Tibor G. Balogh HIST 10 THE REAGAN REVOLUTION --------------------- With this short paper I will attempt to examine the Reagan Revolution. First I will start by researching Ronald Reagan's background and his early beginnings. Second I will explore the domestic-economic policy of the 1980s. In this part of the paper I will investigate what Reagan's policies meant for American businesses and to individuals alike. Third I will examine the foreign policy of the Reagan administration and the effect it had on the rest of the world. Based on my research and personal knowledge of recently passed history I claim that the Reagan Revolution, that is the period from 1981 to 1988, was a prosperous time for America. Additionally the entire world benefited from the topple of communism that was expedited by the well-calculated Reagan foreign policy. First I will start with a brief history of Ronald Reagan the man. He was born February, 6, 1911 in Tampico, Ill. His parents were median class average people who worked hard for all their economic gains. Reagan was born in a room above his father's shoe store. He was not fortunate like most of us to be born in the security of a hospital (Myeres 18). "Reagan's own parents were too poor to own a home, let alone a second car or a boat" (Qtd in Cannon 1). As you can see Reagan had a very simple beginning. In 1932 Reagan graduated from Eureka College with a major in Economics. In 1944 the world was at war again. Reagan served in WWII as a second lieutenant of calvary. After the war was over Reagan becomes an actor and stars in many famous Hollywood films. He entered politics through the film industry, he was elected President of the Screen Actors Guild and represented them during labor negotiations. In 1966 Reagan was elected governor of California beating Incumbent Edmund G. (Pat) Brown Sr. Finally in 1980 Reagan was elected to be the 40'th United States President. He defeated President Jimmy Carter with a landslide victory. Ronald Reagan ran for president under the Republican platform. Reagan said "Republicans want an America in which people can still get rich"(Qtd in Meyerson 7). and the people listened and voted for him. What was the Reagan revolution all about, how did Ronald Reagan's presidency impact the United States of America? Reagan was elected to be president of the United States because the Carter administration failed in many areas. The most notable failure was the economic recession. High interest rates, double digit inflation rates comparable to economic conditions only occurring after the Civil War, and widespread unemployment robbed Jimmy Carter from a second term as President. Another crucial area where the Carter administration failed was foreign policy. The hostage crisis in the Middle East was badly handled. Iran captured the sacred grounds of the American Embassy and held many American citizens at gun point, captive against their will. This was an international embarrassment at the least. The inability of the Cater administration to adequately deal with this problem made Carter look weak. The whole world was watching and waiting for a solution that did not come until after President Reagan was elected. Once in power, President Reagan faced a World full of dangers. The Cold War was probably the hottest ever during the 1980's. The threat from the Communist Empire was real. The Soviet Union and the Warsaw Pact had all their Intercontinental Thermonuclear Ballistic Missiles pointed at Western Europe, and particularly at the United States.(Much like today) Tensions were high between the superpowers. The Russians were the biggest threat to Western Europe and to the Free World. A full scale nuclear exchange was expected any time, and preparations were made in all major communist cities around the world to teach citizens how to survive such a catastrophe. In the latter part of the 1980s I was serving active duty in the United States Air Force. I remember being thought what Nuclear Fallout shelter sings look like and I was instructed to take cover (if such thing is possible) in marked shelters when the signal was given. An example of soviet aggression has quickly manifested itself when one day in September of 1983 a Soviet Mig fighter shot down and destroyed a Korean Airlines passenger plane with 269 innocent people onboard. The Korean 747 Jumbo Jet probably wondered off course accidentally. It was in Soviet Air space when the Soviet Air Force shot it down in cold blood. There were no survivors. Reagan's term in office would be complicated with many major foreign policy issues, but none posed as a monumental threat as the Soviet Union. More will follow on foreign policy but first a closer look at the domestic policies of the 1980s. Reagan promised to downsize government to its proper role. In his January 20, 1981, inaugural speech Reagan said "Government is not the solution to our problem. Government is the problem"(Qtd in Unger 906). Reagan also promised to cut taxes for everyone. On 13 August 1981 the President's Economic Recovery Tax Act was signed into Law clearing the road to a great economic boom. The tax cuts created economic opportunities where none existed before. This stimulated the economy by allowing individuals to open small businesses and it raised more revenues because the small businesses would all be forced to pay some taxes for government. Not to mention that whenever these small businesses hired individuals to work for them those individuals joined the ranks of productive citizens who paid taxes for the government. Reagan cut the red tape or government regulation on businesses, and freed them up to do what they saw best for themselves. Big and