The Gipper
“Gazing out at the majesty of our capitol, the Washington Monument standing tall and President Lincoln gazing at us all, I come to a realization. America will never bow down to its enemies. Though we seek peace for this world, the resolve of our people to remain free is something many underestimate – and they all pay the price for such an underestimation. ”
-Ronald Reagan Inaugural Address-
A chilling wind swept over the nation’s capitol on the day of Ronald Wilson Reagan’s inauguration. Anticipating a large crowd, officials moved the event to the west face of the Capitol Building for the first time in American history. Flanked by President Wallace, gracious toward his successor as he and Cornelia readied to begin their journey back to his plantation home in Alabama, Reagan took the Presidential oath on the family bible to a cheering crowd of liberty conservatives and friendly members of the DC African-American community.
Having made the announcements over a four week period before Christmas, Reagan’s cabinet featured a who’s who of liberty conservative all stars. The more dovish Eugene McCarthy at State contrasted with the noted hawk Edward Teller at Defense, the famous physicist creating quite the controversy upon Reagan’s selection of him for the Pentagon. A record two women and two African-Americans were chosen for the cabinet, the NAACP and Martin Luther King praising Reagan.
One appointment that many in the nation were particularly watching, on the day following his inauguration he finally ended the long standoff over the eleventh seat on the Supreme Court. Vacant since John Rarick’s nomination was defeated, ears perked upon Reagan’s choice of civil rights icon and Mississippi Supreme Court Justice James Meredith to fill the vacancy. Minority Leader Strom Thurmond expressed his displeasure at a press conference, but with the sizable Republican Majority and collection of about a dozen pro-civil rights Democrats supporting the pick he backed off – especially after a fiery confirmation hearing where the Ole Miss Graduate gave back as good as he got from the Minority members. Meredith was confirmed 71-27.
Each cabinet pick rammed through by the massive Republican senate majority, Liberty Conservatism had finally gained control of the entirety of the Federal Government. Worries of Democrats and economic progressives intensified, many in the opposition shouting fire and brimstone about Amcare, the GMI, and Social Security being on the chopping block. People across the world began wondering what Ronald Reagan would tackle first.
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Among the other tenets of Liberty Conservatism, the economic theories of the Reagan Revolution were patently untested. Aside from application in the states and a limited form in Minseito Japan, Buckleyite theories of monetarism and deregulation hadn’t yet been applied on a nation-wide scale. Committed to the new theories, Ronald Reagan wasn’t about to keep from going bold.
His first action upon taking office was an executive order eliminating the wage and price controls established in the early years of the Wallace Administration. Secretaries Casey, Weinberger, Lovell, Clements, and Schweiker followed the Chief Executive’s lead. Dozens of regulations found themselves rescinded, Reagan announcing to the American people that “The regime of red tape and bureaucratic stumbling blocks coming in the way of the American spirit is coming to a close.
Governing much of the Reagan vision was his choice to lead the Council of Economic Advisers. A noted economist and professor – and the writer of four best-selling novels on economic policy – Milton Friedman had advised several foreign governments (such as Japan, East Cuba, and Pinochet’s Chile) before accepting a job in the current administration. A leading liberty conservative figure, oftentimes he found himself the lone monetarist voice in a sea of Keynesian consensus.
With the election of Ronald Reagan, Friedman found himself at the informal head of a cluster of committed “supply siders” as the term went. The unofficial economic team of Friedman, SecTreas William Casey, OMB Director Del Latta, and Trade Representative Art Laffer pushed Reagan to make “Reaganomics” the centerpiece of his 100 days agenda. Chief of Staff Richard Cheney – given the position on the advice of Speaker Ford and Governor Rumsfeld – concurred, feeling that immediate legislation to boost the struggling economy was of the utmost importance. Structural reforms that Reagan personally wished to pass could wait for the economy to pick up, for the latter would largely determine whether the administration was viewed as a success or a failure. Meeting with the full cabinet and Republican leadership on Capitol Hill, Reagan agreed to the approach.
Senate Majority Leader George Murphy and House Majority Leader Bill Brock knew they could pass the tax cuts with the support of the Republican caucus alone – given that several conservative Democrats such as Jesse Helms, Thomas Eagleton, and J. James Exon were ready to vote for cloture in the Senate. However, Cheney and Vice President McCall knew a robustly bipartisan bill would bulletproof the bill against attacks from left-wing media outlets. As a result, Murphy and Brock began making the rounds to members of the minority caucus willing to buck the Democratic leadership’s disagreement with the size of Friedman’s proposed cuts. The focus was kept on districts and states in the south and the Great Plains. Voters there, while pro-entitlement, were known for their fiscal conservatism on tax and regulatory issues. After nearly a month of lobbying and Reagan addressing a nation to explain the tax cuts and “notify your representatives and senators of your opinion on the matter,” many Democrats buckled. In the words of Representative David Boren (D-OK):
“How can I vote against the thirty thousand letters and seven thousand calls to my offices? Those are my constituents, and the vast majority wants to keep their money.”
