Transcription
If you spend long enough looking at the financial and economic data, you would be forgiven for thinking that almost everything is getting worse all the time. Our national debt has become an almost unsolvable issue. Inequality has reached guilded age levels. Union membership has collapsed. Wages have stagnated even as productivity soared. People are saving less of the money they do make. Corporate bankruptcies are up over a,000%. Our life expectancy has fallen behind almost every other advanced economy, and our incarceration rates have more than quadrupled in the last 40 years alone.
It's pretty bleak stuff, but if you look closely enough, you might notice that these numbers all started moving in the wrong direction at around about the same time. Depending on who you ask, Ronald Reagan was either one of the best presidents in history or one of the worst presidents in history. And it's that disconnect that makes a candid recount of his achievements and failures so hard to find. This split of opinions is not helped by the fact that political polarization is at its highest level since the Civil War. Ironically, another trend that started right here with the election of Ronald Reagan.
No matter what side of the fence you sit on, one thing nobody can take away from him is that more so than perhaps anybody else in modern American history, his marks can clearly be seen in almost any metric you might look at. For better or worse, no other president has altered the course of the economy this significantly. But it is possible that old Ronnie gets a lot of credit and or criticism that he wasn't directly responsible for. Before blaming all of our problems on just one man, it's important to understand the circumstances that made him possible in the first place. What really compelled so many people to vote against their own best interest? And why haven't we been able to undo these changes in the last 40 years since now in violation of the laws that one supervisor referred to with regard to his children? And I am hoping that they will in a sense remove themselves from the lawb breakaker. We'll protect the needy while it triggers a recovery that will benefit all Americans. It is no coincidence that our present troubles parallel and are proportionate to the intervention and intrusion in our lives that result from unnecessary and excessive growth of government. It is time for us to realize that we are too great a nation. Tear down this wall.
Ronald Reagan had one of the most unusual origin stories in American political history. A story that he was able to leverage very effectively throughout his entire career. Reagan was born in Dixon, Illinois, the son of a struggling shoe salesman and a mother who by most accounts was emotionally distant. She reportedly raised him with a lot of religion but not a lot of warmth. He moved to Hollywood with the hopes of becoming a movie star. And while he succeeded in getting roles, he was never particularly good at filling them. Over the next two decades, he appeared in dozens of forgettable bee movies, mostly supporting roles that nobody remembers today. But what he lacked in talent, he more than made up for in other assets. The man was handsome, charismatic, and genuinely believable on screen in a way that had nothing to do with his ability to act. More importantly, Reagan was a joiner. In the 1940s, he became politically active in Hollywood, joining various progressive and left-leaning organizations, eventually resulting in him becoming elected president of the Screen Actors Guild, a body representing film actors in negotiations with the studios. For the next 8 years, Reagan would negotiate contracts, fight for better conditions, and defend the rights of his members against studio executives who wanted to pay them as little as possible. During this entire time, he insisted he was a committed Democrat and a friend of the people making the movies.
Now, the Hollywood studios were not particularly thrilled about any of this. Organized groups of performers demanding higher pay was a threat to their profit margins, so they pushed back. While he was still on the board of the union, Reagan was given a job hosting General Electric Theater. The rule paid a reported $125,000 a year in 1950s dollars, which was extraordinary even by Hollywood standards at the time. The only problem was that General Electric was one of the most aggressively anti-UN companies in the country. Reagan's politics began to change. By the late 1950s, his speeches sounded distinctly different. The man who had spent a decade defending performers against exploitations was now warning that organized groups demanding better conditions were the real threat to the American economy, leaning on messaging about communist sympathizers in the ranks. Throughout history, these kinds of political flip-flops have not been unusual. It's easy to fight for the working man until it becomes profitable not to. Just last month, we explored how Mousolini went from a staunch socialist to the father of modern fascism within the span of a few months as it became more advantageous to align himself with the industrialists that could support his messaging. Now, hopefully it should go without saying that Reagan's messaging was never that extreme. But this behind-the-scenes flip-flop would actually later become the centerpiece of his political messaging as he could simultaneously present himself as a man of the people union leader and at the same time also being a wealthy friend of business depending on who was listening. To complete the transition, Reagan formally switched parties and became a Republican in 1962, just one year after leaving his second term as the president of the Screen Actors Guild. The interesting part though was how he sold it. He was very hard to debate over his anti-worker stances because he could always fall back on the gotcha factoid that he was a union president, something that none of his political opponents could challenge him on. What he rarely mentioned were the 15 years spent working against those same interest once the right check arrived.
