Obama in Reagan's shadow
David Frum
Shrum proclaims “end times” for Reaganism. Wise Democrats will want to handle that prediction with care.
If the chapter is closing on the Reagan era in U.S. politics—and I think it is—it is not closing because Reaganism has been repudiated (as Shrum would wish). It is closing because Reaganism has been accepted and digested.
A little history.
In the years after 1965, a generation of bold liberal politicians tried to out-Roosevelt Franklin Roosevelt. With the federal treasury overflowing from the 1960s boom, they launched huge new spending programs like Lyndon Johnson’s Medicare, Medicaid, and the War on Poverty.
These liberals quickly discovered that they had been over-optimistic. The programs they had launched cost much more than expected—and a slowing economy yielded much less revenue than expected. Jolted by inflation, energy shortages, and other crises, politicians began to interfere more and more in the innermost workings of the economy: freezing prices and managing industries. It didn’t work, and the dominant liberalism of the years 1930-1965 began to unravel. Ironically enough, the most extreme of these interventionists was Richard Nixon—the conservative’s conservative on cultural issues, but very much an adherent of the postwar consensus on economic issues.
The unraveling was accelerated by the social disintegration that set in after 1965. Crime, family breakup and urban decay at home and weakness in the face of Soviet provocations abroad all took their toll. As Jonathan Rieder wistfully observed in his famous 1975 anthropological study of the Jewish and Italian-American voters of the Canarsie neighborhood of New York City, the word “liberalism” had come to acquire connotations of “profligacy, spinelessness, malevolence, masochism, elitism, fantasy, anarchy, idealism, softness, irresponsibility, and sanctimoniousness.”
The collapse of liberalism brought Reagan to power. Indeed, the turnaround began even before his election, as neoclassical economics began to win converts even among some Democrats. Gerald Ford launched the deregulation of the economy by repealing New Deal controls on gold ownership and stockbrokers’ fees. After suffering losses in the congressional elections of 1978, Democrats in Congress joined Republicans in deregulating transportation industries. Congress compelled a reluctant Jimmy Carter to pave the way for deregulation of the prices of oil and natural gas (which Reagan would accelerate in 1981).
When Reagan arrived in Washington, he cut taxes, supported the Federal Reserve in its anti-inflation struggle, revised labor laws to restrain the excessive power of trade unions, and generally set a tone reassuring to business and investment. His actions were matched by ideological cognates around the world: Margaret Thatcher in Britain, Brian Mulroney in Canada, and Helmut Kohl in Germany. In true tribute to their success, they were eventually imitated, in part, even by left-of-center parties in Australia, New Zealand, France, and elsewhere.
In the 1990s, conservative Republicans in Congress and the states launched a new wave of reforms. Their crime control and welfare reform programs curbed and corrected harms bequeathed by the social engineers of the 1960s.
Now notice what Reagan and his successors did not do. They did not abolish wholesale New Deal—or even Great Society—programs. Medicaid and Medicare remain in business. They did not repudiate Franklin Roosevelt; indeed Reagan always presented himself as a fulfillment of Roosevelt’s vision. They set limits on liberalism: thus far and no farther.
The Reagan Revolution bookended the New Deal. It did not repeal it. Not all of Reagan’s heirs were so modest, and they usually paid a political price for it. It took him some time, but Bill Clinton made his peace with the legacy of Reagan. He signed welfare reform, accepted balanced budgets, acceded to a cut in the capital gains tax. Just as President Eisenhower accommodated himself to his gigantic liberal predecessor, FDR, so Clinton accommodated himself to Reagan.
Now it is Obama’s turn. He can try (as Shrum recommends) to overthrow the Reagan legacy, to establish himself as a new historical bookend, hurling himself into the kind of great campaign for economic redistribution hinted at by his own early rhetoric. If he does, his career will likely be tumultuous and ultimately doomed. This remains a basically conservative country.
Or Obama can fit himself into the American story, seeking continuity with all that came before, accepting institutional limits on his actions, innovating by inches. That may disappoint his most ardent followers, who long for a second coming of FDR. But it will emulate his wisest predecessors.
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22 Comments
Posted by James, Wednesday, October 29, 2008, 10:57 pm For all the McCain talk of the "radical" Obama, he consistently comes across as a thoughtful moderate in person. I think most Americans see this and will vote accordingly.
Posted by David, Wednesday, October 29, 2008, 11:03 pm I am not sure you can have Clinton "made peace with the Reagan legacy" and "accepted balanced budgets" in the same paragraph. While there are plenty of remnants of the Reagan era, balanced budgets are not one of them. I don't think it is Obama's goal to "overthrow the Reagan legacy" but rather overthrow the George W. Bush legacy. I think it is the result of the Bush legacy, however, that much of the Reagan legacy will be overthrown.
