The Gipper and His Legacies

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Within a few hours after hearing about the death of Ronald Reagan this past Saturday, I decided to read the various obituaries that appeared on the Internet, including one from the New York Times. Not surprisingly, they ranged from near-worshipful on the conservative sites to mostly contemptuous and condescending from the Times.

Since Reagan has been nearly invisible to the public since it was announced a decade ago that he had contracted Alzheimer’s disease, his passing is hardly a shock, and mostly an afterthought on his presidency, which ended almost 16 years ago. Like all presidents, he had a number of legacies although many of the experts, I believe, will miss those things from his eight years in office that will have the longest-lasting impact upon our lives.

Perhaps the most ironic thing about Reagan’s legacies, I believe, is the fact that the longest-term effect of his presidency will be the loss of freedom for many people in this country, and especially the loss of entrepreneurial freedom. That is because if there truly was a "Reagan Revolution" — and I am among the skeptics who question whether or not there were any truly "revolutionary" aspect to his terms in office — it occurred in the area of law, and especially federal criminal law.

I will return to the thoughts presented in the previous paragraph later in this piece. First, however, I wish to address what others have said about him in the wake of his death, and deal with the myths that have surrounded him and that time he spent in office.

Myths abound regarding former presidents. Lincoln, who in reality was a cool and aloof dictator while president, has been recast as "Father Abraham." As a friend of mine who has written three books about this era once remarked to me, the surprising thing about Lincoln is not that he was assassinated, but rather that he lived as long as he did in the White House, given the number of enemies that he managed to create through his war.

Woodrow Wilson is portrayed as an idealist and a visionary, not a man who lied the country into a war that ultimately destroyed the social and political underpinnings of most of Europe, and who was the most virulent racist to occupy the White House since Lincoln. Historians and journalists present the picture of Theodore Roosevelt as someone who was a great "trustbuster," a strong leader who had the foresight to engage in great conservation efforts of U.S. forests. Today, we see the destructiveness of the Progressive Movement that TR brought full-swing into U.S. political and legal life, and the national forests he "gave" us are little more than a demonstration of government mismanagement. Wilson and Teddy Roosevelt were the two presidents after Lincoln who were the most instrumental in destroying what was once a constitutional republic and replacing it with the "progressive" democracy that is killing our liberties.

Franklin Roosevelt is pictured as the man who "brought this country out of the Great Depression" and was an effective and dynamic wartime leader. In truth, FDR’s "New Deal" prolonged the depression and many of his actions made things worse and helped to launch the world toward war. John F. Kennedy’s administration pushed us into Vietnam, and his personal recklessness ultimately endangered the lives of millions of people. His economic policies — full-blown Keynesianism — leave a sorry economic legacy that never seems to leave us. To his admirers, Kennedy’s administration created the "golden years" of "Camelot." To the rest of us, he was another irresponsible person using his presidential powers in an irresponsible way.

So it is with Reagan. To his admirers, Reagan brought "morning in America" and ended the Cold War with the Soviet Union. He rescued the USA from the "malaise" created by the presidency of Jimmy Carter, according to conservatives, and set the country on a rightful course.

Leftists hate him for any number of reasons. First, they believe that somehow his administration killed the welfare state. Of course, that did not happen, as the welfare state grew continuously during the Reagan Administration, but since Reagan once invoked a story about a "welfare queen" that was proof positive that he ended welfare.

Reagan also earned the contempt of the left for his "evil empire" comment about the U.S.S.R., and the fact that he did not waver in his determination to build up the armed forces. Those of us who hold to a libertarian point of view are of two minds about Reagan’s anti-Soviet rhetoric and actions.

Now, we do believe that the Soviet empire was an evil thing, not simply a regime that practiced "alternative" economics. But, in retrospect, the Cold War was a waste of many things, mostly lives and resources, as it gave this country a permanent military-industrial complex that burdens us beyond any understanding.

In the spirit of Marc Anthony, I come to bury Reagan, not to praise him. Yet, I cannot forget that his 1980 campaign was the last presidential contest in which real ideas were discussed. Things like "Say’s Law" and "growth of government" were part of the daily discussion, "one brief, shining moment" if you will. For me, it was the first and last time I have campaigned door to door for a U.S. presidential candidate.

We forget that Reagan also campaigned on ending draft registration, and many of his old speeches were tinged with libertarian ideals. The left called such words "simplistic," or "racist," or "reactionary." One also forgets that his 1980 campaign — following his near-upset of Gerald Ford in the 1976 primaries — was seen as a threat by the Republican establishment of Washington.

Midway through the primary campaign, Ford called a press conference to announce that he was considering jumping into the race, done in large part because of his fear that Reagan was going to win the nomination. At the Republican National Convention that summer, Bill Brock and Howard Baker tried unsuccessfully to engineer Ford onto the ticket as the vice-presidential candidate, with the promise that the outcome would result in a "co-presidency." Reagan ultimately chose George H.W. Bush instead, something that in the long term would mean grave consequences to liberty and law in this country. In the end, Reagan won an easy victory, but he did not govern as he had campaigned, and that has made all the difference.

Early into his new term in 1981, Secretary of Defense Caspar Weinberger prevailed upon Reagan to keep draft registration. It was a small issue on the surface, but an important victory for the Republican establishment; individuals once again were reminded that young men still are considered property of the state who can be forced against their will at any time to be inducted into the armed forces.

We remember 1981, of course, for two things. The first was his barely surviving an assassination attempt just two months into his presidency. The second was the passage of the tax cuts, which knocked down the top rate from 70 percent to 50 percent and cut back other brackets as well. Given the state of mind that was (and is) Washington, D.C., this qualified as a revolution. Furthermore, there was no shortfall of talking heads and politicians who denounced this as irresponsible and harmful to the economy.

The following year, a deep recession hit this country. While those trained in Austrian Economics understood that given the irresponsible economic policies that had been the staple of Republican and Democratic administrations for two decades, not to mention the predations of an economically incoherent Congress, this economic downturn was both inevitable and necessary. The politicians and their worshipful media, of course, blamed the tax cuts. (For example, the leftist Atlanta Constitution ran an editorial in 1982 entitled: "Tax Increases or Recession.")

Deregulation of the country’s major industries, along with airlines, trucking, and railroads, already had begun during the Carter Administration and continued during the Reagan years. Furthermore, Reagan quickly ended oil price controls in February 1981, short-circuiting a process that was supposed to be extended until the summer. The end of some of the economic regulation of the telecommunications industry also occurred during the Reagan years, although it is likely the process would have continued, even had Carter won re-election.

In hindsight, the changes that the Reagan Administration made in government for the most part were quite small. However, that did not keep the Washington establishment from acting as though the federal government had been destroyed. They fought back by not only blaming the recession on cuts in marginal tax rates, but also claiming that the Reagan policies — as modest as they were — were driving people into the street. It was not long before every major news network was claiming that there were three million homeless people in the USA. This was preposterous, but the fake numbers were circulated as proof that Reagan had killed the Holy Welfare State.

In truth, the Reagan Administration made only cosmetic changes in the nation’s welfare system, and for the most part, it was governance as usual. The bureaucracies marched on, as they always do. However, Reagan also ran on an "anti-crime" platform, but realized that the U.S. Constitution limited the role that the federal government could play in state affairs, and that especially meant criminal law. However, the Reagan Administration simply began to experiment around the edges, slowly expanding the federal role in criminal affairs, and helping to lead to the present day situation when nearly every crime committed can be federalized.

Through a series of "crime bill" acts, the federal government slowly but surely expanded the powers of U.S. attorneys, and the most inroads were made in the prosecution of sale and possession of illegal drugs. And out of the "War on Drugs" would come a series of laws and court decisions that expanded the powers of government agents to arrest people on flimsy evidence and seize private property willy-nilly.

The War on Drugs was not an original Reagan brainchild. Instead, it grew from a campaign that Nancy Reagan pursued. The victim of some savage press attacks, especially from the Washington Post and New York Times, Nancy Reagan looked for a "winning" cause and out of her search came "Just Say No to Drugs."

Much of the American public ignored Mrs. Reagan, but the real teeth in this new domestic conflict would come from Congress. Having lost Vietnam, along with the ridiculous "War on Poverty," Congress set out on yet another disastrous "cause." The government not only managed to federalize many drug offenses, but also began to seize property in earnest, a practice that has continued apace to this very time.

Within a short time, both the federal and state prison populations began to grow rapidly. The number of U.S. attorneys also continued to expand, as federal prosecutors began to find ways to manipulate the law in order to pile on the convictions. One especially ambitious federal prosecutor, Rudolph Guiliani the Southern District of New York, decided to use the expanded federal legal powers to beat up certain Wall Street firms.

While space does not permit me to go into Guiliani’s predations in detail, let me simply say that he was clever enough to realize that his boss, President Ronald Reagan, had moved Congress and his administration to make arrests, indictments, and convictions a relatively easy thing. The result was the destruction of innovative and important Wall Street companies that were becoming too competitive for the likes of established financial firms.

Guiliani became the "boy" of firms such as Salomon Brothers and the like, as he went after Michael Milken, who had pioneered the use of high-risk, high-yield bonds to help finance a number of new high-tech entities such as CNN and MCI. Because of the press yelping about Reagan being a "friend of the rich," no one in Reagan’s Department of Justice moved to stop Guiliani, who set bad precedent after bad precedent.

In the end, as I noted earlier, this has become the longest-lasting legacy of Ronald Reagan. Taxes have been increased, budget deficits are now exploding, and the Soviet Union has long since disappeared. Following Reagan’s willingness to use the armed forces abroad in questionable combat action, both Bush administrations, plus the Bill Clinton government, have sent troops abroad, bombed cities and other civilian targets, and generally have made this country a stench in the nostrils of people abroad. Reagan came into office calling for responsible government. In the end, what is left is increased power placed into the hands of U.S. attorneys who would frame their grandmothers if they thought that would earn them political points. And, in the end, we also have a seemingly unending war in Iraq.

I have no idea whether or not Reagan would have approved of the monster that many of his policies helped to create. His intentions here are not important; what is important, however, is that the U.S. Government has become an even bigger threat to life, liberty, and the pursuit of happiness. That is the real Reagan legacy, and it is one that neither the critics of the left or the admirers on the right will ever understand.

June 7, 2004

William L. Anderson, Ph.D. [send him mail], teaches economics at Frostburg State University in Maryland, and is an adjunct scholar of the Ludwig von Mises Institute.

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