The decades following World War 2 served to deepen the divide between the left and the right in America as government grew rapidly during the 1940s and 50s then people saw that sometimes government gets corrupted or fails to so they started to push against it in the 60s and 70s.
The interesting thing to me is that the civil rights campaigners and anti-war protesters were not inherently liberal or conservative. They could have been embraced by either side. They both wanted less government involvement and interference which is the hallmark of conservatism.
However, their move away from traditional “family values” put them at odds with the conservative establishment. Sexual liberation, drug culture, anti-war pacifism, and even racial equality were seen as harmful influences to American culture. So they joined the left, for the most part, and the idea of maintaining traditional values became equated with government protection. Only this time, the threat wasn’t from a foreign army, but a foreign idea.
The 1980s
Ronald Reagan was just the patriotic shot in the arm that America needed after the long slog that was the 1970s. He was a master communicator who believed that government was not the solution to the problem, it was the problem. He condemned the excesses of the welfare state that had been created, he advocated for anti-union free-market economics, and he didn’t want to handle the ongoing Cold War with namby-pamby diplomacy but with a show of power and strength.
He was also beloved by the coalition of religious conservatives known as the Moral Majority (founded by Jerry Fallwell in the 1970s in opposition to abortion rights and in favor of prayer in schools) for standing for those aforementioned “family values.” It must be noted that even though Reagan himself seemed to be warm to civil rights (he did, after all, create Martin Luther King Jr. Day) many who followed him were those in the south who felt as though the civil rights movement was an attack on states rights. He was even endorsed by the Ku Klux Klan in the 1980 election.
There are two things that Reagan is best known for bringing about during the 1980s. The end of the Cold War (which we will discuss next week) and his economic reforms (sometimes called trickle-down economics or Reaganomics)
Economic Reform
How do you end the stagflation of the 1970s? New Deal Liberals would have probably begun a large infrastructure project to allow big government to distribute wealth evenly but Reagan and his economic advisors believed that injecting the country with money would kickstart the economy by allowing the rich to invest and grow private businesses while middle and lower-income classes would be freed up to use their money on discretionary spending.
He did this through massive tax cuts particularly for the wealthy (though just about everyone saw a decrease) and decreased government spending. From 1981-1986 the top tier tax bracket saw their income tax rate fall from 70% to just 33%. Meanwhile, the country’s production rate steadily increased the Per Capita GDP (Total value of finished goods and services divided by population) went from $14,000 in 1981 to over 22,000 in 1989.
Economists bicker back and forth about what exactly caused the economic recovery of the 1980s. Was it Reagan’s broad tax decreases, or the Federal Reserve’s reduction of interest rates, maybe it was the austerity of reducing wasteful government spending (Oh, that’s right spending never decreased). I think that the answer is more than simply one of these but all of them working together along with a technological boom that had started in the mid-1970s and Reagan was lucky enough to be in office as it came to bear fruit.
You may recognize many of the names in that technological boom. Bill Gates started a little company called Microsoft in 1975, Steve Jobs countered by beginning Apple in 1976, and Atari released the Atari 2600 in 1977. These three events would effectively begin the computer and electronics entertainment industry that we know and love today. This technological revolution would produce new opportunities for growth that hadn’t been seen since the industrial revolution.
However, one of the lasting legacies of Reaganomics is the increase in income inequality. This began under Reagan but increased to unheard-of levels in the 1990s during the Clinton years. Take for instance the gap between the average salary of a CEO and a worker within the company. There has always been a gap as there should be, but that gap nearly doubled during Reagan’s time in office so that in 1989 if an employee made 15,000 a year then the CEO was making around 900,000.
Here’s another look at that gap. Notice the black line. That is 1968. Up until that point, there had been a steady growth in the years following World War 2 for everyone pretty equally. In 1968, we see the beginning of the stagflation that carried through Nixon, Ford, and Carter. But in 1982 something happens that woke up the economy (at least for the top 10%). Those of us in the bottom 90% of Americans have not seen any increase to our income over the last 45 years while the top 10% began to increase rapidly and have barely looked back.
This tends to make economists think that while Reaganomics did increase the output of the economy, the benefits did not “trickle-down” as much as promised. What do you think about all this? I know I just threw a lot of numbers at you.