Posted by Don, Wednesday, October 29, 2008, 11:18 pm There is some truth here. But I fear that it is outdated. If conservativism is to regain its vitality, it has to be rethought in terms of our own age, not Reagan's. Reagan's real strength was his ability to speak to his own times. In trying to parrot Reagan, McCain only proves himself a midget. LIberalism is reborn, although Frum is right that we remain very conservative in many respects. But a new less ideological, more pragmatic liberalism is poised to make its contribution to shaping our country and there is no way to predict how that will turn out. All we really know for sure is that the way to the future is not found by looking back over our shoulders.
Posted by Steve HVH, Thursday, October 30, 2008, 7:32 am It's a bit precious to declare that Clinton "accepted" balanced budgets. In fact, he achieved them-- after Reagan ran up the largest deficits in US history (until the record was broken by another Republican, GW Bush).
Posted by Al Rogers, Thursday, October 30, 2008, 7:35 am In 1980 the U.S. curent acoount (balance of payments) was + $106 billion. By the end of Reagan's persidency , it was - $494 billion. The Reagan Recovery was bought by draining the world's savings pool! Fed Chariman Volcker oversaw the beginning of the de-industrialization of the U.S. economy and chronicically large trade deficits in 1979. Today the net U.S. international liabilities amount to $10 trillion and the lack of appetite of our foreign creditors to continue to finance U.S. overconsumption and the free-wheeling and unregulated U.S. debt instruments ignited the financial crisis. It is the financial crisis which has repudiated Reaganism - 20 years overdue.
Posted by dsk, Thursday, October 30, 2008, 7:35 am Republicans are so funny. They assume that because they behave like complete jerkwads any time they think they can get away with it that everyone else is like them. It's kind of like the white people who assume that if there are more brown people than white people in the US that the brown people are going to enslave the whites or otherwise punish them for slavery. Just because your instincts are base and depraved, don't assume everyone else is the same.
Posted by EGB, Thursday, October 30, 2008, 7:41 am Ideology fails in America, which is a nation of pragmatists. I think it likely that this election will turn on this statement more than on personalities, perceived readiness for the office or Joe the Plumber's world view. In the face of the economic disaster brought on by unregulated greed and dishonest, unregulated accounting of talmudically complex derivative securities, what are the solutions offered by the candidates? McCain proposes the catechism of encouraging investment "to create jobs." His vehicle is tax cuts for those wealthy enough to invest. This is a bit ethereal for people having trouble meeting their most basic economic obligations - gasoline and food, for example. Obama, on the other hand, has looked at the individual components of our national problem - health care, indebtedness and dependence of foreign oil among them - and proposes specific, non-ideologically driven solutions. This is why he will win. Problem-solving, not economic theory, is America's long suit. Voters recognize it when they see it.
Posted by Matt, Thursday, October 30, 2008, 7:59 am Mr. Frum aided and abetted the most noxious, arrogant, incompetent administration in living memory. Nobody can be that wrong and/or without integrity, to ever be taken seriously again.
Posted by Quentin, Thursday, October 30, 2008, 8:00 am How can you have "a little history" about the high government spending and social strife in the 1960s and not once mention the Vietnam war? The economic and social costs of that misadventure had much more to with the fear and resentments that followed than free breakfasts for poor kids.
Posted by richard mamelok, Thursday, October 30, 2008, 8:03 am It is of note that Frum skips the W years totally, which did more than anything to gut the Reagan legacy. While giving lip service to the religious right Reagan did little to support them in action, let alone genuflect to that intolerant group. bush spent and borrowed for little no overall gain to conduct his iraq war while letting the Taliban re-emerge. Bush presided over the largest "socialist" effort ever with the bailouts. So before Obama can do much he has to just clean up the mess left by the neocons. His challenge is to do this in 4 years while getting the US back on a strong footing internationally and to overcome the enormous drain on the economy left to us by W. At this point it is not at all clear what the best way to do that is.
