They didn’t call Ronald Reagan “The Great Communicator” just because he knew how to deliver a speech. The fact is, he—more than any president in recent memory—knew how to bring a complex idea to life in ways the public wouldn’t just understand but would embrace.
Sometimes this required some simplifications the media—which continually tried to prove Reagan a dunce—used to distort what he was saying. That’s not to say he didn’t get a few things wrong; every president does. On the big things, however, like the importance of economic growth and how to get it, he was very, very right.
Growth matters. The Republicans who followed Reagan into the White House either didn’t get it or couldn’t explain it. That left the door open for the media and progressives to slander and then dismiss pro-growth measures as deficit-enhancing tax cuts for the wealthy that produced greater income inequality.
The Republicans who tried but failed to follow Reagan into the White House—Bob Dole, John McCain, Mitt Romney—didn’t make it in part because they didn’t understand the need to explain how growth happens. They never communicated how the right kinds of tax cuts and deregulatory measures would cause economic expansion, leading to rising wages, more jobs and new businesses, making everyone better off while eventually bringing into the U.S. treasury as much revenue or more as the liberals claimed the tax cuts “cost.”
Reagan honed his ability to explain the politics and economics of growth to working Americans over years. As a spokesman for General Electric, he went around the country to the company’s various plants and facilities to talk to employees about the virtues of the free market system. More recent Republicans’ comparative inarticulateness may in part explain why the country appears to be embracing the soft socialism Joe Biden and his congressional colleagues are offering.
Pollster Scott Rasmussen just released a national survey of 1,200 registered voters that found 35 percent of them saying economic fairness was more important than economic growth. The fact that just over a third of the country thinks equality of outcomes deserves more focus than equality of opportunity—a key component of any pro-growth policy—should alarm Republican leaders and growth hawks.
Even when the numbers are broken down by party, the results are disheartening. According to Rasmussen, a third of Republicans now believe fairness is more important than growth. In the Reagan years and throughout the Gingrich era, which saw the first balanced budget in decades alongside a period of continued growth, a number that high would have been inconceivable.
It’s not that the GOP doesn’t believe in fairness. The free market is the fairest system ever conceived for the exchange of goods and services between willing sellers and willing buyers. It’s that they reject—or ought to, anyway—the idea that no matter where anyone starts, we all need to end up in the same place.
It’s really that kind of outcome that’s the most unfair. It presumes that no matter how creative a person is, how hard they work, how good their innovation might be or even how lucky they are, no one should do any better than their neighbor. Identical per capita income for every family—that’s the ticket.
Except it’s not. The progressive politicians’ response to the COVID crisis—shutting down the marketplace state by state while the federal government borrows trillions, inflating the debt while doing nothing to stimulate the economy—leads to disaster. It won’t take too much more of this before the United States starts to resemble Greece, and not in a good way. We’ll be comparatively lucky if it stops there, without the U.S. sliding all the way down into the same space as Venezuela.
There is a bright spot in Rasmussen’s data. “Those respondents who believe focusing on economic growth is the most important rated cutting spending and taxes as the best prescriptions” for doing so, as did those “who would rather focus on economic fairness.” Both sides agree on what needs to be done and, at least by implication, reject the Biden White House’s tax-and-spend plans. This means the growth wing of the GOP has a chance to carry the day—if it’s smart and can find leaders who can explain what is going on in ways the public can understand, even through the filter of the elite media and the opposition’s critique.
Among the best remembered summits of the 20th century are those of Ronald Reagan and Mikhail Gorbachev. Reagan’s commitment to dialogue with America’s primary adversary and what then-Secretary of State George P. Shultz called his “personal chemistry” with his Soviet counterpart were hallmarks of his presidency. But even more important was the fact that Reagan had a clear strategy for victory in the global contest with the Soviet Union.
Reagan’s approach — applying intensive economic and military pressure to a superpower adversary — became foundational to American strategic thinking. It hastened the end of Soviet power and promoted a peaceful conclusion to the multi-decade Cold War.
