Reagan's Real Legacy

He missed greatness, but nailed rightness

I was traveling last week, so I missed the chance to go to the Capitol and bid farewell to President Reagan. No doubt he received more than enough goodbyes to waft him happily to the beyond, but I was sorry not to have paid my respects, for I knew what I would have whispered as I passed the casket. "Mr. President," I would have said, "I was wrong. You were right."

In 1980, when Reagan won the presidency, I was a 20-year-old college student at Yale. Because I was 20, because I was a college student, and because I was at Yale, I knew a great deal about Reagan and his ideas. First and foremost, I knew that Reagan was a dangerous simpleton. I greeted his election with a combination of alarm, disbelief, and condescension. Especially condescension.

Reagan, a simpleton? The recent publication of his shiningly cogent radio commentaries from the 1970s reveals him to have been an articulate policy wonk, and the recent publication of his letters shows him to have been a writer of enviable clarity and forthrightness. Even in the 1970s, however, there was plenty of evidence of Reagan's intellectual depth, had I only looked for it. In 1975, the then-ex-governor gave an interview to Reason in which he was asked which authors or economists had especially influenced him. "Oh, it would be hard for me to pinpoint anything in that category," Reagan replied. "I'm an inveterate reader. Bastiat and von Mises and Hayek and Hazlitt—I'm one for the classical economists." Which presidential aspirant today would dare to give such an answer?

The entire 1975 interview is worth reading. Reagan shows deep engagement with big ideas, probingly parsing distinctions between liberty and license, patiently explaining when regulation does and does not make sense. Has Al Gore ever given such an intellectually surefooted interview?

Reagan would chuckle to hear me acknowledge that he was smart. He understood all along that liberals' intellectual snobbery was his best friend—something the liberal intellectuals did not grasp then and, for the most part, still don't grasp now. Bested time and again by Reagan, they might have reconsidered their contempt for him, but instead they chose to turn their contempt on a public dumb enough to be taken in by him. Today, Michael Moore and his legions give President Bush (Yale B.A., Harvard M.B.A.) the same treatment ("Stupid White Men"), with exactly the same result. Liberal condescension is the reason the country adopts so many liberal policies while electing so few liberals.

Reagan might, though, have been genuinely pleased to hear me say not just that he was smart but that he was right. At least, he was right where it mattered most.

Like all right-minded people, in 1980 I knew three things about the world. First, Communism was here for good, and accommodating it was a lot safer and more realistic than confronting it. Second, inflation was caused by scarcity (especially of energy), was a long-term fact of life in a modern economy, and didn't matter much anyway, since everyone adjusted to it. Third, I knew that markets had their place, but that, on the margins, smart regulators and accountable politicians made smarter, fairer decisions than did dumb, unaccountable markets.

Wrong. Or, rather, wrong, wrong, and wrong. Reagan the anti-Communist kook was in fact Reagan the visionary, capable of seeing through the Soviet facade to Communism's inherent contradictions and then heightening them (Marx would have loved that!). The Soviet Union might have fallen anyway, but Reagan clearly helped it along. He saw what the experts missed because he understood, earlier and more deeply than almost any other public figure of his era, the unmatched power of market capitalism and liberal democracy to organize and direct human endeavor.

"Government regulation, like fire, makes a good servant but a bad master," Reagan said in a September 1980 campaign speech in Chicago. Regulation, as Reagan himself acknowledged, has its place. And indeed, as my colleague Clive Crook noted in this magazine last week, Reagan paused but did not roll back the expansion of federal spending and regulation. But there is more to the story. Reagan's contribution was to reverse the enlightened wisdom that regarded markets as guilty until proven innocent. He taught that markets, though imperfect, are astonishingly competent, a point that Republicans and Democrats alike now take for granted. Outside the fringes, we are all Reaganites now.

In that same Chicago speech, Reagan called, twice, for "a sound, stable, and predictable monetary policy," which he said was "essential to restoring economic health." He also declared that "the Federal Reserve Board is, and should remain, independent of the executive branch of government." These were coded instructions for the Federal Reserve. Rough translation: "Let 'er rip!"

As Reagan understood and I did not, inflation was poisoning the economy, and it was a monetary phenomenon requiring a painful dose of tight money. When the Fed gave the president his wish and brought on the worst recession since the Depression, Reagan, true to his word, never meddled or squawked. The result is inflation so reliably low that most Americans have forgotten that the inflation crisis ever happened.

So Reagan did more than I had ever imagined a president could do to beat Communism, douse inflation, empower markets, and even—ironically—rebuild public confidence in the federal government he so mistrusted. To which can be added, less momentously but still significantly, pulling off the audacious and elegant bipartisan tax reform of 1986. Quite a record.

He was not, however, a great president, because he had a squalid side. The Teflon president, people called him, because bad news never seemed to stick. Bad news didn't stick, because Reagan, when confronted with it, could act with breathtaking irresponsibility.

He cared about only a few things: beating Communism, cutting taxes, bolstering defense. Everything else he evaluated by the simple metric: "Is this a bad-news story? Does it look like a hassle? If so, it doesn't exist." When the country's savings and loan system began to cave in, he saw a political loser and averted his gaze. Thanks to Reagan's indifference, albeit with ample help from Congress, what began as a $15 billion problem in the mid-1980s grew almost tenfold in cost and became the most expensive and perilous financial crisis since the Depression.

Reagan showed similar blithe unconcern about unprecedented budget deficits, to which he responded by blaming Congress and demanding a line-item veto. He talked a good game about cutting government spending but walked away in the clutch, in the process entrenching as untouchable the entitlement programs that now constitute the country's biggest fiscal problem. He said not a word about AIDS in his first term and hardly any in his second. We will never know if presidential engagement might have sped preventive action and slowed the virus's spread; in any case, however, for a president not even to take public note of a deadly new epidemic until it was years under way would be unimaginable for anyone but Reagan.

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