small business all flourished in the years to come. Before the tax cut, the Standard & Poor's 500 stock index stood at 129.55 points, when the economic boom was over, this leading economic indicator increased to 418 points (Halverson 7). Likewise, another important economic indicator the Dow Jones Industrial Average stood at 947.27 points at the beginning of the 1980s. When President Reagan was through with his economic program it increased to 3200 points (Halverson 7). The increases of these stock values indicate that there was a general wealth increase during the 1980s. Allowing market forces to guide and dictate businesses was a crucial step to a healthy economic recovery. Reagan recognized this one important fact and he acted on it with his tax cut and deregulation package. In my opinion there really isn't all that much that any one president can do to turn around a sluggish economy, except of course, roll back government red tape and leave the economy alone. The more government gets involved with regulating an economy the harder it is for that economy to operate freely. During the 1980's millions of new well paying jobs were created by the natural market forces of a healthy and growing economy. "The Reagan economy gave us the longest peacetime economic expansion in our history and it did so without reigniting inflation" (Qtd in Roberts 5). With new jobs created on a regular basis, the unemployment rate fell. Particularly the unemployment rate for black teens fell from 38.5% in 1980 to 31.1% in 1990 (Zycher 7). Similarly the unemployment rate for white teens fell from 15.5% in 1980 to 13.4% in 1990 (Zycher 7). The critics of Reaganomics hold the view that most of these new jobs were "fast-food hamburger flipper" type. Nothing could be further from the truth. This image of the United States as a nation of hamburger-flippers was destroyed with the U. S. Department of Labor Statistics report that said "... the percentage of new jobs created in higher- skilled categories was much larger than in the 1980's than in the 1970's..." (Qtd in Roberts 5). In fact the free and growing economy created more new jobs in both the services and manufacturing sectors of the economy. The Commerce Department undertook a 2.5 year study of American Manufacturing during the 1980s. They found that in the 1980s the U. S. manufacturing productivity grew at an unbelievable rate (Roberts 5). Reagan's laissez faire economic policy helped the country to stand back on its economic feet. It simply worked. Not only people were able to find work during the 1980's, they also noticed that their incomes was rising too. "The average real family income grew well over 15% from 1982 to 1989" (Qtd in Zycher 7). Under Reagan's eight years of economic leadership the country reduced inflation and unemployment and enjoyed the longest economic expansion since WWII. Most working people were better off and had more expandable income to spend at their leisure. "Even the poor profited during the Reagan years" (Qtd in Zycher 7) proclaimed Benjamin Zycher the vice president for research at the Milken Institute for Job and Capital Formation in Santa Monica. Zycher further notes "...The fact is that all groups--except young black males--grew wealthier during the 1980's" (Qtd in Zycher 7). America needed a boost in the arm after the recessions of the 1970s. Reagan's tax cut was exactly what had to be done to start the economic comeback. The defense buildup helped the economy as well. During the 1980s the United States spent vast amounts of capital on rebuilding the military. The buildup included investments in military personnel and in new state of the art military weapon systems. The development of new weapon systems injected billions of dollars into the economy. McDonnel Douglas, General Dynamics, General Electric, Motorola, Lockheed and many other American high tech businesses won major contracts from the government that enabled them to hire more employees. The work was plentiful in the defense industry. These workers also found their salaries and their standard of living rising. How did Ronald Reagan's foreign policy effect world affairs? The American arm's buildup during the 1980's was a direct response to the Soviet Union's arm's buildup. The Soviets were developing new weapons themselves, but the real threat to the West was the overwhelming number of conventional military hardware and personnel at their disposal. The USSR and Warsaw Pact Nations had the standing armies needed to take Western Europe in a swift attack. If it were not for NATO and the United States they might have even done it. President Reagan could not allow the USSR to maintain military superiority over the West. As the leader of the Free World, he directed more resources to the buildup of the American military. While the total amount of U. S. spending on the military budget never passed 6% of the Gross National Product (GNP), the Soviet Union's total spending on the military was as high as 25% of their respective Gross national Product (GNP) (Unger 918). The arm's race ended up bankrupting the Soviet Union. It is my belief that this was their primary motivation to sue for peace with the West and pull out of Eastern Europe where they were imposing imperial occupation. Reagan's foreign policy relative to the communist threat was a success throughout his tenure. It secured the continual freedoms enjoyed by the United States and Western Europe from the aggressive communist oppressor. The effect of Reagan's foreign policy was that communism fell sooner than otherwise would have fallen if left to its own natural course. It was bound to happen eventually but it happened during the 