Ronald Reagan’s optimism played a pivotal role in his success
I recently was one of six presidential historians tasked by a national magazine with an intriguing question for Presidents Day: “Please choose an American president you regard as one of the better ones, then one particular decision he made, and explain why that decision is one of his most admirable.”
My choice of president had been pre-made for me. The magazine requested that I do Ronald Reagan and in fewer than 200 words.
The task wasn’t easy. How do you provide one example from any president? Well, you really can’t, or at least not very well. For the illumination of my Trib readers, I’d like to share the case I chose and develop it more fully.
Ronald Reagan was, of course, a conservative and a free marketer. He also was a remarkable optimist, so much so that opponents sometimes ridiculed him.
“Over the years, I’ve been described as an inveterate optimist, an eternal optimist, a reflexive optimist — a born optimist, a canny optimist, a cagey optimist — even as defiantly optimistic,” Reagan once quipped. “It just goes to show there’s no word that cannot be turned into a pejorative if the pundits work hard enough at it.”
Reagan’s optimism was particularly on display in economic policy, and most notably his historic 1981 tax cuts. As one Reagan adviser told Time magazine during the lingering recession of 1982-83, when the tax cuts seemed slow in sparking the economy, “He is absolutely convinced that there will be a big recovery. … He is an optimist. My God is he an optimist!”
There was immense pressure on Reagan to reverse his tax cuts. The naysayers were not only external. They included his administration’s so-called “moderates” and “pragmatists,” the Jim Baker-Dick Darman types who a decade later would convince President George H.W. Bush to change his position on taxes — and thereby kill his presidency.
Reagan, however, hung in there. Undeterred, he knew the free market needed to be freed to perform its magic, which it eventually did. Here are just a few highlights:
• The stimulus effect of the Reagan tax cuts was extraordinary, sparking the longest peacetime expansion/recovery in American history: 92 consecutive months, far surpassing the previous record of 58 months.
• The bogeymen of the 1970s — chronic unemployment and double-digit inflation and interest rates — were vanquished. Carter-Ford-era terms like “malaise” and “misery index” vanished. Only during the Obama years, specifically in 2011, did America re-approach similar misery-index levels. The Dow Jones industrial average, which had declined by 70 percent from 1967-82, nearly tripled from 1983-89.
• The poverty rate dropped. Incomes (median earnings) and standard of living jumped. And contrary to liberal demonology, women and blacks and other minorities did extremely well. Real income for a median black family had dropped 11 percent from 1977-82; from 1982-89, coming out of the recession, it rose by 17 percent. In the 1980s, there was a 40 percent jump in black households earning $50,000 or more. Black unemployment (up significantly under President Obama) actually fell faster than white unemployment in the 1980s. The number of black-owned businesses increased by almost 40 percent, while blacks who enrolled in college increased by almost 30 percent (white college enrollment increased by only 6 percent).
These impressive results were the product not merely of tax cuts but of a president’s optimism and confidence to stay true to a course he believed would work.
We too often boil down history to a simple narrative: On Aug. 13, 1981, Ronald Reagan signed the Economic Recovery Act, and the economy soon soared to unprecedented heights .
Reality never is that simple. There’s always more behind the curtain.
Ronald Reagan had a confident optimism that the private sector could spur economic prosperity far better than the Keynesian-Big Government policies advocated by presidents ranging from Franklin Roosevelt to Barack Obama.
Unfortunately, we have a president today who likewise has confidence (no shortage there). But it’s a misplaced confidence — certainly one that harbors no great optimism in the power of tax cuts and an unleashed free market.
Paul Kengor is a professor of political science at Grove City College. His latest book is “11 Principles of a Reagan Conservative.”