Staff wore suits and ties to the office–by order. Guards of honor were regularly in attendance and properly inspected. The armed forces were delighted. Foreign visitors were impressed. The public was pleased. And Reagan flourished as the chief actor in a show which was again playing to full houses. But it was more than a show. There was substance. Reagan was not content with the relative decline in US military power. He did not think it was necessary. He was sure it was undesirable. He noted that
257 of 278 defense spending as a percentage of GDP, which had been 13.2 percent at the peak of the Korean War, had fallen to 8.9 percent at the peak of hostilities in Southeast Asia. But the time he reached office it was only 4.8 percent of GNP. One of Reagan’s axioms was that real need in global terms was to be the criterion of defense spending, not financial restraints. He believed, as did Margaret Thatcher, that the flowing tide of Soviet expansion in the 1970s could be reversed by judicious additions to the West’s defense efforts, and a renewed will to resist further encroachments. He also believed (as did she) that Russia was a fundamentally flawed power economically, facing growing pressures of all kinds, and that its will to match the West in global defense would eventually falter and crack provided the West itself reasserted the determination which had been so conspicuously lacking in the 1970s. So he embarked on a rearmament program to recover the lost ground and morale. In current dollars, defense spending rose from $119.3 billion in 1979 to $209.9 billion in 1983 and $273.4 billion in 1986. Reagan said: ‘I asked [the Joint Chiefs of Staff] to tell me what new weapons they needed to achieve military superiority over our potential enemies.’ If it came to a choice between national security and the deficit, ’I’d have to come down on the side of national defense.' One of the results of increased spending was the redressing of the strategic nuclear balance, upset by the fact that Russia had, for nearly a decade when Reagan took office, been outspending the US by 50 percent annually on missiles. Reagan was particularly concerned by the large-scale deployment in eastern Europe of intermediate-range, multiple-warhead SS20 rockets. On June 17, 1980 Margaret Thatcher had negotiated with President Carter an agreement to counter the SS20s by deploying American Cruise missiles in Britain. On the basis of this first move, Reagan and Thatcher were able to persuade other NATO members to provide sites for the Cruise network and also to deploy Pershing missiles. Deploying Cruise in particular served notice on the Soviet government that the era of indecision in the White House was over. Reagan was seen at his most decisive and masterful in his adoption of the Strategic Defense Initiative, a project conceived by his National Security Advisor, Robert C. McFarlane. This was an attempt to provide an effective defense against incoming missiles and so to move away from the horrific concept of Mutually Assured Destruction which had dominated the Cold War in the 1970s. McFarlane and Reagan agreed that MAD was a horrible concept anyway and had the additional demerit that it placed the United States, Russian, and China on the same moral (and technical) level. The SDI (or ‘Star Wars’ as it came to be known), on the other hand, allowed the US to make full use of its advanced technology, where it held a big (and, as it turned out, growing) lead over Russia. SDI was an example of Reagan’s ability to grasp a big new idea, simplify it, and give it all it was worth, including presenting it to the American people with consummate skill. It was the most important change in American strategic policy since the adoption of containment and the foundation of NATO, yet from its inception in 1982 to its adoption (and publication) it took only a year. The old man could hustle when necessary. The rearmament program also included the expansion and training of Rapid Deployment Forces, de-mothballing World War Two battleships and equipping them with Cruise missiles, the development of the radar-evasive Stealth bomber, and a vast panoply of high-technology missiles, defensive and offensive, nuclear and conventional. Strategic planning and tactical training of the US forces were redesigned around the use, for both conventional and nuclear purposes, of these new weapons, a change which was to prove of critical importance in the 1990-1 Gulf War. However, Reagan did not hesitate to use armed force, in appropriate measure, during his presidency. On April 2, 1982, without