Whether you see Reagan’s presidency as a success or a setback largely depends on your political leanings. I’d love to hear your thoughts below. In the meantime, I thought you might need a joke. Reagan was an excellent speaker and it is hard to listen to him and not like him. That alone made him a great president.
i don’t know about you guys but a lot of those jokes went over my head and didn’t make sense. I’m also not the most politically knowledged person so i cant make a statement over whether he was a good president or not, but he seemed to be a nice person. A lot of these numbers and statistics make my brain short circuit and i don’t really understand them so i also cant really make a statement about those just because numbers and stuff aren’t my strong suit.
Yea, he did seem to be really nice, and politics are very confusing so I see where you are coming from.
Basically the numbers say that the top 10% ‘s income increased dramatically (highest percent of income change was about 250% in 2007) and the other 90% increased by about 100% by 2010. The other graph shows that the CEOs of companies had a boost in income.
I love Ronald Reagan! His one liners are great, he totally changed economics, he got shot and survived, and he ended the cold war. What more could you ask for in a President,
Seems like a pretty good guy, but was it really, solely him who changed economics?
Of course not. History (and economics) is not that simple. But many would point to his leadership and change in economic policies as the catalyst for the change in trajectory.
Reagan was a good president, but the one thing that didn’t follow through was that the wealth would trickle down. It trickled down a little, but mostly it just made the rich richer.
its funny reagan was endorsed by the kkk
Funny isn’t the word I would use…
I would say that Ronald Reagan did some things good, and somethings not as impressively. I guess he helped in the economic recovery, but it didn’t go as planned when only the rich seemed to get richer. Course, it isn’t just about one man.
He definitely made many smart decisions but not everyone is perfect so obviously some things didn’t go exactly how he had planned. Everyone makes mistakes but overall I think he did make a difference.
thx this was super informational
Incredibly well thought out comment Miguel! I think you’re going to get extra points for this one!
Why did the KKK endorse Ronald Reagan when he created MLK Jr day? It goes completely against what they stood for. In fact, it would make more sense if they tried to assassinate him. If they really liked him, did he have any influence over the KKK to disband them and abolish their disgusting ways?
I was also confused concerning your first question. He was in direct opposition to some of their core values (even if he endorsed others).
I can provide some context here. He was endorsed for the 1980 election before he created MLK Jr. Day. But by the 1984 election he had come out and condemned the KKK.
I find it interesting that the civil rights campaigners and anti-war protesters were not inherently liberal or conservative. They could have been on either side. Its crazy that Reagan was shot many times so close to the heart but still survived. I never knew that he used comedy and humor to influence people.
I had no idea that Ronald Reagan was a Hollywood actor (long) before his presidency. He certainly had an interesting career path. I have no doubt that his previous occupation as an actor aided him in his appearance to the American people.
It was interesting to learn more about Ronald Reagan and the Reagon Revolution
This was so informational about Ronald Reagan. I did not know that about him
Reagen was an amazing and comedic president, but I think he just increased a big problem in the US. What happened is that the people who didnt need any more money like CEOs, just got more income
didnt you say reagan was your favorite president or was that eisenhower?
I like Ike!
The idea that wealth did not trickle down has always been a Democratic argument rooted in the Democrats’ obsession with money. In reality, trickle-down is extremely complex and doesn’t lend itself to objective analysis – especially in light of its controversial political context. Even the professors are biased.
I say that because nobody argues trickle-down in other areas. Health is more important than money. We don’t argue that people with better health, friends, prettier spouses, better school marks, or other desirables somehow use the system to their advantage to deny those less fortunate.
The real question isn’t whether or not wealth trickled down, but whether or not trickling down of wealth is even possible or important. A better approach would be to establish an objective measure of society where the typical person has a high chance of succeeding – if they try, and leave it at that. I like to call this Conservatism. The criticisms of trickle-down are rooted in top-down thinking, whereby it’s assumed that at any given time, if something is wrong with a nation’s patterns of wealth distribution (or indeed just about any of its social issues), this needs to be blamed on that nation’s leaders – not on its citizens.
What it is with this mindset that the citizens of any and every nation are blameless at large, I don’t know, but some will even go as far as blaming society (and their leaders) that they are fat, on drugs, or poorly educated. I can make an argument that our leaders are even poor quality because our deteriorating voter quality “trickles up” to low expectations and we get terrible candidates as a result. But overall we can’t ignore that the people of any generation are probably more responsible for a good system not working than any leader. I think trickle-down works great – as long as the people being trickled down to are quality people. When they’re so spoiled that they don’t even believe that their parents walked two miles to school, they get into this weird quirk of human behavior in that the better people have it, the more they complain about not having it better still – and that sets them up to destroy an optimum system.