Rean ran for governor of California. Back then, California was a solidly Republican state. The deep blue liberal stronghold we know today was at that time governed by Republicans and voting Republican in nearly every election. Reagan's campaign was simple. The government was too big. Taxes were too high. California needed someone who believed in business, but somehow also still had the best interest of the little guy in mind. As governor, Reagan proved radical in his ambitions. He cut social spending, reduced benefit eligibility, and fought environmental regulations. He also became an early champion of what would later be called the war on drugs, an approach that treated substance abuse as a criminal problem rather than a medical one and would eventually lead to mass incarceration on unprecedented scales.
But before that, there was the matter of becoming president. By the late 1970s, America's economy was in serious trouble. Inflation had risen to nearly 14%, interest rates were astronomical, and the average American's purchasing power was declining steadily. Families who had felt secure were now struggling to pay their bills. Jimmy Carter was widely blamed for these problems. Whether fairly or not, Carter had become associated with weakness, humiliation, and a country that felt like it was losing its way. Americans were hungry for change in whatever form it would take. Ronald Reagan promised that change. Lower taxes, deregulation, the removal of rules governing how businesses could operate, strength abroad, and prosperity at home. The core of his economic message was that if we just got out of the way of business, everything would improve. Reagan won the 1980 election in a landslide carrying 44 states. He had a mandate. He had the charisma to sell almost anything, but he did not have Congress. The Senate flipped Republican, but the House of Representatives stayed firmly Democrat by a significant margin. Now, this was actually one of the most interesting parts of the story because it showed that split ticket voting was far more common back then than it is today. Millions of Americans voted for Reagan as president and then turned around and voted Democrat for their local representative. It arguably showed that Reagan's landslide was just as much about people liking his messaging as it was about people hating Carter. And it also meant that to get anything done, Reagan would have to convince Democrats to vote with him, which he did. Within his first year, Reagan signed one of the largest tax cuts in American history. The top marginal rate dropped from 70% to 50% overnight. Lower earners got smaller cuts. And that was just the tax policy. At the same time, he began gutting regulations across every sector of the economy. Banking, environmental protection, workplace safety, all of it. When the air traffic controllers went on strike for better conditions, Reagan fired all 11,345 of them and banned them from the profession for life. And that was just the first year. So, it's time to learn how history works and to find out what happened when one of the most charismatic presidents in American history got everything he asked for and why 40 years later, nobody has been able to undo it.
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Now, behind the headlines about tax cuts and deregulation, something much larger was quietly taking shape. The rules governing how wealth was distributed, how information was consumed, and how ordinary people could push back against those in power were all being rewritten at the same time. The economy recovered, markets climbed, inflation fell, and nobody paid much attention to what else was changing because things felt like they were getting better. By the time the consequences became visible, it was far too late to reverse them. Now, at the time, Reagan's ideas were not entirely wrong. The economy was genuinely broken. Inflation was destroying savings. Productivity was stagnant, and many economists, including left-leaning ones, believed something radical had to be done. Tax cuts and deregulation seemed like potentially reasonable responses to an economy that had been suffocating under the weight of its own bureaucracy. The problem is what came after. Remember those House Democrats who kept their seats? Many of them held views that would be considered quite conservative by modern standards. They believed in cutting social programs and strengthening the military. This mattered enormously. When Reagan came into office, many of them were willing to negotiate and many of them agreed to. Reagan used a budgetary mechanism called a reconciliation bill to bundle massive policy changes into a single legislative package. Instead of debating each tax cut, each regulation change, each spending decision individually, it all went through at once. Congress passed the Economic Recovery Tax Act. The wealthy got massive tax cuts relative to the lower earners. By 1986, Reagan had cut the top rate again to just 28%, which meant it had been reduced by more than 60% in 5 years. Simultaneously, the government removed rules governing everything from banking to environmental protection to workplace safety. The theory behind all of this was called supply side economics. Tax the wealthy less and they will invest more, create more jobs, and grow the economy faster. The extra growth will then generate more tax revenue, which will ultimately balance the budget. Now, whether or not you think that sounds too good to be true is kind of besides the point, because in the short term, it kind of worked. Inflation began to fall. The economy started recovering. Unemployment dropped. It looked like Reagan had fixed what Carter could not. So far so good, right? But the short-term success of these policies was used to justify maintaining them forever. If someone is having a severe allergic reaction, the correct response is adrenaline. Adrenaline works. It is life-saving, but you should not administer it every day for the rest of their life. Once the emergency passes, the same treatment becomes counterproductive. Reagan and his successors never grasp that distinction or chose not to. Tax cuts and deregulation worked in the crisis of 1980 to 1983. They continued these same policies for the next four decades and the consequences are still unfolding today.
