Why the Right Went Wrong: ConservatismFrom Goldwater to the Tea Party and Beyond (15 page)

During the Republican primaries, Anderson had received wide
attention but few votes—12 percent of the total. Moderate Republicans tended to prefer George H. W. Bush to Anderson and he ran second to Reagan. In a shrewd move aimed at uniting the party, Reagan picked Bush as his running mate, even though Bush had described Reagan’s supply-side tax cut plan as “voodoo economics.”

Realizing his views had no future in his own party, Anderson set off on his Independent path. Despite his relatively weak national showing, Anderson won between 10 and 15 percent of the vote in the six New England states, and also had pockets of strength in upstate New York, in the upper Midwest, and on the West Coast. (In light of the vacation habits of Democratic presidents, it’s worth noting that two of Anderson’s top three counties in the country—the third was part of his Illinois congressional district—were Dukes County, which most know as Martha’s Vineyard, and Nantucket in Massachusetts. In both, Anderson won more than 20 percent of the vote.) Anderson’s support serves as a marker for the steady defection of the progressive Republicans from their party. If George Wallace was a way station for southern Democrats on their way to becoming Republicans, Anderson served, in a less spectacular fashion, as a transfer point for northern Republicans moving toward the Democrats.

But the vote for Anderson also reflected the impatience of many liberals with Carter, visible in the third-party candidate’s strength in relatively liberal and normally Democratic states such as Massachusetts and New York. Liberals who voted for Anderson were willing to risk a Reagan victory because they were so fed up with Carter.

If Reagan’s victory was thus impressive, his share of the popular vote less so. Of Reagan’s 489 electoral votes, 222 of them were secured in states in which he won less than 50 percent of the popular vote. In a fair number of these states, Reagan was not far below half the vote and many of them would likely have tipped Reagan’s way even if Anderson had not been on the ballot. But these figures put his Electoral College sweep in context. The map revealed but also exaggerated the extent of his triumph.

Reagan was elected not because he turned the whole country conservative, but because he persuaded enough swing voters frustrated over stagflation, the Iranian hostage crisis, and the seemingly (and misleadingly) rising power of the
Soviet Union that he was not the conservative ideologue of old. Reagan played down his more right-wing positions—deflecting, for example, Carter’s attack on his past opposition to Medicare with the most memorable line of their only debate: “There you go again.”

Reagan’s 1980 acceptance speech at the Republican National Convention in Detroit was one of the best of the genre, and a sign of things to come. Although Reagan pledged to reduce the size of government and was specific on one issue—he called for “a 30 percent reduction in income tax rates over a period of three years” with a 10 percent “down payment” in his first year—it was a speech aimed at an audience much larger than the conservative faithful. Reagan addressed all who shared
“a community of values embodied in these words: family, work, neighborhood, peace and freedom.”

He promised that “everything that can be run more effectively by state and local government we shall turn over to state and local government,” but, perhaps remembering the difficulties his $90 billion devolution plan caused him in 1976, added the words “along with the funding sources to pay for it.” Gone was any talk of privatizing Social Security. On the contrary, Reagan declared that “it is essential that the integrity of all aspects of Social Security be preserved.” This would be no Goldwater campaign. And while conservatives would always love him, his presidency would not be dedicated to fulfilling their more extravagant hopes.

The two Reagan traditions that Republicans can choose to identify with, the aspirational and the pragmatic, reflect the complexity of his actual political project, his personality, and his way of governing. Reagan is often cast as a relatively simple man. He wasn’t.

Our current political turmoil and the ongoing discontent on the right grows out of this essential fact:
Reagan changed the terms of the American political debate without changing the underlying structure of American government.

Reagan’s genius lay in his skill at making a sustained, compelling argument for conservative positions. It is precisely this talent that captured conservative imaginations on that October evening in 1964 when he rallied the faithful, if not many others, to Barry Goldwater. Reagan understood the New Deal argument inside out, having once been a New Dealer himself and never giving up his admiration for Franklin D. Roosevelt. As a result, he could speak
to a national consensus shaped by New Dealism with an eye toward changing it—though less so than most of his core supporters hoped.

