WI: A Prolonged Reagan Recession

After doing some Research on Ronald Reagan for my ALT 1968 TL, I come across some info on how it really wasn't inevitable for Reagan's 1984 landslide. I know the usual consensus is that no body could beat Reagan in '84...But it appears to me that either himself or the economy could have forced Reagan to go the way of Carter or LBJ.

The "Reagan recession," coupled with budget cuts (which were enacted in 1981 but began to take effect in 1982), led many voters to believe that Reagan was insensitive to the needs of average citizens. Reagan's approval ratings sank. In January 1983, Reagan's popularity rating fell to 35%—approaching levels experienced by Richard Nixon and Jimmy Carter at their most unpopular moments. Although his approval rating did not fall as low as Nixon's during Watergate, Reagan's reelection seemed unlikely.

Pressured to counteract the increased deficit caused by the recession, Reagan agreed to a corporate tax increase in 1982. However, he refused to raise income taxes or cut defense spending. The Tax Equity and Fiscal Responsibility Act of 1982 instituted a three-year, $100 billion tax hike—the largest tax increase since World War II.

The 1982 mid-term Congressional elections were largely viewed as a referendum on Reagan and his economic policies. The election results proved to be a major setback for Reagan and the Republicans. The Democrats gained 26 House seats, which at the time was the most for the party in any election since the "Watergate year" of 194. However, the net balance of power in the Senate was unchanged.

The mid-term Congressional elections proved to be the nadir of the Reagan presidency.

A combination of deficit spending and the lowering of interest rates slowly led to economic recovery. From a high of 10.8% in December 1982, unemployment gradually improved until it fell to 7.2% on Election Day in 1984.Nearly two million people left the unemployment rolls. Inflation fell from 10.3% in 1981 to 3.2% in 1983. Corporate earnings rose by 29% in the July-September quarter of 1983, compared with the same period in 1982. Some of the most dramatic improvements came in industries hardest hit by the recession, such as paper and forest products, rubber, airlines, and the auto industry.

By November 1984, voter anger at the recession evaporated and Reagan's re-election was not in doubt. Reagan was subsequently re-elected by a landslide electoral and popular vote margin in the 1984 presidential election.

So what if some of the more crucial pieces for Reagan's economic plan failed and The Recession continues throughout 1983 and most of 1984? With Unemployment still hovering around 10.8% and his Approval rating hovering around 35% does Reagan seek out a second term? Or does he not seek the nomination ala LBJ in '68? If he doesn't does Bush stand any chance of winning the election? How does the Democratic field look in '84? and could a Democratic President in '84 turn the economy back around restore American confidence in itself after four failed Presidency's within a decade? Please discuss
 
I think a centrist Democrat could take Reagan on... but remember that he'll still have his charisma.
 
I remember thinking the same thing when I recently read "The Age of Reagan" by Sean Willentz. (Sidebar: In addition to the information talked about below, Willentz went into the debate performances in 1984. I believe that, in the first debate, Reagan wasn't quite on the ball and seemed to be confused at times, thus fitting into the stereotype of an old man. This caused the polls to tighten. Reagan then came back in the second debate and took Mondale out of the race.)

I think that a good POD for a Reagan defeat could be around one of two things: An economic downturn, or a push for the culture war.

With the first, perhaps Reagan gives into those economists who say that a deficit is the root of all evil in government financing. He cuts a number of programs and doesn't launch new spending. At the same time, maybe he doesn't cut taxes as much. This could then cause the recovery from the early 80s recession to happen much more slowly. Maybe the numbers turn around in late '83 or early '84, but they don't have much of an impact on peoples' daily lives. By the time November 1984 rolls around, the numbers are looking better but (similar to Bush in '92), perception is otherwise. You could even see the Democrats turning Reagan's famous quote of 1980 around on him: Are your lives better than they were 4 years ago?

I don't see the 2nd one having as much of an impact as the first, but I wonder what would happen if Reagan gave in to many of the social conservative elements of the Republican Party? What if he pushed on many different issues all at the same time, for example, abortion, affirmative action, the FCC, etc.? Would there be any risk of him pushing too far and alienating centrists?

As far as Democratic candidates in '84, I can't see much of a change, Mondale was still the front-runner. However, under this scenario of a failed Reagan presidency (at least as far as economics and perception) maybe the party would go more with Hart, as Mondale could still have the memory of Carter attached to him. We could see a President Hart in 1984 and then we might get something like all the Clinton sex scandals over a decade earlier.
 
If I recall, a lot of the current credit and banking crisis originates in the kinds of economic policies Reagan was among the first to advocate. If his economics fail back then, we'd hopefully learn enough not to do it again.
 
I think a centrist Democrat could take Reagan on... but remember that he'll still have his charisma.

Im thinking that if we have a prolonged 1982 Recession, I think the best candidate to represent the opposition to the economic policy of Ronald Reagan would be the same who did it in OTL...Tip O' Neil, Although he was only a year younger than Reagan...I think he has all the pluses, Lack of connection to the Carter White House, Old School New Deal Democrat, Catholic to appeal to the working class, and his staunch rivaly between the Gipper being played on the national scale would be incredible:D
 
I remember thinking the same thing when I recently read "The Age of Reagan" by Sean Willentz. (Sidebar: In addition to the information talked about below, Willentz went into the debate performances in 1984. I believe that, in the first debate, Reagan wasn't quite on the ball and seemed to be confused at times, thus fitting into the stereotype of an old man. This caused the polls to tighten. Reagan then came back in the second debate and took Mondale out of the race.)