Now it is useful to ask if a similar approach would be equally successful in America’s contest with an even more formidable rival, the People’s Republic of China, a challenger with whom the free world’s economies are intertwined and increasingly interdependent.
In 1983, Reagan approved National Security Decision Directive 75, which set the course for an assertive, competitive approach to the Soviets, in contrast to the “live and let live” aspirations of détente. Reagan drew on George F. Kennan’s innovative policy of containment, which acknowledged both the disastrous consequences of a hot war with the Soviet Union and the impracticality of cooperation with a Kremlin driven by communist ideology.
Working from Kennan’s original intuitions, the operational approach that Directive 75 emphasized was “external resistance to Soviet imperialism” and “internal pressure on the USSR to weaken the sources of Soviet imperialism.” Rather than trying to reduce friction with the Soviets as prior administrations had done, Directive 75’s aim was “competing effectively on a sustained basis with the Soviet Union in all international arenas.” Within nine years, the Soviet Union collapsed, worn out by economic pressure, an arms race it could not win and internal political contradictions.
The goal of a competitive strategy versus Chinese Communist Party aggression should be different. The United States and like-minded liberal democracies must defend against the expansion of the party’s influence, thwart its ambitions to dominate the 21st century global economy, and convince Chinese leaders that they can fulfill enough of their aspirations without doing so at the expense of their own people’s rights or the sovereignty of other nations.
These efforts must apply Reagan’s fundamental insight — to win against a rival of China’s magnitude requires sustained pressure against the true sources of the adversary’s power.
China is an economic juggernaut. Through its engagement with the United States and other major markets, it has made itself central to global supply chains, moved to dominate strategic industries and emerging technologies, and built up a military designed to win a war with the U.S. and its allies. Numerous multinational corporations and global financial institutions pump capital, technology and know-how into China. This transfer of capability and competitive advantage can be used against the free world to devastating effect. As the CCP puts it, China is poised to “regain its might and re-ascend to the top of the world.”
To foil China’s plans for preeminence, the United States and its partners should restrict investment into Chinese companies and industries that support the CCP’s strategic goals and human rights abuses. The U.S. should work to block China’s access to Western technology in areas that contribute to military advantage and to construct a new global trade and supply chain system that reduces dependency on China. With India, Australia and Japan, the U.S. must also maintain preponderant military power in the Indo-Pacific to convince Chinese leaders that they cannot accomplish their objectives through threats or the use of force.
In all of this, America and its allies should be confident. At the start of the Reagan administration, the Soviet Union, like China today, appeared to be at the height of its ambitions, exerting influence in every corner of the globe. One decade of focused American strategy helped bring about a peaceful conclusion to what many believed could have been an endless Cold War.
Just as Reagan generated the national and international will necessary to overcome the Soviet challenge, the Biden administration can galvanize efforts to compete effectively with an emboldened China. That effort will bolster the administration’s goal of building back the United States’ strength and prosperity.
The Trump administration’s recognition of that the Chinese Communist Party is a strategic competitor was a crucial shift in U.S. foreign policy. There is now a bipartisan consensus in Washington about the need to sustain a multinational effort to restrict the party’s mobilization against the free world. Applying pressure abroad and fostering growth at home will allow the United States and its partners to prevail in this century’s most important competition, preserve peace, and help build a better future for generations to come.
Something feels off in the timing of our debate over the economy. A loss of faith in free markets, among intellectuals and the public alike, was only natural in the 1930s. But today? Intellectuals on the left and the right are more convinced than ever that our economic policies are deeply misguided, at the same moment that unemployment rates and wage growth are the best they have been in decades. When Americans answer polls, they express less and less confidence in free-market capitalism — even as they express more and more satisfaction about economic conditions.
Perhaps people are evaluating these questions against different time horizons. They may, that is, think that the economy is performing well at the moment but has become less capable of delivering broad-based prosperity over the course of a generation. If today’s conditions persist long enough, then, the reputation of capitalism may recover.
