Obama Could Learn From Ronald Reagan (Guest Voice)
Obama Could Learn From Ronald Reagan
by Michael Reagan
If President Obama really wants to get the U.S. economy going again, he could do worse than to study the results of my Dad’s 1981 Economic Recovery Act, which boosted the economy by leaps and bounds.
Take the matter of jobs, for example. Thanks to the 1981 act, an astounding 20 million new jobs were created. Moreover, inflation dropped from 13.5 percent in 1980 to a mere 4.1 percent by 1988, and unemployment fell from 7.6 percent to 5.5 percent.
Moreover, the net worth of families earning between $20,000 and $50,000 annually grew by 27 percent. At the same time, the real gross national product jumped by 26 percent and the prime interest rate was slashed by half — from 21.5 percent in January 1981 to 10 percent in August 1988.
The amount of individual tax revenues rose from $244 billion in 1980 to $446 billion in 1989. Moreover, total tax revenues jumped grew by almost 100 percent, rising by 99.4 percent during the 1980s. The act produced 92 months of healthy economic growth — the longest period of peacetime in the post WWII period.
Under my Dad, marginal tax rates were cut from a top rate of 70 percent to a mere 28 percent, while revenues to the U.S. government from all taxes nearly doubled – increasing from roughly $500 billion to an astronomical $1.1 TRILLION in 1990.
Such stellar economic growth was the result of my Dad’s economic policies, which were rooted in his belief in the ability of the American people to make the right decisions concerning their nation’s economic activity. Contrast that with the Obama administration’s quasi-Marxist policies, which seek to make Washington the center of the nation’s economic activity.
This results in aberrations, such as non-elected government boards seeking to dictate to corporations and business where they can and cannot locate their various operations, as we’ve seen in the case of Seattle-based Boeing’s decision to open a plant in South Carolina, a right-to-work state. Incredibly, the National Labor Relations Board (NLRB) is trying to block that move, claiming that it is based solely on the status of that state as a right-to-work state, putting the government in league with Big Labor, which hates giving workers their rights to work as they see fit and wants to prevent the move.
Ronald Reagan would have been appalled by that outrage. When faced with a similar attempt by a labor union to twist the rules governing the behavior of air traffic controllers, my Dad simply fired them all and replaced them. He would have defied any attempt to prevent a company from moving some of their operations to a new location because .a labor union opposed the move on the grounds that it freed employees from the grip of Big Labor bosses.
The Obama administration has displayed outright hostility toward Boeing, using the NLRB to harass the company as it attempts to operate free of government interference. Too bad my Dad isn’t around to curb the power of an out-of-control government agency slavishly bowing to the dictates of a powerful labor union, and not the workers it pretends to represent.
Michael Reagan is the son of President Ronald Reagan, a political consultant, and the author of “The New Reagan Revolution” (St. Martin’s Press, 2011). He is the founder and chairman of The Reagan Group and president of The Reagan Legacy Foundation.
©2011 Mike Reagan. Mike’s column is distributed exclusively by: Cagle Cartoons, Inc., newspaper syndicate and is licensed to run on TMV in full.
13 Responses to “Obama Could Learn From Ronald Reagan (Guest Voice)”
That sounds real good Mikey but unfortunately, it wasn’t your fathers Act it was the Kemp-Roth Tax Cut.
Economic Recovery Tax Act of 1981
The issue in Reagans first term was too many regulations, that were overly complex and had real muscle, and high taxes. The issue now is low taxes and toothless and overly rigged regulation combined with having to finally pay off the bubble that Reagan began inflating by ballooning spending and at the same time cutting taxes. We ran in the same direction for 30 years and yes it became a problem. Unless you think that a huge increase in gov spending and more tax cuts are the cure for our problems, which the right and the left both seem to reject fully, then Reagans miracle can not work this time. Instead we are living in the supply side hang over era, we can use old tools to again re-inflate the balloon and give us false prosperity on our kid and grand kids dime or we can deal with the painful unwinding that we are now dealing with. I prefer the unwinding and I would think any true conservative would as well.
Two points:
1) In the 70′s, the Fed kept money way too tight and interest rates way too high. Easing up rates was very easy to do, that loosened up lending and investment, and then jobs grew very quickly. Since then, the Fed has kept rates far too low and now there is nothing else they can do. Obama is trying to get the economy going without that potent weapon available.
