Reagan and Conservatism

#Reagan Revolution

Ronald Reagan’s election in 1980 and re-election in 1984 was the result of many ongoing processes that had their roots in earlier US politics. You should be able to explain his rise to the presidency in 1980 (see also the roots of all this backlash in the 1960s/1970s in Unit 8) and what his policies looked like in the 1980s.

Conservatives disliked the increasing size of the federal government since the New Deal and Great Society, both in terms of overall spending and the intrusion into everyday life. Many fiscal conservatives wanted less government spending and less taxation in return. They blamed the Carter administration (1977-1981) for the stagflation, high gas prices, the poor economy of the 1970s, and perceived US weakness after the Iran Hostage Crisis.

Social Conservatives were concerned about the perceived decline in moral values they saw in the US. They saw Roe v. Wade, which legalized abortion in 1973, as an attack on the sanctity and protection of life. They opposed the ERA, feminism, LGBT rights, and sexual revolution of the 1960s that encouraged sex outside of heterosexual marriage and the undoing of traditional gender roles. This would later play a role in the Reagan administration’s delayed response to the AIDS crisis of the 1980s.

Other conservatives, in a call back to Nixon’s Law and Order rhetoric of the 1970s, opposed the rise in crime and wanted tougher federal policies toward drugs and criminals. This was often linked to opposition to anti-war and civil rights protesters, who some conservatives saw as undermining the social order.

Some conservatives also opposed school desegregation and fought to keep black and white students separate, especially in northern metropolitan areas where bussing was used to integrate school districts. Other conservatives opposed affirmative action—especially in higher education—which gave special consideration to groups who had been discriminated against in the past like women and African Americans. They challenged this in court, but the Supreme Court held in Bakke v. California that while strict racial quotas were not allowed, taking demographic factors like race into consideration was allowable as part of larger admissions processes.

#Election of 1980

Ronald Reagan, a well-known movie and television actor, gained fame among Republicans as an effective political speaker in the 1964 Goldwater campaign. He was soon elected governor of California, the nation’s most populous state.

#Image Courtesy of Wikimedia

In 1980, Jimmy Carter was in serious trouble. Inflation touched off by another oil shock reached double digit figures. The Federal Reserve’s efforts led to a recession.

Carter fought back claiming the Reagan was too reckless to conduct American foreign policy in the nuclear age. He charged that the election would decide whether we had peace or war. He tried to portray him as a war monger. Reagan pointed to a “misery index” of 28 (rate of inflation added to the rate of unemployment) and concluded his campaign by asking a huge television audience “Are you better off now than you were four years ago?” Reagan was elected, carrying 45 states.

#Reaganomics

The Reagan administration advocated supply-side economics, arguing that tax cuts and reduced government spending would increase investment by the private sector, which would lead to increased production, jobs, and prosperity.

This approach contrasted with Keynesian economics long favored by Democrats, which relied on government spending during economic downturns to boost consumer income and demand. Critics of supply-side theory compared it to the “trickle down” economics of the 1920s, in which wealthy Americans prospered, and some of their increased spending benefited the middle class and the poor.

These were supply-side economic policies based on the idea that cutting taxes on the rich would produce new investment and new businesses, which would then create new jobs or raises for middle- and working-class people—also called Trickle-down economics. This remains highly controversial to this day, but it definitely made US economic inequality worse as the rich got richer. Reagan later raised some taxes a few times in the early 1980s, but, overall, tax rates declined in the 1980s and budget deficits soared.

#Tax Cuts

Congress passed the Economic Recovery Act of 1981, which included a 25% decrease in personal income taxes over three years. Cuts in corporate income taxes, capital gains tax (a tax levied on profit from the sale of property or an investment), and gift and inheritance taxes guaranteed that a large share of the tax relief went to upper-income taxpayers. Under Reagan, the top income tax rate was reduced to 28%.

#Spending Cuts

With the help of conservative Southern democrats, the Republicans cut more than $40 billion from domestic programs such as food stamps, student loans, and mass transportation. However, the cuts were offset by a dramatic increase in military spending.

Reagan began to cut the budget for federal programs he disliked, including the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA) Reagan’s Secretary of the Interior, James Watt, opened up federal forests to logging, and public lands to oil and mining interests.

#Recession

As policies of Reaganomics took hold, the economy rebounded and beginning in 1983 entered a long period of recovery. While upper income groups, including well-educated workers and “yuppies” (young urban professionals) enjoyed higher incomes fr...