Now remember that air traffic controller strike? Well, the full story gets much worse. These were people guiding planes in and out of airports. One of the most stressful jobs in the country. Long hours, dangerous conditions, and relatively modest pay at the time. Patco, the union representing them, had been negotiating for better compensation. Management had refused to budge, so they went on strike. Reagan declared the strike illegal and gave the controllers 48 hours to return to their posts. When they did not, he fired every single one of them. Sounds pretty bad, right? Well, after they didn't go back to work, he banned them from working in the profession and government ever again for life. Reagan replaced them with non-members and military personnel. The message to every organized body in America was unmistakable. If you try to bargain, if you challenge your employer, you will be destroyed. Across the country, the threat of collective action effectively disappeared overnight. For decades, the ability to withhold services had been the primary tool available to people negotiating for better pay. Now, the government had demonstrated it would simply crush anyone who tried. Membership in these organizations began to decline immediately. As that negotiating power evaporated, wages stagnated, and they never recovered. Reagan also changed immigration policy in ways that reinforced this dynamic. The Immigration Reform and Control Act expanded temporary visa programs that tied people to specific employers. If a visa holder left their job, they lost legal status in the country. Critics pointed out that this was another mechanism for suppressing the ability for ordinary people to demand better conditions by introducing a supply of labor who could not push back even if they wanted to.
Now, throughout all of this, Reagan continued to reference his time representing performers. He would mention it in speeches, interviews, and campaign advertisements. I was president of the Screen Actors Guild. I understand the concerns of everyday Americans. The public believed him. They saw a man who had once fought for better conditions. They did not necessarily connect that with the subsequent years spent quietly dismantling those same protections once General Electric started signing the checks.
But Reagan's impact extended far beyond economics. Remember those House Democrats who voted with Reagan on tax cuts and deregulation? They did so because back then, broadcasting rules actually forced politicians to engage with opposing viewpoints. The Fairness Doctrine was an FCC rule that required broadcasters to give roughly equal airtime to different political perspectives. If a network ran a segment supporting Reagan's tax cuts, they had to give airtime to someone arguing against them. This mattered because it meant voters were exposed to both sides whether they liked it or not. Democrats and Republicans had to coexist in the sameformational universe, which is partly why so many of those House Democrats were willing to work with a Republican president in the first place. Reagan believed this was government overreach, so he removed it. What followed was the birth of explicitly partisan broadcast media. Rush Limbbo show became the perfect example. Cable news networks began creating openly partisan programming instead of attempting balance. Fox News took this to its logical conclusion. Within a decade, Americans could live in completely separateformational universes. Conservatives consumed only conservative media. Progressives consumed only progressive media. They stopped sharing basic facts about reality. They stopped being able to have productive conversations about anything. This was not inevitable. The conditions that made it possible were created by a specific policy decision. Now, it's worth pointing out that one of the reasons split ticket voting was so common before Reagan is because of the fairness doctrine. Voters were exposed to nuance arguments from both sides, which made it much easier to vote for the best candidate regardless of party. Once that rule disappeared, so did nuance, and so did the split tickets.