2) also in the 70′s, tax rates were indeed high. Cutting them was easy, and that also led to great benefits. Today, tax receipts are at historical lows, regardless of right-wing propaganda to the country, so there is no no wiggle room left in them, either.
Reagan’s actions were right at that time. They are not right today. We have a different set of problems to deal with. Sadly, Obama isn’t dealing with them, and the GOP, so fixated on the past, are incapable of solving them either.
Can we avoid bringing up the authors relationship to his dead father that he can no longer resolve in any manner? It is a tad beyond vicious. I understand that the author has a long history of being a vicious and thin skinned partisan warrior but I also think we can instead attack him for that as opposed to matters that should be left in his family. Do not attack those you hate for their methods with those same methods or find yourself no better than them.
MSF-
I don’t remember any Reagan “miracle”. I do remember Reagan robbing the Social Security coffers to fund Star Wars, and, massive military spending while giving the working people a “One Hundred Dollar” rebate, that did nothing at all for the economy.
Actually I don’t believe Reagan had any original ideas at all. I don’t believe he personally accomplished anything or personally initiated anything at all. He simply put on his “Death Valley Days” character and make-up, then went on stage representing his corporate puppet masters to sell their agenda. Reagan was an extension of our economic ills today that began with Nixon and Ford, disrupted by Carter, stopped by Clinton, and, restarted again in mass by Bush II.
Republican voodoo economics don’t work, never has. Reagan had no clue.
I thought we already tried a tax stimulus.
I agree that the “actions” were right at the time BUT they were not “Reagan’s actions” they were Acts of Congress.
As it was to Congresses (not Reagan’s) credit then it is also Congresses (not Obama’s) fault today.
Both Obama and Reagan pushed for compromise and angered some of there base BUT IT’S Congress (an obstructive, no compromise Republican Congress) that failing the United States of America today.
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All I said was his father would be ashamed. Had Michael Reagan NOT misrepresented his father, his fathers actions and the credit his father deserved in the “Kemp-Roth Tax Cut” it would not have been pertinent but he did and therefore, in my opinion, it was, and is, pertinent.
Allen-Well workers felt a “miracle” though it was largely paid for by us that are now feeling the economic impact of using money that didnt exist. In fairness to Reagan it wasnt his fault we decided to run in the same direction for 30 years but I would like to remind people that the miracle was an illusion that can happen when you are living on future money or SS funds. He created jobs in the defense contractor sector while cutting taxes and regs, all three of which created jobs which in turn created support jobs (in other words he used a no tax cut stimulus mixed with tax cuts and gutting regs to please business). You can say one or all of those things had an impact but regardless it is not something we can or should repeat because now we have to unwind it.
SteveK-I do understand, I myself have went for this authors throat many times but I also know that it is counterproductive. I just prefer to note how in conflict with who Reagan truly was he is while using his father as an example even though Reagan did not do or act in such a way as his son, step-son, implies.
Allen-I can respect your view on it but I also think that such “insults” are the very fuel for his continued fantasy creations. He is a man that should be pitied not pilloried but it is hard to pity those with great influence over the minds of some that then harm us all. I would say though that to treat those that throw hate with pity, while remaining ready to defend yourself if needed of course, is a wonderful way to highlight who is truly selling hate/lies and venom.
“I would say though that to treat those that throw hate with pity, while remaining ready to defend yourself if needed of course, is a wonderful way to highlight who is truly selling hate/lies and venom.”
Hate is like anything. Sometimes it is good, sometimes it is bad.
“Pity” is just a slovenly, insincere, fashionable form of hatred anyway. Passive-aggressiveness.
Prof.: Yes, we have tried a tax (-cut) stimulus. (freezing income tax rates at Bush temporary-cut levels, “temporarily” reducing FICA taxes)
Hopefully Obama won’t try to perpetuate the payroll (FICA) tax reduction, which is more irresponsible than extending the income tax cuts insofar as what it does to the already-unsustinable entitlements, and the deficits they’re already running.
get back to the topic, not the writer, and all will be well. All our guest posters are under the same commenters rules as TMV writers. Discuss the topic, not the writer. Even if the writer makes you see red. The comments section is for discussion of the topic of the post, not the writer. Thanks.
archangel/ dr.e