The transformation of the debate in the Reagan years is unmistakable. Perhaps appropriately in light of Reagan’s past, the shift can be illustrated by way of one of the most beloved movies of the 1940s,
It’s a Wonderful Life
. The film captures the underlying values of the New Deal Era by pitting the socially oriented capitalism of George Bailey against the cold banking calculations of Mr. Potter. Bailey’s commitment is to broadly shared prosperity, reflected in the success of his savings and loan in turning so many people in Bedford Falls into homeowners. Potter is a man of the bottom line, for whom Bailey’s behavior is mere sentimentalism. Moreover, the movie makes the case that “traditional values”—warm and loving home lives, the patriotism of George’s war hero brother, the intimate ties of a tightly knit community—are rooted in economic arrangements that guarantee everyone a stake. In the movie’s alternative universe—the world as it would have been without George Bailey and the opportunities he created—Bedford Falls becomes “Pottersville,” a nasty gambling town where prostitution thrives and social bonds are shattered.

Reagan’s project might be seen as turning
It’s a Wonderful Life
on its head. In the world of the 1980s, entrepreneurs and bankers—the Mr. Potters of the world—became heroes as conservative persuaded Americans that Potter’s analysis of capitalism was right: getting rich was good because when some people got rich, everyone prospered. There was an underlying morality and even spirituality to capitalism, captured well by two popular books of the early Reagan era,
Wealth and Poverty
by George Gilder (the onetime liberal Republican who had written about 1964 Republicanism as “the party that lost its head”), and Michael Novak’s
The Spirit of Democratic Capitalism
. The condemnations of Mr. Potter had things all wrong.

“Capitalism begins with giving,” Gilder insisted. “Not from greed, avarice or even self-love can one expect the rewards of commerce, but from a spirit closely akin to altruism, a regard for the needs of others, a benevolent, outgoing and courageous temper of mind.” Novak similarly linked capitalism to spiritual growth.
“The highest goal of the political economy of democratic capitalism is to be suffused by
caritas
,” he wrote. “Within such a system each
person is regarded as an originating source of insight, choice, action and love. Yet each is also a part of all the others.”

In this telling, the free individual’s greatest calling is to be entrepreneurial, to use a word that came back into vogue in the Reagan period. Gilder linked the disorders of family life to high inflation and high marginal tax rates, which had the tendency “to penalize the family that depends on a single earner who is fully and resourcefully devoted to his career.”

In the meantime, the rise of the counterculture in the 1960s drove a wedge between traditional values and New Dealism. The morally tidy world of Bedford Falls was not under threat from Mr. Potter or from economic injustice. It was being challenged by new values, including feminism, sexual license, an attack on religion, the drug culture—and, as Gilder suggested, excessive taxation.

Government plays a limited role in
It’s a Wonderful Life,
although the state’s bank examiners are cast as friendly rather than threatening figures when they tear up their complaint against Bailey and toss a contribution into the community fund that Bailey’s wife raises to get George out of bankruptcy. But Reagan built on the disaffection with government unleashed by the Vietnam War, Watergate, and the hyperinflation of the late 1970s to create a new, long-term view of the state as bumbling, incompetent, and ultimately oppressive. In their sleep, conservatives can recite the Reagan catechism, preached in his Inaugural Address: “Government is not the solution to our problem. Government is the problem.”

What’s not fully appreciated is that Americans did not hold this view of government until the late 1970s and early 1980s. Government was seen from the Great Depression forward as the force that ended the Depression, won World War II, and built the nation up through the Public Works Administration, the Works Progress Administration, the Interstate Highway System, and countless other public investment projects. In 2011 Rachel Maddow, the MSNBC host, filmed a promotional spot in front of the Hoover Dam that harks back to the New Deal worldview and captures it quite precisely:

I feel like we have sort of an amazing inheritance in terms of what our grandparents and our great-grandparents thought to leave us when they were
building the infrastructure that is the spine of this country—they knew that the benefit of it would redound to us—they knew it. What are we doing?