Posted by John, Thursday, October 30, 2008, 8:10 am It's fairly clear the country is going to move left whoever is elected next Tuesday. Basically no one really disagrees with the concept of regulated capitalism as the most efficient and effective economic system. The debate is all about the matter of degree. And the fact is that over the past eight years we've seen the pendulum swing way to far to the right. This has proved a fairly convincing test that most extreme doctrinaire Republican/Conservative nostrums simply don't work in the context of 21st century America . Take supply side economics, they didn't work in the Reagan era when deficit spending piled up record deficits which had to be paid off with tax increases by the next two presidents, one Republican and one democratic. The trickle down experiment was tried yet again over the past eight year and surprise, surprise, new record deficits have been created. Or how about the notion of "small" govt. The federal budget is around 3 trillion, add in another 1.5 trillion for state spending to give us a total spend of around 4.5 trillion. This figure is so far beyond the govermental expenditures of any other state in the world to make the idea of small govt laughable. Govt is here, what we need to figure out is how to manage it efficiently. Which brings us to another central credo of conservatism: the perfection of deregulated markets as a mechanism for economic activity. As we sit amongst the ruins of that theory with the govt having to rescue the financial system by nationalising banks and insurance companies, with the car companies next, you have to wonder how conservatives can keep a straight face. Another perfect case if anyone want to check it out is the electricity industry where deregulation has been a disaster that has increased costs massively for domestic and commercial consumers without producing any benefits as far as I can see. The much maligned Clinton was actually a very good economic manager (and yes presidents have a huge impact on the economic management of the country). A five minute comparison of the records in job creation, income growth, fiscal management of him and his successor tells you all you need to know. And btw I'm a mild Republican but an old fashioned one that relies on facts an empirical evidence, remember the old show me, rather than myth and spin.
Posted by baz, Thursday, October 30, 2008, 8:18 am While I disagree with Frum's deifying of Reagan, who I believe started our decline to it's present mess, with his anti-government, anti-union, anti-people, anti-alternative energy approach to economics/government, I do believe Reagan helped the Democratic Party, focus more on fiscal responsibility. I also think that the Right will be surprised by Obama - - he's not the extreme Liberal, they portray him as. Lastly, it was Reagan that repudiated Carter's forward-thinking energy initiatives. Had he followed Carter's lead on energy, we would wouldn't be in the energy mess we're in, and probably never would have invaded Iraq.
Posted by jamie, Thursday, October 30, 2008, 8:44 am What a bunch of BS. Why am i not astounded by these lines - He can try (as Shrum recommends) to overthrow the Reagan legacy, to establish himself as a new historical bookend, hurling himself into the kind of great campaign for economic redistribution hinted at by his own early rhetoric. If he does, his career will likely be tumultuous and ultimately doomed. This remains a basically conservative country. Frum needs to get over it and deal with reality! IF this was truly a conservative country, Obama would not be on his way to winning the Presidency. Expect 4 more years of this garbage.
Posted by Steve HVH, Thursday, October 30, 2008, 8:53 am The Republican mantra of "cut taxes" in all circumstances as a remedy for all ills is a metaphor for the current financial crisis. On the one hand, they extol the virtues of the middle class family that pays its way and saves some money for a rainy day and they excoriate Wall Street for its excesses and financial finagling, while of the other hand they advocate the same kind of fiscal irresponsibility themselves-- cutting taxes at the same time as spending continues to run rampant. The last eight years of this nonsensical policy have made the USA the largest sub-prime borrower in world history, with a monstrous and growing debt to foreign creditors, notably China and Saudi Arabia. If the average family went to the bank and asked them not just to keep the mortgage in place but to increase the balance owing every year, because they'd like to buy a new boat, or car, or take a vacation, what would the bank say? Will China and the other international lenders be any more likely to continue to advance trillions to the USA just because the government at Washington wants to spend money but refuses to pay its own way? If a return to the the Clinton and Carter years of surpluses is taken as evidence of socialism, bring it on.
Posted by Jim, Thursday, October 30, 2008, 9:56 am In the final analysis reagan will be in top five worst presidents in modern US history. The man couldn't balance a teeter-totter, much less a budget. "Borrow and Spend" is the theme he introduced to the free world. Will we label the republicans that vote for Obama "Obama Republicans"? No, we should label them, as well as the "Reagan Democrats" as "fed up with their parties direction crats". There are not enough characters allowed in this post to list all the wrongs created by reagan. Fittingly, after he defunded mental health care in this country - he died of a mental illness. BTW - love the fact that Nancy supports stem cell research. Never would have happened if Ronnie wouldn't have benefited! As an independent voter my entire voting life (28 years) - never has a republican president understood fiscal responsibility. While the republicans will never go away - thankfully - as they are great on local issues - hopefully a third party will emerge to keep everyone honest.
Posted by nem0.n00ne, Thursday, October 30, 2008, 1:45 pm Reagan ran up deficits because he was fighting a war - the Cold War, which he won. Clinton's balenced budgets were achieved totally by sizable cuts in the military budget which were possible only because Reagan won the Cold War. Those cuts were also the reason that US forces were not properly equipped in the early years of the Iraq war.
Posted by Kat, Thursday, October 30, 2008, 2:22 pm "The unraveling was accelerated by the social disintegration that set in after 1965. Crime, family breakup and urban decay at home and weakness in the face of Soviet provocations abroad all took their toll." Yeah, that damn civil rights movement, if only those women and minorities hadn't gotten all riled up.....
