Reagan vs. Clinton

Dear E.J.,

       As this is my concluding statement, let me say how much I have enjoyed this dialogue with you. Although my book Ronald Reagan: How an Ordinary Man Became an Extraordinary Leader exposes the whopping errors of a legion of Reagan’s critics–including Arthur Schlesinger, Strobe Talbott, Garry Wills, and others–these pundits have responded to my public critique by going into hiding. Possibly the “wise men” are embarrassed at being consistently outsmarted by a “dummy” like Reagan. But you have gallantly entered the ring, and these have been spirited sparring sessions.
       I’ll begin by answering a couple of your questions. Reagan’s policy of conducting secret negotiations with Iran, a regime he called “Murder Inc.,” was a huge blunder. In my book I cite a White House aide saying that for Americans, discovering that Reagan was trading with Iran was like finding out that John Wayne had been selling liquor and firearms to the Indians!
       Yet we might explore the question further by asking: Why did Reagan do it? Bill Clinton’s scandals–Whitewater, Travelgate, Filegate, Paula Jones, the campaign-fund-raising shenanigans–have all involved self-aggrandizement and the pursuit of personal gain. Reagan, by contrast, was rendered gullible because he identified with the suffering of the hostages and their families. My point is that while the media speculate about “Teflon Bill” and “Teflon Ron,” there is a world of difference in the motives that guided the two men into the scandals that plagued their administrations.
       On the tax-reform bill of 1986: I didn’t address this issue earlier because I didn’t think your point here was especially strong. The Reagan administration introduced the bill shortly after Treasury Secretary Donald Regan informed Reagan that a review of tax returns had showed that many major corporations had taken advantage of tax loopholes to pay no taxes at all. Both men agreed it was wrong and that further reform of the Internal Revenue Code was required.
       At the time, most pundits felt that after the landmark tax changes of 1981, another major effort at tax reform was never going to succeed. But Reagan knew that some Democrats, such as Bill Bradley and Dan Rostenkowski, supported a restructuring of the tax code. The Reagan administration negotiated a compromise: Republicans would agree to close loopholes if Democrats would agree to lower tax rates. And the top marginal rate, which was 70 percent when Reagan came to office and had been lowered to 50 percent in 1981, was further reduced to 28 percent.
       You charge me with arguing that a mere correlation between events and Reagan’s tenure proves that Reagan did all the things that happened under his watch. But my argument is hardly as simple as that. Rather, when we come across remarkable and unforeseen developments, we have to ask: Did all these things happen purely by chance? If not, what factors can be reasonably credited with producing them? Specifically, what policies helped to tame inflation after an era of double-digit price increases, to revive economic growth after the malaise of the Carter years, or to bring about the end of the Soviet empire after a period in which the Soviets seemed in the vanguard of history?
       When we consider that Reagan–in complete defiance of the prevailing wisdom–predicted these outcomes, implemented policies to bring them about, and then witnessed them occur, we have to take seriously the possibility that this was not another timeserver but one of those few men who truly changed the world in which we live. By contrast, Clinton inherited a country that was already enjoying the blessings of post-Cold War peace and a rising economic tide. Sure, he deserves some credit for not screwing it up. But that is a much less impressive accomplishment than turning the country and the world around.
       Nowhere do I argue, as you allege, that “what led to the economic recovery was Reagan’s massive deficit.” The 15-year Reagan boom was propelled by sharply lower marginal tax rates, together with other Reaganite policies of deregulation and privatization. Reagan’s rhetoric as well as his policies validated the achievements of the entrepreneur rather than the social worker or government bureaucrat. Thus my book makes the case that the economic and technological surge of the 1980s was no accident. Yes, the results were a tribute to the functioning of free markets, but Reagan’s policies created an environment in which markets could flourish relatively unmolested by meddlesome bureaucrats.
       You say that Reagan could have prevented the large deficits of the 1980s by settling for a smaller tax cut or a more modest defense buildup. The flaw in your argument is your assumption that a smaller tax cut would have had no effect on slowing economic growth, or that a scaled-back defense buildup would have been just as effective in taking the Soviets to the edge of bankruptcy. Is there any firm basis for such claims?
       It is so easy, with hindsight, to issue these pronouncements. It’s like saying, “Wellington could have prevailed at Waterloo with fewer soldiers, so it was a big waste for him to deploy so many men.” Even if you are right about the premise, Wellington had no way of knowing this in advance. Statesmen can only be judged based on the information available to them at the time.
       Reagan made the judgment call in the early 1980s that it was more important for the United States to cut taxes in order to galvanize economic growth, and to stop Soviet aggression through a massive military buildup, than it was to balance the budget. Leaders have to establish priorities. While Reagan said during the 1980 campaign that he wanted a balanced budget, he made it clear at the outset of his administration that he was not willing to do it at the expense of his tax program or his defense program. If we cannot balance the budget now, Reagan said publicly in 1981, “we’ll have to do it later.”
       Throughout the 1980s liberal pundits like Lester Thurow predicted that the $200-billion deficit would revive inflation, drive up interest rates, and wreck the economy. None of this happened. And you do not seem to dispute my assertion that the two main reasons for the balanced budget of today is a 15-year spiral of economic growth and huge defense savings that have resulted from the ending of the Cold War. Compared with these two factors, the tax increases of the Bush-Clinton era are relatively insignificant.
       Finally let me address your point about cultural decline. Reagan has been criticized for paying lip service to the social issues while downplaying them as a matter of public policy. I agree that Reagan could have done more in this area. Yet you would probably agree with me that he was right to have given priority to the Soviet threat abroad and the malfunctioning economy.
       Moreover, isn’t it true that Reagan’s “lip service,” as much as anything else, helped to raise public concern about the problems of drugs, crime, and illegitimacy? Wasn’t welfare reform an attempt by Reagan’s ideological progeny in the GOP leadership to complete the Reagan revolution? Didn’t Clinton sign the welfare-reform bill in large part because his political adviser Dick Morris told him that if he didn’t, he could forget about being re-elected? (Hint: The answers are “yes,” “yes,” and “yes” again.)
       Surely you will not contend with a straight face that Clinton’s family-values rhetoric, which most people recognize as a cynical accommodation to the new political climate created by Reagan, has fostered a moral renaissance in the 1990s. Rather, there is a conservative mood in the country now that is a continuation of the Reagan era. Clinton is an opportunist with a surfboard, but let’s not make the mistake of crediting him with having created the wave he is trying to ride.
       It is a great irony that despite his anti-government rhetoric, Reagan restored honor to the presidency, while Clinton has debased it. At the risk of signing off with another cheap shot, in comparing Clinton’s leadership and character with Reagan’s I am reminded of columnist P.J. O’Rourke’s observation: “We are nostalgic for the days when sleeping with the president meant attending a Cabinet meeting.”