258 of 278 warning or declaration of war, Argentine armed forces invaded and occupied the British Falkland Islands in the South Atlantic. Reagan agreed with Margaret Thatcher that this act of unprovoked aggression must be reversed, and the US provided valuable high-technology intelligence assistance to the British forces deployed to remove the aggressors, an operation which ended in the unconditional surrender of the Argentine forces (and, in consequence, the replacement of the Argentine military dictatorship by a democratic regime). In late October 1983 Reagan took decisive action to reverse the violent installation of a Communist regime in the island of Grenada in the West Indies, a move which had been made with Cuban and Russian support and was designed to lead to Communist takeovers in other West Indian islands. Reagan acted at the request of the leaders of Grenada’s neighbors, Jamaica, Barbados, St Vincent, St Lucia, Dominica, and Antigua, and the speed and secrecy with which he moved was an important part of the operation’s success. Reagan took the decision to act on October 21, US troops landed on the 25th and restored constitutional authority, and began withdrawing promptly on November 2. Reagan also took effective action against international terrorism, a growing scourge of the 1970s and 1980s. On July 8, 1985, he branded five nations, Iran, North Korea, Cuba, Nicaragua and Libya as ‘members of a confederation of terrorist states,’ carrying out ‘outright acts of war’ against the US. On April 5, 1986, a terrorist bomb exploded in a Berlin disco frequented by US servicemen, killing one and a Turkish woman, and injuring 200. US intercepts established beyond doubt that Libya had a hand in this crime and on April 14 Reagan authorized US F111 bombers to carry an attack on Gadafy’s military headquarters and barracks in Tripoli, Mrs. Thatcher giving permission for US aircraft to operate from the bases in Britain. This successful raid got the message across to Gadafy and others. Reagan’s confident simplicity and willingness to take risks and act fast continued to surprise his colleagues. Critics laughed at his supposed naivety, but as ‘Bud’ McFarlane would say, shaking his head in wonder, ‘He know so little and accomplishes so much.’ George Shultz, Regan’s Secretary of State, presented a remarkable portrait of his boss. He wrote: ‘Reagan knew more about the big picture and matters of salient importance than most people, perhaps especially some of his immediate staff, gave him credit for or appreciated. He had blind spots and a tendency to avoid tedious detail. But the job of those around him was to protect him from those weaknesses and build on his strengths.’ He had, said Shultz, ‘a strong and constructive agenda, much of it labeled impossible and unsustainable in the early years of his presidency. He challenged the conventional wisdom on arms-control, on the possibility of movement towards freedom in the Communist-dominated world, on the need to stand up to Iran in the Persian Gulf, on the superiority of market- and enterprise-based economies.’ Reagan’s great virtue, said Shultz, was that he ’did not accept that extensive political opposition doomed and attractive idea. He would fight resolutely for an idea believing that, if it was valid, he could persuade the American people to support it. Reagan’s essential achievement was to restore the will and self-confidence of the American people, while at the same time breaking the will and undermining the self-confidence of the small group of men who ran what he insisted on calling the ‘Evil Empire’ of Communism. In this second part of his task, he was aided by an extraordinary stroke of fortune, From December 1979, the Soviet leaders, from a mixture of fear, greed, and good intentions, plunged into the civil war in Afghanistan which they had helped to promote. They thus became involved in a Vietnam-type guerrilla war which they could never win and which placed a growing strain on their resources. ‘The boot,’ as Reagan put it, was ‘now on the other foot.’ In Vietnam, Russia and China, by supplying weapons, had been able to inflict a totally
