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In 1980, Ronald Reagan, a former movie actor, was elected president as part of a big election victory for the Republicans. In a three-way race –Jimmy Carter, the incumbent, was the Democratic nominee and John Anderson ran as an independent—Reagan won with 489 electoral votes and 50.7% of the popular vote (Carter won only 49 electoral votes and 41.0% of the popular vote). The Republicans also flipped 12 Senate seats, becoming the majority in the Senate for the first time since 1955, and gaining 34 seats in the House, although it stayed in Democratic control by 243-193.
The Carter Years. Carter had been widely unpopular because his four years were years of high inflation (for the Carter years inflation averaged 10.4%) and a disorienting energy crisis. NPR captured the feeling at the time. “Independence Day, 1979: Lines at gas pumps stretch for blocks, and President Jimmy Carter is scheduled to address the nation. But when he cancels last minute and disappears from the public eye, rumors spread of a health problem or, even worse, that he’s left the country. After 10 days, he reemerges with a speech — to address the energy crisis, unemployment, inflation and something else a bit more nebulous:
“The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.”
The speech was later dubbed the “malaise speech,” even though Carter never used that word. “Jimmy Carter had grown increasingly convinced that Americans had to face up to the energy crisis, but they only could do this if they faced up to the crisis in their own values,” says Kevin Mattson, author of “What the Heck Are You Up To, Mr. President?”, which examines the underlying themes of Carter’s speech. “He tried to push the energy crisis on to a kind of moral and civic plane, and the speech was used to unify around a sense of civic sacrifice.” In fact, Carter enjoyed an immediate 11 percent bump in his job approval rating in the days that followed. Clearly many agreed with Carter’s line that the nation was mired in a “moral and spiritual crisis.” The President, however, failed to capitalize on the resonance of his speech with Americans. Just two days after his speech, Carter fired his entire cabinet, which seemed to suggest that his government was in disarray.
Then, in November 1979, 52 American diplomats were taken hostage by Iranian students in the midst of the Iranian Revolution. Carter seemed ineffectual in the face of Iranian resistance to release the hostages; they were not released until Reagan’s inauguration.
The graph below presents GDP growth and inflation rates between 1970 and 1988. Carter’s presidency was a time of “stagflation.”
Implementing the Reagan Revolution. Although the Democrats controlled the House, the Republicans proceeded as if they had a popular mandate. They managed to pass a major tax reduction, cut government spending and reduced regulations. All of this was expected to herald a new era of small government. As laid out in Wikipedia, “Reagan believed that reducing the role of the government would lead to increased economic growth, which in turn would lead to higher revenues that would help pay down the national debt. Working with Congressman Jack Kemp, the Reagan administration introduced a major tax cut bill that won the support of enough Republicans and conservative Democrats to pass both houses of Congress. In August 1981, Reagan signed the Economic Recovery Tax Act of 1981, which enacted a 27% across-the-board federal income tax cut over three years, as well as a separate bill that reduced federal spending, especially in anti-poverty programs.”
The economic theory behind this was something called the “Laffer Curve,” jotted down on a napkin over lunch. Arthur Laffer, an economist working in the Business School of the University of Chicago, posited that cutting taxes would not only spur growth, but it would spur such an acceleration of growth that total taxes would increase.
This “Voodoo Economics” as President Bush termed it, turned out to be precisely that. The Laffer Curve had its purest experiment in Kansas in 2012-2013. As seen in the chart above, the Kansas experiment was a dismal failure. According to Wikipedia, “The cuts were based on model legislation published by the conservative American Legislative Exchange Council (ALEC), supported by supply-side economist Arthur Laffer, and anti-tax leader Grover Norquist. The law cut taxes by US$231 million in its first year, and cuts were projected to total US$934 million after six years, by eliminating taxes on business income for the owners of almost 200,000 businesses and cutting individual income tax rates.[Brownback compared his tax policies with those of Ronald Reagan, but also described them as “a real live experiment”, and had predicted that by 2020 they would have created an additional 23,000 jobs.”
However, by 2017 state revenues had fallen by hundreds of millions of dollars, causing spending on roads, bridges, and education to be slashed. With economic growth remaining consistently below average, the Republican Legislature of Kansas voted to roll back the cuts; although Brownback vetoed the repeal, the legislature succeeded in overriding his veto.