Timing is relevant to our evaluation in another way. If our economy has gotten worse at generating sustained prosperity, worse enough to make a loss of faith in capitalism understandable if not justified, then it matters when this decline began.
In 2015, during the last presidential campaign, Hillary Clinton suggested that “for decades” the economy had been offering a worse deal for most people. Her explanation: “For 35 years, Republicans have argued that if we give more wealth to those at the top — by cutting their taxes and letting big corporations write their own rules — it will trickle down. It will trickle down to everyone else.” The election of Ronald Reagan, in other words, was the turning point. It followed that many of his policies should be reversed: The top tax rates should go back up and unions should be strengthened.
If economic conditions have been deteriorating for an even longer period, however, then merely reversing Reaganomics might not be enough. And it is common to run into claims, apparently backed by data, that suggest as much. The Pew Research Center notes that the average wage, adjusted for inflation, fell between 1973 and 2018. It had risen steeply from 1964 (when the data series began) through 1973. Then it dropped for roughly two decades, and over the next two recovered but did not get back to its peak.
If real wages have truly been stagnant for longer than most Americans have been alive, then the economy has not worked in anything resembling the fashion we expect. Economic growth has been mostly an illusion: We have more stuff only because more of us work, large numbers of women having joined the paid labor force. If this picture is accurate, we need to make radical changes either to the economy or to our expectations of ever-rising prosperity.
There are, however, two big reasons to doubt the stagnation thesis. The first is that non-wage benefits have become a larger and larger element of compensation. Perhaps they have become too large an element: The tax code encourages employees to get health insurance through their companies rather than take higher wages and buy coverage themselves, and there are reasons to think we would be better-off if the tax code did not do that. But non-wage benefits have economic value to employees, and so looking at wages alone will cause us to underestimate employees’ material welfare.
The second reason for doubt is that a common method of adjusting for inflation — the one used in the Pew numbers cited above — overdoes it. The center-right social scientist Scott Winship has been indefatigable in explaining why using the Consumer Price Index (specifically a measure called “CPI-U”) as the gauge of inflation is a mistake, and how it warps our understanding of economic trends. It overestimates housing inflation before 1983, and ignores how consumer behavior responds when prices change.
Since inflation compounds, small errors each year add up to major changes over decades. Use a better measure of inflation, one based on personal-consumption expenditures, and the average wage rose by 21 percent from 1973 to 2018. (Average compensation must have risen more.)
The data on median family income also show a reassuring amount of growth. The family in the middle of the pack in 2015 made 45 percent more, with the right inflation adjustment, than its counterpart in 1970.
But the same numbers may also explain some of the public’s dissatisfaction with the economy. Median family income grew by a spectacular 58 percent in the 15 years from 1955 to 1970, then grew another 11 percent from 1970 to 1985, and 24 percent from 1985 to 2000. But the median family income of 2014 was slightly lower than it was in 2000.
What happened is that after the turn of the millennium we went through an extended period of slow growth punctuated by one mild and one severe recession. Median family income dropped more than 7 percent from 2007 through 2011, the sharpest decline since this data series started in 1953. It did not recover completely until 2015.
We have had a few good years since then. But it is not surprising that during the last two decades many Americans came to feel that their economic circumstances were stagnant and insecure. It is not surprising, either, that many of them have the sense that things used to be better — or that a generation of young people who started their work lives in a slow-growth economy tend not to have positive attitudes toward capitalism.
Instead of five decades of economic stagnation, we have had two decades of weak growth. That record does not suggest that the pro-market policies of the 1980s and 1990s were fundamentally mistaken. It suggests, rather, that we have discrete problems that deserve to be tackled.
High on the list of needed changes should be a reform of our monetary regime. It failed badly over the last dozen years. In 2008, excessive fear of inflation led the Federal Reserve to signal that it was going to tighten monetary policy even as the economy was sinking into a recession. It kept monetary conditions too tight after the crisis hit, too, for example by encouraging banks to hold additional reserves. These policies made the recession more severe and the recovery weaker. That these failures are not more widely appreciated is symptomatic of the misguided thinking that continues to govern monetary policy.7
Reforms should be undertaken in other areas, too. Our higher-education system is not working for most young people. Our immense health sector includes immense inefficiency. Regions of the country with high economic growth have imposed regulations that make it prohibitively expensive for less fortunately situated Americans to move there.