Introduced in the House by Representative Charlton Heston (R-IL) and primarily sponsored by Senator Eagleton (D-MO) in the Senate, the creatively named American People’s Tax Relief Act passed by overwhelming margins (even netting administration opponents like House Minority Whip Frank Fitzsimmons and Sen. Patrick Leahy) after three-week long hearings – Friedman famously testifying with eccentric enthusiasm in favor of his brainchild. The personal tax rate, corporate tax rate, and capital gains tax rate were slashed massively, the bill’s Democratic sponsors managing to push an amendment through to end a large proportion of business and individual tax deductions to compensate for the lost revenue. Additional amendments from Representative Jack Kemp restructured the Wallace-era Minimum Tax to focus on providing further tax relief to middle-class Americans. His economic team and chief congressional sponsors flanking him, Reagan signed the bill with a bright smile on his face the day after Independence Day, announcing the beginning of the economic recovery had started.
His words would prove prophetic. Business confidence soared upon APTA’s passage. While it would take about a year for the effects to begin to take hold, by 1979 the fourth-quarter growth rate had spiked to above 4.5% for the first time since 1974. The unemployment rate, after rising to over 7.5% at the end of the Wallace Administration, rose to 8.7% in April 1978 before beginning a slow and steady decline to a low of 4.5% not seen since the early years of the Kennedy Administration. Inflation was vigorously combatted by Reagan-appointed Federal Reserve Chairman Paul Volker (collapsing nearly five percentage points by 1979), the President proclaiming that “Morning will soon arrive for America once more.”
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While historians and the general public would associate the late seventies economic boom with Reaganomics, to discount the Gipper’s energy policies would be disingenuous. Faced with the aftermath of the Oil Crisis of 1975, the economic pain that the spike in energy prices had hit American policy objectives hard. The Wallace Administration had made greenlighting new drilling and mining for natural gas and coal a top priority, the goal to allow the United States to maintain a strong economy if foreign sources were cut off. This activity was seen by Reagan as too timid:
“Only a few decades ago, the United States was the energy capitol of the world. Now, bureaucratic regulation and fear-mongering by fringe elements threaten to shackle us to undependable sources to power our economy. This is something that has to change. Our civilization is dependent on energy, and the bounty of America has all the energy needed to maintain it.”
With this passage in his first State of the Union Address, Reagan had planted his flag in the policy of complete energy independence. The resulting legislation, introduced by Texas Senator George H. W. Bush, attacked the problem in multiple areas. The national oil reserve was created for national emergencies, as was a requirement that the nation’s power grid be equipped to handle more than the demand at any given time. What stood out with the bill, considered the most important portion of the legislation, was the smoothening of the process to approve of and construct power plants and the creation of the Subdepartment of Energy within the Department of the Interior.
After passage, Reagan and Interior Secretary William P. Clements would pursue an all of the above energy strategy. Power facilities as wide ranging as coal, oil, hydroelectric, nuclear, and wind were created (the increase in fission plants being the largest percentage increase, thirty new facilities greenlit through the act). The fledgling environmental movement complained, but the announcement of strict safeguards to protect against pollution and safety hazards. Energy prices fell considerably, corresponding to a twelve percent decrease in the average cost of living to help match inflation.
While the economic and energy initiatives would take the lion’s share of the coverage of the Administration’s early legislative efforts, the Liberty Conservatives on Reagan’s team used the large Republican congressional majorities and public support to push a plethora of priorities into law. The appointment of Dr. Eula Bingham to head the Occupational Safety and Health Administration made great progress into researching reasonable safety standards for industries. With the explosion of “Crack Cocaine” hitting the streets that overwhelmed the nation’s institutional rehabilitation system, Reagan put policies into place that would evolve into the “War on Drugs” targeting traffickers and dealers with harsh prison sentences including life in prison (ruled constitutional by the Supreme Court in
Clay v. Deukmejian, though the court would also state that capital punishment would only apply for trafficking in large amounts). The Merit Pay Act revolutionized education funding, directing the Department of Health, Education, and Welfare to withhold federal funding to school districts that didn’t apply merit pay rules.
As a result of what appeared to be anti-union policies, the Federal air traffic controller union went on strike in Reagan’s first year in office. Announcing that he was sympathetic to their demands, Reagan nonetheless stated he would not allow such a critical industry to go on strike. They defied him, thinking he wouldn’t follow through and jeopardize his legislative agenda. Reagan stood firm and fired them all, shocking the nation and the world.
Like George Wallace before him, the Gipper had proven he possessed a spine of steel. Many took notice of this, especially a group of worried men in the basement of the Kremlin.