Nationally, economic growth stalled, deficits increased and Reagan’s popularity plummeted (his approval rating fell to 35%). However, A strong economic recovery began in 1983 boosted Reagan’s approval ratings, and the administration argued that the tax cuts had been the primary factor in turning the economy around. In the 1984 presidential election, Reagan won his party’s re-nomination without facing a serious challenge, while former Vice President Walter Mondale won the Democratic nomination. On election day, Reagan won 59% of the popular vote and carried 49 states, leading to speculation of a permanent realignment in U.S. politics towards the Republican Party.
But the Reagan Revolution would disappoint its supporters. The large deficits (see chart below), hindered further domestic policy initiatives and. In the end, his most enduring legacy was his appointment of conservative justices in both the Supreme Court and lower courts. What Reagan did not do was inaugurate an era of shrinking government.
Forty years after Reagan was first elected the majority of Americans believe that government should play a major role in ensuring safe food and medicine, handling threats to public health, strengthening the economy, protecting the environment, maintaining infrastructure, ensuring access to health care and helping people get out of poverty (see figure below). America is slowly changing its views on the role of government, and the old conservative shibboleths no longer have currency.
For example, Obamacare was a public relations disaster; Republicans convinced Americans that the government was overreaching. In 2000, 59% of Americans held that provision of health care was a government responsibility, while 38% held the opposite view. From 2009 to 2014, the number of Americans who believed that providing health care was a government responsibility dipped below the number who believed the opposite. But, beginning in 2014, opinions changed, and by 2020, the proportion of people who believed government had a responsibility here increased to 60%, while the opposing position was only held by 37%.
Americans also believe that the government has an important role in helping get people out of poverty. A 2014 Report from the Center for American Progress (a left-leaning think tank) found that “Americans strongly believe that poverty is primarily the result of a failed economy rather than the result of personal decisions and lack of effort. In a forced choice test of ideas, nearly two in three Americans (64 percent) agree more with a structural argument about the causes of poverty. A majority agree that “Most people who live in poverty are poor because their jobs don’t pay enough, they lack good health care and education, and things cost too much for them to save and get ahead,” underscoring the current economy’s failings in the areas of wages, health care, education, and cost of living. In contrast, only 25 percent of Americans agree more with a personal cause: “Most people who live in poverty are poor because they make bad decisions or act irresponsibly in their own lives.” Even white conservatives and libertarians prefer the structural vision of a failed economy to personal reasons for poverty by a wide margin of 63 percent to 29 percent, respectively.”
The same report found that “Americans also express very strong support for a number of policies to help reduce poverty rates, particularly with jobs, wages, and education but also on more traditional safety net items. Of the 11 policy ideas tested, five proposals received 80 percent or higher total support and 50 percent or higher strong support from Americans. These five policy proposals are: help low-wage workers afford quality child care (86 percent total support and 52 percent strong support); expand nutrition assistance to provide families with healthy food and enough to eat (85 percent total support and 50 percent strong support); make universal pre-kindergarten available for all children (84 percent total support and 59 percent strong support); expand publicly funded scholarships to help more families afford college (84 percent total support and 54 percent strong support); and increase the minimum wage and make sure it rises with inflation (80 percent total support and 58 percent strong support). A second tier of anti-poverty proposals includes ideas for expanded tax credits such as the Earned Income Tax Credit, or EITC, Child Tax Credit, and access to affordable health coverage, as well as proposals for a new national jobs program and more refinancing of mortgages. Roughly three-quarters of those polled support these proposals, and more than 40 percent strongly support them.
Progressive ideas are slowly but steadily defeating conservative ideas. This should not be surprising. Societies tend to move forward. The word “progressive” includes the word “progress.” Consider all the major initiatives that created government responsibilities since the New Deal: social security, Medicare, Medicaid, Head Start, the Supplemental Nutrition Assistance Programs (SNAP), Obamacare, the Temporary Assistance for Needy Families (TANF), and the Earned Income Tax Credit (EITC). These programs are now fixtures of our governmental landscape. The current fights are not whether to end them, but how to expand them. Conservatives are forced to fight rearguard actions, harkening back to a better past that has little resonance with a younger and increasingly diverse electorate. Our political structure (which disproportionately favors rural areas) favors these rearguard actions, at least for a time, but the arc of progress is bent toward creating a more inclusive society that takes care of the basic needs of all of its people.
The chart below demonstrates the shift toward progressivism between 1994 and 2015.
The Reagan Revolution was a failure. The real revolutionaries were Franklin Delano Roosevelt, Harry Truman and Lyndon Johnson. We are living in the world they created.