So we are called to be ambitious, but not revolutionary. Capitalism does not need to be overthrown or even rethought. Rather, the principles that make markets work need to be applied to some areas where they have not been present. Our economic system does not need dismantling. But it does
If the deal approved, this much is certain — Iran will obtain nuclear weapons, terrorism will increase, an arms race in the Middle East will ensue, and America and our allies will be far less secure.
by George Landrith • President of Frontiers of Freedom
Under the agreement now being celebrated by the Supreme Leader of the Islamic Republic of Iran, Ali Khamenei, and by the President of the United States, Barack Obama, Iran will become a nuclear power in 15 years — perhaps sooner. Even the Obama administration admits that Iran could have nukes within about one year, if it cheats on the agreement. But in any event, the deal paves the way for Iran to have nukes in 15 years — all with the world’s approval and blessings.
If 15 years sounds like a long time, think about your young child, grandchild, niece or nephew and ask if their world will be a safer place if the Islamic Republic of Iran has nuclear weapons when that child is in from high school.
Former Democratic Vice Presidential Candidate and former Senator Joseph Lieberman testified before Congress this week, “The agreement …ultimately allows Iran to become a nuclear weapon state, and indeed legitimizes Iran’s possession of nuclear weapons…. This is a bad deal for America, a bad deal for Iran’s neighbors in the Middle East, and a bad deal for the world.” Continue reading
Martin Anderson, a key adviser to Ronald Reagan, leaves behind a lasting legacy.
By Peter Roff • U.S. News
As an economist and political scientist, Martin Anderson was a man without peer. A senior fellow at Stanford University’s Hoover Institution since 1971, he did much to advance the cause of freedom as expressed in his love of big ideas.
Many credit the case he made against mandatory conscription inside the White House as a special assistant to former President Richard Nixon as an invaluable, perhaps even decisive contribution to the campaign to end the draft, which Nixon did in 1973 as the war in Vietnam was winding down.
In the late 1970s and early 1980s, Anderson was a key adviser to Ronald Reagan, helping him formulate a successful economic policy that permitted the liberation of American capital through tax cuts that, when combined with declining interest rates and a stable monetary policy, triggered an economic boom that led the world out of a long recession and laid the groundwork for the West’s ultimate victory in the Cold War. Continue reading
Washington, DC — Frontiers of Freedom, a public advocacy group founded by the late Sen. Malcolm Wallop, R-Wy., announced Thursday it had presented in 2014 Ronald Reagan Award to actor Gary Sinise in recognition of his efforts to keep Reaganite values alive in Hollywood and for his work in support of wounded warriors and active duty servicemen and women.
“Gary Sinise is a true American patriot. His unselfish devotion to the cause of liberty, which is best expressed by his ongoing commitment to the health, morale, and well-being of America’s fighting men and women, makes him exceptionally worthy of the Reagan Award. The example Gary sets is one that other members of the film and entertainment community should seriously consider following,” George Landrith, president of Frontiers of Freedom said. Continue reading
How often have you heard a Democrat prattle on and on about how well Barack Obama has done with the economy, given the mess he inherited? Usually, it’s some version of, “Things are getting better, but the economy the President started with was so awful, so he’s done as well as anyone could expect.”
When Ronald Reagan took over from Jimmy Carter in ’81, things were actually worse economically compared to when Obama took over from George W. Bush in ’08. Continue reading
I think the poor need another Reagan in the White House.
The income of black heads-of-households dropped by 10.9 percent from June 2009 to June 2013. This decline in black income is more than double the overall 4.4 percent drop nationally in real, adjusted for inflation, median household income during the same four years of alleged “recovery.”