Posted by Brett, Friday, October 31, 2008, 7:51 am We need balance in order to thrive. Some situations call for what we would now consider to be a 'conservative' response while others are best served by what we now consider to be a 'liberal' response (aspects of the definitions of the two interchange over time). What really needs repudiating by whoever gets into the White House is the disproven belief that one political ideology is always correct in every situation. We can never get so rigid or unreasonable again.
Posted by David, Friday, October 31, 2008, 1:41 pm MANTRA TO LIVE BY - everything Reagan did was right and what Clinton did was wrong. PROOF- the current finanical crises was NOT the result of deregulation. It was due to two causes: the Community Reinvestment Act changes under Clinton. Also due to the last two years when democrats have controlled congress. (On this last point I do not know how this caused it, but am sure deep down in my heart that it must be. And do not be influenced by the MSM, the fact that congress was controlled by Republicans until two years ago is irrelevant.) Reagan ran up deficits because he was fighting a war - the Cold War, which he won. Clinton's balenced budgets were achieved totally by sizable cuts in the military budget which were possible only because Reagan won the Cold War. Those cuts were also the reason that US forces were not properly equipped in the early years of the Iraq war. LOL
Posted by John, Friday, October 31, 2008, 2:15 pm The federal budget is around $3 trillion, and another $1.5trillion for state budgets to give total govt spending of around $4.5 trillion per year. This is so far beyond the govt budgets of any communist or social democratic state in the world that talk about small govt is nonsense. Big govt is a fact of life. The debate is all about the matter of how you manage the relationship between govt and capitalism which just about everyone agrees is the most efficient economic system. Economically the Reagan years were so so, inflation was squeezed out of the system by Paul Volcker, growth averaged around 3%, about 12 million jobs were created, real incomes rose for all even if modestly for most, but he piled up enormous budget and current account deficits which had to be paid off by the subsequent Bush senior and Clinton administrations. By contrast Clinton's presidency was in economic terms the most impressive since the war. Growth was well over 4%, real incomes for all ticked up strongly, he got the budget deficit under control and actually acchieved surpluses in the last three years, about 22 million jobs were created. The performance of his successor has been truly appalling. Average growth under 3%, about 5 million jobs created, record deficits and the public debt more than doubled, and he leaves office with the entire financial system on the edge of collapse and the country in the early stages of what looks like a severe recession. For most of the time David Frum has been telling what a great president Bush has been so he's hardly objective. The fact is whoeve is elected President is going to take the country left because of the realities of our current economic situation and the structural problems the country faces like the imminent collapse of the auto industry. Contrary to what Frum says I believe if Obama is elected we'll see a decisive move left with the creation of universal heathcare, much tighter regulation of the financial industry, and massive public programs to speed certain economic sectors like alternative energy sources. As a longtime but lapsed Republican I'm bound to say it's probably for the best. He's going to make some mistakes of course but as the country enters a period of relative decline we need some realism about our situation not the perpetuation of national myths about how unique and wonderful we are. The other thing he's going to do is restore some competence to govt and it's much easier to that if you think govt has solutions rather than being a problem which most far right conservatives believed until cities were inundated and financial markets collapsed when it became save me mommy. In eight years time America is going to look like a very different place.
Posted by Todd Wharton Schaffner, Saturday, November 1, 2008, 1:09 pm David Frum makes an important point - Reaganism and Thatcherism did not abolish the welfare state, but rather modified the welfare state with a series of reforms that curbed The New Deal and Great Society but did not abolish them. Liberal, socialists, social democrats and others on the Left have modified their ambitions and expectations considerably since the 1980's. What this article did not mention were the Vietnam war and the Iraq war. Both did much to curtail - first LBJ's Great Society and George W's cultural and post- Reaganite conservative agenda. Just as two world wars ended the Old Order in Europe and in Russia and China, the endless Cold War (1946-89?) caused a re-evaluation of not only waging war, but also of enacting social and economic changes by governments. I believe we are near the end of an era ( an oft. stated cliche) that was born about 1966-68 (Reagan as Gov. of California and Nixon as President) and now, 2008 - we are experiencing the conclusion of about forty years of a modified governmental and private enterprise counter-revolution to liberal-social-economic reform. We've have had two forty-year cycles - 1928-68 and 1968-2008. The wheel has come full-circle yet again - not totally re-invented but remodeled with needed modifications in governmental-industrial regulation and environmental concerns not previously considered by more than a few "visionaries" who have predicted (since the Sixties) the crises we now experience more and more as the years move on. The Roosevelt Revolution and the Reagan "counter" Revolution have been well-established and a newer "Obama-esk?" age may be about to begin, even if by some chance John McCain is elected president. History and humanity move on as the process of life and death always have.
Posted by nicholas, Tuesday, November 4, 2008, 2:48 am Were you drunk when you wrote this?
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