1980s. Of course Reagan cannot take all the credit for the fall of communism because every president before him was committed to the policy of containment. Additionally the Soviet leadership was dealing with great pressures from within. The Soviet people wanted a democratic government, one that would not oppress them any more, so they also contributed to the fall of communism. However, "Ronald Reagan turned up the heat in military spending and high tech, on regional battlefields and on the ideological front" (Qtd in Rosenfeld 27), which expedited the inevitable. Despite the apparent victories won in matters relating to foreign policy and domestic affairs, there is a popular movement that would like to remember Reagan as only an actor and not as a key person who shaped domestic and world history. According to Godfry Sperling Jr. the Christian Science Monitor's Washington columnist, "Early ratings from the academic community--that liberal world where histories are written--consign Reagan to the lower third of US chief executives. In these assessments, Reagan is viewed as an actor, not a leader--indeed, as somewhat of a simpleton" (Qtd in Sperling 18). The critics will have to deal with the facts. The hard economic numbers clearly speak for themselves, they point to a successful economic policy. Additionally in the 1980s "the Federal Reserve's Index of manufacturing production grew faster by a 6.3% a year-yielding an awesome total increase of 48.3%. All the talk about the deindustrialization of America turns out to have been not only false but ludicrous" (Qtd in Reynolds 22) It is true that Reagan was a great communicator and he used his talent to his advantage every chance he had. But most importantly Reagan had a clear vision that guided him. Once he was elected, the people knew exactly what were the three most important goals President Reagan would be working on. He would cut taxes, beat the Russians, and rebuild the Defense Department. Reagan also surrounded himself with White House aids who were experts in their respected fields. He drew from their advice and experience when faced with big decisions. Reagan used good managerial practices as well. He delegated authority to qualified aids yet at the same time he retained responsibility over the outcome of events. Reagan's vision can be further illustrated when we examine the language he used in speeches. "Mr. Gorbachev, open this gate! Mr. Gorbachev, tear down this wall" (Qtd in Meyerson 7). These words were spoken by Reagan in Berlin 1987. They represent the final push for freedom from the Russian oppressors in Eastern Europe. Millions of Poles, East Germans and Hungarians owe their freedoms to President Reagan's diligent foreign policy. Reagan described the Russians as an evil empire. In 1982 at the British Parliament Reagan said "It is the Soviet Union that runs against the tide of history. ... the march of freedom and democracy which will leave Marxism-Leninism on the ash heap of history as it has left other tyrannies which stifle the freedom and muzzle the self-expression of the people" (Qtd in Meyerson 7). Ronald Reagan's legacy, the "Reagan Revolution" was a very positive time in American History. The Reagan Revolution was about the economic opportunities created by the rolling back of government regulations early in the 1980s. This helped the economy and many people prospered as a result. Reagan's role in the topple of communism should also be recognized, and recorded favorably in the history books of future generations. Reagan's role in making the 1980s a prosperous decade needs to be credited as well, and acknowledged even on liberal college campuses. "A decade of success has proven Reagan right, no matter what the politicians try to say" (Qtd in Roberts 5). Roberts who is the William E. Simon Professor of Political Economy at the Center for Strategic and International Studies in Washington D. C. also said "Reaganomics showed that capitalism remained the engine of economic progress and inspired the worldwide retreat from socialism in the 1980's. Reagan earned our votes by fixing the economy" (Qtd in Roberts 5). The truth is that the 1980s were a decade of prosperity where even common people were better off. Additionally if the United States wishes to remain a strong economic and political superpower then the current political leadership should reflect on the capitalist -- free market principles of the 1980s when charting future economic battle plans for America. WORKS CITED ----------- Cannon, Lou. "Ronald Reagan: All-American Individualist." The Washington Post 114 April 22, 1991: C1. Halverson, Guy. "Looking at Wall Street's Record in the Reagan- Bush Era." Christian Science Monitor 84 Nov 12, 1992: 17. Judge, Clark. "The Reagan Legacy." The Wall Street Journal August 17, 1992: A10. Meyers, Michael. "Ronald Reagan: His Life." Los Angeles Times 110 November 4, 1991: A18. Meyerson, Adam. "Shortchanging Reagan." The Washington Post 116 February 14, 1993: C7. Reynolds, Alan. "Reagan's Awesome Economic Boom." The Wall Street Journal May 7, 1991: A22. Roberts, Paul Craig. "Supply-Side Prescription Was the Cure." Los Angeles Times 110 August 5, 1991: B5. Rogers, David. "No Delay Found in 1980 Release of Hostages." The Wall Street Journal January 13, 1993: A4. Rosenfeld, Stephen. "Winners of the Cold War." The Washington Post 115 October 30, 1992: A27. Sperling, Godfrey Jr. "Sizing Up the Reagan Presidency." Christian Science Monitor 83 Jan 15, 1991: 18. Unger, Irwin. These United States: Questions of our Past. Englewood Clifs: Prentice Hall, 1992. Zycher, Benjamin. "Even the Poor Profit in the Reagan Years." Los Angeles Times 112 Dec 15, 1992: B7.