259 of 278 incommensurate degree of damage on US resources and morale. Now America, in turn, by supplying a comparatively small number of weapons to the Afghan guerrillas, was able to put an immense strain on the Soviet economy and, still more, on the resolution of its leadership. The war lasted a decade and Russia never even began to win it, despite deploying 120,000 troops (16,000 of whom were killed and 30,000 wounded) and immense numbers of tanks, aircraft, and helicopters, many of which were destroyed by US-supplied weapons. During the last year of Reagan’s presidency, the new Soviet dictator, Mikhail Gorbachev, accepted the inevitable: on February 8, 1988 he announced that Soviet troops would pull out of Afghanistan completely, and the withdrawal was completed by February 15, 1989, just after Reagan handed over to his successor. The cost of the war to the already strained and declining Soviet economy was unbearable and undoubtedly played a major role in bringing about the changes in Moscow’s thinking which began in the mid-1980s and soon accelerated. On top of the debilitating effect of Afghanistan came the Reagan rearmament program, and especially the Strategic Defense Initiative. In a desperate attempt to match the US technological effort in defense, the Soviet leadership did the unthinkable: it attempted to reform the Marxist-Leninist economy in the hope of reinvigorating. In the process they lost control of the system as a whole, saw the Evil Empire disintegrate, and watched, almost helpless, as the great monolith of the USSR collapsed. So Communism was submerged, the Cold War ended, and the United States became the world’s sole superpower. The effect of SDI was to add to the stresses on the Soviet economy and thus eventually destroy the totalitarian states. As Vladimir Lukhim, Soviet foreign policy expert and later ambassador to the United States, put it at the Carnegie Endowment for International Peace in Washington in 1992: ‘It is clear that SDI accelerated our catastrophe by at least five years.’ The end of the Cold War began on September 12, 1989 when the first non-Communist government took over in Warsaw, continued with the destruction of the Berlin Wall on the night of November 9-10, and culminated in the first half of 1991, when the Soviet Union was abolished and Boris Yeltsin was elected first democratic President of a non-Communist Russia. All this took place after Reagan had left the White House but it came as no surprise to him. He had never accepted the view, commonly expressed even late in his presidency, that the US was in irreversible decline, especially in relation to Russia. One of the most fashionable books of 1988, much flourished by liberal pundits as a stick to beat the Reagan administration, pointed to the many ‘threats’ to America’s economic wellbeing, especially from Mexico: ‘By far the most worrying situation of all…lies just to the south of the United States, and makes the Polish “crisis” for the USSR seem small by comparison.’ Reagan was content to follow the guidance of his own President’s Committee on Integrated Long Term Strategy, which also in 1988 published its long-term forecast, Discriminate Deterrence. This argued that there were no economic reasons why the US should not continue to shoulder its superpower burden and continue its limited role of the preserving peace up to the year 2010 and beyond. It predicted that, by this date, the USSR would have sunk to the fourth place in the world league (fifth if the European Union was counted as a single power) and that America, with an $8 trillion economy, would still be producing twice as much as its nearest rival, China. The events of the years 1989-91 reinforced the essential truth of this calculation, and no developments have occurred since the early 1990s have undermined it. Johnson, Paul (2009). A History of the American People (pp. 917-931). HarperCollins e-books. Kindle Edition.
260 of 278 Reagan’s Vice-President, George Bush, won the Republican nomination in 1988 by acclamation because he was identified with the Reagan achievement, and he won the election handsomely because he promised that he would carry on in the Reagan spirit, and was generally believed. His opponent, Michael Dukakis, governor of Massachusetts, said he stood on his state record, which he said demonstrated his ‘competence,’ but he made of mess of organizing his campaign, which suggested otherwise. The result gave Bush (and his running mate Dan Quayle, Senator from Indiana) a comfortable plurality, 48,886,097 to 41,809,074, and a big majority in the electoral college, 426 to 111. It had been forgotten, however, that Bush had originally hotly opposed Reagan in 1980 as a maverick and extremist, and had joined Reagan on the ticket as part of a balanced compromise package. He was not fundamentally in sympathy with Reagan’s aims either intellectually or by temperament and, more important, he lacked Reagan’s simple clarity and will. Bush was at his best when he had a more resolute foreign ally to stiffen his resolve, and indeed to make up his mind for him. One of the consequences of the end of the Cold War was that Russia (and to some extent even China, which remained Communist) began to play a more responsible role at the United Nations and so allowed the Security Council to operate, for the first