The escalation of the war on drugs had similarly devastating consequences. The rhetoric framed substance abuse as a national emergency. The threat was overstated. The science was questionable, but politically it was perfect. Drugs were presented as an enemy requiring military-style force. What followed was unprecedented expansion of law enforcement and incarceration. Mandatory minimum sentences increased. Police funding exploded. And a prison industrial complex emerged that incentivized locking people up rather than rehabilitating them. The United States now incarcerates more people per capita than any other developed nation, more even than many authoritarian regimes. This did not happen by accident.
So, how was one man able to accomplish all of this? Several things aligned perfectly. First, Reagan inherited a genuine crisis. Carter left office with 14% inflation and public confidence had been shattered, which gave Reagan enormous political capital. When the economy was breaking, voters will tolerate radical solutions they might otherwise reject. Second, charisma. 27 years as an actor had taught Reagan how to deliver a message that felt authentic even when the substance was questionable. Wealth will trickle down. We will all rise together. People wanted to believe that, so they did. Third, timing. The baby boomers were entering the peak of their earning years. They were a massive generation and a powerful voting block. Affluent people tend to vote for lower taxes, even when those cuts come at the expense of services that help people who are not them. Fourth, Democrats were weak. Many congressional Democrats held conservative views and sympathized with Reagan's agenda. No unified opposition emerged because in many ways there was significant agreement across party lines. Fifth, the reconciliation mechanism by bundling enormous policy changes into a single legislative package. Reagan avoided having to defend each decision individually. Tax cuts, deregulation, and spending changes all went through together before most Americans fully understood what was happening. And finally, Reagan had an enemy, communism. Anyone who organized could be painted as a communist sympathizer. Environmentalists became enemies of prosperity. You were with Reagan or you were with the communists. There was no middle ground.
Now, here is where it gets complicated. Because Regan's legacy is not as simple as one man ruined everything. Many of the trends people blame on Reagan were already in motion before he took office. Manufacturing had been declining since the 1960s. Globalization was reshaping economies around the world regardless of who occupied the White House. Reagan did not create these forces, but he removed every guardrail that might have managed them. When manufacturing moved overseas, there was no retraining programs because Reagan had cut them. When corporations consolidated into monopolies, there was no enforcement because Reagan had gutted the agencies responsible. When wealth concentrated at the top, there was no progressive tax structure to redistribute it because Reagan had cut taxes. The trends were already happening. Reagan ensured that there was nothing standing in their way.
And perhaps the most lasting damage was psychological. Reagan sold a story about how the economy works that 40 years later, Americans still largely believe. The idea that wealth created at the top eventually benefits everyone at the bottom. That government is always the problem, never the solution. That if you are struggling, it is because you have not worked hard enough. This narrative was enormously comforting to people who were doing well because it absolved them of any responsibility for people who were not. And it was quietly devastating to people who were struggling because it told them their suffering was their own fault. By the time the evidence made it clear that wealth was not trickling down, the fairness doctrine was gone. The media landscape had fractured and a significant portion of the population was consuming information that reinforced the Reagan worldview rather than challenging it. The feedback loop was complete. Policies created conditions. Conditions were reinforced by media. Media shaped public opinion and public opinion prevented the policies from being reversed.
So we return to the original question. Did Reagan ruin everything? The honest answer is he inherited a genuine crisis and applied genuine solutions. Those solutions worked in the short term and that short-term success was real. But those short-term solutions became permanent policy. And permanent policy created structural damage that has compounded over four decades. Stagnant wages, shattered collective bargaining, mass incarceration, a media landscape so fractured that Americans cannot agree on basic facts, and an economy where the gains go almost exclusively to the people who are already winning. Reagan did not ruin everything. He changed the rules, and nobody has changed them back.
Reagan also undid efforts that were a historical anomaly rather than the expectation. Go and watch his video next to find out why the 30 years before he took office were truly unique economically. And don't forget to like and subscribe to keep on learning how history works.