It shows us how much Reagan changed the prevailing assumptions. Maddow insists that generational responsibility should be defined by the public investments earlier cohorts of Americans made that benefited those who came after. This was the New Deal view. But when generational responsibility is invoked now, it is almost always done to criticize the public debt being left behind for later generations to pay off. For Maddow, government was part of the solution. The Reagan view that it is part of the problem is still with us—even though we have had two long Democratic presidencies since Reagan left office. Neither Bill Clinton nor Barack Obama fully undid Reagan’s ideological inheritance.

The federal government certainly tilted in different directions in the Reagan era—toward employers and against unions, toward companies and away from environmentalists, toward extractive industries and away from renewables, toward laissez-faire and away from consumer protection, employee health and safety, and financial regulation. In the financial field, Clinton approved measures that pushed deregulation even further.

Yet the underlying structure of government changed little.
The historian Joshua Freeman summarizes Reagan’s fiscal legacy:

The political arithmetic of the budget made it impossible for the Reagan administration to reduce nonmilitary spending sufficiently to meet its goal of ending deficits. It could do nothing about debt payments, and Reagan ruled out substantial cuts in the popular Medicare, veterans’, school lunch, Head Start and summer youth programs. Social Security made up a major component of the budget, but Reagan’s one effort to reduce its cost backfired, when his proposal to further reduce benefits for people who chose to retire early led to a Congressional uproar, forcing him to retreat. . . . What remained were the discretionary domestic programs that made up 17 percent of federal spending, which the Reagan Administration tried to slash.

Even here, Reagan made less of a dent than his budget director, David Stockman, had hoped. Stockman wanted to cut
“weak claims, rather than weak claimants.”
Instead, the weak claims largely survived and the cuts hit weak claimants. As Freeman notes,
Reagan failed to make a significant dent in agricultural subsides and the Export-Import Bank, along with “tobacco subsidies, the NASA budget [and] subsidies for nuclear fuel plants.” Spending on “local bridges and roads” survived, too. All of these reductions were defeated or contained “as affected groups and local political interests mobilized resistance.”

That left spending for
“the poor and the urban working class, groups with little clout in the White House or the new Congress.” So Reagan did manage to reduce or eliminate “child nutrition programs, CETA [spending under the Comprehensive Employment and Training Act], food stamps and mass transit subsidies.” The budget of the Department of Housing and Urban Development fell by 57 percent between 1981 and 1987, and social spending, “which had risen under each of the previous five presidents, fell at an average annual rate of 1.5 percent under Reagan.”

In retrospect, one can understand why the Reagan years left both liberals and small-government conservatives dissatisfied. The cuts that were real and visible hit programs for low-income Americans. This is the Reagan progressives remember. And he fundamentally altered the nation’s tax structure. Tax rates have gone up since Reagan’s time, but the top marginal tax rate is still far lower than it was when he took office. This is an achievement that still shapes (and, from a progressive point of view, bedevils) our fiscal debates.

But at the end of Reagan’s eight years, the federal apparatus was not only left standing; it was spending more than ever. Reagan had promised to balance the budget, but the federal government ran a deficit of $100 billion or more every year of his term.
The national debt rose from $907 billion in 1980 to $2.8 trillion in 1989. In his 1980 Republican convention speech, Reagan had pledged to “work to reduce the cost of government as a percentage of our gross national product.” As a share of gross domestic product (GDP), federal spending had stood at 21.1 percent in 1980, the last full year of Jimmy Carter’s presidency. By 1987, it had been cut to 21.0 percent, virtually no change.
It fell back further to 20.5 percent in 1989, but the post-Reagan recession pushed it back up to 21.7 percent in 1991, higher than its level at the end of the Carter years.

Of course, the mix of spending changed, with Reagan pushing his
military buildup. And here is one of history’s ironies. There was indeed a strong economic recovery that helped Reagan win his landslide reelection. But as Freeman notes, the theory that conservatives put forward to explain the boom didn’t match the reality. Reagan’s large tax cuts did not boost personal savings, which fell under Reagan, nor did they lead to massive investment in plant and equipment, “which even during the recovery remained below the rate of previous decades.”
But the tax cuts and the military spending together did act “as a vast Keynesian stimulus program.” In other words: high deficits and government spending saved the economy. The very theory the supply-siders rejected came to Reagan’s rescue and was immensely helpful to his political standing.