time, as its founders had intended. During the 1980s, the Iraqi dictator Saddam Hussein, who was in bitter dispute with fundamentalist Iran, had received some support and encouragement from the West, not least America, on the basis of the old adage, ’my enemy’s enemy is my friend.' Thus encouraged, he had used his country’s oil revenues to build up immense armed forces. Suspicion of Saddam’s intentions had been growing, however, and on July 27, 1990 the US Senate, without any prompting from the administration, prohibited the sale of any further military technology to Iraq and, for good measure, cut off farm credits. By July 31, over 100,000 Iraqi troops were massed on the border of Kuwait, the small but immensely rich Gulf state which was a major supplier of crude to the United States and many other advanced countries. At the time it was widely reported that the American ambassador in Baghdad had failed to warn Saddam during a meeting at this time that an occupation of Kuwait would be regarded by Washington as a threat to America’s vital interests, though this was denied in evidence before the Senate Foreign Affairs Committee in March 1990. At all events, on August 1, 1990 Saddam’s army invaded and occupied Kuwait and annexed its oilfields. Happily, this unprovoked act of aggression coincided with a private international meeting in Aspen, Colorado, attended by both President Bush and Margaret Thatcher, who was then still British Prime Minister. Bush’s first inclination was to concentrate on the defense of Saudi Arabia, America’s chief ally (and oil supplier) in the area. But Mrs. Thatcher, with the Falklands campaign in mind, forcefully persuaded him that the act of aggression must be reversed, not merely for the sake of the unfortunate people of Kuwait, who were being treated with merciless cruelty by the Iraqi troops, but to deter any other potential aggressor. Bush agreed, that was the plan adopted, the Security Council was consulted and signified its consent, and over the next few weeks, under Bush’s leadership, an international coalition of over fifty states was assembled. An enormous armed force, chiefly composed of American units but with significant contributions by Britain and France (as well as many Arab states) was assembled in the area. In December 1990 Bush, quoting the ‘Carter Doctrine,’ secured the consent of
261 of 278 the Democratic Congress to use force, and Saddam was told that, if his troops were not withdrawn by January 15, 1991, he would be ejected from Kuwait by force. By this time, Mrs. Thatcher had been ousted by an internal coup in her own party, being succeeded by the featureless John Major. But the momentum of Operation Desert Storm, as it was called, was unstoppable, even in Bush’s hands, and when Saddam missed the deadline, intense aerial bombing of Iraqi military targets began. The ground offensive, involving units from the huge coalition army (540,000 US troops, 43,000 British, 40,000 Egyptian, 16,000 French, and 20,000 Syrians) began on February 24 and lasted five days, during which all Iraqi troops had been cleared from Kuwait or surrendered, and Saddam’s 600,000-strong army decisively defeated. This brief campaign was a triumph for General Norman K. Schwarskopf, the American force commander, and the chairman of the Joint Chiefs of Staff, General Colin L. Powell, who had organized the gigantic build-up and directed the overall strategy. But neither was anxious to press on to Baghdad and impose a democratic alternative to Saddam’s military dictatorship, which they saw as a ‘political’ extension of a UN-authorized campaign which was entirely military. In the absence of pressure from Mrs. Thatcher to finish the job, Bush was content with the liberation of Kuwait. So an unrepentant Saddam was left in power, with much of his armed forces intact, and the United States was left with the burden of maintaining large forces in the area and supervising Saddam’s adherence to the terms he had agreed for a ceasefire and to UN resolutions. This unsatisfactory conclusion and aftermath to one of the most brilliant military campaigns in US history, which had demonstrated the power and efficacy of the new generation of sophisticated weapons produced by Reagan’s rearmament program, naturally lowered public confidence in President Bush’s judgment and resolve. He was increasingly seen as well meaning but ineffectual and indecisive. There was indeed something fundamentally wrong with Bush, to which his curriculum vitae gave a clue. In addition to serving two terms as vice-president, he had been a Texas oilman, a Texas congressman (1967-70), American ambassador to the UN (1971-2) and to China (1974-5), head of the