Similarly, real incomes of those under age 25 fell by 9.6 percent over the same period — again, more than double the average drop in household income. Continue reading
The evidence that Vladimir Putin — and not his American public relations firm — really wrote the pugnacious New York Times op-ed on Syria that infuriated both Republicans and Democrats came in a snarky passage near the end that included the phrase: “American Exceptionalism.”
In the old Soviet system, the one that nurtured Putin’s ambitions and his career, party functionaries were long hostile to the very idea that America was special. The offending phrase itself was actually popularized by Joe Stalin. In 1929, Stalin used it in response to a contingent of American communists who claimed that U.S.-style capitalism might constitute an exception to Marxist thought.
Decreeing an end to the “heresy of American Exceptionalism,” Stalin expelled them from the Communist Party; and during the Great Depression, Communist Party USA derided “American Exceptionalism” by way of denouncing free-market democracy. Continue reading
“They came not as Conquerors, but as Liberators”
by Scott L. Vanatter
After speaking at Pointe du Hoc earlier in the day (June 6, 1984), President Reagan also spoke at Omaha Beach, France.
He began by harking to Lincoln’s challenge that “we can only honor” those who stormed the beaches and cliffs “by rededicating ourselves to the cause for which they gave a last full measure of devotion.”
Again that day he reminded a world facing another kind of aggression, a still existent Soviet Union, that the Allies “came not as conquerors, but as liberators. When these troops swept across the French countryside and into the forests of Belgium and Luxembourg they came not to take, but to return what had been wrongly seized.” Continue reading
Ronald Reagan coined the phrase, “Peace through strength,” but it was not a new idea and it had not been an historically partisan concept. It dates back to George Washington who said, “To be prepared for war is one of the most effectual means of preserving peace.” Washington and Reagan understood that peace is achieved through strength and conversely that weakness invites attack. This was once a universally accepted truth among American leaders. Current events prove, it should again become American policy regardless of party.
We live in a dangerous world. Kim Jung-un is threatening military invasions and nuclear attacks. We’ve recently learned that the North Koreans are much closer to being able to put a nuclear warhead on a missile than was previously believed. China, already a nuclear power, is rapidly developing a large navy and stealth aircraft. Russia has been sending its military aircraft into American airspace on provocative test missions. Continue reading
“You can call it mysticism if you want to, but I have always believed that there was some divine plan that placed this great continent between two oceans to be sought out by those who were possessed of an abiding love of freedom and a special kind of courage. . . . Call it chauvinistic, but our heritage does set us apart.”
by Scott L. Vanatter
Later this week the Conservative Political Action Conference will again convene. Thirty nine years ago, in 1974, Ronald Reagan spoke at the very first conference. At the time conservatism was thought by many to be on the ropes, discredited, and out-of-date. Ronald Reagan thought otherwise.
He labeled certain of his conservative contemporaries, even men at the dinner that night, as “prophets of our philosophy.” In this he might as well have been reading aloud his own bio. Not only a prophet for telling the truth, he also led conservative followers in bringing to pass what later became known as, the Reagan Revolution. In Europe there are old bridges still being used to this day which are many times older than the American republic. We are still young. Continue reading
“Every dollar the federal government does not take from us, every decision it does not make for us will make our economy stronger, our lives more abundant, our future more free.”
by Scott L. Vanatter
Granted the privilege of being elected to a second term, it was his first term accomplishments which enabled Reagan to describe the continued path to an even greater future. These concrete accomplishments – in the face of a terrible economy and a palpable lack of hope — gave the country confidence that we could become the shining city on a hill he so often pointed to. His February 6, 1985 State of the Union address cemented these hopes in the minds and hearts of Americans of all walks of life. Reagan’s generous, positive vision of the future was contagious. This contagion was assisted by the results of the politics and policies he pursued. Continue reading
Ronald Reagan, Master of the State of the Union
First laying out his plans, then later his accomplishments, Ronald Reagan mastered the formal setting of the State of the Union. He used these eight events to unify congressional and American opinion in support of his positive, generous vision.
Ronald Reagan’s State of the Union speeches: