Ronald Reagan, Hedgehog

According to the conventional (liberal) wisdom, President Ronald Reagan, who recently celebrated his 90th birthday, was little more an amiable dolt, helpless without his handlers or the teleprompter. His presidency was a case of "sleepwalking through history." His successes were the result of dumb luck, and his popularity was due to the backwardness of the American people.

According to the conventional (liberal) wisdom, the Reagan presidency unleashed the "decade of greed." Of course, not all benefited. The rich got richer and the poor got poorer. His tax cuts saddled the country with massive debt. Meanwhile, his saber rattling set back relations with the Soviet Union. Only an open-minded leader like Mikhail Gorbachev was able to undo the damage wrought by President Reagan and end the Cold War.

Fortunately for the historical record, there is a serious reevaluation of the Reagan presidency underway. In a recent survey of presidential historians from across the political spectrum, Mr. Reagan was ranked eighth, firmly within the category of "near great" presidents, a group that included Thomas Jefferson, Theodore Roosevelt, Harry Truman, and Dwight Eisenhower.

The key to Mr. Reagan’s success as president is to be found in a famous 1953 essay by the British philosopher, Sir Isaiah Berlin. In that essay, "The Hedgehog and the Fox," Sir Isaiah categorized writers, thinkers, and human beings in general according to the dictum of the Greek poet Archilochus: "The fox knows many things, but the hedgehog knows one big thing." Ronald Reagan was clearly a hedgehog.

The one big thing that Mr. Reagan knew was that the United States was a fundamentally decent regime that constituted the only hope for freedom and prosperity in the modern world. He knew that the "idea" of America was undermined at home by a shift away from individual effort and liberty to reliance on the government and that it was undermined abroad by ideology of communism. The focus of his presidency was to unfetter America. The position of the United States today is a tribute to his success.

In 1980, the United States was in trouble. Malaise was in the air. President Carter could not govern, despite having a Democratic majority in both house of Congress. The US economy was stagnant and beset by a variety of other problems: inflation and unemployment were both high, something conventional Keynesian macro-economic policy and the Phillips Curve said was not supposed to happen. Because inflation was well into double digits, interest rates were sky high as well. Having dishonorably abandoned South Vietnam only five years earlier, US influence abroad was at its nadir while Soviet adventurism was on the rise. The "correlation of forces" certainly seemed to favor the Soviet Union.

The domestic component of President Reagan’s one big idea was to unleash the US economy. The international component was to break the back of the Soviet economy.The first entailed deregulation and reduction of marginal tax rates. The second meant going beyond containment of communism to active support of freedom within the Soviet sphere of influence, a policy that had once been called "rollback."

The steps he took in both arenas were heresy to the liberal elites that dominated debate in the US. Hence the charges catalogued above. But President Reagan was right and his critics were wrong.

Following a recession that ended in 1983 (the cost of cutting the rate of inflation), the US economy began a steady growth that has continued, with a minor blip in 1992, for 17 years. In the first seven years of the Reagan boom, the economy grew by one third, adding the equivalent of West Germany’s economy to our own. The performance of the US economy greatly surpassed that of Japan and Europe, widely expected by the "experts" to set the standard of economic growth. And the Soviet Union did, as President Reagan predicted in 1982, end up on the "ash heap of history."

Ah, but what about the inequities of the Reagan tax cuts and the resulting "deficits as far as the eye could see?" And what about President Reagan’s reputation as a cowboy who endangered world peace by provoking the Soviet Union?

The Reagan tax cut originally did cost the treasury money. But Larry Lindsey, a former member of the Federal Reserve Board and currently the top economic advisor to President Bush, points out that an analysis of IRS data shows that only 24 percent of the deficits of the 80s and 90s was attributable to the tax cuts. The remaining 76 percent of the deficits were the result of increases in federal spending, most of which went to domestic programs.

As for fairness, the reductions in the marginal tax rates arising from the Reagan tax cut actually increased the burden for wealthier tax payers. From 1980 to 1990, the real tax revenue collected from the top one percent of earners rose by 51 percent, of the top five percent, by 36 percent, and of the top 10 percent, by 29 percent. Those making over $200,000 were paying seven percent of the total income tax bill in 1981. By 1986, they were paying 14 percent.

If his domestic goal was to free up the US economy, his international goal was to put pressure on the weak Soviet economy. Indeed, the great accomplishment of the Reagan administration was to target the Soviet economy as the "strategic center of gravity" upon which to focus an asymmetric and cost-incurring US strategy. This strategy exploited the mismatch between the large and growing US economy and the much smaller Soviet economy.

We know now that a national security decision document (NSDD-75) was issued in 1983 that outlined a broad political, economic, and military strategy designed to demoralize the Soviet leadership. The objective of this strategy was to demonstrate that Soviet attempts to achieve military supremacy had failed and that any attempt to compete militarily with the US would bankrupt the USSR. Either the Soviet elite would recognize that the political structure of the USSR must be liberalized or it would go down to sure and certain defeat. Gorbachev’s role in ending the Cold War was to recognize the strength of Ronald Reagan’s strategic hand.

Along with Abraham Lincoln, Harry Truman, and Dwight Eisenhower, Mr. Reagan had the good fortune to be consistently underestimated by his adversaries. But even his advisers could miss the mark. Robert McFarlane, who served as one of President Reagan’s national security advisors, once said of him, "he knows so little and accomplishes so much."

Like President Reagan’s detractors, Mr. McFarlane did not understand that just because someone does not claim to understand all the details of an issue, he knows nothing at all about it. By knowing one big thing and acting accordingly, Mr. Reagan changed the terms of the debate so completely that today we take for granted the vast transformation that he wrought. Indeed, so all-embracing has this transformation been that Bill Clinton, that most fox-like of men, was most successful when he governed as a steward of the Reagan revolution. Now that’s a legacy.

Mackubin Thomas Owens is professor of strategy and force planning at the Naval War College in Newport. He can be reached by e-mail at mowens@ashbrook.org.