I think that a good POD for a Reagan defeat could be around one of two things: An economic downturn, or a push for the culture war.

With the first, perhaps Reagan gives into those economists who say that a deficit is the root of all evil in government financing. He cuts a number of programs and doesn't launch new spending. At the same time, maybe he doesn't cut taxes as much. This could then cause the recovery from the early 80s recession to happen much more slowly. Maybe the numbers turn around in late '83 or early '84, but they don't have much of an impact on peoples' daily lives. By the time November 1984 rolls around, the numbers are looking better but (similar to Bush in '92), perception is otherwise. You could even see the Democrats turning Reagan's famous quote of 1980 around on him: Are your lives better than they were 4 years ago?

I don't see the 2nd one having as much of an impact as the first, but I wonder what would happen if Reagan gave in to many of the social conservative elements of the Republican Party? What if he pushed on many different issues all at the same time, for example, abortion, affirmative action, the FCC, etc.? Would there be any risk of him pushing too far and alienating centrists?

As far as Democratic candidates in '84, I can't see much of a change, Mondale was still the front-runner. However, under this scenario of a failed Reagan presidency (at least as far as economics and perception) maybe the party would go more with Hart, as Mondale could still have the memory of Carter attached to him. We could see a President Hart in 1984 and then we might get something like all the Clinton sex scandals over a decade earlier.


Yeah, I still think the economy would be the only thing that could bring Reagan down in '84. Turning the '84 election in to a situation simmilar to what happened in '92 is exactly what I had in mind. It be interesting to see how it might turn out electorally, if it was Reagan vs. Hart or O'Neil...I just can't see Mondale being successfull as he became to much a reminder of the Carter years.
 
If I recall, a lot of the current credit and banking crisis originates in the kinds of economic policies Reagan was among the first to advocate. If his economics fail back then, we'd hopefully learn enough not to do it again.

Basically, if it is shown that Supply side economy really doesn't work early in the 80's...I think a smarter form of Regulation reintroduced around this time, solution to the spending problem and possibly a balanced budget could hinder some of the policy's that have existed for almost 30 years.
 
I think a centrist Democrat could take Reagan on... but remember that he'll still have his charisma.

If the economy is falling, Democrats lurching to the right and adopting conservative rhetoric on the issues isn't going to help. If anything, I think the Democrats nominate someone more liberal than Carter or close to that of Mondale's liberalism, but not necessarily Mondale, due to his connection to Carter in the first place. Ted Kennedy might see an opening, thus clearing the Democratic field.
 
I am sorry, but would not the cuts and the balanced budget be good for the US on the long term?So Reagan is out in 84 but the US is Better on the long run?
 
the easiest way would've been for the Tax Reform of 2 years earlier to come in 1983 and then have a Democrat bring up that Reagan promised tax cuts but he only cut them for the richest by almost half while raising taxes on the poor by like 2-3% unfortunately that didn't come until 1986 and by the time the next election came everyone forgot about it.
 
Im thinking that if we have a prolonged 1982 Recession, I think the best candidate to represent the opposition to the economic policy of Ronald Reagan would be the same who did it in OTL...Tip O' Neil, Although he was only a year younger than Reagan...I think he has all the pluses, Lack of connection to the Carter White House, Old School New Deal Democrat, Catholic to appeal to the working class, and his staunch rivaly between the Gipper being played on the national scale would be incredible:D

That would indeed be very cool, imagine the debates ... *drools*
 

burmafrd

Banned
The Dems controlled the House so any problems coming can be partly laid at their door as well. Reagan wanted spending cuts and the Dems promised to help then reneged.
 
A super subtle POD for prolonged economic problems: Carter doesn't appoint Volcker to the Fed. Thus the US does not handle it's problems very well, and the recession of '82-83 continues.

That also gives you a few extra years to play with small butterflies.

If I recall, a lot of the current credit and banking crisis originates in the kinds of economic policies Reagan was among the first to advocate. If his economics fail back then, we'd hopefully learn enough not to do it again.

To some extent, mostly in regulation.

Interestingly enough Reagan replaced Volcker with Greenspan because Volcker believed in some regulation and Greenspan did not.

I am sorry, but would not the cuts and the balanced budget be good for the US on the long term?So Reagan is out in 84 but the US is Better on the long run?

Pretty much. IOTL Reagan never brought in the budget cuts he promised in favour of large increases in the budget and tax cuts. Obviously this sky-rocketed the budget deficit.

One should also note the "good" economy of the middle to late '80s did not increase real wages one iota. Those have been stagnant since the mid '70s in the USA despite increased productivity and the vast riches accumulated by the upper echelons of the wealthy.

A US that seeks to balance its budget and address the "trade gap" coupled with a liberal Democratic President who keeps the balanced budget but, let's say, strengthens unions while working to remove heavy industry problems like long-term pension and healthcare liabilities would be in a much better place.

The Dems controlled the House so any problems coming can be partly laid at their door as well. Reagan wanted spending cuts and the Dems promised to help then reneged.

Heh. Key word "wanted". Reagan never actually pushed hard on spending cuts, and for someone who got the Democrats to do almost everything else he wanted (large scale tax cuts, massive military spending, deregulation) he was curiously unable to get them to move on spending cuts.

In actual fact there's a number of interesting books about the early Reagan administration. I can't remember his name but the only major figure pushing for spending cuts was sidelined by Reagan's second term.
 
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