CIA (1976) and chairman of the Republican National Committee (1972-4). But he had done all these jobs for brief spells before moving on, and there was always the suggestion that he was not a stayer. Moreover he had fought two unsuccessful campaigns to get into the Senate, as well as his aborted bid for the presidency in 1980. Though presenting himself as a large-scale Texan operator, he had in fact been born in Massachusetts, had an Ivy League education, lived in Maine, and worshipped in an Episcopalian church: he was, in short, an Eastern Wasp in a stetson. He was curiously inarticulate for a well-educated man, used words clumsily (unlike Reagan, whose verbal touch was always sure). He had an unfortunate habit of abandoning his written text, in speeches, for extempore remarks, and beginning sentences without being sure what his main verb would be, entangling himself in syntactical confusion and this ending each utterance on an uncertain note. Bush was always a gentleman and, so long as the Reagan penumbra surrounded him, did moderately well. Then, as impact of Reagan faded, Bush faded with it. Panama was a case in point. President Carter had concluded a treaty with Panama, ratified by the Senate on March 16, 1978, which in effect handed over the Panama Canal in stages to a sovereign Panamanian government. This retreat of US power had been much criticized, and the feeling that America had got a poor deal was reinforced by the behavior of President Manuel Noriega, who used the Panamanian government to operate a huge drug-smuggling business in the United States. In 1989 Florida grand juries indicted Noriega on a variety of serious drug offenses and demanded his extradition. America imposed economic sanctions when
262 of 278 Noriega refused to surrender to the US authorities and, after a US naval officer was killed by Panamanian police on December 16, Bush brought himself to order an invasion of the country by 10,000 American troops. Panamanian dissidents duly overthrew the government; Noriega was arrested on January 3, 1990 and taken to Miami, where he was convicted of drug-smuggling on April 9, 1992 and sentenced to forty years in a top-security prison. But, characteristically, Bush did not follow up this striking, and much approved, success by revising the operations of the Panama Canal, where conditions continued to deteriorate under Panamanian control. Bush’s instincts were often right but he did not know the meaning of the word ‘through.’ Thus the fact that he delighted to display a portrait of Theodore Roosevelt in the Cabinet room and tell visitors about his quiet voice and Big Stick, was an ironic comment on his administration. Nevertheless, it is likely that Bush would have been reelected in 1992 had it not been for the intervention of a Texas billionaire, H. Ross Perot, in the race. Perot, born in 1930, was an Annapolis graduate who left the US Navy in 1957 to found Electronic Data Systems, which he built into a firm worth over $2 billion by the mid 1980s. Campaigning on a platform of eliminating the deficit and paying off the national debt, Perot originally attracted more interest, in a poor field, than any third candidate since the Bull Moose Party. However, his indecisiveness–he filed his candidacy on March 18, 1992, pulled out on July 16, and reentered on October 1–ruined his chances of a dramatic upset. Even so, he polled 19 percent of the votes, the largest third-party fraction of the polls since Theodore Roosevelt in 1912 (27.4 percent) and Millard Fillmore in 1856 (21.6 percent). The effect of the high Perot poll was to let in a lackluster Democratic candidate, William (‘Bill’) Jefferson Clinton, governor of Arkansas. Born in 1946, Clinton came from a modest family background and rose through academic performance, was Rhodes Scholar at Oxford, graduated at Yale Law School in 1973, and taught law at the University of Arkansas. Critics dismissed him as a ‘spoiled Sixties rebel’ and ‘draft dodger’ who had consistently taken up anti-American postures from Vietnam to the Gulf War. Others drew attention to his career in the murky waters of Arkansas politics. There, he ran unsuccessfully for Congress at thirty-two, was elected Arkansas attorney-general in 1976, and became the state’s youngest governor in 1978. Although defeated in 1980, he won reelection as governor in 1982, 1984, and 1986. In Arkansas he was universally known as ‘The Boy,’ and when elected president of the United States in 1992, with 43 percent of the vote, he was the first minority President since 1976 and the youngest since Kennedy was chosen in 1960. Clinton, and his wife Hillary Rodham Clinton, rapidly ran into trouble in the White House. One reason was inexperience. Clinton had great difficulty in completing his administration and getting Senate approval for some of his nominees, especially for the post of attorney-general. When he finally succeeded, his choice, Janet Reno, soon involved the administration in a disastrous episode near Waco, Texas, where federal agents conducted an ill-planned assault on the headquarters of the Branch Davidian religious sect, run by a messianic figure called David Koresh. The raid, by nearly 100 agents from the Bureau of Alcohol, Tobacco, and Firearms, was a failure and led to five deaths, four of them agents. Reno then took over personally and, tiring of negotiations, she ordered a military-style attack with heavy equipment and gas, during which the entire compound went up in flames, in which seventy-eight of Koresh’s followers were burned alive. Among the dead were seventeen children. On the more positive side, Clinton entrusted the presentation of his health-care bill on Capitol Hill to his wife, and outspoken and venturesome lady who impressed the legislators, one of whom, Democrat
263 of 278 Dan Rostenkowski, of the House Ways and Means Committee, told her: ‘In the very near future, the President will be known as your husband.’ This turned into an accurate, if embarrassing, prophecy since the First Lady was soon involved in a complex financial investigation into an Arkansas firm with which she was connected, the Whitewater Development Corporation, and a number of other awkward matters. Indeed she became the first President’s wife to be subpoenaed in a criminal investigation. … Johnson, Paul (2009). A History of the American People (pp. 931-935). HarperCollins e-books. Kindle Edition. The failures and moral inadequacies of Clinton did have one important, indeed historic consequence however. In the mid-term elections of 1994, Clinton’s unpopularity enabled a brilliant political tactician, New Gingrich, the Republican Minority Whip in the House, to organize a nationwide campaign which ended in the Republican recapture of both Houses of Congress. This victory, the biggest Congressional upset since 1946, was significant for a number of reasons. For all practical purposes, the Democrats had dominated Congress, except for one or two brief intervals, since 1931. There had been no precedent for this long legislative hegemony in American history and, the Democrats tending to be the high-tax, high-spending party, their continued tenure of the Constitution’s financial mechanism explained why the federal government had continued to absorb so large a proportion of the GDP, why the deficit had mounted, and why national indebtedness had become such a problem. What was so remarkable about Democratic control of Congress was that it had continued during the period when the nation preferred to elect Republican presidents. Thus in every Congress from 1961 to 1993 (the 87th to the 103rd), the Democrats had a majority in the House, even though the Republicans held the presidency in ten of them. These majorities were sometimes overwhelming and always substantial: even in Nixon’s best year, 1973, for instance, the Democrats still had a margin of 47 in the House. Carter, a weak Democratic president, nevertheless had a majority of 149 in 1977. Under Reagan, who twice won Republican landslides, the Democratic majority varied from 51 to 104. Reagan did contrive, however, to exert a pull over senatorial elections and had a small Republican Senate majority in three of his four Congresses. But the situation returned to ‘normal’ under Bush, who had to work throughout his presidency with Congresses in which his opponents controlled both Houses easily. Johnson, Paul (2009). A History of the American People (pp. 938-939). HarperCollins e-books. Kindle Edition. In August 1996 Clinton signed into law the Welfare Reform Act, the first major piece of legislation from the new Republican Congress, which dismantled a fundamental part of the welfare-state structure going back to the New Deal in 1935. Under this Aid to Families with Dependent Children ceased to be an open-ended distribution of cash entitlements to individual beneficiaries and became a $16.4 billion lump-sum ‘block grant’ to the fifty states to allocate as they believed more effectively. This return of financial power from the federal government to the states set up pragmatic competition between them in ways to use money to reduce poverty. It marked the first change of approach to the problem since Lyndon Johnson declared ‘unconditional war on poverty’ in 1964–a war which had been going on longer than Vietnam, had cost more, and had been even less successful. Clinton’s action in signing the Bill into